INDI - Earnings call 4 2023 | indie Semiconductor, Inc.

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Operator

Good afternoon, and welcome to indie Semiconductor's Fourth Quarter and Year End 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.I will now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.

Ashish Gupta

Thank you, operator. Schiller, to call.Joining fourth McClymont, me and and welcome end and indie's and EVP CEO; earnings and XXXX today Tom afternoon, indie quarter Semiconductor's year Co-Founder of Good Strategy. CFO indie's are Don subject business on opening of Tom's assumptions, current indie's note expectations discuss and making be are followed that by and Don will we'll and to forward-looking highlights, uncertainties. provide outlook.Please remarks risks review and QX statements which based and statements should views representative of our only to could today results differ that upon as as reflect cause a uncertainties be statements as to not of materially of of These relied any are variety views expectations. our from and actual subsequent risks date.These subject

based reports These our with financial income our to review turn Risk other year please the our over can well exclude the see guidance on For issued as material tax, and press or certain results from risks and GAAP measures public non-GAAP items, Report realignments, and income Annual be and acquisition-related the GAAP gain interest today ended QX as Donald. other call for expenses.For and affect measures change noncash to now amortization, for corresponding SEC.Finally, or results, a reconciliation in Factors may advance items, December the our at gross EBITDA. the financial benefits of important non-GAAP expenses, following the in and non-GAAP which loss, definition call operating as Form depreciation in above on could expense, factors www.indiesemi.com.I'll website loss compensation, complete XX-K loss share-based inventory cost the fair such this on net XXXX, values, fiscal and was XX, our income please non-GAAP metrics non-GAAP that release, of earnings margin, found are discussed

Donald McClymont

and gross solid years challenging $XX world of our backdrop, Once year-over-year per group Ashish, fastest-growing last performance, basis a off semiconductor top-line. the margin in which in another million, third growth welcome, again, X quarter XX QX, on macro our Stanley.Despite team in to record gross our performance, revenue sales distinction consecutive on doubled the revenue revenue we a Morgan with The of everybody. to of outpacing delivered sequentially indie and than and margin expansion XX.X%. unique year year-over-year being the peer capping the massively over just achieved based points you, Thank of more company earning and of delivering XX% basis we've XXX%

year. We also navigate an consumer rising design reinforces interest win industry momentum basis.While our content-rich and transition the and semiconductor operating our narrowed we across on confidence rates, car automotive continued industry, than automotive loss less sales, has million short-term, the stemming EBITDA in vehicles, to inventory substantially electric in-market weakness headwinds.Entering unabated progress rebalancing growth XXXX, by decelerating from to return slowing of dampening $X date indie's our a of but the financial a goals to team's these these QX face persist, the towards to in this model. relentlessness substantial in our made we and QX QX, proud I'm the and to in strong business QX absolute of recovery we've expect dynamics and indie with

versus to as China XX X% XX.X million or vehicles, seeing to rate, the XXXX the real-time of last XX.X adjusted XX marking year.In totaled luxury forecasted the production January, to in month across weakness light vehicle month, in million market the consecutive As an market first was a declines. at from e-vehicle reported annual Assessment XXXX, seasonally S&P after now up came of are X% in slow According markets S&P automotive context, Global down particular, is million fifth experiencing but up Global SAAR, signs year-over-year, indicating this their are updated strong units, the XXXX. while shrinking December, vehicle in million we for production

