Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to the Mobileye Q4 2022 Business Update. [Operator Instructions] Please note this conference is being recorded.

I'll now turn the conference over to your host, Dan Galves.

You may begin.

Dan Galves

to for quarter XX, the welcome earnings full XXXX. and call conference period everyone, Mobileye's and fourth year Hello, ending December

differ contains actual to see on factors it. As that statements additional involve materially. the formality, information of uncertainties. Such results press environment forward-looking Please that release, and discussion includes refer business currently a risk on accompanying statements could the we please as to specific risks cause based the matter today's note which

call, financial this to posted GAAP provided on refer Additionally, we of both our and will reconciliation A GAAP in earnings non-GAAP measures figures. release. to non-GAAP is

Joining Prof. Anat Amnon us President; are and today Heller, and the on Shashua, Mobileye's Mobileye's call CEO CFO.

And turn now to Thanks. I'll the call Amnon. over

Amnon Shashua

thank you call. and our everyone, earning joining Hello, for Dan. you, Thank

a many Mobileye. Mobileye for from public only our by on to by was experiencing. attention a advanced important We when a increase big see was possible again, at already most really is for in I executed attention benefits and and time companies. year by we we IPO successful of have broader and this plays important opportunities incremental partners, think the momentum and seen solutions we media business this focus This a the more but analyst. our being driven very unique amplifying into drives customers incremental visibility XXXX are

to up of generated source operating started those higher by per than combination cash Financial results our almost that More operating adjusted in of and pure shift clearly is vehicle. from the XXXX million and flow. XX%, were headlines grew grew Revenue volume to growth $XXX a by good. profit volume content very XX% of we important

came price Our of growth clear advanced and of products higher saw in we a historical ASPs. a products, our that XXXX, evidence revenue higher from one-third per vehicle where our much than carry

future year. generation, was record XXXX In terms a business of

billion about This $X.X XXXX our content revenue about business actual year basis. generated in our at current on that times we alone, of Just $XXX is estimated per X.X new double representing ASP. blended in a car and revenue unit future per

Overall, through of represent of business current revenue XXXX. total billion that estimate future we over our book $XX

our particular new shipments consumer as AV this continue outpace to number long to our Also Mobility our clear, excludes as actual wins Service in business this continue a year, As grow. backlog. to be a number and will

businesses. new our with to and a the business Beyond numbers, business top The of we win to ADAS segment. ADAS like high-level platforms will that trends significant higher all development every business this our variant ADAS now customers is camera, large-volume one run a in XX maintenance revenue saw revenue recurring grew We of continues single-chip the and to positive XXXX, ASP in from This that in map. have drive across REM front-facing many XXXX includes machine. map. key A continue volume cloud-enhanced

many reasons difference a secured regions are increased saw also There development SuperVision start-up across a for interest in all product our uptick between the traditional product product. in OEMs very launched the Board. is really and volume and a from and big We in a both significant There traction.

the important solution means time like in a catalyst that that high from in will SuperVision interest ZEEKR is in other production was investment major with A capital. OEMs. a valuable the environment. a with and in Offering in OEM probability. driving SuperVision very result an already in from Launching China is current commitment This program product major is a

in Number have anywhere, two, to the SuperVision demonstrate ability of just Israel. we full the now set a feature not

and all in the nearly Our Europe. REM U.S. map roads cover now

ability and Europe to have carmakers, show covering in discussions intervention. This customers with to thousands technology in the critical everywhere both expeditions little been moving decision of As miles phase. the able to has a that long-distance truly U.S. works result, human we been execute with

tool their is decision-making then surround as is recently. of particularly with something offer SuperVision The an with part mapping Kit, development. vision, own as take development the served own customize we software It one and until at Mobileye's OEM another a ability software for the and computer EyeQ their but important software Mobileye's strategic development partnership beyond customers, REM the began couldn't is, catalyst for differentiated earliest. truly that software many our for system OEM has consumer-facing discussions of asset like to our

camera-based wide automakers an In operational This the overall probability success to in surround profit hands-off benefiting in of design OEMs that meantime, among and performance invest and the competitive environment from and has technology urgency eyes-on, Chinese high domain, sense terms of have ramped-up in both Tesla, validation. systems with prestige. creating systems among OEMs other is of

for eyes-off point makes presentation, a growth served incremental in shared We in eyes-off design a CES product this large beyond, expect step SuperVision driver instead modular of and the But a ODDs broad our which IR it website. a operates at very available product forecast is be and SuperVision operational very to to our series Because transition our XXXX of across AV launch Consumer our expected volume moonshots. domain, also as super. experience of and and

work. traffic becomes here, roads high-definition the to all in of the environment SuperVision the policy done driving the in take types From other system. system the covering and maneuver redundancies In the to are maps require describing all the great requirement in all heavy-lifting words, scenario adding to to any car perception of incremental detail, eyes-off for eyes-on

