Aeva Technologies, Inc. (NYSE:AEVA) Q1 2024 Earnings Call Transcript May 7, 2024
Aeva Technologies, Inc. beats earnings expectations. Reported EPS is $-0.56, expectations were $-0.58. AEVA isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day. My name is Desiree and I will be your conference facilitator. I would like to welcome everyone to Aeva Technologies’ First Quarter 2024 Earnings Conference Call. [Operator Instructions]. As a reminder, today’s conference call is being recorded and simultaneously webcasted. I would now like to turn the call over to Andrew Fung, Director of Invest Relations and Corporate Development. Andrew, please go ahead.
Andrew Fung: Thank you, and welcome, everyone, to Aeva’s first quarter 2024 earnings conference call. Joining on the call today are Soroush Salehian, Aeva’s Co-Founder and CEO, and Saurabh Sinha, Aeva’s CFO. Ahead of this call, we issued our first quarter 2024 press release and presentation, which we will refer to today and can be found on our Investor Relations website at investors.aeva.com. Please note that on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent dates. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.
For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our most recent Form 10-K. In addition, during today’s call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Aeva’s performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. A webcast replay of this call will be available on our company website under the investor relations link. And with that, let me turn the call over to Soroush.
Soroush Salehian: Thank you, Andrew, and good afternoon, everyone. In Q1, Aeva continued to build on our strong start to 2024 as we executed to our customers’ milestones as well as further our commercial traction on new opportunities. I would like to highlight our key accomplishments in Q1. We shipped a record number of sensors to customers in the Q1, including to Daimler Truck. As a result, the first Daimler Truck vehicles equipped with Aeva sensors are now on the road for real world operation in order for Daimler truck to continue to ready their stack for commercial operations. We are excited to enter this next phase and are overall on track with the OEMs development milestones and start up production timelines. We also made significant progress on multiple automotive RFQs. In particular, Aeva completed a comprehensive audit for a global top 10 passenger OEM and advanced on multiple other automotive engagements, which reflects the growing interest and maturity of Aeva 4D LiDAR.
To support our commercial momentum, we established a new automotive center of excellence located in Germany, which positions Aeva to collaborate directly and more closely with our existing and new partners in Europe. We believe this team further positions Aeva to expand our automotive momentum. Let’s now discuss in more detail our recent business developments. With Daimler Truck, we have successfully kicked off the next phase as our exclusive Tier 1 production supplier for long range and ultra long-range LiDAR. In Q1, we delivered a significant number of sensors to Daimler, which have been integrated into the trucks and are now on the road collecting data. As part of this, our teams are in close collaboration to integrate Aeva’s unique velocity data into their perception stack and continue addressing key use cases needed for safe operation at highway speeds.
This work and the real-world data will help Daimler Truck and Torc validate their stack on routes they intend to deploy for commercial use in series production. Overall, we are progressing well on Daimler Truck’s milestones on their path to production. We will continue supporting the rollout of additional trucks over the course of this year, as Daimler Truck expands its fleet for on road deployments. As partners, we are jointly on track for Aeva’s start up production in 2026 to support Daimler Truck’s market entry in 2027, which they recently reiterated in their post Q1 investor update. As highlighted in their Q1 update, Daimler Truck is making great strides on their path to vehicle launch, where they highlighted the startup testing with the industry first vehicle platform and finalization of the production intent hardware for commercial launch.
Finally, before moving to the next topic, we will have some additional updates to share together with Daimler Truck and Torc at upcoming events. The first will be at a Fireside Chat at Financial Times Future of the Car later this week, where I will be joined by Peter Vaughan Schmidt, the CEO of Torc. And later this month, we will be at Advanced Clean Transportation Expo or ACT with Joanna Buttler, Head of Autonomous Technology Group at Daimler Truck and other key management at Torc. We hope to see you there. Now, I would like to provide an update on additional opportunities that we are working on in automotive. Interest for Aeva’s unique 4D LiDAR continues to increase following the production program win with Daimler Truck. This is across a range of applications including for both passenger and commercial vehicle programs.
Based on our engagements and inbound interests, we are excited to see that the industry is advancing on its trend towards FMCW technology to enable new capabilities, including automation at highway speeds. While the adoption of FMCW has begun first in commercial vehicles, there continues to be signs of similar trends emerging in passenger vehicles with an increasing number of industry participants publicly announcing FMCW initiatives for next generation programs as well as Aeva’s growing number of RFQs. In particular, we mentioned last quarter our engagement with a new global top 10 passenger OEM. I am pleased to share that we have advanced as a finalist on this OEM’s RFQ, having completed the comprehensive audit and final assessment ahead of their award decision.