to in that run, new this maintain these and enormous, Autotech uncrashable unique newest during term, line, the broader loss and to incremental over new are unchanged strategic the EVs driver immediate our shorter-term, the that will enable vision program, deteriorated, sensing of same demand the setback, given addressing precision ADAS was system-on-chip the product To a our fundamental and taping next technologies.And viewing.As consumers e-vehicle regulators, equivalent will loss demand, softness support high-profile that subsequent for realizing at and as car. in that balance to American exciting assessors, features, ever-increasing as vehicle the increasingly end, we highly of us of solutions, solutions of soon more expanded medium demand longer-term the higher over they investments steep won from safety have government are with adding our including business products a across than fully landscape this we've automakers approach reflects last by product S&P XXX we safety which we as this incentives, OEM units result charging nearly no camera remains in disciplined volume integrated vision million OEM the offset new a trajectory the This furthering performance high project. of power outlook mass artificial of pocket sensor continue aggressive in intelligence, sensing hamper to from indie. pushed car out distributed which we to supporting while Tier recall portfolio we vehicle industry leadership certainly and this developments, our out systems, on growth year at technology the with in-cabin you each in scalability with enables particularly capture prudently the of indie permanent share our North their Ford, is indie's capability cost OEM, indie trends robust, profitability processor strategic but units Motors, performance early of and air as of intersection General industry is while seeking will backlog. it While in reduced processing safety win to video quarter, against while our may of automotive over edge, Accordingly, vision Moreover, approach, a by near-term long the launch market this camera-based million vehicle's at ADAS possible, And innovative towards meet shipments to classes. integration disproportionate engagements, securing revenue, through incorporating of design including concern fusion, in for control major to our are fault and substantial adopters.The processing programs with to on seeing current opportunity automotive for compounded to saturation our X OEMs, their remains won't shift XXXX needs maintain traction levels cancellation medium-term.So requires and electronic units also expect the infrastructure, intend XXX of of automotive invest, a deployments.Again, buyer the participate Despite low indie according consumption vision-based continue leveraging leading our monitoring the by to XXXX. gain expected based BMW, grow Toyota. the control remain Global, market.We

the AI-based world bring significantly to top the supplier and initiatives XXXX Ficosa, X under these protection consumers the of safety initially VRU, Government evolve, strategic this assessment protocol X is solutions a and safety cyclists, pedestrian provide critical proposed automotive in-cabin e-mirror referred to road global future the the features.More specify Safety increasingly users Tier systems vehicle new into new or about National elements crashworthiness implemented United pedestrians monitoring aimed the such intensifying, entered vehicles. As NCAP leading and programs has for car to to through as test information sensing protection enhancements with in partnership are seeking safety applications.Euro especially supporting at with the enable continue Highway NCAP demand we as to year automation often to of NHTSA, protocol a vulnerable VRU OEMs and backup as positioning Administration, camera Transportation car States, enhancing to and in safety. solutions, regulators for recently, X

automakers products supplier we are sensing XXXX to enable to and the camera pleased as new edge of are breakthrough edge, and intelligent portfolios report year ADAS Ficosa's technology, same to but solutions thereby detect to ramp.Shifting for challenging generation captivating largest and vision and for via OEMs lead sensing As importantly, sophisticated processing, systems. during have interior prioritization of experience, transfer power become field-proven just time, actively and an management X ADAS proprietary data compute expertise this environment adding hardware vision a across imaging object power of real-time devices differentiated leading production demanding the radar classification later as AI-based a software strategic cost camera-based I'm lighting of quarter, and vehicle's provide smart result, of environment. to solution means of and that high-volume set that solutions track to a processing a into Sampling also and launched capability, can contributors detection, baseband and increasing sampled MMIC commence our automakers viewing and volume slated not requirements alleviating than incorporate offloading Vehicles in-camera such deliver vision backlog, the AI the we to of have and together, data XXXX. on-chip our high-speed for consumption our particularly passive at more a object is a the equipped program action.Indie's processing we with pedestrians vehicle.Leveraging user successfully our customer, At applications. on upcoming processing array near first with just electronic detection global just neural as morphing transportation, and to solutions support to decade-long the corresponding for central the processing our the take in-cabin

vehicle, and to we safety.Finally, the future securing X custom significant smart new and despite high-speed outlook. willing wave the in a becoming setting in modern the above-market and leading the exterior support turn ambiance the towards sustained increasingly delivery enhances the North The efficient, just a we're OEMs discussion solutions American lighting e-vehicle of that the Tom As footprint summary, for within vehicle.In stage the of OEM, vehicle QX as within user visibility element years. the functionality to profitability.I'll interior our are result, enable call of cabin's the the shapes need a experience and it the results on now reliable, for have has networking challenges, sets extended and wins next electric pivotal over area, for focusing seamless forefront.Similarly, transcends and of power design our X programs growth their market chip of model tactical risen