with ZEEKR program. The from having AV SuperVision we're our successful Chauffeur has interest products. Essentially, every SuperVision also eyes-off is eyes-off follow-on top more discussion lot and customers including to created the modularity to a productization Consumer develop now five of this concept of

a evidence recent in program this QX. off saw with kicked OEM, European premium which We in a SuperVision

opportunity represents The XXXX this portion During discussions, alone in that expanded scope include through program billion of Chauffeur XXXX. timeframe. the Chauffeur to program program of $X.X expected launch the a will an

our enable to demand a as develop to supply come Service, self-driving a then together on Mobility plan into demand and continues and and the side, supply relationships system scalable on business. use our Finally, to

many We the network public on companies operators. and transportation relationships demand with side have transit

We builders, vehicle with system. Mobileye Drive purpose-built three platforms our which have integrate self-driving developing are engagement vehicle that also

generate We in first our our future through in estimated self-driving expect this systems an $X.X total XXXX. business have to for revenue relationships revenue orders XXXX side billion of and that supply

course, and was the growth solutions of our systems this XXXX and why SuperVision traction resources. is This overall, as these really interest to well. in productization So, of XXXX operating testing and OEMs led for process accelerated from where supporting increase an expenses Continuing the year for was eyes-off in requires and teams testing it high with XXXX. supporting support unusually growth development areas and validation of and next-generations is a in works This EyeQ will radar OEMs, Service of be chip. lidar terms launches as and and SuperVision of in to our productization expansion site growth Mobility again like of -- launch,

XX% expenses would active of are revenue our that product. to R&D I products related either and a like generate sensor-ready beginning approximately to note Chauffeur, like just is still or Drive that pre-revenue SuperVision

to it you. Thank now turn results. the I over go to Anat through And

Anat Heller

and Amnon, joining for the Thank thanks everyone. you, call,

that to XXXX. related to exclusion is Mobileye The all aware is non-GAAP begin, of acquisition in non-GAAP numbers comments intangible assets, Mobileye's primary Intel's of will in mainly my measurements. I amortization please Before on be profitability refer which

stock-based exclude compensation expenses. also and We IPO-related

about to of global Revenue our the down year-over-year track top few Compared is XX%. up line a full-year. with Starting growth and in words our revenue XX% record consistent production is continued of XXXX growth. XXXX, XXX%

SuperVision, from made $XX a alone advanced to to our extent the mentioned, which in average a points in we price, rise revenue meaningful portfolio about XXXX. Amnon in growth XXXX. system our along system This rose price as which as As well in XXXX, impact in drove average chip up lesser increase XX mainly passed on driven of $XX to The customers. was by cost

mix to content. product. to unit much system SuperVision addition profit certain more higher SuperVision margin as importantly, than But hardware gross in a our The decrease of gross a full per we led EyeQ higher core which contains product deploy generates solution our

gross and X% XXXX. unit SuperVision result, grew per As a profit EyeQ combined in by

Turning grew Revenue year-over-year. to QX. XX%

with being the remainder margin of Our year. operating volumes. was about the to XX%, of overall our above due prior our EyeQ from SuperVision million shifted the QX revenue R&D also was to product $XX despite X% up due but growth, of in was up revenue guidance than XX% that XX% This better-than-expected we expectation XXXX. expenses related to QX, of growth, but less driving a in expected most

to guidance. XXXX Turning

macro expectations that pleased line of the with of are of our despite IPO, coming internal down at assumptions the remains since in the for XXXX We guidance October our time our spin. midpoint

of I'll give side, assumptions. On the you sense our a revenue

want level X% That uncertainty consistent points volume remains for corresponds years, that volume about is X share. and lower growth, X from Focusing are commitment remain prior to and high-end, of production on we've customers below EyeQ market than somewhat which growth, We that elevated. the is our ADAS to received global to we that acknowledged assuming the the few production macro somewhat the conservative XXXX.

about we SuperVision Demand component than are than which chain the in some experiencing the XX,XXX particular On of XXX% this, we a higher side, is units. ECU. supply but assuming still bit are constraints versus XXXX, growth was one more

as the level run including commitment supports rate suppliers focusing, side, On XXXX at forecast have that second-half well. positive the our we from our we a are

quarterly around half be over is In to the terms revenue has up the year. our first expected cadence, more historically, year. pronounced the even XX% of course of This ramped in expected revenue the year of of with

some revenue conservatism the lower elevated QX appears that price SuperVision EyeQ QX and businesses, general XXXX of the part on on as into On as versus to are ahead customers, from both be XXXX. of increase well and our the expected went X. volume January EyeQ purchases This to in effect impact be

