NASDAQ:ARBE Arbe Robotics Q3 2023 Earnings Report $1.36 -0.02 (-1.45%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$1.38 +0.02 (+1.47%) As of 04/25/2025 07:29 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Arbe Robotics EPS ResultsActual EPS-$0.12Consensus EPS -$0.13Beat/MissBeat by +$0.01One Year Ago EPSN/AArbe Robotics Revenue ResultsActual Revenue$0.48 millionExpected Revenue$0.70 millionBeat/MissMissed by -$220.00 thousandYoY Revenue GrowthN/AArbe Robotics Announcement DetailsQuarterQ3 2023Date11/8/2023TimeN/AConference Call DateWednesday, November 8, 2023Conference Call Time8:30AM ETUpcoming EarningsArbe Robotics' Q1 2025 earnings is scheduled for Tuesday, May 20, 2025, with a conference call scheduled on Wednesday, May 21, 2025 at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Arbe Robotics Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 8, 2023 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Good morning, and welcome to the RBAY Robotics Third Quarter 2023 Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Alexis Pascal of MSIR. Operator00:00:42Please go ahead. Speaker 100:00:44Thank you, and thank you everyone for joining us today. Welcome to Arvay's Q3 2023 financial results conference call. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the Safe Harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the Investor Relations section of the company's website. Today, we are joined by Kobi Marenko, Arby's Co Founder and CEO, who will begin the call with a business update. Speaker 100:01:20Then we will turn the call over to Karim Pinto Flomenboim, CFO, who will review the financials. Finally, we will open up the call for the Q and A session. With that, I'd like to turn it over to Koby Marenko, Rovi's CEO. Koby, please go ahead. Speaker 200:01:37Thank you, Alexi. Good morning, everyone, and thank you for joining us. I will begin by reviewing some of our recent business highlights. In the Q3, our VE and our Tier 1s made significant progress service commercial production, supporting our goal to become a leader in perception radar solutions for the automotive industry. The selection process by vehicle manufacturers involves multiple steps. Speaker 200:02:06During the quarter, our Betium-1 delivered P samples of radar systems based on our chipset to leading OEMs. These samples facilitate the evaluation of production functionality and mark a crucial milestone in the OEM selection process. Additionally, they enable OEM perception team to gather data for their L2 plus and L3 applications within ongoing development projects using Abe's cutting edge technology. Our advanced technology plays an increasingly pivotal role in enhancing the next generation product offering of our Tier 1 partners. Test performed on radar systems using the Arabic chipset have consistently demonstrated performance that meets or exceeds target benchmarks reaffirming the superior quality of our technology. Speaker 200:03:07Our base currently engaged with 4 top Tier 1 companies, Magna, Hirein, Wifu and Sensrad. In Q3, all 4 advanced to the production of radio system based on our chipset and are now in the final stages of selection with prominent European, American and Asian OEMs. Additionally, we are awaiting the final confirmation of success in securing 2 prominent truck projects. Collectively, the OEMs that are in the final selection stages for our technology represent 31% of the global passenger vehicle market. The fact that they are currently opting for imaging radar shows a strong preference for imaging radar technology and it will likely become the standard technology of choice for most passenger vehicles by the end of the decade. Speaker 200:04:03We are finding this opportunity and are fully committed to realizing it. As previously announced, we have received preliminary chipset orders from China for 24 and 25. Wefu High Technology Group, a key Tier 1 we've been working with since 2019 has placed an 11,600,000 preliminary order for Abe radar chipsets, meeting their projected sales demand for customers in China. In addition, Hyren Technologies, a leading Chinese ADAS Tier 1 supplier, has placed a preliminary order for 340,000 radar chipsets to serve their customers throughout China. Aave's current cash balance ensures sufficient funds until the second half of twenty twenty five. Speaker 200:04:51The current funds and the preliminary orders from China will allow the company to reach breakeven with its existing cash. On the call to respond, we are delighted to welcome Professor Yodina Eldar to our Board of Directors. Professor Eldar is a known expert in electrical engineering and radar theory at the Weizmann Institute of Science. She is known for a groundbreaking role in Nyquist Centering. Her addition to our role is of great significance and we are proud she chose to join RBAC. Speaker 200:05:26Regarding the current situation in Israel, we want to emphasize that our operations and ability to conduct