CPTN - Earnings call 3 2023

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Operator

Hello, and welcome to the Third Quarter 2023 Cepton Inc. Business Update and Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Hull Xu, Chief Financial Officer. Please go ahead.

Hull Xu

to Quarter welcome and Earnings and Update. Business you, Cepton's XXXX Third Call Thank are Co-Founder Jun Officer; today me With Pei, Hourtienne, Commercial and and Chief Officer. Mitch Executive Chief

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

remind like statements safe this company's financial the statements I'd statements harbor in expected regarding comments conference These call everyone the on the release earnings our and to that the current slides relating to made expectations may and performance operational contained statements periods. call. the based in for and future include forward-looking this that are forward-looking are to company's accompany subject

may implied of statements from the Actual materially those described during future for earnings uncertainties release or or with risks, to periods due those other filings and U.S. factors, the or expressed discussed results in those call including SEC. forward-looking in differ a these today's by our number

any of not required commitment these are a update result undertaking We law. as future statements as except events, to by

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

to like turn over Jun. I'd Now call to the

Jun Pei

XXXX Thank Thank for Earnings you, you Quarter Cepton's Call. joining and Hull, Third everyone. good afternoon,

with you financial and you. We review with will our results update business quarter provide a third

a efforts, part Officer. his look contributions on to and He his his of congratulate our Before has that, like to development promotion role. to new I'd Chief in continued forward we business Commercial critical been Mitch

proud product that I'm new record a company announce have the revenue. for to quarter, quarterly we delivered straight second For

milestones customers deliver we quarter, highest to continue our we end units, on number to startup production. the lidar prepare automotive as This shipped for to of

we AUTOSAR For scale targets. customers. production, our cybersecurity we straight capability as one internal to see to I'm requirements our rigid efforts the industry. the our passed set software software production of integrating into demands our quarter, of fully proud revenue that production have in second milestone the of the meet demonstrate met translate series and to We're beginning the launch under for report most final of automotive we

industry We're be the of that the qualified. companies to proud series first one production lidar in is

that some start-up volume ready for stands industry automotive will the volume confident through in requirements, headwinds known, and delays. are near which be production anticipated the resulted some We're in recent customer our Cepton was these to working our preparing has efforts appreciated While meet future. publicly launch experienced lead fully in OEM production vehicle

with seen have addition to our new side, smart tolling we of application tolling the existing infrastructure we flourish continue operator tolling a On contracts. the fulfill smart the customer, smart while

partnership In addition, to airports for Indoor Labs. smart application we with in support the continue

production these in few for months. deployment expect mature next the to into projects We orders commercial

to on technology. Moving the

our into our automotive sensor is sensors. enables matching key suite automotive hardware ADAS work In automotive that Through our collaboration Ethernet-based domain solutions have broader a our application development the can integrate validation our software extensive software where development for with teams modality, plug-and-play lidar has expertise important best-in-class stack. customers, the work our software software increasingly developed with Our become customers. OEM

in we extends have as manufacturing control visibility to capabilities our domain all processes so as a line both well development sensors life software of stages the Our cycle. quality the expertise production

and I'll that, Cepton with position and yet sourcing second additional automotive on delivered horizon. in As win turn it quarter for our industry to efforts build Mitch we good award customer have production series with on remains continuing we're to programs. a over in revenue. record With discussed for in decisions details pursuing the quarters, to prior steadfast business remains in opportunities another our

Mitch Hourtienne

release Jun. tools software certain to production in and OEM fine-tuning you, software on With vehicle the software and the Thank result at OEM contracted our lead delay milestones for was customer, to readiness. continued The has level. validation products launch of a meeting vehicle development, Cepton of fine-tune models wanting deliver system

lidar. has our in line automotive our the Vista-X Additionally, behind of XX the publicly manufacturing partner, Manufacturing automotive production to support windshield Koito their Japan grade unveiled

as programs. decision Thanks of of for with and macroeconomic the we end our headwinds result by for have customer efforts, major short-range lidar OEMs a further year OEM This to reported ready the decision lidars are decision lidar, trucking we sourcing year. we and discussion our our sourcing our our lidar pursue entered delayed automotive is final vehicle expected and last discussions the instructions rollouts somewhat major same We've with industry. await also final to the go by the activity, expected our sourcing quarter. RFI also RFQ the been long-range customer the on scaling continued has as in for On from and new as development a OEM of end remain the in another

more We hope to months upcoming in about share production the awards. details sourcing

against mentioned, contract as ship commercial side, the infrastructure continue smart application. largest in the Jun our we tolling On to

geographic states reach we U.S. a new new added lidars as well of operator expanding as into internationally. Cepton quarter, our This customer, tolling

passenger we'll maturity applications. York's announce improvement efficiency traffic wins partner, The initial application Lab, Francisco and into our We are indoor expanding lidar use sensors design optimization operations both Indoor and also airports. of happy outdoor with but for airport security Denver and our case New be with of be will management, and Tampa, the to in San at JFK, projects the continued

expect deployment to phases, enter it shipping now. sensors I'll orders this started coming We quarters. and to airports internationally turn fill back domestically quarter, to and we these the both decision and several in Hull other

Hull Xu

compared $X.X quarter Starting up million, Mitch. an comparable period revenue compared the quarter. Product increase quarter $X.X you, XX% and previous period third the to a for results. our XXX% an the million, and prior to company to was new compared up quarter for record this Thank of Total our with was previous XXX% to prior year year the increase XX% our of compared revenue quarter.