QX volume XXXX and the low in the mentioned SuperVision, QX component earlier. is key to On related ECU QX versus

constraints, to exit the is in side, QX we which SuperVision QX expect expect bit due system than we price QX and the to the to be trajectory. excellent On low-$XX, average a XXXX an but lower

point income few will to above. higher things operating expected increase gross is again down per due On the of a margin but profit year-over-year, revenue to SuperVision side, mix unit Gross mentioned percentage out. to the there's the be

with OpEx also only expected combined We XXXX, to at XXXX. moderate operating our portfolio, in grow higher in year, OpEx the margin beginning of time is will mentioned, expected On range XX% continue in ROI to operating high growth to in XXXX to our with the expectation advanced which to impact that consistent growth estimate are our internal which IPO. operating in expenses leverage the as invest low-XX% during results. versus Amnon side, heavily is the we rate to lead

for Mobileye pretty at just taking your I my for public timeline newly team wanted earnings and others what a questions, is company. thank supporting a Before to many accelerated

take we you. Thank And will now your questions.

Operator

[Operator questions. Instructions] proceed line first Please your with the Itay question from of comes Our Michaeli Citi. with

Itay Michaeli

Great. Hello, everybody. Thanks.

two SuperVision. questions, one one on financial Just and

On SuperVision, And then talk gross what maybe SuperVision full you Lite Anat, offering financial, ADAS talk of to as the SuperVision, at perhaps are margins, Thank well in and engagements what business enhanced XXXX? solution for seeing offering? for there about you're ADAS core kind what versus looking of expecting camera-only hoping the about SuperVision for the as customer maybe you're ODD could you. on portion a hoping for

Anat Heller

Okay.

margin So for on this on SuperVision we're consistent gross seeing are year. we side, side, XX% And XXXX. approximately the seeing EyeQ through

Amnon Shashua

two version, gross version, of an are Okay. with there our there. cost, efficiency a with increase our creating that is SuperVision to margin. a lower we're more I'll the will add evil increase new drivers bit margin production, that One the

increase margin. at arterial The SuperVision highways, of our Second bundles. car, the unlocked of the also increase content is per be per the and and gross and during naturally roads launch course, will moment China XXXX in urban would customer the revenue would at that the

are reaching of margin XX% between of XX% SuperVision targeting gross in to the long-run. kind We

about of In part the second a front-facing of terms SuperVision is plus question camera-only, your radar. a camera-only

radar on as vehicle front-facing is well. example, there So ZEEKR a the for

can another without element having satisfy Although add redundancy, can front-facing which but all system. improve the the of the radar, a MTBF of functionality we the radar

this SuperVision which offering In a Lite, is recently. terms been of has done product very

is So two growing don't and have camera suit. the have traction for for with yet the -- the full SuperVision full traction we all X is and EyeQ that we

Itay Michaeli

helpful. Thank That's all very Perfect. you.

Amnon Shashua

Itay. you, Thank

Operator

Goldman next with question with of the questions. Sachs. from Our Delaney your proceed Please comes Mark line

Mark Delaney

opportunity on the based? Yes. if your for And question. the depth to few broader or Thank this SuperVision. relative perhaps days for you're you products those to with much you XX ago? having with or very and respect taking of a in XXX more seeing that Can solutions is like versus the a use discussions breadth just Mobileye With you're OEMs the improve say to bit elaborate advanced programs OEMs more traction

Amnon Shashua

design nine traction I And expect in eyes-off carmakers, the second said, into is SuperVision half the out six Chauffeur, scope win year. As have towards we we now brands. additional expanding to system. The SuperVision of the come

that be customers we but the ones OEMs. outside six named additional traction those half would second think have We the yet, I haven't in of

Mark Delaney

Do your chain the bit supply your on constraints that steps that taking having intermediate That's one longer-term. alleviate And and from could. please, the that limit very in more Thanks. a me that chain have alleviated to I more are Company to including you you Thank supply and a if for chain Mobileye partners you. said and helpful. supply ECU component. SuperVision The called visibility potentially

Amnon Shashua

the first year. component rest towards from have the year be full we So SuperVision, half it's the supplier, the This the volume. alleviated the rather volume we one deliver we're of than the and of constraints of It's issue the we second half in motherboard. out an tilted of the really half in of is that confident SuperVision why and second one of with have year will a the that particular can component the

Dan Galves

could Yes, add words on couple I this. just if maybe more a

we a ECU produce. had than bit to XXXX, possibly it in to So expected we quarter, the delivered And access. more fourth could able every we be in little was

supply satisfy the said the to more so to in we needed time have can of and a sort order order get capacity, additional where much so the half, gas well. would at of only XXXX the install capacity a take-down not we to levels that production run-rate; have in also a just in commitments to for that satisfy really much XXXX in as but We what to I XXXX demand, period to could demand reiterate we satisfy really second that be higher

Amnon Shashua

Thank you, Mark.

question Next please.

Operator

question and the question. your next proceed Buchalter Cowen from comes with Our of line with Joshua Do Company.

