Earnings call transcript Q4 2022

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Operator

Good day everyone and welcome to the Q4 2022 Cepton, Inc. Business Update and Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

to conference like Xu, to now CFO. the would turn over the Hull I sir. ahead, go Please

Hull Xu

Thank to and earnings you, welcome call year and and XXXX full business update. Cepton's fourth quarter

Chief are Pei, Senior today President Development. Business of and me With Vice Co-Founder and Mitch Executive Jun Hourtienne, Officer;

performance During the for be not financial our non-GAAP GAAP. measures considered a substitute refer may superior with unaudited measures to non-GAAP of should and call, in financial in earnings our measures we or Reconciliations the are in measures release. our to accordance GAAP prepared The non-GAAP as release. earnings for included

periods. I not our the filings and statements those described in differ or or discussed call subject call. expectations and statements on future these the earnings everyone may to results commitment release statements U.S. our to safe undertaking remind due Company's SEC. current are that conference statements including forward-looking contained to a of with forward-looking this in call, harbor today's future regarding the required release this risk, financial periods would to These future like law. Company's as include by We're result and implied any and number expected accompany statements other based as Actual comments statements that in expressed those materially of to from operational update forward-looking a those the related events, uncertainties earnings by the or made may during those except in for for the performance factors slides are

that the this earnings recorded of and call webcast released at call, is as a As and can you being as call find this replay investors.cepton.com. this well quick the accompany slides reminder,

would like Jun. call I to to Now, over the turn

Jun Pei

Thank joining earnings everyone. for Thank fourth full and XXXX afternoon, you Cepton's call. year quarter and good you, Paul,

review our business for a provide update, and provide full fourth view financial XXXX. XXXX and results will quarter We year

past this from General point the -- GM of the quarterly progress its I announcement on with Cruise system business year, most hearing your we our last have update, notably series updates to customers’ Starting me Tuesday. over Xth, will enabling on quarter, look March offered ADAS announcement, Motors’ the than with their the detection, our towards Rather comprehensive into OEM accurate shared all our lidar the Ultra of towards even of conditions. to hands-free three-dimensional ADAS unique object suite in driving next in scene, windshield, in the in system produced lidar role generation driving precise deployment our our an sensor integration view more scenarios. enable inclement behind of weather lidar XX% Highlighting their designed of production.

is to lidar deploy key ADAS offering. GM's Our safely enabler sensor generation next a

shipping At production. start look began the series of to year, units end off we preproduction This to last we customers. OEM our year,

and We are and to Award next interested both flagship lidar, yet options a excited for products. a vehicle compared their view, reduction of XX-degree in new lidar series X-XXX superior additional of sensor to our our field design. evaluating which customers, next resolution sensor core offers Innovation selected X-XX, year, the and and our platforms. the builds has to existing CES the size MMT its new At on commercialization closer in our for testing another CES This unveiled is reduction wider integration XX% this vehicle Plus our our generation step by technology move XX% Plus the in recognized production. X-XXX Program, OEM Many slim Vista we generation and new for with are height

programs. series Vista upcoming contender evaluation. And a for top products automotive global major we expect first for have X-XXX Plus the shipped be XX We samples of production for the our to to OEM

signal generation existing next of expect chip processing combination unison to our and X-XXX ASIC significantly industry This both end the processing to and our be image available ASIC of to Vista complementary taped out working year. early the ASIC. improve we is new starting At last this two reduce year, in will samples first The performance Plus, cost. in leading our be new featured successfully

the Our our forward extends to we ASIC full compute roadmap. products, unique proprietary frame level moving point offering compute, capabilities. look differentiation compute you signal ASIC our with sharing to to level up level eventually and ahead, chipset In year

to all expanding the for President deployment is We Dr. Dongyi in pleasure his of the Cepton. responsible of Dongyi of our the as software Company. our look team, the Applications of announce Senior served forward XXXX the lidar. Liao Vice to since Officer of our it leadership With is value Chief software my effort of Technology to previously appointment and contributions growing as