Our to shipment customers. revenue the automotive driven growth product development in strong increase was volumes this OEM an was minimal There by revenue quarter.

record We fixed achieved basis a gross on primarily XX% a leverage between by unit level shift of mix customers on GAAP of positive infrastructure margin automotive shipments. smart revenue and and cost a driven

was Third quarter basic share million share per or million net or net diluted. $XX.X was per basic GAAP Non-GAAP diluted. $X.XX loss $X.X $X.XX loss and and

we reverse so quarter all been have share per one-for-ten split stock reminder, completed As adjusted announced for previously this purposes. historical a our metrics comparative

adjusted Third million. $X.X quarter was non-GAAP EBITDA negative

and As approximately short-term and of September million in investments $XX had XX, cash no debt. XXXX, we

million million, our $X the result business. impact start of and by expect lead between discipline and We a now we on for of below guidance year As driven production and revenue are reflect delay, higher year operating the be operating full expenses. be to we million our $XX our revising OEM our efficiencies $XX to expect to non-GAAP our full expenses increased on year

like questions. to And for open call the with up that, I'd

Operator

Capital Markets. Today's comes first with Narayan question Instructions] Tom [Operator RBC from

Gautam Narayan

Mitch.

with question the there. on, out major First is that guess, I called delay the OEM

first about OEM in understanding question I what that issues well. And also I mean, is ambitions guess are I light more there, just and out just talked that, How their EV they've question. serious. to there. is as delay has also delays the their been having you think, with convicted matter curious, of the That's that robotaxi Just something a business are business opposed of pushing a as schedule their

Mitch Hourtienne

Tom. I Yes. This can speak Thanks, is to that. Mitch.

far So of we details. of in can't terms get out front the in too OEM

and for months little launch. Michael we the So delay. going bit reflected about XX. have software talked now system information it's vehicle update fact we'll a October organization Abbott in earnings The they're by new the And in doing defer today. level. This the that fine-tuning release feature that QX we've some our to is specific and and revenue They led them be on a at to few indicated was on the GM's details vehicle software

Hull Xu

Tom, this is Hull.

Just question. to answer to your add

Cepton's in You're GM asking committed we to very are terms program? of committed we of From that program. supporting point are that how view, in

changed. on So that has nothing

Gautam Narayan

Okay. like an not on to that more end your is completely, It's a mean, point, there face the I -- that. risk indication it's there's is about there's no of And right? a delay

Hull Xu

correct. you for Yes. That transcript earnings It's is be And a can to to call refer GM's meant really delay. that.

Gautam Narayan

to about that what just And Okay. OEM we can OEM, sense of magnitude or understand potential order talked Mitch, give anything there? you other a the anything about then of

Mitch Hourtienne

on there's been further bigger Yes. I the win. you're of our than process the production through the we same the indicated quarter. maybe this out that OEM of. aware series as end We delays initial, before headwinds our It's year. of in even decision the decision even final small expect size through because still the the But of relatively market a advanced some favorable some initial

Gautam Narayan

per to of to is a committed macro concern lidar narrative And higher last there OEMs is been like -- of like slowed is is in What more this see might I've try costs, will it content addition the mean, macroeconomic kind as backdrop narrative those sense I the in a vehicle. opposed -- Okay. technologies. sounds labor you OEMs is more there -- falls your before backdrop, think one, mean I be outright a impacting -- mix sorts my do may and cancellations, you like. if obviously, it that how for on just of down that delays of I reduce in mean EV -- some of asking what do lidar that how to appetite price vehicle, of they with

Mitch Hourtienne

question. good figure OEM believe Yes. customers. to no lidar let's the how is of transitory We're That's We and target reorg Thanks, part launch. as is safety. a I engaged they very Tom. of our want remember, ending all appetite more There's for suite. impact these still delays mean, of this they safety a out with

strictly vehicles some of comment, our that So also tied it's to with are EVs vehicles. ICE contracted not

the is to the we by investments need for don't is think see increase. launch. the delay safety So they a this going out and We to increased that and figure And continue how reorganize OEMs away. as real,

Hull Xu

are we're EV war, going because I'll is also a Since macro down the here. about OEMs going industry to definitely right, margin And add, On labor into industry, right? price automotive ASP trend, Tesla. that the led side, the of talking coming And the up. cost is whole is Tom Yes. and by compress and going

So make optional margin. actually that's So on going what think equipment. the is about And the to profit some those if a equipment, could initially, money they necessity actually for right? safety is are but lidar, where optional you they be make

Operator

The next question comes WestPark Kevin Garrigan with from Capital.