Joshua Buchalter

way how sort Hi, result. the SuperVision. first my to don't ask guys. guess, you a, a premium questions for European scope automaker I Any Thanks sounds much you for for announced needle is first moving like a congrats that taking the you're know, in about does program? I can that with and you. particular, much doing be ZEEKR to material eyes-off currently potential mover, Thank what that us on hands-off, how of wanted I and Geely with and it program, the can give that

Amnon Shashua

we the time called to eyes-off, will six streamlined in it, CHXXX, it With with was EyeQ hardware to respect we X hardware the three piece are the streamlining with ZEEKR, that one chips, at of be the announced EyeQ it now XXXX X, we timeframe. we so announced when

that which the an additional in named for based additional additional not the the eyes have a X. I second half European, We eyes-off is with timeframe, and believe there an of potential off-system yet OEM one, year which be on three could is EyeQ and for an one, this announced XXXX

Joshua Buchalter

so appreciate spending. about ask the Hi, I And color. wanted OpEx your then R&D to and

internal between, it about spending let's giving say, as you You ones was XX% focused you're was market, AV, the adoption your on have Thank order excited of ones on and the called could the but but color, software well and fire. to number you're just lot forthcoming out, you priorities, if where that as mapping. you. product, lidar And irons a wondering rank which particularly I helpful broader like Consumer even bringing are own radar AMAS,

Amnon Shashua

a and expenses Our very mentioned them. number of diverse you is

middle working radars the on both productization the radar, have sensors, expense and timeframe, lidar, on a XXXX of lidars. there we We of are active

ongoing. is this So

have this compute We mapping REM based not require the increasing on on expense headcount on is mapping, The programs mostly much and more is the increasing, is more mapping. a really compute. that that it's

Drive, SuperVision the of expense forward expense. to from another Chauffeur which have Mobility to go the We that's of source is the R&D we as Service, in

software, X, coming on support six is XXXX expense a more algorithmic very it this SuperVision, on There's going there with all a to those lot as XXXX. software, have six from the starting same around just hardware, We is Tier like not to support SuperVision till timeframe, infrastructure it's carmakers, software. diverse, but carmakers

a investments. creates need So this also for

We last So, our jump, now investments from year a will are investments, very that XXXX, on jump another year think XXXX diverse. we made forward. off and it this taper

Dan Galves

all with vehicle. the know, content that And last few value much the on say just and supporting is thing portfolio we've last that say, per months I'd additional it's talked for you so about I'd the

Joshua Buchalter

you. thank it Got

Dan Galves

Josh. Thanks,

Operator

line ISI. the question. Evercore our next with proceed question comes from your Chris with of And McNally Please

Chris McNally

the much going so one one explained gross numbers on on orders, you're for you've just XXXX, And looks progression on down it Quick side. matter XXX the pass-through early help like think team. profit points. something for QX, the STM that's the be just you that in just just to us like increase timing and Could margin gross Thanks profit just the so gross basis I us does do, help obviously could profit doesn't as QX, for on happen you on as walk, the dollars, but chip timing? that

Anat Heller

timing the January so Yes from is X.

but cost this we're year, over to our the already testing of it reason in that without for testing our a margin at beginning EyeQ. are decrease over those this - and customers the slight is increase additional we margin, for the and We

Amnon Shashua

SuperVision as second the half a profit a margin, much lower, in then half. prepared on the because effect but remarks that mix Yes the that SuperVision percentage we but margin is higher thing our significantly higher, is gross per of volume effect the bigger in is of second bigger unit be the will the a in a of revenue mathematical gross and was second becoming mentioned kind

Chris McNally

- 'XX, win, huge to you're just talk sort did the SuperVision in Chauffeur the to of the about walked typical can timing bit 'XX? And scale it in of some SuperVision us you of little - mean, into OEM is these But it conversation of that that then talking if congrats a on launches is Great. Chauffeur. 'XX, the the is obviously a of what's - transitioning think Chauffeur a I around - that deal. it it’s about lot

such part any of an of then with level three level working of half we when curious just talk, may the we it decade And programs starting these to idea launch? - and sort then up later important the obviously - four, of

Amnon Shashua

- so and level level Yes, no there this eyes-on or system is it's taxonomy, difference now us three that eyes-off with at CES. the is been between spoke what about I four,

with except eyes-off the XXXX, are So that in system starts in on ZEEKER rest OEMs starting XXXX. of the OEMs

XXXX. have a OEMs quite So be for - three year half said as closed this should the we systems and I be for one should eyes-off fourth nice second of traction,

Dan Galves

SuperVision because the serves Chauffeur really significant timing the the a - be number a launch SuperVision as launch years. Yes, of - and to doesn't gap baseline between have

Chris McNally

And your remarks, discussion having prepared confirm, in this of said conversations just to SuperVision most to you're Chauffeur? the walk you that great. That's of

Amnon Shashua

yes, it's Yes, not and every bought into most all that SuperVision. every, customer with

meaningful to Chauffeur. expanding about have indeed We discussion a

Chris McNally

Thanks so much.

