Earnings call transcript Q2 2023

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Operator

Good afternoon and welcome to indie Semiconductor's Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference call is being recorded.

I will now turn the call over to Ashish Gupta, Investor Relations. Mr. ahead. go please Gupta,

Ashish Gupta

Good earnings welcome call. operator. second indie quarter XXXX afternoon you, to and Semiconductor's Thank

EVP Joining Co-Founder Tom and and today CEO; Strategy. me are and Schiller, Don indie's McClymont, indie's of CFO

remarks Don indie's to and we assumptions, current of and will and will making results statements and provide discuss highlights uncertainties. statements Tom's QX note followed Please outlook. subject expectations forward-looking which risks business These QX be are review by that today on opening These and that representative variety of not subject reflect be as differ as our as and could views a upon should of to results of materially relied only uncertainties to actual risks of any statements from views cause our expectations. subsequent date. are based

that factors the could factors well the XXXX, important other as affect our financial fiscal XX, public please Form and with risks our year reports material in SEC. XX-K results, risk as other Report review Annual on for December our ended For filed

guidance and based results on the measures. discussed Finally, financial non-GAAP are today

a please which to can at QX found of advance on our GAAP, call be this www.indisemi.com. see reconciliation issued in release, our was press website earnings For complete and

turn over call now Donald. to I'll the

Donald McClymont

welcome operational once to delivered line everybody. our commitment Autotech delighted Thanks Ashish, both demand record to our increasing unwavering quarter that and solutions our achieving indie for performance, innovative am and of report again gross to another margin I and and top exceeded excellence. guidance a testament

worldwide, across be all and by win over OEMs design vehicle XXX and demonstrable by automotive Our Xs. continues with virtually Tier deep indie's pipeline, outperformance against engagements portfolio product global peers applications fuelled leading and industry backed to patents

XX% XXX% $XX.X XXXX, the revenue sequentially and a of XX.X%. quarter we second achieved of year-over-year the margin during gross to Specifically, million grew and

traction user As across we'll and applications. we're design experience electrification ADAS, win gaining outline,

Lexus. win rounds captured automotive special world's out dramatically the our and win particular ever customer the a X to level, the including and lifetime free industry. millions leading Toyota, above in Bosch, the revenue suppliers higher annuity quarter, Tier at of like this sustained during the of program wins flow. first base generation Of for like of one This note, growth initially market stage At extends cash our the reach we dollars at of in set potential OEM hundreds our

strides end, To our biggest that we're investments within win engineering design and making ADAS.

the is fact, else. now advanced focused safety industry entire automotive squarely on vehicle above features In all

capabilities, Highway crashes proposed initiatives with countless equipped next National vehicles technologies Traffic this the similar instance, be that has all generation applaud regulation would leverage prevent that with For automatic lives. save and injuries NHTSA, capable a braking mandate vehicles preventing We to Administration, and of proposal of Autotech safety rear and recently new pedestrians. passenger collisions end other the Safety with

vehicles of increasingly the incremental cars the addition indie, safety sophisticated far made of safer industry of and Despite vehicle, software benefit and processors uncrashable outweigh car. tomorrow and new and Tier empowering certainly at company this associated costs. sensors suppliers vehicle the within and OEMs ultimately the more the our incalculable we've And yet X the for cost-effective semiconductors towards regulations and leading with mission, the roadways

approach to competition, single of the potential are exclusive ultrasonic different in including radar, enabling Specifically, solutions. modalities vision, a are highly to fusion data following capture multiple environments or of and and ranges enable and a modalities versus sensor fusion flexible indie comprehensive for a these a The We develop amplified an hopes just in whom many apart modality of expedited a we our strategy the perception apply differentiated sensor the product discrete vehicle's partitioning by and trying either computer to customer. integration and distinctly roadmap set our targeted landing acquisitions accurate surroundings. has from often of LIDAR,