Kevin Garrigan

progress. the on Congrats

delays of seeing automotive or doing Are you're lot that that mentioned nearly as that the are OEMs they had car with companies you engines? developing EVs. Are focusing OEMs answer, combustion are as a kind internal delayed internal on previous your platforms. more EV in So the not are more

Mitch Hourtienne

Mitch. That's is a Kevin. good Yes. question, This

to maintain and the across So to in the earnings transitioning They're but ICE traditional about GM had Barra and vehicles. OEMs in both, going the segment, talked the they from EV, it have traction luxury ICE release that EV. right? Mary expands they're about gained ICE the And

delays I one EVs other, there been up-and-coming or or wouldn't companies. on versus traditional So companies the ICE say versus way has

Hull the I to was resorts back megatrend this talking about. think

Hull Xu

as months also that events all not EV of these that industry last automobile is may associated are is obvious in the it's of. resolved, pretty And the just with macro be specific. aware finally And of couple the you Yes.

kind it's the board. of So across

X here. a not effect or the macro really It's it's way So other.

Mitch Hourtienne

attention vehicles right? priority EV, kind EV it recent Yes. that some does time, the vehicles OEM's and those And the EV, bring And having some on has couple of ICE the maybe refocus for although OEMs technology their priorities, changes a of been years. to add I'd standard. headwind up quite the of on

And ICE So thing platforms. take that vehicles time. platform are award both our EV good and would also we with some awarded internally the that is

Kevin Garrigan

is big of Okay. that color. Perfect. fully perception cybersecurity talking you're point software. integrating cybersecurity systems software? you lidar a and appreciate in How then dealing with No, And mentioned I

Mitch Hourtienne

perception Yes. automotive. stakes through mean, I rigid was it's of I a table go could mean, element requirements. accessed lidar cybersecurity cybersecurity for launching pose similar very threat is to if a externally radar, for any that cameras, it

talked OEM, It's the Our integrating rigid requirements. about industry. General front. most in we finally, that that's on a all requirement And lead notable has one what the of Motors those today,

Operator

is question from next Group. with Matthew Galinko The Maxim

Matthew Galinko

new does Can that Or does about -- at vehicle your with we conversations decisions platforms to or how that decisions delay guess, primary and the -- you delay those I to are further respect or progressing? to on OEM? change any automotive that your can talk customer, programs

Mitch Hourtienne

Mitch. This question. is good Matt, Yes,

been OEM in the target we're defer We right? on many have engaged on case. with too Motors, contracted specifics awarded into to We our course. can't to And vehicles, the with that customers. General We've of concentrated engaged We're still vehicles. get still and

vehicles, So at we're programs, additional just I additional leave constantly have talking I think about it that. to features,

Hull Xu

from been there basically based is months way on And GM other. on is these release, the or of communication have delay and few the getting no platforms the further vehicle one we their discussion really

Matthew Galinko

Got it.

of decided you're in being, Okay. automotive end Are for the is I process in decision of the expect along follow-ups. the the guess, decisioning expect programs end being? Or any the I sort guess, between year. far that One now time the you that past X XXXX? quick that other be there that of you to and

Mitch Hourtienne

X opportunity Nova. short-range phase on European we've the final That's in major for major of we're RFQ decision working year. called is been before lidar trucking the Yes. end There's This expect the OEM. and Mitch. of And other a that our

Matthew Galinko

in talk the today? able non-truck that's much you're about to But just pretty XXXX, for Okay. automotive, all

Mitch Hourtienne

Okay.

long-range You're sourcing XXXX. asking lidar in automotive other

Matthew Galinko

Yes.

Mitch Hourtienne

the Yes. we immediate about as but RFI the year, There's OEMs the in anything pipeline. as always will in for next couple think don't right I talked some be now. There's there's sourcings additional sure. there phase today,

Matthew Galinko

out point. give a I on that what it. it. Can what opportunities. not the at expect preliminary looking about delays you All really right. out and like this expanding on give the side, kind last maybe side. assume And automotive that of off smart building on of sounds is me But pipeline, of question means business given us us have And at for maybe with base for a you you infrastructure the you're to XXXX, Got a of what XXXX. the the infrastructure just side in in sense It the just talk place should that you're preview to we can baseline