Dan Galves

Thanks, Chris.

Operator

Antoine proceed Our New from line the question question. with comes Research. Street Chkaiban next your Please with of

Antoine Chkaiban

what quick the declare on what we additional for update OTA you features where where taking in unlock in I features question. the features Maybe first, Hi you users stand thank expect update on to should well? deploying mapping that exactly one base wondering will China key as upcoming the my was a

Amnon Shashua

the road REM is of recently the months, we'll part ZEEKR the highway in throughout to we'll OTA SuperVision that REM urban. the OTA And and leading SuperVision entire fleet - we - months highways. with XXXX, ZEEKR this to as arterial assist, as believe full the month And limited for customer full two together to be we full able highways, with it. of types the with or next we do like coverage we China including with start three will REM capability in map ago unlocking OTAed for So, about our additional increase then maps

Antoine Chkaiban

factor - competitor you an while follow-up a as offer think that maybe rather I your And you. main so, that Mobileye today the you reference understand us one thank a in offers how like is important your kick-off versus follow-ups has solution, work end-to-end competitor differentiating really Can Okay, when integration better practice, main when a doesn't? project platform. development differs you help

of on practice done the in that case offering work the is themselves, get by things be in us anything other how happen significant some helpful? development very typically still needs there, that assuming can out you there I'm would but the to OEMs tell

Amnon Shashua

Mobileye - - and system. end-to-end SuperVision is not an offering is the

all are about system, Vertical talked you're end-to-end So the other still the nine because together map. an an perception launches is is map six the built teams with ZEEKR a talking an about that think, talking building perception. the with system. of is end-to-end SuperVision end-to-end as OEMs system, handle and about the I integrating brands The crucial, you're that I

the same the policy is with sensing the both you the and is and have it both So built perception. of if get under-engineered The perception crazy. integrated it sea from you Then over-engineered driving be the is The crucial. also a the served try to to policy. separate into now be cost-wise, the that driving you perception suppliers, be is different way integrating will issues, being fact two or map team could map either

conservative But the too perception, doing supplier end you other and policy doing and up an again, if will places slow. driving you be into under-engineered try over-engineered to and be supply a with some too in separate system it the that

performance in a one think everything not only an but a advantages lot cost by advantages. is end-to-end also I So of has has advantages, system and complex done such where supplier also

shy not Everything ways. under cooperating it one under chip But cost - we house advantages. one other from in incredible offers are is

we're are to policy, like driving the only to of would example, where take that For open the control provides OEMs that. there perception, Mobileye

efficient top with which driving that. whether resist to chip we a is an it's end-to-end much OEM can Kit, policy, why more But of having our it we is offer different software, system supplier don't the the or whether EyeQ can other on be down This fusion our write to suppliers. get than code sensors, we enables to on

Antoine Chkaiban

helpful. Very

Dan Galves

Antoine. you, Thank

next And please? so question our

Operator

proceed Our next with Vijay with question Rakesh question. Please your comes from Mizuho. the line of

Vijay Rakesh

Yes great and guide here. guys, hi, quarter

Just a ZEEKR, back as of, to can give SuperVision Geely quick to on you the of higher significantly OEMs And kind there. at other OEMs and you of about for ramp the they you the the just Geely second outside volumes SuperVision that volume us in idea in talked half. are – What the six two outside terms question and of ZEEKR looking go some OEMs?

Anat Heller

Yes, I mean.

Amnon Shashua

Yes, no but did revealed number the reveal do We the volume, - did think. we say I at actual [bottom] the there. not we we said. but What

Anat Heller

Yes.

Amnon Shashua

We said that - we're than volume. that that we more said double

Anat Heller

half only. the For

Amnon Shashua

For the overall volume.

Anat Heller

will half the first second half. much than be The weaker

Amnon Shashua

specific capacity not of first coming ramp the we're new we're second not in talked Because the yes being about EyeQ and SuperVision, the up we half - quarterly. online. the is about but That's half. SuperVision that's versus revealing XX%, Yes, - of revenue of significant. combination for a But XX% second-half

Dan Galves

SuperVision than - than year-on be more growth. XXXX, XXXX more overall year And of XXX% so will double

Vijay Rakesh

it. talked Got pretty of And nicely of and capacity we expect then that grow these we probably in you and OEMs you right? have 'XX, building as safe 'XX accelerate should about into kind well, to for kind expect then that should as

Amnon Shashua

currently additional talking one it's of. XXXX brand its there not throughout ZEEKR, end the the so OEMs that Yes, OEMs of and not of Geely additional ZEEKR only another are brand, ZEEKR OEMs XXXX. there then there's That's and Geely outside - will We're ZEEKR then Group. XXX. coming outside kicking-in XXXX to Geely be it's launch XXXX are of in about beginning XXXX, of

Vijay Rakesh

the the Can able you talk ramping. to quickly it. I Toyota on what incumbent, kind to all how then in side - us? drove that EyeQ the Thanks. were will really you Got 'XX just of have win And you core know help drove have what displace on that you of win,

Amnon Shashua

Win which Toyota. with

Vijay Rakesh

Toyota.