McCord, Mark join and Mark to both me and Advisory new congratulating Technical roles. Board will Cepton's in Please property CTO, Company the in with Chair Dongyi current as of in charge the our intellectual our continue created newly portfolio. serve of their remain will

will principles sensors reliability to to performance, our XXXX Staying cost is more ever must a important. for Cepton our that series true landmark a as achieve be look production. and into we year of transition balance

costs. As on our we sensors focused are enter scale vehicles, delivering also mainstream quality volume grade at hyper

but more only our end, manufacturing production Our focus share complement Koito, our not you volume Tier will series winning brings which automotive collaboration partner, details X efforts In will with expertise to technology. OEM next. Mitch the programs, execution, on additional year decades the of

Mitch Hourtienne

you, Jun. Thank

sites. shipments vehicle automotive of our preproduction as in started to end and indicated, with previous at Starting the the year Jun multiple expanded vehicles have programs, manufacturing multiple

expand our in Celestiq sensor up announcement the late are week GM to the a comprehensive with the models. of ago. a Cruise in advanced of announcement last existing Ultra year kicked-off vehicle additional the to followed and suite system We business award discussions

across in models We additional expect year the announcements more ahead.

being Level out. year in we focus result automotive programs pushed ADAS past seen a have investments X and plus on the industry, as accelerated Over the LX offerings, of

customers, Of top automotive speaking course, I'm our OEMs. about target always XX leading global

to to OEMs approach near the plus similar additional GM with LX in expect or on LX a take deployments system announcements future. We

OEMs. our target We position production very a with remain additional in awards good for

global advanced top We XX in several discussions at this are stage. OEMs with

have past we list competitive production industry the smaller that lidar of seen existing As awards. over companies year, the landscape automotive is a have the across lidar

grade industry, both, as through automotive trust We the development an spans across suppliers having process software OEMs. a extensive over efforts and This have one process few gone Motors. in entire gained and establishing for General development, three launch years with of auto lidar Cepton hardware

we efforts In production Plus awards direct product. Vista winning series X-XXX XXXX, our will launched in newly toward

to in the has of lidar next lot January in a OEMs, vehicle platforms. interest gen launch public Our received hoping among the deploy

deployment lidar outside infrastructure, multimillion leading in the U.S. contract to We the for a believe for smart announced U.S. this is recently the future potential deployments. largest from of operator. tolling to with Turning systems we the contract more a dollar U.S. commercial application, date to and highway scale highways our across

with across Our targeted smaller market. customers partner and applications end in to more strategy systems in extend fragmented our work integrators reach a helps us

will to airports in executing strategy in target on We ahead. focus our the our continue year applications, including

of and with Finally, is be customer to of XX project X a ground deployment Details our top we vehicles near Nova the Cepton supporting application lidar. with autonomous a soon. have forthcoming will this Level range ground safe announce. automotive autonomous OEM vehicle new

So, stay tuned.

turn I'll it now. Hull back to

Hull Xu

Thank you, Mitch.

Fourth achieving XX% revenue the of the based compared of year million increased had was timing $X product period. with total on in consistent results, quarter the prior development And quarter a fourth milestones $X.X prior million, our period. quarter, $X.X for we was year to the those revenue projects. quarter million, with fourth revenue on Starting

driven revenue Our gross product in improved quarter and mix by to shift between primarily margin profit the development XX%, revenues. fourth

GAAP or non-GAAP loss diluted. $X.XX net loss and Fourth per quarter $XX.X million non-GAAP EBITDA $XX.X negative million per or basic $XX.X Fourth share basic share, Fourth was quarter was adjusted diluted. quarter million. was net $X.XX and

revenue million, guidance the year compared revenue XX% represents year. achieved and increase $X.X prior We to of a full our meeting

While consistent our of our positive is increase prior and ongoing prior was efforts revenue consistent our the product to margin a profit Full the X.X% year year, compared at was commercialization products. $X.X our development with reflecting was XX% slightly revenue million, gross year. year-over-year,

full year $XX.X expenses GAAP guidance. our million, operating operating expense Our were meeting

year our our for under and one-time Excluding the well million, transactional $XX.X non-cash guide. costs, items, was OpEx operating expenses

net million $X.X $X.XX or share per and Full diluted. basic year was income GAAP

per $XX.X million. negative net non-GAAP million and was years loss was for $XX.X $X.XX basic diluted. share Non-GAAP or For year adjusted the EBITDA

