INDI - Earnings call transcript Q3 2024 | indie Semiconductor, Inc.

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Operator

Good afternoon, and welcome to indie Semiconductor's Third Quarter 2024 Earnings 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

operator. you, Thank welcome Call. and Semiconductor's Quarter Third Good to Earnings XXXX afternoon, indie

Joining Co-Founder of Corporate McClymont, Bal, Don followed opening me are today business discuss indie's results Relations. will and highlights, and Tyndall, remarks outlook. and Investor Roger's indie's Mark and QX Head and of review Development by Don provide indie's CFO; Raja CEO; QX

statements and risks be that forward-looking statements not These expectations we and current to subject will should making our as assumptions, note only are Please on which and views of reflect uncertainties. based today be subsequent differ that to relied upon as could a representative subject uncertainties of results our actual materially views from date. of statements variety any cause and expectations. These of risks to are

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

discussed loss Finally, net financial margin, non-GAAP the loss, results and share. loss non-GAAP operating non-GAAP today are such per as measures on non-GAAP gross net non-GAAP and consolidated based guidance

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

the I'll Donald. turn to now over call

Donald McClymont

everybody. welcome, and Ashish, Thanks,

our before cover performance the the within briefly first financial indie's on focusing environment me business automotive Let market context of achievements. overall

above the midpoint guidance. total of of During revenue $XX million, XXXX, of the coming in third quarter achieved indie our

to these challenges environment results well-reported industry, impacting automotive unfavorable indie's persisting macroeconomic global short-term the the resilience. Given are a testament the and

vehicle ongoing ability strategic highlights the the the factors purchasing reflected and of forward, fourth high including in look and quarter, influencing of quarter cost negatively we semiconductor our outlook the of backlog inventory. and take and our the elevated decisions impacting industry, some levels Last outperform. As automotive credit share highlighted growth update to consumer we

Fast days, widely the that is paraphrase XX automotive experienced. what exaggerated. forward the the indeed to We also reports of to of persist were has these through demise challenges greatly this were But noted Twain, Mark industry anticipated XXXX. second half industry's the

for long-term of While safety with market, safety we programs regulations the and vehicle electrification market electrification automotive new accelerated Euro assessment and drivers uncertainty remain from in-cabin and by the global some see and experience, being demanding further increasingly still NHTSA stringent strong, NCAP.

significant to vehicles. leveraging which well-positioned incredibly remains deliver wins, and X portfolio innovative growing will Indie translate these volume our into product design in across shipments global megatrends, to secure production growth

Additionally, China that the Chinese strong automotive industry, strength. indie's to relative EVs showing remained ICs for demand in quarter. in the particular, through are end, And

quarter Let's target unequivocally across our third was turn our the focus business the markets to across for our news quarter progress The positive. sectors. in

We traction our continue to with customer class-leading products. commercial gain

upcoming for with processor is and the ADAS, new exhaustive launched hitting exceeding U.S. safety power demonstrably quarter. very I solution For driving requirements and performance, starting spot testing, last users vulnerable sweet of our the our customer discussed vision, design requirements. is European In family recently that cost Indie road and of performance the XXX rigorous by regulation vision customer wins

now highlighted the OEM monitoring activities at and is popular we with and across European that pace. road predecessor applications for design-in continue Asia-based numerous supplying processor solutions. on the And occupant Avatar products also our iNDIXXX China, vision the e-vehicle Additionally, and driver time e-mirror its last in

innovation the Innovation embodied organization award of We're technology that Breakthrough Year of the the peers that recognized validation is companies, the AutoTech is a in signal was latest award indie's Awards vision field of Sensor strong with in independent products a technologies delighted the and an in the and processing top Winning generation family prestigious Breakthrough incredible markets. transportation iNDIXXX of automotive class-leading products. AutoTech also last this image recognizes the by processor month. leading

gigahertz XX key radar well. progress to continues Our program

track Our our support within to with is we lead competitive customer ECUs XXXX our bring the previously customer advancing highly production radar through line on remain productization to stages, internal to communicated. as multiple their and OEMs time steadfastly

a photonics customer-funded optical programs LiDAR, has module. a our world-class For in-house leverage abilities. design team for a LiDAR win Both component plus system a separate integration optical will secured complete program our engine optical for and high-performance

quarter for I latest now schedule various products ramping experience. charging power last well and commencing lighting, and and are Moving and in in progressing described to wireless wins. all volume delivery these our deployments in-cabin user on program detail And XXXX.

