Arbe Robotics Ltd. Price & Performance (ARBE)

Good morning, everyone, and thank you for joining us. I will begin by reviewing some of our recent business highlights.

Throughout the year, we focused on driving a RADAR evolution by innovating and delivering cutting edge solutions that set new industry standards. Our commitment to pushing the boundaries of Radler technology with our industry leading solutions remains strong. We take pride in the progress we have made in both product development and customer relationships expanding and enhancing our offering. And we are confident that our chipset will play a key role in those discussions. 2024, one of the top 10 global auto OEMs selected our chipsets for its next generation imaging radar. Zensac, a Swedish AI and software company and ALVI's T1 Sprint have announced a joint exploration of four d high resolution imaging radar to enhance safety in automated driving. We were thrilled to announce the collaboration with NVIDIA where together we are revolutionizing vehicle safety and autonomy. Arbe proud to showcase this groundbreaking technology at the CES exhibition in Las Vegas in January. Our high resolution radar integrates with NVIDIA's in vehicle computing platform [indiscernible] These technologies combine to redefine vehicle perception and decision making paving the way for what we believe will be safer and smarter mobility solutions. We look forward to future collaboration with NVIDIA. In September, Hirent Technologies is one of our key team ones announced that it is in fast tracking of the development of an ADAS system for a Chinese auto manufacturer using our chipset effectively replacing LiDAR from the currency The Asia system is anticipated to enter serial production by Q4 and pending final approval from the OEM.

Collaboration with the leading European truck manufacturer to integrate our automotive grade imaging radar technology into its next generation sensor suite. This marks a significant milestone in the manufacturer's transition to an advanced implementation [indiscernible] It is important to mention that our RADAR technology addresses the unique challenges of the trucking market such as larger size of trucks [indiscernible] and higher impact potential. Moving on, Fencelabs announced that it is signed a framework [indiscernible] worth an estimated $7,300,000 to supply all the imaging radars powered by ALVE technology to Tianyi Transportation Technology in China for Vehicle World Cloud Integration Technology. This framework agreement follows an extensive year long evaluation of our advanced chipset technology. We believe that there are significant opportunities for growth in the non automotive market and we are happy to support Telstraat in delivering unparalleled radial solutions and driving innovation forward in such key Arbe. While the decision making process and development timelines are longer than initially expected, We have not received negative responses or missed any opportunities and the total addressable market continues to Based on our current engagement and our ability to secure and execute contracts with leading OEMs, we estimate that by 02/1930, we can ship around 5,000,000 imaging radar chipsets to our customers.

I'd like to elaborate on our successful fundraising initiatives which resulted in a total amount of nearly $17,000,000 This includes $33,000,000 raised through and underwriting registered direct offering which included the exercise of $4,000,000 over allotment option by the underwriters closed in January 2025 led by Canaccord Genuity. Dollars 21,500,000.0 release to the company in January 2025 for the escrow account following the conversion of convertible bonds issued on Tel Aviv Stock Exchange in 2024. Dollars 30,000,000 raised in underwriting public offering that closed in November 2024 led by Canacold along with $500,000 rate in January 2025 from the exercise of warrants issued as part of the November 2024 offering.

We are delighted to share that AWM one of our largest travel builds has invested in our recent fundraising round for the third time in addition, we are happy to welcome the new investors who participated and believe in the future of Audeik. This funding provides the financial support needed to accelerate our growth enhance the development of the next generation of our radio solutions and reinforce our market leadership. With a strong balance sheet that helps ensure our financial stability we believe we are in a great position to grow our global presence and gain more OEM and Tier one relationships. In conclusion, we are pleased with the progress we've made over the past year along with the achievement of our Tier one partners and recent collaborations with key players like NVIDIA. We look forward to sharing more as we continue to move forward. Now, I'd like to turn it over to our CFO, Corinne, to go over the financials.

Thank you, Colby, and hello, everyone. Let me review our financial results for the fourth quarter and full year 2024 in more detail.

Total revenue in the fourth quarter was $100,000 compared to $350,000 in the fourth quarter of twenty twenty For the full year of 2024, total revenue was $800,000 compared to $1,500,000 in 2023. Backlog as of December 31, 2024 is $300,000 Gross margin loss for Q4 twenty twenty four was similar to the gross margin loss in Q4 twenty twenty three at a level of $200,000 loss. Gross margin for the full year of 2024 was $800,000 loss compared to a $0 Arbe margin in 2023. Year over year gross margin reduction is mainly related to a low level of revenue and to the increase in labor costs. Moving on to expenses, Q4 twenty twenty four, we reported total operating expenses of $12,600,000 compared to $11,900,000 in Q4 twenty twenty three. Operating expenses for the full year of 2024 totaled $48,900,000 compared to $46,800,000 in 2023.

The operating expenses increase was primarily a result of non cash share based compensation expense. [indiscernible] ramp up related costs the doubtful debt provision and to a lesser extent the increase in labor costs were offset by a decrease due to the finalization of costs related to our advanced production stage and the savings in our P and O insurance. The company maintains a strong focus on research and development ensuring continuous innovation and technological advancement.

With R and D expenses totaling $9,000,000 for Q4 twenty twenty four compared to $8,400,000 in Q4 twenty twenty three. R and D expenses for the full year of 2024 were $35,100,000 compared to $34,100,000 in 2023.

Operating loss for the fourth quarter of twenty twenty four was $12,800,000 compared to a loss of $12,100,000 in the fourth quarter of twenty twenty three.