business activities are not affected. We continue to monitor the situation and will adjust as needed to ensure the continuity of our business while prioritizing the safety and the well-being of our employees. I would also like to highlight that our base is a public company. The manufacturing and production of our chipsets are carried out in Germany by GlobalFoundries, a multinational semiconductor manufacturing and design company. As a result, we do not anticipate any changes in product availability. Speaker 200:06:11While around 20% of our team were called for military duty, this primary affects long term projects that we are involved with, with no impact on our immediate client support capabilities. Alber has successfully continued to operate as planned, thanks to the commitment and dedication of our employees. Now, I would like to turn it over to our CFO, Karim, to review the financial results in more detail. Speaker 300:06:42Thank you, Kobi, and hello, everyone. Total revenue in the Q3 was $500,000 a decrease from $1,300,000 in Q3 2022, in line with longer OEM implementation timelines. Backlog as of September 30 is $1,100,000 not including Hyren and Weifu's previously announced preliminary orders. Gross margin for Q3 2023 was 24 percent compared to a 72.5 percent gross margin in Q3 2022. As a result of our reduced quarterly revenue with a fixed cost portion in our cost of goods sold. Speaker 300:07:29Moving on to expenses. In Q3 2023, we reported total operating expenses of 11,700,000 dollars compared to $11,800,000 in Q3 2022. The decrease in operating expenses was primarily driven by a decrease in research and development from $8,600,000 in Q3 2022 to $8,400,000 in Q3 2023 and a decrease in general and administrative expenses from $2,200,000 in Q3 2022 to $2,000,000 in Q3 2023. The decrease in both was primarily due to a lower subcontractor expenses, favorable exchange rates, as well as reduction in our D and O insurance costs, partially offset by an increase in our shared based compensation costs. Sales and marketing expenses increased from $1,100,000 in Q3 2022 to $1,300,000 in Q3 2023. Speaker 300:08:39Share based compensation increased from $2,300,000 in Q3 2022 to $3,900,000 in Q3 of 2023 related to equity grants from Q2 2023 under our stock option plan. Operating loss in the Q3 of 2023 was $11,600,000 compared to an operating loss of $10,900,000 in the Q3 of 2022. Adjusted EBITDA and non GAAP measurement, which excludes expenses for share based compensation and for non recurring items was a loss of $7,500,000 in Q3 of 2023, over performed company's expectations and compared to a loss of $8,400,000 in the Q3 of 2022. Net loss in Q3 of 2023 was $11,700,000 compared to a net loss of $9,900,000 in the Q3 of 2022. Net loss in Q3 2023 includes $100,000 of financial expenses, mainly related to exchange revaluation expenses, partially offset by interest from deposits and warrants revaluation. Speaker 300:10:05Net loss in Q3 20 22 included financial income of $1,000,000 mainly related to exchange rate revaluation income. Moving to our balance sheet. As of September 30, 2023, Arbe had $23,500,000 in cash and cash equivalents and $25,600,000 in short term bank deposits with no debt. With respect to our guidance for the year, Arbe is in the final selection stages with leading OEMs in Europe, the U. S. Speaker 300:10:44And Asia Pacific. These OEMs account for 31% of the global passenger vehicle market. Revenue is expected to be in the lower range of $5,000,000 to $7,000,000 Adjusted EBITDA is expected Operator00:11:22session. Our first question comes from Gary Mobley with Wells Fargo Securities. Please go ahead. Speaker 400:11:50Hi, Colby. Hi, Corinne. I hope you and your families are safe and remain safe. And relating to the conflict, I wanted to ask about the day to day operational challenges that the conflict brings. I know you mentioned 20% workforce getting called to the military. Speaker 400:12:10Maybe you can speak to how that affects your long term R and D roadmap? And as well, what has been the feedback and support that you've received from your prospective customers since this began a month ago? Speaker 200:12:26Yes. So thank you for this question and thank you for the kind words. So first of all, it's not easy, but I think it came to us after the corona. So the company knows how to operate in a remote way. Part of the team is working from home, part of the team is working from the office. Speaker 200:12:53From the beginning, we prioritized the tasks. So first of all, everything that is related to our next generation of chipsets will be delayed and this team will be will move to work mainly on the current activities with the customers. I don't think it really makes a difference. Anyway, our next generation should be in the market in 'twenty five or 'twenty six, so a month here and there is not really influencing. We have a team outside of Israel, especially support and sales and this helps us support