to As approximately XX, of available approximately XXXX, of of $XX million in December Park up short-term Capital. from million investments consists had equity and $XX $XXX we liquidity commitment million. purchase liquidity to available cash and a Lincoln in Total

preferred after from we investment transaction. approval January, shareholder stock the closed for $XXX obtaining In the million Koito

dividend from an the rate initial stock As be will a year date the At will and proceeds X.XX% carry X.XX% close, and in increasing to our reminder, if paid a approximately term of or from convertible paid preferred transaction issuance if use the price to $X.XXX conversion at loan our cash in Koito, repay after beginning $XX of equivalent the million. one kind cash cash. we'll outstanding

equity commitment launch to available $XXX Park Capital, to in $XX support up and current Including liquidity and to up liquidity of from sufficient believe ramp approximately million we available production Lincoln the which the increases purchase our to million, provides series award. cash

and year to of full between as unit to begins the we and the guidance, $XX back in million, $XX year weighted ramp. half production Turning expecting series revenue we're XXXX million launch volume

be positive year. the to margin gross expect for We

operating year to be or On line and the between we cost full that in XXXX expenses million of million. $XX expect side, with $XX

our a public have achievements year first in many notable as We company.

growth held look resources follow. production with with to of we With We look be to financial transaction, year. have to annual in the sufficient our launch stock preferred at the to of connecting we to next forward believe as May Koito of series meeting event details fund stockholders investors our closing the this stage we

for Now, I’d up call the to questions. open like

Operator

[Operator with Tom comes Instructions] question RBC. go ahead. First from Please Narayan

Tom Narayan

press GM the announcement. on congratulations First,

to question first has guidance. XXXX the The do with

incremental what is driving You in revenue in million is maybe million in million understand looks $X.X 'XX, just new $XX and infrastructure breakout? growth in GM, XXXX. maybe to like increasing Is you this what revenue, it smart $XX us help the OEM the organic Could here? to have mostly guidance a well? GM, further auto beyond as wins assuming Maybe or it

Hull Xu

do provide more on color our question. Yes, bit for a me to let Tom, guidance. little Happy Yes. that. thanks the

short is the GM it's that So, the primarily program. it by driven of

it. some So numbers provide just behind to

shipments, months And to terms program. units. XX% the visibility. about do have of Right in a now, little XX% more of series bit we X,XXX have unit visibility XXXX, you smart So that's and infrastructure. we When to programs, you for automotive into production shipped have six

hands XX,XXX have units. we purchase our now right in of So, orders over

that's to forward months. six So, going

is unit relation increase a last units. significant in of year's So, shipments, terms to this in

that's -- program automotive. the just just actually automotive GM in that's So,

tolling electronic And in had provider occur The won an announced will we multimillion turning that to contract smart dollar infrastructure, year. that of this we the this U.S. from bulk

that a So, gives confidence Did of I questions, also us lot our answer your Tom? guidance. in

Tom Narayan

it not in And revenues sounds for piece OEM is not yes. for are guidance? so new -- you assuming Yes, the there then, 'XX auto beyond like GM the

Hull Xu

right? it years program, will large win not real We to some, OEMs, So, but going isn't meaningful, with take GM be when of through. compares automotive It's the we have immediate. ramp couple going to the work as programs to to a additional

are to we the discussion ramp OEMs. meantime, next will global stages forms will in GM there to of those, XX be the the the year So, be not maybe some be of wise other able in with large is real even revenue toward But in NREs. GM will higher. program. we year be this top going But volume match and And just the late

Tom Narayan

GM. And -- It of of and handful space. like a today seems to you it. then before in winners who lidar could. kind there is us Got winning, it's there seems are with in my I if one, kind solidifying There of be guys like second the today,

kind let's Just with in shares you in market say many, of years happening, kind just maybe OEMs? do Do see now? Yes, dominant you out consolidation do equal across many you players, curious or how you playing from see five of players the couple eyes? this see of your with a how industry just see

Jun Pei

this bringing start that Yes. the additional follow the industry. to consolidation with maybe Tom. fact But Mitch. winners through we right is, marketplace. into winners sophisticated continue automotive from I'll some is question, already in comments as those well here. because The of the the process go happening, can plain will it program now defined Jun Thanks, component with all see be automotive a

hand. takes So, indeed, all group yes be winner it a concentrated into people it's that by will one position. for But not counted a be basically sure, can of small