We of efficient sensor this needs ensures scale advanced of strategy Contrast applications. the cornerstone field of autonomous forms effectively combination market. playing and solution environment. due holistic believe day, and with immediate robust the and the and the one highest safety of diversity believe The to we over ADAS single this a complexity the fusion a no driving the harmonious monopolize out, and implementations at further safety vehicle that will sensor technology indie, for diverse meets the levels technologies in

not achieved Within collaboration proud effectiveness but by first year. adaptability in enabled product which this our the of broadens footprint the occupant win program monitoring underscores and with GEO pivotal driver our of and Vision systems. the the the quarter, we're highlight to area earlier This past was our milestone solutions, also area, only aforementioned Bosch, of in acquisition our

combine real-time safety-enabled industry's products enable functional to instruct and most corrective microcontrollers, accelerators, importantly, leading the perhaps intelligence, vision signal Our artificial perception to vehicle actions. the processing, which algorithms AI, take

at cross Toyota. billion combination and rapidly indie radar is market systems these soon and within solutions XXXX. As in-cabin recent the enable autonomous initiatives well-positioned for sensing projected S&P demand with leadership to capabilities, BMW to the $X.X by vision the OMS-DMS is elements critical emerging reinforces threshold intensifying, global features. Global safety Mobility's to ascend continue this to of for semiconductors as unique market forecast at as these enhanced view positioning monitoring we this evolve, With to our ramp

acquisitions Speaking in product made our complementary the augmented to terms, radar date including ON of Analog and concrete design of achievements, similarly design win synergistic Radar, a with most SEMI's by supplier. investments extremely Devices, strides automotive an in short period including top-tier and IP. and and supply of deep Division and to Radar agreement recently, by a strategic acquisitions, Silicon with largest unique significant each led development bringing These have also team, we've R&D highly radar, teams aided time

OEMs Japan. partnership recently, with number the Technologies announced to On LiDAR progress frequency-modulated more an LiDAR make in a leading a FMCW, continue world-class Europe, in Surya our to demonstrating strategic of our or and SiLC the continuous with great we chipset SOC, we deliver front, U.S., FMCW wave, LiDAR increasing solution. And

the and background, real-world sets time-of-flight distance performance, cost This enable watermark detection-based FMCW-based instantaneous direct immunity, compared award-winning from into This laser of deploying emerging including partnership velocity combines fully a competing benefits consumption, to multiple detection, magnitude that power By rapidly interference high SiLC relative partnership long-range system, offers order measurement. delivers architectures. and platforms LiDAR sensing an solutions, products applications. precision, with coherent for pair-point integrated LiDAR high factor, and form improvement indie in reference to and manufacturability, scanning

OEMs experience than cars ever. we cabin best-in-class and the across as doubling entertainment becoming cabin a centers, more With new portfolio to experience, highly network entire ramped buyer workplace quarter, power-efficient leading becoming experience rolling the integrated, further modern ultimate our Turning car paradigm. throughout during user is automakers the providing the as user global hubs environments, prioritize

can that to with personal an lighting, interior at For provide example, as overall the commitment These also seamless emotional reinforcing and bolstering PD and, brand creating charging and wireless in are unique OEM forefront. innovation. but it as experience design thus driver focused components form drive OEMs wireless into interaction an part to creating And interior and devices connection differentiated lighting, the a in-cabin Likewise, with now and to integration again, USB of convenience tech-forward integral are the while PD strong only linkage a increasingly the features on impression, are vehicle's to brand of affinity. recognition. the charging similar technology factors vehicle, ecosystem, and contributing brand's user's USB a key serve not the

also system and power a we also systems. navigation, background, integrated launched the the use charging to become smartphone as known mobile accelerates and By simplifies wireless services. drivers cost-effective in-cabin has highly their many who During WPC, device on connections, other in-cabin of provide automotive for and passengers music, real-time charging Qi-based necessity voice This product quarter, chip. a charging development

is magnetic particularly irrespective reliable X.X faster, vehicle an standard, designs, aligning to inductive position maintaining by emerging in coil, relevant offering the the charging motion. The more device featuring with of automotive Qi smartphones profile, automatically charging power

PD time, integration delivery of USB a Qi a facilitating for the embarked to power on leading we functionality X, the hub a design OEM. emerging collaboration rapidly At same Tier with a USB application module high-speed

details production, have ramp designs into more share. these As high-volume to we'll certainly

as area, history. more than continue Cox in vehicles Americans sales XXX,XXX Finally, brought electric EVs XXXX, full-battery in we nearly secular million the gain implying to U.S. Automotive, electric the EV According for to of momentum. time tailwinds long-term a see quarter in vehicle annually second the first