our customers in China and in Germany and in U. Speaker 200:13:48S. Even at that time. And we are trying to do the best with the team we have right now. We are able to support majority of our plan and especially all of the tasks that are needed for our Tier 1 partners to go to production and all of the tasks that are related to OEM evaluation and to OEM's integration are prioritized and I can ensure that no touch task is hurt due to the situation and we hope that the piece will come back to the Middle East soon. Speaker 400:14:35Thank you for that Colby. As my follow-up, I wanted to ask about some of the preliminary orders you have from some of your China Tier 1s between Weifu and Hai Rain, it sounds like you have multiple tens of 1,000,000 of dollars of potential sales there. What has to happen? What has to go right before those preliminary orders to actually turn into shipments? Speaker 200:15:02It's actually what we need to do right now is to close the last phases of winning the sorry, the Tier 1s need to close the last phases of winning contracts with the OEMs. The preliminary orders are based on their forecast for next year and the year after. And we believe that till the end of the year or early very early next year, they will be able to finalize the deals with the OEMs based on their feed samples and will turn those preliminary orders into actual orders. Operator00:15:53The next question is from Joshua Buchalter with TD Cowen. Speaker 100:16:00Hi. This is Lanny on for Joshua Gokulter. Can you hear me Speaker 300:16:04okay? Yes. Speaker 100:16:08Great. I'd like to echo Gary's comment and wish the best safety for you, your family and as well as your staff. Moving on to my question. My first question is, meeting your guidance for 2023 implies quite a steep ramp in 4Q with your true ones and being in the final talk with OEMs now, can you tell us a little bit more about the volumes where you expect it to be driven by and where they're going? Speaker 200:16:44Yes. So we are in the final stages as we mentioned in the call with 11 OEMs. We believe that at least 5 or 6 of them will take decisions before year end or early next year, part of them in China, part of them in Europe and the Western countries. With all of them, I think that the process is almost done. And we're in at least in the with all of them, we are in the Tier 1s are in final stages and negotiating prices and negotiating year of production. Speaker 200:17:34We saw the car. We see in China, top for our radar for the car in 2025 And outside of China, we are now in the process of projects for SOC 26, SOC 27, Fotekar, which means that we will see the revenues ramping from the second half of twenty twenty four, mainly in 2025, 2026 and 2027. Speaker 100:18:07That's really helpful color. Thank you. And for my education standpoint, who are you seeing in these final processes as your competitors? Like how many competitors are you seeing narrowed down into these final decisions? Speaker 200:18:27I think that the competitive landscape in the radar has not really changed. So there is on imaging radar bucket, there is the low end imaging radar that is based on 4 cascaded chips coming from TI or NXP and then FPGA or a processor of NXP, this gives something like 200 virtual channels compared to our 2,304 virtual channels. And basically those products grow to the market by 2 Tier 1, Continental and ZS. We see in the last few months aggressive that Mobileye is trying to get aggressively. Also into the imaging radar business, they have a product that is more or less close to the performance that we are bringing to the market, but we are a year and a half or 2 years ahead of them in terms of production and readiness for getting into a car. Speaker 100:19:42Thank you very much. Operator00:19:45The next question is from Suji D'Silva with ROTH MKM. Please go ahead. Speaker 500:19:53Hi, Kobi. Hi, Corinne. I also echo my hopes that you and your folks there are staying safe. So the you talked about the customers looking at the B sample and integrating the data sets from the 4 gs imaging there. Kobi, how long does that process typically take in terms of how long do you think it will take for them to have that the 4 d imaging data set integrated with their perception software and data? Speaker 200:20:23So basically what we see is going all over the OEMs is that the need is for something like 100,000 hours of driving of data in order to train the basic algorithms between 2 to 3 months, the data collection, which we are in the middle of this phase. And then we're improving the stack for that, it can be from 6 months to 12 months, depends on the abilities of the software team. I think that even the data collection in parallel that beginning to train the stack, they already see the value in an imaging radar and the ability to use an imaging radar like we are bringing to the market for a full free space mapping based just on the radar and we are the only company to date