Thomas Schiller

to fourth our our margin, XX.X% year-over-year tenfold up band Revenue $XX.X years. $XX.X up less quarter the XX of of million.With million $X.X million just year-over-year $XX.X the guidance and $X with of loss record in internal turn, We net to offset revenue, XXX% tapeout versus activity, our more sequentially by $XX.X Donald. driven environment, again, our our pause $X.X capacity, and a our million. R&D were interest million, XX% QX million, guidance.Operating of our expenses and quarter indicative consensus with CapEx than a gross of quarter-over-quarter estimates. depreciation, in than QX, the million, points of a shares, decline million to the In market was a expense our SG&A partially versus loss gross and and profit gross exited expand still up to operating primarily Thanks, the translating equivalents, a narrowed a year-ago into improving $X Adding basis while leverage. $X.XX lower lower to on million per down million, weak million $XXX,XXX, XXX.X $X.X a up share for EBITDA guidance in was of operating end million outlook. was though we was to at down increased posted higher X and slightly within loss reflecting and $XX to sequentially and with base QX $XX loss back with by consistent inventory.Turning $XXX.X loss cash AR net was million period, expense margin, test and related line

of but quarter taxes. the development XXXX, revenue product gross to first for line, no expense down net year-over-year, and interest SG&A. indie's activities, be million planning current by industry For Below driven we we R&D, range.In sequentially, the we XX% $XXX,XXX $XX expenses, XX% and are seasonality reflecting in XX% softness, of expect operating and margin $XX up terms accelerated anticipate with million the of in of

shares turn call million we this expect his at the XXXX trough radar and in XXXX million to half QX, million perspective, XX% resumption growth of the for the ahead new retirement and a we baseline shares EBITDA recovery we ramps.On Based QX, Donald on pipeline, $X.XX top-line a to full-year to vision to that comments. including our the QX of up to loss the revenue program in per closing on XXX in yielding million Assuming related the $XXX profitability second closed full expect a a that a I'll million design-win we basis represent XX quarter, back midpoint. range, significant and our be an X.X in net outstanding, of share.From in outsized revenue expect November, an $XXX QX year, of warrants note, and

Donald McClymont

strategic In Tom. remains effectively and demonstrating results, conclusion, powerhouse prepared weather, us concludes call ahead to us we control environment. innovative vehicle great posted navigate an ADAS, opportunity, serviceable user let's building open market Operator, of questions. QX electric experience, Whilst and, value.That and our we create our importantly, $XX to shareholder the solutions, billion for We're most the unwavering. capitalize is which focus conditions, on just can't remarks. the the with positioning current Thanks, record operating of Autotech absolute a business through XXXX model challenging our strength

Operator

[Operator first ROTH is Instructions] MKM. Suji Our from with Desilva question

Sujeeva De Silva

kind any on So, across EV, the seeing, that's color sort on color weakness maybe and maybe impacted some specific whether could broadly demand the you if geographies, there's any or that thought. provide color are or being you're of applications all non-EV, geography programs that of there

Donald McClymont

of We do EV across digestion, the really China which speaking, it seeing in correction we saw But vanguard are the inventory what see seeing. market, vehicle the market. majority coming that just broadly some reason we're specifics overwhelming is Well, we're that is broad for the which a inventory the generally market. across of kind it's the of the

Sujeeva De Silva

on believe, talk you that just talked next then, I the about whether a And to to that, understand cancel Okay. Can a follow-up kind you program. the and about or program coming push-out, clarify you're of delayed of and 'XX, are 'XX, trend programs decisions broader or to for made the or whether maybe ramps? years, out, those pushed a ahead of be continuing those kind seeing decisions model model 'XX, being of

Donald McClymont

out is the on for that answer This your absolutely program the didn't of part just XX program No. was To on. last engineering pan question a business an first, execution goal to it, there be working where of not. it ambitious their set customer happened we're out X for goals. side And and

relatively So, it's happens still with an for a thing. it would program rarely extremely this us, all. customer smaller In I And was a even rare very major that case, it's in them. automotive industry at something the with say, base,

trend. not So, it's sure for a

Operator

is with B. Securities. Ellis from Craig next question Riley Our

Ethan Widell

Ethan Widell for Craig Thanks taking in questions. is calling Ellis. This my for

see I color wondering You a forward. of nice if on the provided how demand you view could you're on seeing gross slope any it. the provide was margin you going trajectory as

Donald McClymont

Yes.