Mitch Hourtienne

vehicles right, the puts wins late have we the the just have road, year. this claims once you just for of on that over Tom, units point, about, early proof companies Mitch. year, next is these this add, design so XX,XXX for them on Yes. year, talked this projections. see road, I'll made really and the which Hull final that That's orders

vehicle, that's replace windshield, what into working or that Once the are competitor we for it's very that to especially we hard the So, get like are integrated are towards. behind socket. location any you to

wins So, years, the on are these XX minimum. order OEMs X with really design of to

Tom Narayan

Right.

an And you commoditized so for space, a negative do great for or is it's thing, of you sorry, all, vehicles comes the have could incentive beneficiaries that where, have not and rear-view one come that becomes with to you lidar because and better a required, do take of competitors winner world let's where more guys, environment see guys of I just like tons you pricing developing, sort that we of in an becomes could that? how or or create perhaps guys mirrors, is, right, How it out down? positive win kind airbags, for it for as but that last into safety be view that say,

Jun Pei

it's what car could the if be device, lidar thing a to -- they regulated a have safety to referring and think for good into in that's if to, having commonplace already that's Well, even I a us. always cars, extent you're

really Mitch yourself to We’re get a word to very one the it's in really, a you runners front through like use business, when actually, business. lidar get in socket long has hard said, the there, into the automotive of to process go commoditized, And established.

So, a to long this we're into as is enjoy benefit. going foothold having as space, the space that expanding,

Mitch Hourtienne

Yes.

so I’d follow suppliers from. XX I had a qualified them it'll establish to as OEMs where a think, of called years add, to to XX radar commoditized It similar path took camera. handful just choose and

XX So, at least I say, XX far years. we're I think, would to from very that situation,

So, to these next going winners the are for the winners be that launch decade.

Hull Xu

And ASP front. Yes. add on I'll the

our question doing expect technology Tom, think, your that's the of becomes ASP valley, also. I proliferated, that as as good some ASIC, what And We at, the bring down. point will work we right? current down to already a dramatically which come part generation the we're have to version company costing and our I'll which our was in component our this in do to fact is, engineering products. the cost that And out reduce second taped of in next and

Operator

The with Instructions] Morgan. [Operator next question Chatterjee comes Please JP from Samik ahead. go

Samik Chatterjee

start, you pipeline XX,XXX you I series if there. production to the -- order can guess, the six with that as months Hull, visibility I think about units you visibility the relation mentioned production and of in I mentioned, have

of give on of you Just solution does any options details in OEM volume their the is of take more six-month thinking of -- relation the wondering have what should if in ADAS planning a that follow-up on vehicles, you're about read stuff era sort series I over that that to unit to on? a is you what that the of And sort quick And give the that that in relative you. stuff does as as terms rate Thank the well. to relation OEM attach platforms for about production XXk in more the a visibility we terms little period? that

Mitch Hourtienne

I think, on I can color offer that. some

have for first units the platforms talking that So, we just GM. covers is orders Hull of about, at couple the That that.

year, could bit take XXX% end lower, which be but will models, luxury be until platform. where there don't next rate a the mix versus up volume start take higher could whether the high it's rates, little so, they’re a of the to And be vehicle, mid-grade

we insight surprising original the think far firm the our anything GM. yes, getting or orders, at so I think but as we're So I more obviously don't assumptions get vehicle platforms nine there's from from different

Samik Chatterjee

Okay.

rate pretty on So initially I platforms make you're high in on clarify the mean, to launching XXXX? peak just is that a XX,XXX that -- that the you're platforms, implying

Mitch Hourtienne

Yes, vehicles. the first few on Yes.