EV In fact, up U.S., other the digits. in total massive sales words, headroom. sales market the with low relatively XX% the penetration were of prior the share in single second versus is remains in year the still yet In EV quarter, the EV

gallon, With declining per costs, through expansion improvements proposed target EV proliferation the market to XX goal. in this extraordinary. is technology, for a that miles NHTSA of charging introduced reach battery encouraging economy Further a of fleet ambitious plan end, and infrastructure EV potential XXXX with truly of EVs to average has fuel the rapid advancements clearly

this Given Volkswagen, and especially NIO, Hyundai, we including to are market Mercedes, indie's Auto, leaders BYD, customer megatrend. Ford, GM, Lee Rivian, spanning third Nissan, engagements BMW, well-positioned Chaupin, outpace

over for QX QX outlook. results our now I'll turn and discussion to the Tom call a our of

Tom Schiller

delivered our a solid indie gross top-line margin quarter, once exceeding again second guidance. Thanks, Donald. and

ninth meeting targets quarter least In of indie's consecutive fact, beating our at this post- represents IPO. or such

sequentially up the to of the up higher million. and and for range XXX% revenue was period end Specifically, guidance on XX% $XX.X our year-over-year

to SG&A XX.X% a Asia, margin up given sales product was of reach, Gross basis as slightly R&D QX, particularly time profit reflecting in marketing importantly million our plan, near-immediate the million, development results. with of in pulling converged also above was tape-outs into year-over-year and XXX extension Similarly, but ahead gross in $X.X guidance. revenue. and $XX was and translating and benefit which accelerated $XX.X our points costs XX.X% million, of multiple our further

interest million, In turn, operating on shares. per loss line, XXX.X below was loss our and loss $XX.X improvement narrowing was base and year-over-year, million $XX.X net further a percentage of basis. QX we other negligible on a the share a operating With XX a expense million, posted and $X.XX margin net our poin sequential

aggressive a $X $X test partner million the via the supply capabilities expanded and multi-year Turning invested quality agreement capacity capital, million growth to our balance internal we $XX strategic during in working given for expenditures. entered and foundry in with lab sheet, capital our plans, a quarter, million,

including total issued X.X To Blocktrade, shares cash enabling $XXX partially our in program, million equivalents. of via ATM under for million million the offset proceeds $XX quarter cash exit us we to outlays, and million, with these shares X.X

synergies to Looking for intend of we more into base, revenue rate, XX% up up and all At expansion particularly from our pushouts expect XXX% this XXXX XX% we sales, the with than program in and million margin as third OEM sequentially, two the operational annualized our a despite range, forward, to growth, tenfold $XXX we gross versus begin million and quarter, the scale $XX acquisition. macro run GEO choppy realize backdrop. to year-over-year revenue

are to planning and elevated million costs, SG&A additional sequentially. R&D, again $XX.X remain flat in once We also from mass expect

further As net a Below our we we loss and the $XX to result, narrow to anticipate intend operating interest no taxes. million. expense $X.X million of line, approximately

from an further vestings shares share. scheduled and loss net million outstanding XXX no per we $X.XX activity, Assuming expect ATM

remain in reach profitability for we quarter and Further, more on double year, consecutive this annual a than revenues leverage. our expansion, and expense growth, by gross of to the sustained third margin sales fourth driven track operating year

plan operating towards of forecast model. indie's top-line new gross on XX% Donald as continue horizon margin outsized product outlined, based to term, our and the deliver we XX% the over depth target pipeline, growth Longer to

turn closing I'll back call his that, Donald With the to comments. for

Donald McClymont

Thanks, Tom.

indie traction, effectively design-win agility our executing to demonstrate, our and strategy. is scalability As operational

fact, getting revenue $X annual just in started. XXXX path we over and by we're result, now a to clear as net a billion In see yet,

portfolio, billion experience customer user auto powerhouse, to innovative Our and diverse stellar the IP engagements, triple and not tech $XX course, most importantly, on value. least, and last and are deepening team, capitalize supplier megatrend, positioning process, EV shareholder product roadmaps, of and in the and partnerships, extraordinary but an our collaborative build us ADAS create

open Operator, questions. remarks. let's prepared our call the for concludes That

Operator

from Suji is of Please Roth go MKM. question first Our instructions] ahead. DeSilva [Operator