strong Our OEMs, ICs. And Volkswagen design Xiaomi, across pleased models. BYD, are Li and and commercial Auto in OEMs we lighting ambient China, multiple Porsche, numerous with Motors, Ford more are report wins many including Western is using to momentum General indie's Avatar,

smart want entertainment The connectivity. an highlight data ADAS and high-bandwidth of audio/video data of visualization. effective I experience multitude quarter, and vehicle supporting essential applications user This our is recent across and to transportation for unsung growing addition hero sensor more the in-cabin with the reproduction portfolio to

retimers indie's design-in manufacturer. with active American lineup OEMs, engagements has high-performance smart of global connectivity including a North e-vehicle interface now converters and large multiple

Finally, electrification me touch briefly upon let portfolio. our

today capabilities ASICs our as have custom by We segment not customers. primarily this commissioned solutions on are in specific elaborated our

power them who valued management, worth to need. highly applications, they that deliver compelling are to indie's highlighting truly indie system with X what their electrification Tier dissatisfied digital for engineering are solutions of by off-the-shelf design system and it's analog, commission However, capabilities unique integrators

strong. Although the have the continues challenging, several long-term remain past quarters been automotive outlook to

group's for the new on well-positioned to While indie and incredibly is dependent remain peer analysts to our XXXX, leveraging market deliver and product indie's growth many of projections, above forecast differentiated our in vehicle portfolio. continues this. growth not production uniquely modest growth expanding

momentum strategic November. the The is update our which best indicator of our and success we the annually win in design size of backlog, field in

earnings QX release. please reminder, our As of our a for press see full definition a backlog, strategic

backlog backlog $X.X revenue billion, I'm $XXX to have we share our our in this up We completed process, strategic from would XX% million than increased XXXX. and expect $X.X today, over year XXXX. Based review billion achieve last of to annual strategic and recently that greater $X.X has in on pleased billion to

comprise updated our of XX% The for the in-cabin shared additions previously, our our of major of DMS, connectivity next-generation experience accounting strategic wins wireless the year a wins our electrification balance. that smart with strategic backlog, notable over plus and some family to combination user charging solutions. and for processor ADAS this include we OMS iNDIXXX vision backlog

Officer. full-time like would I to Financial Lastly, Chief on congratulate his appointment as our Raja

of Acting CFO since know, the Chief recently, promotion when more months. our personally our I As as Officer deserved. has and Tom for Accounting over last to as extremely and is served Raja the you his launch support medical June thank dedication This well leave. Raja took from time want

with Tom, to who recuperating, soon has projects. been will assist strategic an advisory return capacity in

us, with continued engagement with transition. expect and Given indie seamless Raja's Tom's tenure we a

turn I Raja and call results for our our outlook. to will now the of over QX a discussion QX

Kanwardev Raja Singh Bal

Donald. Thanks,

XX.X% product above up XXXX, For the in sequentially, gross or which at up from resulting revenue third improved million mix. midpoint Non-GAAP our was above quarter of came the slightly million, profit outlook $XX margin, $XX.X of outlook, and was X.X% gross primarily our sequentially.

million, operating R&D was forecast. million, total bringing $XX $XX.X to was million, with expenses consistent our SG&A $XX.X while

As $XX.X a our quarter third operating result, non-GAAP loss million. was

million share net was $X.XX was XXX.X our $XXX,XXX, $XX.X of per expense and base loss interest loss million of on a shares. net With

the the the with cash including million of to $XXX.X of Turning reflecting net cash, million million total We restricted $XX.X $XX.X sheet. balance $XXX.X during ATM of million QX, exited of by primarily quarter comprised million short-term operations, of a facility. versus cash was in third usage the in and quarter. facility This $X.X offset partially used raised in million increase from our cash credit $XX.X

in the quarter driven of was inventory The higher-than-anticipated revenue build by an anticipation future primarily accelerated cash in during usage growth. operations