that brings such value. Speaker 500:21:43Okay. That's very helpful. And then my other question is on the high range of 340 ks units. I think you talked about it seems like they'll start shipping in 4Q. I want to understand if the rest of it is still expected to ship in calendar 2024 or if any factors are shifting the shipment plan for that high rein POV? Speaker 200:22:06We are not yet sure when we exactly will begin to ship the chip, but it's mainly going to the main volume would be in 2024. We're not sure if we will be able to start shipping in by the end of 2023 or only in the beginning of 2024. But anyway, as we assume the majority of the shipping of the chips will be in 2024. Operator00:22:39The next question is from Jamie Perez with R. F. Lafferty. Please go ahead. Speaker 600:22:47Yes. Thank you for taking my question. I want to reiterate the thoughts and prayers to everybody in the firm and the people of Israel. My first question, I noted you noted on the press release that you have 2 projects for trucks in the commercial side. You talk a little bit about that because we're seeing there's a big difference between especially in the EV between the passenger and the commercial fleet market as far as dynamics. Speaker 600:23:16So, could you give a little bit more color on that? Thanks. Speaker 200:23:19Yes. So I think the truck market today is becoming a bit complicated. So there is that trucks manufacturers themselves, which this is what we referred to, They are working on adding ADAS level 2 plus level 3 functionalities to the trucks and also to having there is the fleet owners that by the end of the day need to buy those trucks with this service. And there is, I would say, operations or operating companies like we announced in China, the subsidiary of Didi, they're doing the service of track. And this is also on our agenda to support those companies. Speaker 200:24:22But to refer to those two projects, it's a big brand of truck company. All right. Speaker 600:24:30And my follow-up question on the market you're developing with the passenger side, are you going to maybe I apologize if you've touched upon this before. Are you going to be part of a suite or standalone radar component? And also concerning that, especially here in the U. S. Where cars are becoming more expensive, there is a question of affordability. Speaker 600:24:56I mean, what's your price comparison between obvious chipset and let's say the LIDAR because I know there's a significant difference, especially with consumers being strapped for cash? Speaker 200:25:11So first of all, the radar is part of the stack. The stack consists of, of course, at least 8 to 10 cameras and sometimes also with the LiDAR. Comparing to the price of a LiDAR, imaging radar is much cheaper. Actually, the imaging radar is quite close to the price of the current front facing radar. And we see that we are on the path to achieve with our Tier 1 partners a price that is around 100 and $50, $160 for a front facing radar, imaging radar 48x48, 2,304 channels. Operator00:26:02The next question is from Matthew Galinko with Maxim Group. Please go ahead. Speaker 700:26:09Thank you for taking my question. I think mentioned you're potentially touching 31% of the global passenger market with the OEMs during the final selection process for. So I think we've visited this question in the past in various forms. But for the rest of the global passenger market, is there reticence to imaging radar among the other OEMs? Is it geographically you're just kind of touching those areas yet? Speaker 700:26:41Just, 31% is a great number, but where is the rest of the market? Thanks. Speaker 200:26:50I think so. There is few things here that related to adoption of an imaging radar. So first of all, there is early adopters and we all and as the early adapters are the premium car manufacturers and this is our first target. And also there is the premium adapters in China that again are not the old school car companies but more of the private ones and not the government control. So we are approaching those companies first. Speaker 200:27:32And of course, as I mentioned, we believe that by the end of the day, every car will have an imaging radar, but the first adoption would be on premium cars, on high end cars and on early adopters of new technologies. Speaker 700:27:50Thank you. And I think you just mentioned this, but did you say towards the end of the decade, do you expect imaging radar to be standard on all cars? Speaker 200:28:02Yes. And I should come Speaker 600:28:06Got it. Speaker 700:28:06Okay. Thank you. Operator00:28:11This concludes our Arbe's Q3 conference call. I would like to turn the conference back over to Kobi Marenko for any closing remarks. Speaker 200:28:24Thank you all for joining us today. I'd like to extend my gratitude to our team for their contribution. Whether they are currently serving in Israel's armed forces or fully dedicated to ensuring we continue to execute our business priorities as planned. Israeli babies, children, women and men are currently held in hamak captivity. Our lives will not be whole before each of them is returned home safely. Speaker 200:28:59Throughout this period, we have experienced outstanding support from our customers, partners and investors. We thank you for standing with us. Thank you and goodbye for now.