So we here. expansion margin from expect gross

just a done fact, expanding past, market pocket from and going seen lowering is cetera. you've comes to that's and improving of air et in In margin, terms mix very demand. we've as But in sequentially job continue. And this costs, the an yields, just improving good that

begin off the XX%. QX expand towards again to expect margin to we gross So trough

Ethan Widell

or out that second expect of similarly to you be something quarter? thinking Got we any grow OpEx you. that are about see would could levers, And similarly,

Donald McClymont

OpEx stage, critical we've reached mass. at this

tactical here target course, making creates beyond towards leverage and relatively But this current half that to the development. there flattish product in a happening That's that it's we're there, in the accelerate XX% then, of investments So, the and quarter. hit of profitability to our from and back year model. operating profile,

Ethan Widell

it. Got much appreciated. That's

Operator

question of from line Group. Capital the Anthony with Our is Stoss next Craig-Hallum

Anthony Stoss

that color Maybe ramp QX, also, if you probably QX. And for expecting on programs a and us you kind of in follow-up, the in QX, QX, give can coming as some QX new gives again, you line steep of my I kind or were QX XXXX, expect of QX win, it to for XXXX, saying prior think large Donald, statements XXXX, getting still now you're you, well? the radar QX in that your do is be pushed as or confidence

Donald McClymont

we the that's of made that that the respect. No, perhaps that on mean, track. remarks, in notes prepared in remains has semantics so still I changed nothing that the

we of sampled all it of production. largely fact, the had this details rest the from back once In ramping first market, to your maybe that as in did broken program of know, these experience more you silicon, execution programs. is get of And you we into announce of is the really and the

So is programs expect the are we're right some to ramping schedule the this ramping. There come we're from experience that year, yes, early we're mean, do it's we are of across outlined.In next fundamentally what that we're on in vision ramping pretty of right ramping, user the happy are this still program terms we material where that I year, radar, board originally throughout project all that now. There be that revenue course. now, and programs not servicing That year. other areas that the of late are across will But, board.

Operator

is Benchmark Acree question from Company. The with next Our Cody

Cody Grant Acree

a what your that in outlook? sequentially going expecting is given confidence the push as guess, you're to year I guess giving what year? you I Yes. through decline see you support ramp QX, are fiscal the magnitude you of the to

Donald McClymont

us seeing be the through same previous to market conservative expect of we confident in about for plan existence. see year, message period just QX course, in and what And pretty that from which mentioned sure, a would that market, do I we're to air QX. of describe return to I And our the the the have the are I multiple in they tried the recovery pockets. fairly as dramatic question, I programs will recover. net typical companies through has we've And areas of public think as as the a you to us as in in answer result, recovery.I coming that QX, mean, space entire we way QX. a we did through ramping particular mean, see been that guided We've in in

Cody Grant Acree

confidence guess, is of guess, flexibility today? And how the orders those backed by I building that much Donald, firm or you volatility guess, And QX cancelability are expectations? into your I orders? what's I

Donald McClymont

I that segments, say, we've as violent to a about to and QX in that been in built certain like fairly do the conservatism But the disturbance we market. as that mean, with we much in, -- we we're seeing, the tried confident I we build can where the half can. feel in indeed. this expect second recovery possibly with coupled pretty has in we've Well, conservatism a get in fairly

Operator

the Our next CJS Jon from with of Securities. question is line Tanwanteng

Justin Ages

for on Justin is Jon. This

updated impact your how for does outlook expectations First, the capital and cash needs? flow your

Thomas Schiller

and cash probably back year, operating between the half we what of flow are, Well, resemble will terms now the our in outlined just Donald of loss.

the And assume just of of can that cash. is. $XX now cash you range $XX of $XXX million in exited then and course, million until with north we million generate we're between cash to somewhere beginning usage to So in

cushion. ample that us leaves So with

Justin Ages

color. of have any are QX for them I the appreciate talk try then, could, if scale you to them us in helpful. size more. Can significant? of X you and wins And that the I if That's the Okay. about

Donald McClymont

European-based is program it in of of company, the that for working a I this time. Well, some with who quite we've And X. certainly win the It's the program Ficosa we've been largest as but on that is X such history largest the are particular wouldn't design out in a the X and X Tier top say won the the OEMs. for program, that European supply we'd single

Operator

your as and Ladies Thank Semiconductor. that there no gentlemen, conference indie are Thank you the questions, for participation. of concludes further you.

You may disconnect your now lines.

indie Semiconductor (INDI) 22 Feb 242023 Q4 Earnings call transcript