Operating loss for the full year of 2024 totaled $49,700,000 compared to $46,900,000 in 2023. Looking at adjusted EBITDA. A non GAAP measurement which excludes expenses for non cash share based compensation, and for non recurring items in Q4 of twenty twenty four, was a loss of $9,000,000 compared to a loss of $8,200,000 in the fourth quarter of twenty twenty three.

Adjusted EBITDA for the full year of 2024 amounted to a loss of $33,300,000 slightly below 2023 adjusted EBITDA with a loss $32,500,000 Net loss in the fourth quarter of twenty twenty four was $12,200,000 compared to a net loss of $9,300,000 in the fourth quarter of twenty twenty three.

Net loss for the full year of 2024 was $49,300,000 compared to a loss of $43,500,000 in 2023.

Net loss in 2024 included financial income of $300,000 compared to our financial income of $3,400,000 in 2023. 2024 full year financial income resulted from interest and warrants revaluation income. Partially offset by bond financing Moving to our balance sheet. As of 12/31/2024, Arba had $24,600,000 in cash, cash equivalents and short term bank deposits. During January 2025, we raised gross proceeds of $54,500,000 $33,000,000 of which related to underwritten public offering and $21,500,000 were related to the portion released from escrow due to the conversion of our thus providing us with a robust balance sheet. With respect to our guidance, Arbe's leading radar technology remains a top priority for key decision makers in the automotive industry. Recent cash infusion totaling $17,000,000 investors' confidence potential and growth Trajectory. While broader economic shift have led to short term delay in automakers' rollout of advanced driver assist systems decision timelines have been extended. As a result, Arbeth continues to engage closely with industry leaders advancing through RFQ's and strengthening its position for adoption. We continue with our goal to pursue four design wins with automakers in 2025. 2025 annual revenue are expected to be in the range of $2,000,000 to $5,000,000 and will be weighted towards the end of [indiscernible] Adjusted EBITDA for 2025 is projected to be in the range of $29,000,000 loss to $35,000,000 loss.

Now we will be happy to take your questions.

Ladies and gentlemen, at this time, we'll begin the question and answer session. [indiscernible] Handset before pressing the keys to ensure the best sound quality. [indiscernible] And our first question today comes from Suji Desilva from ROTH Capital. Please go ahead with your question. Hi, Kobe. Hi, Karina. Congrats on the fundings. And the position here. As we look at the '25 revenue forecast Toward the end of the year, which revenue quarters that you're expecting to be going '26 ramp. Sorry, Suji, you were breaking. Can you repeat?

So which programs Karim Arbe you expecting to help drive 1,000,000 plus revenue quarters towards the end of the year.

Well, as we said, there is or three leading projects that are in the final stages of maturing while is Tiani, the non automotive one is the cracks in Europe, and the third most important one is [indiscernible] common effector with the Chinese common effector All of them we expect to start shipping chips as as we will have full production.

Okay. That helps. Great. I guess the update on the I guess as opposed to the end 4Q, the current cash balance and And the share count [indiscernible] Was the question Suji?

What is the current Current, you may now post the raising Correct. Post the raise, yes.

So currently, it's above $70,000,000 about $73,000,000 Okay.

And the currency cash count is 85,700,000 Sharers count. Sharers count. 85.7%. Okay, got it. And then lastly, maybe Coby, the China EV market can you update us on the opportunity there? We know that market is doing well. Where might you see initial traction there? Thanks.

So I think as you said, the Chinese market is especially on the EV is doing well. And I think all of the Chinese car manufacturers that focusing on launching first generation of of self driving services, which is more or less advanced adaptive cruise control Now looking into achieving kinds of hands free eyes of driving, And for that, they are looking for a radar like an imaging radar together with the camera to solve the problem.

Okay. All right. Thanks. Our next question comes from George, Dion Arithias from Canaccord Genuity, Hi, everyone. Thank you for taking my questions. Coby, could you just sort of describe to us a little bit of the what's happening within the OEMs that you're having discussions with? To what extent are they evaluating other offerings from OEMs or do you feel like you're already on the on the strong path to converting these discussions into wins? Over the next call twelve months?

I think so let's divide it between China and the rest of the world. On the rest of the world, All of the valuations are in the final stages we are shortlisted in most of them with one competitor, in some of them with two competitor. Again, it's not that of course, it's Magna, our Tier one and the other chips that are available in the market is NXP that the radar is done by Continental and Valero that chipset is done by Mobilize.

We know that we have advantage on both of them in terms of performance or price, So with Continental, we have a better performance more or less same price with Mobilize we have same performance more or less and much and a huge advantage on price.

Thank you. And maybe for Karin, you've obviously given your 2025 EBITDA outlook. Can you just help us understand the glide path for OpEx to the extent you can over the next couple of few years?

So as we mentioned It's between $29,000,000 to $35,000,000 guidance which is middle range is about $32,000,000 $33,000,000 of OpEx. We expect this quite similar for the next couple of years. And maybe just to add additional investments which we carry in our next generation [indiscernible] [indiscernible] related costs associated with it. So additional increase in investment between $5,000,000 to $15,000,000 over those two to three years coming in addition to our ongoing OpEx expenses.

Thank you very much.

And ladies and gentlemen, at this time, I'm showing no additional questions. We'll be concluding today's question and answer session. Like to turn the floor back over to Arave's CEO, Koby Marenko Arbe closing remarks.

We are so pleased to have you join us today to our employees and partners your continued dedication is deeply appreciated. We look forward to updating you further on our progress the coming months. Look out for updates as we prepare for several investor events including the ROTH Conference in Dana Point, California on March 2017. We'd love to meet you in person for further discussions. Please contact us at investors. Otherobotics dot com or visit our site to schedule a meeting. Thank you all.

Call. We do thank you for attending today's presentation. You may now disconnect your lines.