Samik Chatterjee

GM milestones peers of earning sort any of Wondering that something terms the color just I you've of XXXX. in XXXX. of I front? been of expansion expect sort with terms this through think season XXXX, wins, targeting they that of milestones in -- new OEMs, you're know, setting against, customer But opportunity for of of being secondly, et for of for number be you just of then in that cetera sort should we And have you're get reported about any additions, tracking on who to most your talked sort of sort targeting have number

Mitch Hourtienne

Yes.

can that, one than I'll of in add Hull at additional as again, top But, any answer the OEMs. right the have you say we So, adding goal OEMs I'd once that, is more and now late year, then XX. two Mitch, this or But stages mentioned, in comments. always we're this the

And decisions so, or so. six make to them we do really next within months expect the

there course, Of if details Cruise. OEM. company of GM from a the at And you our timing changes. can look have lidar revealed Ultra been target no customers, dictate on an lot more has

So valid validation. a that's public

down next. Sony. months we also ADAS, Honda so with next shut three, -- venture ago, announced a down four on or Argo joint they're but and may Ford they doubling BlueCruise Hony gen expect said

Toyota new a tech. adopting then And step CEO. that's ADAS just in So changed

that Korea So, would very I and in discussion, to we're there's lot in discussion sometimes their much sourcing delays we're the the here. a of Europe, some expand all and the major OEMs at in movement even the decisions But of sourcing. that

Operator

Hallum. with ahead. go from Richard Craig Next Please question comes Shannon

Richard Shannon

half you think a can going first here loaded this mentioned half up XXXX you I'm Maybe way how the just the regarding sense bigger get of will question much I second asked a of Hull, the profile year. or what first very to to think than backend here? here. the more some give kind on I expecting you're revenue like, be to follow clarity that, being

Hull Xu

Yes.

So, little take the bit nonlinear of a fashion. ramp does

the half. say, is backend probably I'd So, the much first twice as as

Richard Shannon

then, or in how at you're least in here, characterize of lead that are in And many you terms order models that can or now, your clarify your book? shipping into units covered OEM XX,XXX

Mitch Hourtienne

are also staged It’s models, they're shipments two. have, models. vehicle same all the into more of three don't timing, number the they orders we they right? multiple or that Yes. yes, same launch than preproduction two hard models. month. right The cover so in the now And But going Like

Richard Shannon

the so. Right. be I throughout staged year they'd figured

in helpful dynamic That's here. Okay. this understanding

Let's see here.

I earnings of RFIs a talked think in didn't to go RFQ. hear you're the last had to couple I to you that here. effect call, hoping about about you language talk that

just some Mitch, you describe mentioned to I language relationship that you be to the maybe think, advanced stage different situations. appear used some competition. in Then those without also engagement

on So, two first I advanced that that those at then officially have or you make and can that’d be great. if guess, any RFQs engagement the RFIs, on not, any competition didn't statements moved

Mitch Hourtienne

Sure, been both sure. there those. Yes, on has of some progress

So the RFQ advanced another with major RFIs, phase the first on OEM we’ve recently. point yes, on

are in them. with So, the we RFQ phase much very

that has General point this where made at into vehicle about point, duration second evolved OEM, I we’re The models about and lead the that our advanced that's discussions Motors. with additional extended

Richard Shannon

call someone last still hasn't about the So know in mentioned -- mentioned I been model on you think And past year Okay. year haven't mentioned so 'XX? I 'XX? beyond, that, extended earnings there’s you been model it's there but you discussions, -- the

Mitch Hourtienne

That's right. Yes.

Richard Shannon

rates guess ones compete of well two in your just similar Korea one know last how competitive here you Maybe as are or few in That Tier office as about the think able guess at Munich. well the competitive market in think up of staying the pretty kind flat, peers I here. manage But guide year. Okay. a here, of OpEx keeping to kind especially it I being across of and public least done flat of Europe Mitch, able OpEx are? at engagements your your do in spending do you a that But well, on range at opening How helpful. context year? announced well, your the mentioned, I have and one keeping kind above your question in in what in other you OpEx you are with also Xs Asia some your ago with there. you world, I where I months least lidar this with thinking here to with you the is

Hull Xu

Yes.

think focused. So the is of I word one operative

very we they’ve So, are XX we OEMs, while maybe really got but global say, focused much just other with wins others are top Top the -- XX. OEMs, on could

relationship actually office little North much is key of months. And Koito, recent because more So, are in in we’ve while for we geography. very in Europe I quite an with we’ve our and a plugged America you there. a now, think Europe, know had Japan, bit activity gone

I success European maybe think of GM, can that's tractions. had the we’ve about talk with OEM owing some the Mitch to

Mitch Hourtienne

Yes.