Suji DeSilva

it's ahead little obviously, bit but to in Congrats is just Hi, a the my Sure, behind XQ. choppy, Tom. The curious. here Donald. I'm progress consensus Hi, guide number. I'm on looking here.

on color for talked pushouts Any were there end-market would maybe and indie-specific helpful. customer-specific those about pushouts You color here. or want then Thanks. reasons? just be some two I to understand reasons, reasons, those,

Donald McClymont

Yeah. Hi, Suji. Sure.

within I need significant these has by were And do with own quarters programs to to engineering to pushouts, were So, would that it's pushed allow our whatever do been side. se, two note no It's really lost just customer's business engineering here. that complete being a there say on order they to guys in was the few per their out which the important control, nothing to execution.

Suji DeSilva

for win contrasted just be how on maybe perhaps the together think of book helpful timing And hundreds magnitude to Bosch you Okay. up of sense had, Great. to the layer that, with to kind OMS, win on a you That's as you said helpful. large start radar and I understand the the give that the millions then of opportunity, very these. build of lifetime, two a of of it'd of

Donald McClymont

Yeah. made company. with given there we've We're the say, attach the largest exactly, is that super multiple the and their or largely this date. will our is in excited one portfolio three will would but two history about in OEMs, wins the from to likely size of design they've one top to we platforms, it that missing It's this. feel up players which then Bosch to of be of hard the been, they industry, I key

excited So, it. about we're super

Operator

The Please Cody Benchmark ahead. next question Acree of is go The from Company.

Cody Acree

markets, Yes. my seeing points is questions. total out back for Thank to finally are We're much a of but thanks of patch. lot speculation of outlook, and autos data The go you a Don, light, there's been a how of some like a that softer in hit and he macro? me is little question. that going bit said, countervailing taking let Suji's to just

to you look getting with in themselves, ahead changes of is Now, or it is the the the market? this, more if estimates of more this at do

Donald McClymont

side, or QX, see company. XXX% the QX, issue not year-on-year. market. versus grew the way of we and course, QX guiding to likely our to XXX% We're a nobody's In in From But it's as that obviously, it. a secondary immune chop year-on-year, Cody. that In growth rate that be will question, and to we've macro perspective, good the achieved growth Well, our blind we better. from we're

translated us So our from see to our effects directly macro own perspective, it's business. the kind of hard for into

So, there, which pushouts, from perspective, about is pocket us program on really, is a and a just change really but, our our doesn't us anything of long-term it's larger outlook. the air couple minor for effect

Cody Acree

Okay.

$XX in what's in up about that to therefore, is are you getting as from to here, total timing if not making breaking shipping got the up programs be you at at look may take $XX SAR prior much are revenue volumes a of on that bulk those platforms then So And new that million versus schedule? you're vagaries, established how talk longer-term look the agreements, that that on your can it's may the to million new and programs, customers? you've your of $XX or getting contributed into

Donald McClymont

ramp, new still product, growth we course, the of ramp then our of virtue revenue overall always we're bit engineering, we a well Once lot to to And It's from of a our just fact And mix. growth programs. by ongoing. our you can new going starts, typically I at contributes as there's nature there's of ramps of the a have the we've would are product a OEMs, typically and we like, beast. if mix products say, ramp ongoing company, planned to which It's a of as that be that the profile. done mitigate those, existing

revenue. to are new running in to addition a We're there so programs going that ramp company, are growing

Operator

from Craig Please is Riley question next B. The go Ellis Securities. ahead. of

Craig Ellis

more company longer-term you feel billion question I was Donald. comment business by that the you for about by just broadly, $X role broadly, what visibility what increased business from timeframe then very wondering I'll the becoming start could if a a the in bit to play and out Yeah, have experience getting a see with talk to XXXX. you was electrification ADAS that user I like Donald, in intrigued you that flesh and will that little billion? sales

Donald McClymont

ADAS, know, heaviest Yeah. the And as Well, to over large our that's user experience engine let's going grow, wind that. directly little the that you would to period. main for to that can e-vehicle customer space. can a say, R&D portfolio growth say, course, investment in we've be building but last behind ADAS The continue design been the you will as pertaining see, the you of one the propulsion system, our, the is And behind timeframe. and of be that into drivers maybe as course portfolio of and