Amnon Shashua

that think launched design two and we bid. a yet. it is a of anyone hasn't we the - win ongoing And program the I years displaced Toyota With bid don't was it won was ago

Vijay Rakesh

you. it, Got thank

Dan Galves

Thank you, Vijay.

Operator

the Our with next Adam your comes proceed question Jonas Please from Morgan line of Stanley. question. with

Adam Jonas

Hi, everybody.

And cash a if directionally as is bit growth operating profit keep well, flow 'XX? on expenses? can some or in little guide in with lag if of CapEx, that where it wondering So, was you given give could does going curious even of operating of kind the I'm pace

Anat Heller

in Yes, expect investment to be similar CapEx so XXXX. we to the

Our quarter to and the million. CapEx new is completed relates planned The second for about additional storage, is completion $XX and computer be and campus investments such. datacenters to investments remaining during equipment

Adam Jonas

Thanks, Anat. XQ in you terms? shifted dollar you follow-up, quantify shifted that And either a guess same, could, I the the help could margin And if XXXX, just engineering or into quantify from expenses to possible it's engineering quantify help bridging the could the purposes? expense mainly you forward Anat. for increase, I price hope of but the pull just of ahead something Thanks, volume is would if

Anat Heller

Yes so it's about $XX million chip that was made.

Adam Jonas

One to clear. be four, XX

Anat Heller

about out not of mostly to significant expenses. year next it's it's a the number NRE total mix OpEx to in yes this the But year XX four, from be One clear XXXX. very

Adam Jonas

Language]. Thank you. [Foreign

Dan Galves

Thanks, Adam.

Operator

next with the question. JPMorgan. your Please proceed with comes question from line of Chatterjee Our Samik

Samik Chatterjee

seeing for for comes it being about to was of, solutions, to on Yes when of the terms can the just hi. the expecting Thanks first basic of On for ADAS taking my questions. about and you you're able customers in guess, what ADAS wondering talk talked you. bit you quick that much particularly follow-up. more increase how of if enhanced nearing you Is one, ASP of I at are OEMs be sort it and upsell basic a that, little going REM. more market, much of to really ADAS sell driven it I point? adoption looked down seeing Thank and a this how sort being a how adopted but is able to solution high-end enhanced sort of the ADAS or they XXXX, by or I have

Amnon Shashua

it ADAS, with with makes Beyond enhanced a it's include Volkswagen the additional maybe OEMs now at the add launched trim a a big it's versus with hardware because of X.X, enhanced higher have would of carmaker believe lot XX two every doesn't end front-facing camera we and a sense. any day, it that option with just and software and cloud I the also ADAS, a an year to as update ramping-up. mix, programs ago option

increasing drivable But location creates the cloud, reasonable are, enhancing cost significantly path, by year, of new assist like of something for traffic drivable driving increasing the landmarks path dollars about of having where from all for the that. per of the by few light, car data ADAS traffic capability quite this opportunities lights, a the at tens association of the

Samik Chatterjee

about pushouts, to for Okay And the end of thinking questions you're of backdrop timelines of year, But if does of We out in worse? about the think sort demand of program, about terms of being OpEx adoption the in in macro of particularly seeing would a follow-up. plan the some lot of launches sort sort terms about or OEM get your a tapering pushing was also the programs. the talked flex the volumes. to certain worse. scenario performance you are get that this I know that likelihood bit you a how you. and Thank how towards in how you of of of recession and sort the

Dan Galves

- of faster years by, swings mean susceptible we're basically acknowledge even below we're global not Yes in so, - impact growth, I X% forecast We others. is set we've overall that's commitments bit growing forecast around Obviously, we in much a than to why the big from to and customers. this risks gotten production, you've the and production as to and set to seen global to so though orders that the as as past is production our our our Dan. probably flat volume production us kind an of

we any just much clear, to about driver of that. We're us like well, like hearing, impact and that but have anything about not hearing or the programs adoption also wouldn't definitely that hearing of push-out as of growth anything not not kind be too

overall So like, well environments we've last the done kinds all XX years. of in over

And - would. flexing of so in I that's don't expenses, that's terms yes, we think and operating

content I vehicle for solutions years that is our business per to new the for plus. the think growth long-term built drive XX drive next to

expenses. So, I would operating we on pull-back don't think

Samik Chatterjee

Got you Thank it much. thank you. very

Dan Galves

Thanks, Samik.