I more think, Richard, we lot and a lot less with Koito can of our General do Motors. a because competition with relationship than the

Asia a in is Koito doing and So, Japan region. development, the more business the end lot on front especially

we a them. about divulging more about rely General is, are where public especially understand solution. So, and with And announcements more lidar this can details these OEMs other Motors now, Cepton viewing system, lot on

have working on that's right, big with are but So, with. companies two doing are you we more this are because we less, we

Richard Shannon

Okay.

for you much. very all that's I'll me. questions think guys. the I jump Thank offline,

Operator

Please The Growth comes go Capital. next [indiscernible] question ahead. from

Unidentified Analyst

actual of to expect questions at couple I when just ask Cepton’s to for see cars a dealerships. wanted of first the lidar Just using me. you GM's batch

Mitch Hourtienne

GM mean, you dealership. on at revealed first I stage. the that's Celestiq last not know July Yes. publicly But a

target of at vehicles is before the the the be will dealerships. that end year So, these

is This on Of vehicle. General model on that's we're relying believe what hitting I But they've Motors already own ‘XX a year internal their course, revealed. milestones.

Hull Xu

the XX,XXX. we just numbers have the we Actually, units that to XX,XXX we in PO year. to ship And in in this well back Yes. over have that be the over refer need hand I'll that number final hand, will

Celestiqs units wouldn't road. if handful two of on you put So, many a are ordering be that only they the if together,

Unidentified Analyst

color. That a lot of Thanks. gives Okay.

comment to situation comment at is you all the ask the other or pressure. latest you to Can this all? share I regarding price wanted if Can SVB situation? the Bank The at at all was thing related Signature

Hull Xu

really comment our But could regards to own some share can’t we information. We share with on price. SVB,

operating have loan the been has did SVB, a the SVB was small company that ever back the were But back, a when since a So, went bank was long ago. Company's we with several company. private which the And we paid in filing process. through years time

that's we're sure -- But, not or But with of of we bank needs operating now, it the as that related other and in already probably not. be take is accounts national So, shouldn't if funds. safest already. really over of put a our terms SVB concern. operational to doing open have that place can banks

Operator

The comes Galinko next from Maxim. with question Matthew

Matthew Galinko

Maybe you the guess visibility with having your talked if guidance, I could about the primary -- we start customer. with about six-month

how So, into fourth that how thinking How window? quarter factors about think are provided? you guidance of constructing about do and you the XXXX the sort or six-month beyond

Hull Xu

Sure.

-- so, we in than of visibility And be POs until what second have to we have the that more So have the right, expect half into first terms volume received. the is to half. September, we

expect we previous quarter be than So will the the now right volume higher last quarters.

Mitch Hourtienne

shipments the the larger capacity of year. is capacity one putting And than much making OEM right. units actual we're checkpoints for That's this in demonstrating is Yes. place the we’re obviously

Matthew Galinko

for timeline least I mentioned you at most the then, revenue the deal expand initial that to think or in mentioned And the the potential potential current think within What's expansion? wins. phases of I tolling that XXXX. in you your system

how see within and would win? when expansion So, that we

Mitch Hourtienne

have already sections first an tolling to additional project, covers, couple the projects install. should quicker. if Yes. acquisition the believe, win there. So different be Those three we months or next four at order XX-month across final on But install long you six should a That win to It's look of highway be roughly from to customer, right? I the to states. three

Hull Xu

that To of add probably that initial has. this covers highways Yes. this operator XX% the order

projects this to potential bit follow and this launches do. So, quite there's on a once of

Matthew Galinko

of there I moving period of scale is of that the sense guess a to through it there's more to moving, next a to XX% performance more? at want or stopping going see or, more And quickly sort that what's portfolio, before works that of -- sort through they're how that them from want

Mitch Hourtienne

is different the all by performance the each value the are so state. And The end you states. adopting customer, proven, decision. is obviously within state by Department a The are three But tech, lag. states of state commercials recognized it's already Yes. new more know, aggressive proven Transportation that as the really some some

some have Some processes, expedited processes. slower have

So, is of sourcing the just process states and technology adopting the item the main gating additional this.

Jun Pei

that probably a probably final gets to Yes, funding I is And, bill, think and piece capital as well. the bit rolled that's that'll available infrastructure the operators. these out, as help

Operator

is from question a The next Craig Shannon Richard follow-up with Hallum.