Moving our outlook. to

million For $XX automotive of XXXX, expect revenue to growth, growth the $XX to to the fourth outpacing This X% within midpoint. range million quarter translates of for million $XX industry. deliver quarter-over-quarter the sequential strong at we projections over or the

the income Moving statement. down

sequentially. QX roughly gross be margins expect We to flat

of to taxes. million We also reduction approximately fourth interest Below expense R&D anticipate OpEx of we expect net approximately line, the the expense no $XX of a and SG&A expense quarter. $XX.X $X.X of $XX.X in with million million and marginal million

Assuming the the million net shares XXX loss and quarter. for revenue the a outstanding, fourth $X.XX per expect share with we range midpoint of

and to take efficiency want I management. In conducting cost all intensifying efficiency organization, structure new capitalize focus the engineering across and expense moment working my a role, functions. capital a we are operational to and on opportunities including on to of and address our our administrative cost improvement manufacturing, identify review comprehensive

providing to priorities market this as navigate particularly to the these of result front. This environment. important the of intended one The we initiatives for pull is current forward progress we the highest look executive We team forward and profitability. as on is updates

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

Donald McClymont

persisting is market it In closing, Roger. Thanks, experiencing differentiated indie's headwinds, industry is the that while core drivers are clear strong. products for the

are strategic current consensus growing and innovative by our backlog strategic and operational for momentum, positive, XXXX, remains supported and comfortable design long-term product We continuing our outlook indie's an by excellence. analyst with as on evidenced extremely portfolio unerring win focus

that user indie concludes ADAS, prepared global will automotive automakers choice electrification, innovation, That be of leader megatrends ensure and and partner the our silicon transforming continues and system experience to remarks. integrators. Our of for an

open please questions. Operator, for the line

Operator

with ROTH of Capital question comes first [Operator Partners. Suji Instructions] The line from Desilva the

Sujeeva De Silva

the new be great Donald, role, congratulations will best Tom back Roger, in to and coming of luck that soon. and hear

revenue on So consensus the estimates. color the there thanks the XX% growth, for

are you into then familiar a I that looks you the ago term quarters homologation. really the of customer mentioned give wasn't doing Just that programs announced and programs radar several term. with in terms uptake? what can And initial large you OEM sense of

would the know. So to growth, ramp impact be opportunity any that has that if helpful on

Donald McClymont

So track. progress the this it, planned quarter. a than about made -- radar on maybe We've lot we talk is little remains bit a through better program, as

the of small where a good revenue is. the and We in that frequently word XXXX, feel And which of wedge our very but is is -- part thin used and in of qualification of then sort the have program, we a approval, for of end automotive. about the ramp homologation that fancy amount of significant just

Sujeeva De Silva

for Can then specific helpful imply ship regulations to I'll up and well. benefits indie and would separate there. but shipments? there And would those of the in I'd maybe question terms try about regulations, kicking talked sets what in timing ahead try on NHTSA you'd color a talk just product for to imagine any you keep those you the as requirements, of of about NCAP. be the --

Donald McClymont

I the that by being sort as are in for emergency now of getting we're braking we far cars the particularly becoming governed driver They're automatic monitoring and our dealing mean, several regulations as with go. frame regulated are systems. design-ins designed basically, into areas, time now

just a terms of that's for is, becomes kind It basically and it. that's tailwind us what So product base what's that's driving of where our in about.

Sujeeva De Silva

Okay. product Last cost talked breakeven kind on. what Raja product cost any move implied there? would specifically there question, improvements, impacted areas and are And The be the efforts? revenue I'll of rate by run any that about,

Kanwardev Raja Singh Bal

Yes.

of no just at at manufacturing, product are board wasn't cost my going the efficiencies. et fresh areas a all OpEx, across capital metrics, in role impacted. That be of working functions, to cetera. look So our looking the Really, taking comment. no, we're intent new support my We're

there, updated. the So not point keeping breakeven to changing on view point. I see and we're opportunity this we But forward definitely at look our you

with line the million that comfortable of have $XX roughly top and models consensus think us we're now. for getting at to breakeven, I