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallArbe Robotics Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) Arbe Robotics Earnings HeadlinesHiRain Launches LRR615, Production-Intent Imaging Radar System Based on Arbe's ChipsetApril 24 at 2:00 AM | prnewswire.comArbe Robotics (NasdaqCM:ARBE) Reports Earnings Decline US$0.1M Sales Rise In Losses As Stock Drops 12% In A WeekApril 3, 2025 | finance.yahoo.comHere’s How to Claim Your Stake in Elon’s Private Company, xAIEven though xAI is a private company, tech legend and angel investor Jeff Brown found a way for everyday folks like you… To partner with Elon on what he believes will be the biggest AI project of the century… Starting with as little as $500.April 27, 2025 | Brownstone Research (Ad)Arbe Robotics: Decent Radar Credentials, But Not In VogueMarch 31, 2025 | seekingalpha.comAnalysts’ Opinions Are Mixed on These Technology Stocks: WISeKey International Holding (WKEY) and Micron (MU)March 26, 2025 | markets.businessinsider.com10 Penny Stocks With Huge Upside Potential According To AnalystsMarch 23, 2025 | insidermonkey.comSee More Arbe Robotics Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Arbe Robotics? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Arbe Robotics and other key companies, straight to your email. Email Address About Arbe RoboticsArbe Robotics (NASDAQ:ARBE), a semiconductor company, provides 4D imaging radar solutions for tier 1 automotive suppliers and automotive manufacturers in China, Hong Kong, Sweden, Germany, the United States, Israel, and internationally. It offers 4D imaging radar chipset solutions that address the core issues that have caused autonomous vehicle and autopilot accidents, such as detecting stationary objects, identifying vulnerable road users, operation at poor lighting conditions, and eliminating false alarms without radar ambiguities. 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There are 8 speakers on the call. Operator00:00:00Good morning, and welcome to the RBAY Robotics Third Quarter 2023 Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Alexis Pascal of MSIR. Operator00:00:42Please go ahead. Speaker 100:00:44Thank you, and thank you everyone for joining us today. Welcome to Arvay's Q3 2023 financial results conference call. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the Safe Harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the Investor Relations section of the company's website. Today, we are joined by Kobi Marenko, Arby's Co Founder and CEO, who will begin the call with a business update. Speaker 100:01:20Then we will turn the call over to Karim Pinto Flomenboim, CFO, who will review the financials. Finally, we will open up the call for the Q and A session. With that, I'd like to turn it over to Koby Marenko, Rovi's CEO. Koby, please go ahead. Speaker 200:01:37Thank you, Alexi. Good morning, everyone, and thank you for joining us. I will begin by reviewing some of our recent business highlights. In the Q3, our VE and our Tier 1s made significant progress service commercial production, supporting our goal to become a leader in perception radar solutions for the automotive industry. The selection process by vehicle manufacturers involves multiple steps. Speaker 200:02:06During the quarter, our Betium-1 delivered P samples of radar systems based on our chipset to leading OEMs. These samples facilitate the evaluation of production functionality and mark a crucial milestone in the OEM selection process. Additionally, they enable OEM perception team to gather data for their L2 plus and L3 applications within ongoing development projects using Abe's cutting edge technology. Our advanced technology plays an increasingly pivotal role in enhancing the next generation product offering of our Tier 1 partners. Test performed on radar systems using the Arabic chipset have consistently demonstrated performance that meets or exceeds target benchmarks reaffirming the superior quality of our technology. Speaker 200:03:07Our base currently engaged with 4 top Tier 1 companies, Magna, Hirein, Wifu and Sensrad. In Q3, all 4 advanced to the production of radio system based on our chipset and are now in the final stages of selection with prominent European, American and Asian OEMs. Additionally, we are awaiting the final confirmation of success in securing 2 prominent truck projects. Collectively, the OEMs that are in the final selection stages for our technology represent 31% of the global passenger vehicle market. The fact that they are currently opting for imaging radar shows a strong preference for imaging radar