Richard Shannon

What don't of we here, some your kind do about exit gross But of know we a Maybe or as kind of margin some be type year? the volumes do throughout infrastructure the get one gain here. in on through and help number? if gross there's margins? that I us want qualify think rate of of mix you velocity NRE we Obviously, or of that two stuff auto product some for way, is and guidance but know a kind exit quantify go I'd think something and to sense to as questions some here. here. think Hull, positive I you we love mentioned this your think of as how you product to

Hull Xu

Tough question. Good answer. one to Richard. Thanks, Yes.

revenue of mix is there you versus mentioned, a revenue. development As product

revenue, and ASP really depends on, cost, for software on X,XXX. more automotive, or more, typically, it we at is running now, So, below ASP. around development the the development something it also or launching in and else. right XX% also Product depends it's in future are the BOM revenue, cost

that ASP smart take But As bit targeting before we somewhere And higher it will a are years be reach below. of is automotive. XXX that then, volume. scales, a or couple we than ASP to near infrastructure quite

but our of we come X,XXX. expect very gradually, little or that For be expect example, quite higher do ASP to a around bit, bit do X,XXX smart than infrastructure down to that year this still ASP last infrastructure And smart We somewhere year, gradually. a automotive.

So, what what can we all play into right picture. to we gross margin And guided is, -- I these of now. we the feel think, confidence in where

Richard Shannon

Okay.

would that my Thank think you question. be I only much.

Hull Xu

Thanks. Okay.

Operator

question is go Please ahead. The Gus from with Northland. next Richard

Gus Richard

idea for be you just NRE, question. question. and year going is give taking follow rough the this Can between my Yes. what us auto Richard's to mix infrastructure? Thanks on to And a of

Hull Xu

Yes.

right there's now. our not NRE, lot of a guidance, So, in

additional So NRE be will upside.

And auto it's So, I'd essentially, for the revenue. of auto maybe versus X of majority terms in X:X of product infra terms in is smart kind say, revenue. then, for X of the smart infra, relationship, guide

Gus Richard

And to of -- OpEx just have you year be R&D and major sort last had wondering tape-out do flat? or you the it. year, is a and don't flat, be assuming I'm your you because and R&D a then Got flat tape-out how of kind hold expected will am that, I this

Jun Pei

of is in do it's expect there of heard as efficient came operation product just new we again, is a this from as of continuous not slowdown out lot a Well, you and you There tape-outs lot it development. has And tape-out. extremely terms chips R&D -- Jun very have been We new But changes. also efficient place improvement, with This or budget. always ASIC CES, -- here. any here, for call the actually been has a operating our our actually research Gus. a that products, always in new

Some MMT technology. of beyond goes our them even

budget. these of out existing came the of All

is use no to waste just have charge we if can as to the of So, we more just now. forward best reason money, make we what are is. going There

Mitch Hourtienne

launching to are This building upon are is add, we that right. already I’ll something Mitch. we just

our product, because wise a So our GM CES products, on original OpEx and fraction investments can we like at ASICs of are incremental launched new the only software we reuse development. from

Gus Richard

then And me. for last one

is, I mentioned vehicle. color you're vehicle there? what think Any you that a of on to it ground as Level is working X color any -- ground kind

Mitch Hourtienne

It'll this -- show mean, it in I operates will a It's revealed. at Yes. more trade being bit. little be A week demonstrated. outside. sites remote be details

and subsidiary a gets construction But we XX vehicle a So details week. to a takes autonomous that's revealed more that auto of ground top this basically supplies it sites. company, why comment it's Level materials couldn't remote X yes, until

Operator

As back would no like Jun to remarks. to any Pei I our concludes this we further the conference closing turn session. questions, over have question-and-answer for

Jun Pei

Okay.

our Cepton. another good execution up, certainly Just very past OEM and progress quarter it’s good to year for on of wrap a program it

As we please levels move higher forward as Thank with higher intensity, you. bring attention speed additional to strive we of automotive industry. and to the safety to pay us

Operator

The you conference attending today's has for concluded. presentation. Thank now

disconnect. now may You

Cepton (CPTN) 14 Mar 232022 Q4 Earnings call transcript