Operator

from is with of Bank. the question next Ross The line Deutsche Seymore

Ross Seymore

And strong, Donald, of the in et guess visibility kind lot peers getting rest question of worse, near-term cetera. the of burn, not you you of talked from talk the What another able trend I have question. business a world, sorts geographically much. a but and why now? down or about indie in long-term the was so buck and to those general, I the to things? customers, leg is China kind a of whether just seeing are want inventory

Donald McClymont

the much and us. And the now particularly believe affected -- gone had really our the X the in the us quarters governed at order original were share we've X macro. where us takes as to solidity where issues largely we're is that So that through the for specific back is it the more had to program quite the trend a our gain and period that. that by in own macro that rather see simply, profile to in ones we ones market last is that And We able usual our we're business choppy. than are that And buck the reason ramps, by beginning behind delays first revenue those are still us. to sure, or

Ross Seymore

that? your perspective. a Got of weaker to It's is from it. are is. macro Makes sense. just exactly is not where And is demand sense it it sort in stronger centricity that or is designs where Or any there geographic your

Donald McClymont

it's through this the see did also, of little recovery Whatever the -- former No, latter designs others the it's than latter more and e-vehicle a a centered. the last you the more But latter China, actually seen a We tailwind a quarter than due rather, former. as said. geographic, to former. are end have the towards bit quarter of or the where Not but of bit more yes, of our their in industry. than than

Ross Seymore

that? is just we remind last half, comfortable any the I this seasonality us question, say to to give what's second with anything What the to guess like year's the is importantly, of there revenue? of little have about Any us sort products to next where conceptually, Can then us that a one, half, vision, -- color. get revenue for you just more think And bridge key refreshing are are need you you're buckets it. year's of launching, my radar? Street Got you probably it's hear kind sort make to more that year. first like But next from that

Donald McClymont

million. year largely to the approximately evenly And experience run are drivers of $XX and which exiting between main radar for second which in have user X we're which bridge at a Well, products, the get half, said, split the quarter the as that's about rate vision-based and through also, dogs a there, is I amount some then there's, it. small then we and talked cats, in ramping of last but a And year. gut we

Operator

next the line is of The The Instructions] question Company. [Operator Acree Cody from with Benchmark

Cody Grant Acree

thought And about XX%. you during radar Were the with on this could could and Raja, I in maybe on that wins the puts promotion. that talk that, that and backlog congrats the have the higher. the machine been have backlog Maybe Congrats growth, progress. the wins year number out? if any would there number vision came takes

Donald McClymont

which I the fairly on were. have going landed. we future. than run is But But impact and and adjacent way won we incremental the had reflected to pushouts, translate in number we're between into there annual Yes, a the year, did mean, very next business happy business where number, well-publicized years. mean some number that rate that. it's It's I near in the great more an

Cody Grant Acree

year? And ramps either maybe the just further you provide any or can on vision radar detail machine program for next that you're for expecting

Donald McClymont

Well, ramping this I is heavily mean, machine vision through year. already

the X of We programs in deploy add with And I of to across is space models expect to going have we to mean BMW classic spread the a individual a OEMs. lot OEMs going model lot programs in Series same they new more Series. that example launches. as X Series, X that starting

radar portion OEMs of will that So multiple also. through XXXX, in we computer We that's then top do ramp next that. on the out. and vision a of roll be that that -- really year to to expect how year Through more expect big

Operator

Stoss question next the The from Craig-Hallum. line Anthony is with of

Anthony Stoss

a coming and evenly Congrats vehicles? sense also a in. on the of it's give little geography, nice as the sense also, Donald. Raja. vehicles And of in to seeing congrats, where then wanted it's if on reduction maybe lower-priced drill I you execution, content split, a if a you backlog, bit are us can shift more just by to And in

Donald McClymont

but larger of and U.S. lines some product wins the China of Xs also Korea. won Japan terms the in we China. in span which European and business, more there, split we The a of Tier have is multiple and programs, also in within backlog, which centric have OEMs business, is In lot geographic the based, outside

-- is what -- it's of And second was of I question, mean it So sorry, your half it's probably XX% then outside. the Tony?