In Q1, we also progressed on other ongoing automotive RFQs and advanced from the RFI to RFQ stage on additional opportunities. We continue to expect a number of these RFQs to be awarded this year. In addition, the recent rulemaking from the National Highway Traffic Safety Administration requiring passenger vehicles in the U.S. to have standard automatic emergency braking systems by 2029 has the potential to accelerate OEM adoption of LiDAR. And we believe FMCW LiDAR is an enabler for achieving the more stringent requirements. The new standard will require OEMs to prevent forward collision at speeds up to 100 kilometers per hour or 62 miles per hour as well as prevent collision with pedestrians at up to 45 miles per hour, both of which are at higher speeds than what solutions on the road today are reliably capable of preventing.
Building on the work that we have done with Daimler Truck, we believe Aeva 4D LiDAR is particularly well positioned to help OEMs achieve automation at higher speeds. Aeva’s unique ability to simultaneously deliver long range at high resolution and instant velocity measurement enables our LiDAR to more accurately detect and classify objects at farther distances, even in challenging conditions such as inclement weather. The new standard also requires for the first time that testing for pedestrian automatic braking to be conducted in the dark without overhead lighting. With more than three quarters of pedestrian fatalities occurring in conditions other than daylight, this is another important test scenario where we see LiDAR with its ability to function in complete darkness has the potential to meaningfully improve safety for vulnerable road users by pedestrians and cyclists.
Aeva’s 4D LiDAR further improves perception with instant velocity for every pixel that can enable faster and more accurate object segmentation and greater ability to filter out noise resulting in more confidence in avoiding hazards on the road. So overall, we are highly encouraged by this industry development. Our focus is on meeting the growing interest for Aeva 4D LiDAR and converting our current RFQs to production wins. As part of this, Aeva announced a new automotive center of excellence with a local engineering team in Europe out of Germany. This positions Aeva to collaborate more directly and closely with OEMs that we are engaged with in the region and will also allow us to accelerate the validation, testing and as well as providing direct OEM support for their programs.
We have assembled a team of industry veterans with extensive experience spanning ADAS, autonomous and software technologies at top OEMs and suppliers such as Mercedes Benz, Daimler Truck and Valeo. We believe this new center of excellence will not only enable us to support our existing engagements, but also better meet the growing interest for Eeva 4D LiDAR on new opportunities. With that, let me turn the call Saurabh to discuss the financials.
Saurabh Sinha: Thanks, Soroush, and good afternoon to everyone on this call today. I would like to review our Q1 financial results. Revenue in Q1 was $2.1 million driven by scaling of Aeries II shipments and NRE revenues. Non-GAAP operating loss was $32.1 million which is near flat year-over-year as we maintained a disciplined approach to capital allocation. Gross cash use, which we have defined as operating cash flow less capital expenditures was $32.6 million in the quarter. We finished Q1 with a total liquidity of $314.3 million which includes $189.3 million of cash, cash equivalents and marketable securities and a $125 million of available facility. As a result, we remain in a good position to continue executing with our existing production partners and to build on our growing commercial momentum with additional production program wins.
As Soroush mentioned earlier, we are engaged on a number of RFQs, which are expected to be decided during this year. We believe that the combination of our differentiated technology and a strong balance sheet positions us well to execute on our existing programs and win additional programs. With that, let me turn the call back to Soroush for closing remarks.
Soroush Salehian: Thank you, Saurabh. Aeva is off to a great start in 2024. In automotive, we executed the Daimler Trucks milestone and realized strong progress with multiple automotive RFQs. And in industrial, we are on track with our first industrial SOP later this year with Nikon. I want to thank the Aeva team for enabling these accomplishments and for their continued commitment to Aeva’s mission and partners. Looking ahead, we continue to see strong and growing momentum for the adoption of FMCW technology to bring new levels of capabilities to markets in both automotive and industrial. We continue to position Aeva for greater success, having added leaders in their respective fields and maintaining a solid financial position. Together with our strong progress on multiple RFQs, we remain confident in executing on our existing programs and securing additional production wins. With that, we will now open the line up for questions.
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