technology and it will likely become the standard technology of choice for most passenger vehicles by the end of the decade. Speaker 200:04:03We are finding this opportunity and are fully committed to realizing it. As previously announced, we have received preliminary chipset orders from China for 24 and 25. Wefu High Technology Group, a key Tier 1 we've been working with since 2019 has placed an 11,600,000 preliminary order for Abe radar chipsets, meeting their projected sales demand for customers in China. In addition, Hyren Technologies, a leading Chinese ADAS Tier 1 supplier, has placed a preliminary order for 340,000 radar chipsets to serve their customers throughout China. Aave's current cash balance ensures sufficient funds until the second half of twenty twenty five. Speaker 200:04:51The current funds and the preliminary orders from China will allow the company to reach breakeven with its existing cash. On the call to respond, we are delighted to welcome Professor Yodina Eldar to our Board of Directors. Professor Eldar is a known expert in electrical engineering and radar theory at the Weizmann Institute of Science. She is known for a groundbreaking role in Nyquist Centering. Her addition to our role is of great significance and we are proud she chose to join RBAC. Speaker 200:05:26Regarding the current situation in Israel, we want to emphasize that our operations and ability to conduct business activities are not affected. We continue to monitor the situation and will adjust as needed to ensure the continuity of our business while prioritizing the safety and the well-being of our employees. I would also like to highlight that our base is a public company. The manufacturing and production of our chipsets are carried out in Germany by GlobalFoundries, a multinational semiconductor manufacturing and design company. As a result, we do not anticipate any changes in product availability. Speaker 200:06:11While around 20% of our team were called for military duty, this primary affects long term projects that we are involved with, with no impact on our immediate client support capabilities. Alber has successfully continued to operate as planned, thanks to the commitment and dedication of our employees. Now, I would like to turn it over to our CFO, Karim, to review the financial results in more detail. Speaker 300:06:42Thank you, Kobi, and hello, everyone. Total revenue in the Q3 was $500,000 a decrease from $1,300,000 in Q3 2022, in line with longer OEM implementation timelines. Backlog as of September 30 is $1,100,000 not including Hyren and Weifu's previously announced preliminary orders. Gross margin for Q3 2023 was 24 percent compared to a 72.5 percent gross margin in Q3 2022. As a result of our reduced quarterly revenue with a fixed cost portion in our cost of goods sold. Speaker 300:07:29Moving on to expenses. In Q3 2023, we reported total operating expenses of 11,700,000 dollars compared to $11,800,000 in Q3 2022. The decrease in operating expenses was primarily driven by a decrease in research and development from $8,600,000 in Q3 2022 to $8,400,000 in Q3 2023 and a decrease in general and administrative expenses from $2,200,000 in Q3 2022 to $2,000,000 in Q3 2023. The decrease in both was primarily due to a lower subcontractor expenses, favorable exchange rates, as well as reduction in our D and O insurance costs, partially offset by an increase in our shared based compensation costs. Sales and marketing expenses increased from $1,100,000 in Q3 2022 to $1,300,000 in Q3 2023. Speaker 300:08:39Share based compensation increased from $2,300,000 in Q3 2022 to $3,900,000 in Q3 of 2023 related to equity grants from Q2 2023 under our stock option plan. Operating loss in the Q3 of 2023 was $11,600,000 compared to an operating loss of $10,900,000 in the Q3 of 2022. Adjusted EBITDA and non GAAP measurement, which excludes expenses for share based compensation and for non recurring items was a loss of $7,500,000 in Q3 of 2023, over performed company's expectations and compared to a loss of $8,400,000 in the Q3 of 2022. Net loss in Q3 of 2023 was $11,700,000 compared to a net loss of $9,900,000 in the Q3 of 2022. Net loss in Q3 2023 includes $100,000 of financial expenses, mainly related to exchange revaluation expenses, partially offset by interest from deposits and warrants revaluation. Speaker 300:10:05Net loss in Q3 20 22 included financial income of $1,000,000 mainly related to exchange rate revaluation income. Moving to our balance sheet. As of September 30, 2023, Arbe had $23,500,000 in cash and cash equivalents and $25,600,000 in short term bank deposits with no debt. With respect to our guidance for the year, Arbe is in the final selection stages with leading OEMs in Europe, the U. S. Speaker 300:10:44And Asia Pacific. These OEMs account for 31% of the global passenger vehicle market. Revenue is expected to be in the lower range of $5,000,000 to $7,000,000 Adjusted EBITDA is expected