Operator

with with comes Our of proceed next Baird. line Please Junk question the questions. from your Luke

Luke Junk

questions. the taking for Thanks morning. Good

we've so And if evolution EyeQ intersecting developed bit, quite these six-plus How those SuperVision past the say. ask been all could we of with over about conversations with SuperVision well, months, to the I'm it with customers? ADAS wanted or that's about Kit cloud-enhanced wondering it could at talked customers. discuss a let's First, has as

Amnon Shashua

critical Yes, But advanced programs system when also and EyeQ indeed. a major advanced include is a do of the talk not. component as the of Chauffeur our becoming comes Kit EyeQ some SuperVision Kit in you Kit discussions SuperVision, All about the some component, Chauffeur, system. EyeQ especially

something SuperVision So advanced beyond. and system is beyond the

Luke Junk

just I follow-up, question my near-term for And to ask that. for on wanted you a expectations. Thank

guardrails first with should to So just of that especially near-term comes additional in SuperVision, component the in keeping and it we you. sounds Thank issue which said quarter there of any timing light expectations? you timing be the are mind expenses, like it's, when

Dan Galves

Can you repeat about Luke? the that. question, Sorry

Luke Junk

that. Yes, sorry about

timing and So as the quarter, financial the question of on looking around clearly timing well to component expense is side so things, in availability terms first SuperVision R&D. at around want be of the

there's, would first half the versus additional if any in first wondering things should guardrails or half, beyond specific revenue mind you. be just say? let's waiting second we quarter keeping be the Thank to that Just

Dan Galves

Yes reasons QX. year well not will the versus I the in the this mean, be We're first-half below of than I we do mean, more as. that. think we be and it's covered little a We specific in supply revenue going back QX that, talked kind half about going as revenue on think more I think the to get constraints pronounced year, because more to we bit every SuperVision first-half have of the

do our QX of We price major, but don't the EyeQ is read of a I you increase, that bit we I Thanks, below is natural, it that's think enough buying before there was think Luke. information. was little which why some that QX, additional hopefully think gives

Operator

the question your Gill from our Please comes of proceed And Needham Company. question. & with with next Rajvi line

Rajvindra Gill

How kind from Yes, ASP more of do kind higher of the of kind unit results. and about growth, strong SuperVision between move of your products? balance of revenue this your the investment thesis you thank and we of ramp-up as the very think of growth higher. growth ASP a congratulations ASPs great you kind question appears you growth be year came versus on that on third to ASPs A last mentioned

Amnon Shashua

take to I think mean, that? you - I want

Anat Heller

- to when of this - in that lot the ASP is or and generate there these you're you difference don't So order with and big volume going SuperVision, need produce SuperVision grow between a of therefore EyeQ a revenue. to high

So to a higher continue there's grow. and there mix, ASP difference with we we a this the you will in big further, think that as SuperVision see go

Dan Galves

blended the of volume right, vehicle lot achieved year-over-year we base of mix the SuperVision. SuperVision we QX. at XXXX prepared though mean, per think a in growth X.X% in came $XXX to that we EyeQ, and that of a was a cloud-enhanced saw per definitely in content I design-wins said remarks. the unit. Even growth it basis, I have like that's the on we ADAS, On visibility in contributor in biggest ASP was the Exactly

to in one half. of an additional trajectory plus We really half XXXX, customer, the in back the the see XXs a still brand back low with Geely

content driver bigger potential So about of future. in takes this business, the is the OEMs, feeling per the everything and powerful good like even Chauffeur that vehicle becoming a discussions we're time with more but in really out fact very brings to trajectory. upside play the a It part

Rajvindra Gill

we developing for from And niche are that. to trying certain a some application? that the of of competitors suppliers, analyze types with my lot as competitive Appreciate the investors vision well as questions landscape is, semiconductor large follow-up, computer evolving very receive

you autonomy, you. higher you you're and OEMs adopt currently how increasing are Thank autonomy? do as I'm of upgrading kind levels upselling and So of higher you vehicle how adding as do levels the customers foresee going per see the competition content wondering to evolving and of it as to your

Amnon Shashua

I of really go a of is those, the high think when semiconductor level systems, of you complexity to mix. the part small

much semiconductor. You so have of on top the

perception of it which when even the beyond driving the talk camera of a the with way, business software, it. you of control policy way behind a chip the integration car mapping, is front-facing semiconductor the software, ADAS, a together them is have all software, the You about the basic

if And stops that and less being incumbent some idea able market you a economy deliver. particular properly product, us very stopping as to deliver it's see in optimized to it The of newcomer new hundreds share particular validation any highly I very of to It's this expensive, there, optimization reason to don't very very, petabytes optimized market validate. and the very, share. don't over gain and disrupting scales last to unlikely of the highly have decade makes take business very, to unlikely of for is the data requires

So is really SuperVision systems, in game the share the terms beyond. complex market of on and

see it. are there carmakers Mobileye product, Chauffeur of very, we SuperVision more a even clearly brands. comes for the very of that FSD it, Tesla a a a think traction more is to I I strong very anything at And type don't and outside another leading position is step-up. having more close

the is ADAS. on competitive this And beyond to way business. the end low be So is where going semiconductor not it's there game a

Dan Galves

Thank you, Rajvi.