Craig Ellis

Got it. Thank to wanted ask to you. of near-term a much you And I it then, more question. Tom, flip over and

all this loss reduction? either expense think where I sequential there. get operating seems quarter, renewed the Can operating fourth quarter pretty gap dramatic this that were be to or the little like profitability imply a would quarter, really profitability you So, help operating target way you. million or just significant to which between next or us reiterated of $XX revenue we Thank help kind the very margin year. growth a to to Just gross bridge

Tom Schiller

Yeah. Sure.

it's fact, of In all above. the

QX, gross QX down then QX we're out accelerating it's We tape that'll So, QX. to and coming mass reduce QX, into margin OpEx in operating But costs for leverage. expect and actually growth because tick through. costs, seeing higher expansion, continued

So, those quarter. factors us profitability all of to get next

Operator

The of go Ross Deutsche next Bank. is question from Please Seymore ahead.

Ross Seymore

for Thanks the guys. Hi, question.

gives quarter cynical, the the Craig's side but to of pushout not wanted things in revenue the side that sound side acceleration in follow too fourth quarter? considering the up of things you on Just question on to the third fourth and quarter, the confidence what in

Donald McClymont

extremely it a we the sense, things about we can backlog it's are, called of that Otherwise, wouldn't feel going. given see our We turn. confident where in short-term Just situation it. where we have

also we help the little from have do Tom a mentioned, As dropping. OpEx

intensive right programs cost say, which more, now. ever labor have R&D we're and We let's deploying

the the beyond. out, which going are and where XXXX, XXXX of to drive timeframe in tape spent is the middle heavily we the to revenue the XXXX, year So, get

Ross Seymore

guess bit headwinds your think What within Wall that in what user experience, you so maybe into I terms, to that year? automotive, product would not backlog, ramping think you if sensing the minuses next those types longer as XXXX growth whole, a much of Street Then, tailwinds the as it. see far the looking and you and a sorts I would new out ramps, longer Donald, Got in different term, potential be pluses little are term, as in things? ADAS, look would of

Donald McClymont

ramp the larger we significantly company. the were Well, end in that see that the became to XXXX, we to begin than company, you'll a we win as private of which public could designs thin the of ones a as command began

And so, that generally to of of the phase the speaking, take us we back which that's beginning decade. sort of into really half of this the expect company's second growth,

Again, time and and deal spent be significantly really drivers beyond. in we've a are space, of are of in that's heaviest ASPs ADAS of XXXX terms the great gross the higher the XXXX the mix, going and margins in one higher, to

Operator

is The next of from question ahead. Anthony go Craig-Hallum. Please Stoss

Anthony Stoss

much you if to then, what be would QX. questions. couple a in can in revenue you Hi, GEO guys. two for expect the you of And QX equated was A maybe that Don, and of to? can guide maybe your some Tom, share what terms pushouts, GEO have of how OEM share

Donald McClymont

Sure.

some course, on of Toyota, we'll the be particular have have I to we're to these able sub-segmenting, large-scale with able programs. terms we'll of higher to mentioned then, But other be It's an Tony, soon other may The already in just delighted at names share you front. some that we first acquisition. soon level, to market. certainly one, And Bosch, that know. as as aren't GEO had names would fruit We bearing convey a hit

GEO and to opportunity and second better long-term the just better then, on the continues So, around look part?

Tom Schiller

Yeah.

of they course, part are when bit ramp, of they're annually. that, programs a mean, these second million which, fully significant. of takes And combined the I $XX time, On about little

Anthony Stoss

you're Okay. on OpEx in for you're over margin And what you'd what QX. QX? even then, kind XX% QX, shifting thinking run back million break a revenues math, to expecting $XX for the when of gross in of Tom, knowing Is that from to you be

Tom Schiller

yeah, the, roughly gross That's revenue, margin range. Yeah, in idea. right the XX% $XX million in

I gets think there. you that

Operator

have we McClymon back Thank you remarks. to very the end the of turn for session. question-and-answer we'd And Ladies reached much. the and gentlemen, Donald some like to call closing

Donald McClymont

over few the listening Thanks, see you weeks. at for next everybody, conferences investor the and

Operator

gentlemen, Thank much, Ladies conference. concludes today's that you very Sir. and

at time lines You thank may disconnect participation. your your and you for this

indie Semiconductor (INDI) 10 Aug 232023 Q2 Earnings call transcript