Operator00:11:22session. Our first question comes from Gary Mobley with Wells Fargo Securities. Please go ahead. Speaker 400:11:50Hi, Colby. Hi, Corinne. I hope you and your families are safe and remain safe. And relating to the conflict, I wanted to ask about the day to day operational challenges that the conflict brings. I know you mentioned 20% workforce getting called to the military. Speaker 400:12:10Maybe you can speak to how that affects your long term R and D roadmap? And as well, what has been the feedback and support that you've received from your prospective customers since this began a month ago? Speaker 200:12:26Yes. So thank you for this question and thank you for the kind words. So first of all, it's not easy, but I think it came to us after the corona. So the company knows how to operate in a remote way. Part of the team is working from home, part of the team is working from the office. Speaker 200:12:53From the beginning, we prioritized the tasks. So first of all, everything that is related to our next generation of chipsets will be delayed and this team will be will move to work mainly on the current activities with the customers. I don't think it really makes a difference. Anyway, our next generation should be in the market in 'twenty five or 'twenty six, so a month here and there is not really influencing. We have a team outside of Israel, especially support and sales and this helps us support our customers in China and in Germany and in U. Speaker 200:13:48S. Even at that time. And we are trying to do the best with the team we have right now. We are able to support majority of our plan and especially all of the tasks that are needed for our Tier 1 partners to go to production and all of the tasks that are related to OEM evaluation and to OEM's integration are prioritized and I can ensure that no touch task is hurt due to the situation and we hope that the piece will come back to the Middle East soon. Speaker 400:14:35Thank you for that Colby. As my follow-up, I wanted to ask about some of the preliminary orders you have from some of your China Tier 1s between Weifu and Hai Rain, it sounds like you have multiple tens of 1,000,000 of dollars of potential sales there. What has to happen? What has to go right before those preliminary orders to actually turn into shipments? Speaker 200:15:02It's actually what we need to do right now is to close the last phases of winning the sorry, the Tier 1s need to close the last phases of winning contracts with the OEMs. The preliminary orders are based on their forecast for next year and the year after. And we believe that till the end of the year or early very early next year, they will be able to finalize the deals with the OEMs based on their feed samples and will turn those preliminary orders into actual orders. Operator00:15:53The next question is from Joshua Buchalter with TD Cowen. Speaker 100:16:00Hi. This is Lanny on for Joshua Gokulter. Can you hear me Speaker 300:16:04okay? Yes. Speaker 100:16:08Great. I'd like to echo Gary's comment and wish the best safety for you, your family and as well as your staff. Moving on to my question. My first question is, meeting your guidance for 2023 implies quite a steep ramp in 4Q with your true ones and being in the final talk with OEMs now, can you tell us a little bit more about the volumes where you expect it to be driven by and where they're going? Speaker 200:16:44Yes. So we are in the final stages as we mentioned in the call with 11 OEMs. We believe that at least 5 or 6 of them will take decisions before year end or early next year, part of them in China, part of them in Europe and the Western countries. With all of them, I think that the process is almost done. And we're in at least in the with all of them, we are in the Tier 1s are in final stages and negotiating prices and negotiating year of production. Speaker 200:17:34We saw the car. We see in China, top for our radar for the car in 2025 And outside of China, we are now in the process of projects for SOC 26, SOC 27, Fotekar, which means that we will see the revenues ramping from the second half of twenty twenty four, mainly in 2025, 2026 and 2027. Speaker 100:18:07That's really helpful color. Thank you. And for my education standpoint, who are you seeing in these final processes as your competitors? Like how many competitors are you seeing narrowed down into these final decisions? Speaker 200:18:27I think that the competitive landscape in the radar has not really changed. So there is on imaging radar bucket, there is the low end imaging radar that is based on 4 cascaded chips coming from TI or NXP and then FPGA or a processor of NXP, this gives something like 200 virtual channels compared to our 2,304 virtual channels. And basically those products grow to the market by 2 Tier 1, Continental and ZS. We see in the last few months aggressive that Mobileye is trying to get aggressively. Also into the imaging radar business, they have a product that is more or less