Anthony Stoss

customers? in with content shift Is a seeing where you're a to reduction your there cheaper vehicles

Donald McClymont

at a just we macro an the of the last story quarter, which could into Not is offer. narrative mean sort present. we I that that malaise really explanation for brought that's overall

mid- but related some to in going they're at and deployed typically into the to of we in mid-tier computer higher where tier in they're us, and by low-end mandated particularly end lower the of safety deploy also then law, customers, applications For vision be vehicles. also

feel I much -- rates ranges, we'll we right interest don't model now. the of think too So split a between especially coming with down

I time. of think over that's which something narrative course may decays the as a be

Operator

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

Craig Ellis

appointment. dynamic the some wanted of I go to and longer-term your just a on back congratulations to about Raja, prepared inquire to relative Donald, comments. backlog

talked again past look revenues. today, level some has years the we the mentioned If about the in in X and visibility. out, $XXX providing company you the of So backlog million

I blocks calendar be The that at think million? 'XX. is, are from we'll it XXXX, you where the was bigger level think about year beyond take what us towards $XXX that we that question as consensus next talked that

Donald McClymont

running be The will and larger continue it, add in the the still will and terms to Well, think backlog also that And some ADAS vision our which so. growth are less to large entire backup radar. We it linear today the by driven business is in tend will of design our percentage is experience to drivers do prepared portion the a we driven user be of drivers products, continue do a in to company future. good be and the It But remarks chunky, business. those grow. Yes. now we wins that into is those we large radar. key of I mentioned our the have more and from expect by for really vision cases

Craig Ellis

some design you China. then talked in back follow-up And the of wins to that question about the it. Got going

in there then Can intermediate-term domestic ambient customers? win how processing. those the about you maybe revenue X design momentum with in the some in area just lighting think and one think the talk geography that were and vision about you I of opportunity

Donald McClymont

I to it's traditional had BYD the is of more ours much cetera. also. all the which et around mean we've period, OEMs, from and newer China longer for large at Li been and such have good. I a mean more Nio, ones, pretty Avatar entries, Auto the Yes. a presence including as a customer

a we sales great representation. So have

sales We it's channel guys. exciting. all great very a have of market. dynamic It's And a very those into

entrants And is we at OEMs into reason. than we're new ignore. more others. say, The of similar It's speed. the market. about that that volatile a It's for more can't XX% entire term China there. afford It the well There, much in things we behavior excited intend coined space. is But can move of market automotive market, so e-vehicle quickly in be geography let's moving to, represented to is in to the market the we

Operator

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

Jonathan Tanwanteng

you Raja, could potential risk role. Congrats, or I the that. further about delays anything or on talk if pushouts wondering the like of was for

You in and you are What account not all those point, of safe mentioned have Or of visibility for across at completely kind to the obviously this the the they're seen have pipeline? into think industry cushion you put maybe do you past. most that just what year next we've is in low, in that done yet? pretty

Donald McClymont

review to felt be after that remains built we quarter did a last mean in enough I the conservatism case. and further during on, we days XX we that large

believed days do specific in belief ago. days that behind we We our XX us, then, more strongly we're road us. that that even they're it but more the secure we believe The hurt we believe now. were strongly down than issues fact, of XX In

believe view upward paper. macro, In moves conservative the overall to the on And for beyond. we've model units versus and SAR built should what overall that a addition down in 'XX in influence into 'XX on or of we and the automotive our very direction anything industry be terms tailwind, of we a shipped that put

Jonathan Tanwanteng

Got good momentum back. see to it. it's That's helpful. coming the And

get might that -- is reaccelerates? use to positive? the Or use final guess, any on you need flow of to Second, you one I you thoughts as before cash the ATM you to if again kind expect could Raja, growth

Kanwardev Raja Singh Bal

use. No, we don't anticipate any further

Operator

further questions, for no would comments. like now hand conference to the are McClymont there to I Donald As closing over

Donald McClymont

Well, thanks, weeks. course investor look forward seeing conferences everybody, and the the at few attending, of over the for next to you

Operator

you. Thank teleconference. This today's concludes

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

indie Semiconductor (INDI) 7 Nov 242024 Q3 Earnings call transcript