Mitch Hourtienne

Today, another think I contract this is our that the can talked XXXX, we've customer space. earlier X fulfilling We see we in we year. comment we been the that a tolling tolling about landed updated, in have I major make multimillion-dollar airport to the multiple customer whereas and range, I'll contracts all just we're say airport we just size -- filled multimillion be the offering in contract fulfilling more contracts XXXX, X the basically details that on installations. are dollar of in in we expect major XXXX. we

Operator

The from Richard Craig-Hallum. comes next question Shannon with

Richard Shannon

here, the to you I talked this, on referring is think so to heard referring decisions sourcing this on about another you OEM don't one? I I think here about you to X Jumped of late of to clearly question your up of award release I X sorry And I'm call you're you during very I the page but the follow when think that that listed a it's that want the bigger vehicle repeating ramp if the than size decided and here initial answer X your the on an Q&A. current an that of Is it's the year? said calendar And start the final end be expect award. before press for major perhaps front

Mitch Hourtienne

That's is exactly right. were about. Mitch. Yes, talking this Richard, the one you're we

Richard Shannon

the stage are one there's only of competition or present? still you Okay. are you aware And whether at this

Mitch Hourtienne

are the it's down in process We've months on X comment there know if for I this now. can't stage. others, been final to we

or X more no there's at So this than company. likely stage, X

Richard Shannon

and signs been delays decisions seeing And on be dynamic some want presenting software issues those any Fair that terms generally industry to industry. in issues the integration if including I'm up here sensor are to that lidar dynamic? solved? on come here, broader have that wondering any the you're Okay. seems further suite, across of up in have of of I this follow because those seeing sourcing And enough. the you

Mitch Hourtienne

Yes.

think, about of is centers. I the Jun today one thing integration Ethernet-based talked

output, radars have lidars the have of Ethernet lot Ethernet an most a output. newest So an

that's really of developed GM particular validation perception for software contract. OEM a working a not Outside that, there's which that's we're taking challenge the software this we've but state-of-the-art, to tools side, So overcome. the big program care of suite on of

think news seeing what I different think So another other past I isn't challenging. about of that year. And you're from other you're that's from much area that's the today some talking the over OEMs

Hull Xu

the So is indeed integration it's ADAS software to lidar. really specific but challenging, not

these but that entire will as the it see few entire actually and lidar there in we make the procedures of lidar, the part of the it's In in our in fact, validation with integration, ADAS. over of and certainly much bottleneck to tools make to certainly And pain, stack can shine industry. months. we a it Cepton, try make very -- of Ethernet-based are you not growing But in challenges stack be the we

Richard Shannon

question One enough. line the I'll last here. jump Fair me, Okay. on from and

would than be first like calendar passage interesting that Or fact long-range in your is on what frame could farther launching time next-gen stays and to the you're what's on this here everything launch it 'XX? for something about your C-sample the your lidar, assuming that? you'd production? technology, track then in releases getting press happen be Another track Is time or out to and in

Mitch Hourtienne

'XX and half that the continue of and that. with of on Yes. definitely The and beyond. working lead starting first to ready customers year on even to calendar be next next-gen through their we'll Koito sample some OEMs, will candidate We're for process year demonstrate some the of already

Operator

from is Narayan RBC question Markets. next follow-up a with Capital The Tom

Gautam Narayan

to an just of like a road? all wonder wondering if was kind use about, script I X+, the about gives maybe camera. those you like something greater follow-up you And industry if And stats. is something potential this could Hull right Is safety addition guys further on Tesla to a that you the do guys numbers But in that could offerings. had down flip FSD see just you Level lobbying to even something maybe or maybe. do just seen lobby saying We've I mandate you talking catalyst of could X, as potentially lobby Or you regulators? it's that guys something now, were lidar the the I radar optionality on safety. Actually, lidar Level but that was regulators for notoriously

think I the safer regular than like is their product the on road. car Xx

on yes, topic mandatory. regulators lobbying this to that could that of make happen? you that greater So just Is think something

Mitch Hourtienne

for Thanks definitely. Yes, the That's great point. question. a

the I topics, service fact, a Department meeting have seatbelts did of But safety ago couple of lidar a the a of vehicle these whether it's all and months centered vehicles do or over about with infrastructure airbags safety. In of broader the in but officials we taking absolutely, safety see it's safety, of Transportation or around and cameras maybe some time. path

So the goes of on driving has are and we're down that to come up, And the right? period we prerequisite a over also that's working toward. that's economics, time. our cost exactly cost time. what exactly performance down what of one too, And is over So of goes

Operator

closing I hand concludes And session. to the Jun Pei, for call would back to question-and-answer remarks. This CEO, our like now

Jun Pei

joining of for more XXXX you. We exciting year revenue Yes. very look summarizing Again, thank this to exciting much record and next news. Thank share quarter. up time meet this tally again to forward you us,

Operator

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

may You disconnect. now

Cepton (CPTN) 9 Nov 232023 Q3 Earnings call transcript