Rajvindra Gill

Appreciate that. Thank you.

Operator

question. question Our with line of John comes Please next America. of your Bank Murphy from with proceed the

John Murphy

ones. just guys quick two Hi,

understand with pre-bought big front what can just could understand of is? that the hike, folks have just in how January may so to that, we if you on discuss First, exactly price why

as progress or book the hands up And you're are as other the customers just we as do just can't and with this discussions, partners. SuperVision throwing making one, and far these Amnon, listen, saying, their business kind then of second ourselves this

handing that - they exclusive just of processing with parallel the keys how we're becoming kind is of what sort developing? systems or and other are So and you

Amnon Shashua

to don't value the to need OEMs, is and other the customers a is as provide with They to compete doing. want to deliver what key, so think most what do all story the they product, Mobileye a see sense. right? product, competitive I handling makes deliver want to dramatic OEMs they the to they they need

I ZEEKR the of moment. think launch a SuperVision of created a kind the significant

thing it's one to system very to system a and show thing something other development impressive. production show Because is doing

that not natural it's it's in So towel, decided landscape. of competitive the a simply OEMs to a evolution throw

- was brands the You deliver to a allows need best use I the and suppliers here. carmaker Kit think, very it. to for The EyeQ important moment EyeQ able with the technology be Kit the

this just time system to completely it money. done. know create at carmakers tweak makes investments time has Mobileye to add further really, the There forward. trying amount our of And cannot the forward the through significant factor sense, replicate to done kind I but investments of that's is been think software black-box, differentiation, don't being because, allows a be and personally doing, a factor not what - to to I their it It own but

a ZEEKR in of So OEM I created think of partners. kind that check the many our launch reality

Anat Heller

EyeQ the about And talk…

Amnon Shashua

Yes the costs, in we're EyeQ terms of a… talking about

Anat Heller

increase. of $X an to $X

Amnon Shashua

$X to $X.

Anat Heller

impact increase. a in And not buying significant slight now ahead before it's this of terms

John Murphy

Thank you very much.

Dan Galves

our to all question, John. to Thanks, this has right This [Somali]. going be be - is last

Operator

No problem.

with Fox question. comes with Advisors. last question line proceed Our from Steven your Please the of Fox

Steven Fox

morning to trying good XXXX business. you're guess pretty me going around was innovations market just I going roadmap. drive Two to CES your at all on conversation interesting. your Hi, What talking could, else is technology in and the in to radar ability about beyond win the in. of to if thanks first squeezing space? new product start wondering for that I disrupting to were questions I

volumes SuperVision end end gross thinking sort under you improving about secondly, calendar you. beyond and for is that your then with the the needed it's of of need to volumes this partner start seeing when year like improvement? as we 'XX start or And manufacturing we margins SuperVision, right-sized do more that of by Thank should

Amnon Shashua

Was did highly spin-off the component, the Okay, half not optimize better, of the cost I'll so start the margin that - is cost. production question was reduce in We simply of volume-dependent. with your another off the of a our hardware. gross would - the second terms

software margin, of gross it increasing our margin of beyond bundles, first the increase once was higher will - our include half. gross the part is that Another bundles Once bundled. SuperVision highway

Anat Heller

Radar.

Amnon Shashua

very imaging The building is handled limit not from those XXX really degree radar a radars to radars you front-facing we're imaging We awareness be developing that it's ladders want just terms a into important to the ladder, market motivations and our radars place by and create cutting-edge the because eyes-off to remaining those enter expensive. system XXX to and only don't need where streamlined, for in that a of. was to a new that for mention is

eyes-off experience autonomous cost layer I'm - an end-to-end can the of DB XXX eyes-off and channels, another would system. sensitivity of with XX-by-XX that and an reduced ODD. as And full about driving of considerably Now a the they talking create capability, full redundancy.

Steven Fox

Great, that's you Thank so much. helpful. very

Amnon Shashua

you. Thank

Dan Galves

as again. earnings call Steven. you. Thank joining first Thank we you a our you and for quarter. see Thanks, public will Thanks next company everyone

Amnon Shashua

Thank you.

Anat Heller

you. Thank

Operator

conference you today's for Thank concludes and this you And lines at your time. your participation. may disconnect this

Mobileye Global (MBLY) 26 Jan 232022 Q4 Earnings call transcript