close to the performance that we are bringing to the market, but we are a year and a half or 2 years ahead of them in terms of production and readiness for getting into a car. Speaker 100:19:42Thank you very much. Operator00:19:45The next question is from Suji D'Silva with ROTH MKM. Please go ahead. Speaker 500:19:53Hi, Kobi. Hi, Corinne. I also echo my hopes that you and your folks there are staying safe. So the you talked about the customers looking at the B sample and integrating the data sets from the 4 gs imaging there. Kobi, how long does that process typically take in terms of how long do you think it will take for them to have that the 4 d imaging data set integrated with their perception software and data? Speaker 200:20:23So basically what we see is going all over the OEMs is that the need is for something like 100,000 hours of driving of data in order to train the basic algorithms between 2 to 3 months, the data collection, which we are in the middle of this phase. And then we're improving the stack for that, it can be from 6 months to 12 months, depends on the abilities of the software team. I think that even the data collection in parallel that beginning to train the stack, they already see the value in an imaging radar and the ability to use an imaging radar like we are bringing to the market for a full free space mapping based just on the radar and we are the only company to date that brings such value. Speaker 500:21:43Okay. That's very helpful. And then my other question is on the high range of 340 ks units. I think you talked about it seems like they'll start shipping in 4Q. I want to understand if the rest of it is still expected to ship in calendar 2024 or if any factors are shifting the shipment plan for that high rein POV? Speaker 200:22:06We are not yet sure when we exactly will begin to ship the chip, but it's mainly going to the main volume would be in 2024. We're not sure if we will be able to start shipping in by the end of 2023 or only in the beginning of 2024. But anyway, as we assume the majority of the shipping of the chips will be in 2024. Operator00:22:39The next question is from Jamie Perez with R. F. Lafferty. Please go ahead. Speaker 600:22:47Yes. Thank you for taking my question. I want to reiterate the thoughts and prayers to everybody in the firm and the people of Israel. My first question, I noted you noted on the press release that you have 2 projects for trucks in the commercial side. You talk a little bit about that because we're seeing there's a big difference between especially in the EV between the passenger and the commercial fleet market as far as dynamics. Speaker 600:23:16So, could you give a little bit more color on that? Thanks. Speaker 200:23:19Yes. So I think the truck market today is becoming a bit complicated. So there is that trucks manufacturers themselves, which this is what we referred to, They are working on adding ADAS level 2 plus level 3 functionalities to the trucks and also to having there is the fleet owners that by the end of the day need to buy those trucks with this service. And there is, I would say, operations or operating companies like we announced in China, the subsidiary of Didi, they're doing the service of track. And this is also on our agenda to support those companies. Speaker 200:24:22But to refer to those two projects, it's a big brand of truck company. All right. Speaker 600:24:30And my follow-up question on the market you're developing with the passenger side, are you going to maybe I apologize if you've touched upon this before. Are you going to be part of a suite or standalone radar component? And also concerning that, especially here in the U. S. Where cars are becoming more expensive, there is a question of affordability. Speaker 600:24:56I mean, what's your price comparison between obvious chipset and let's say the LIDAR because I know there's a significant difference, especially with consumers being strapped for cash? Speaker 200:25:11So first of all, the radar is part of the stack. The stack consists of, of course, at least 8 to 10 cameras and sometimes also with the LiDAR. Comparing to the price of a LiDAR, imaging radar is much cheaper. Actually, the imaging radar is quite close to the price of the current front facing radar. And we see that we are on the path to achieve with our Tier 1 partners a price that is around 100 and $50, $160 for a front facing radar, imaging radar 48x48, 2,304 channels. Operator00:26:02The next question is from Matthew Galinko with Maxim Group. Please go ahead. Speaker 700:26:09Thank you for taking my question. I think mentioned you're potentially touching 31% of the global passenger market with the OEMs during the final selection process for. So I think we've visited this question in the past in various forms. But for the rest of the global passenger market, is there reticence to imaging radar among the other OEMs? Is it geographically you're just kind of touching those areas yet? Speaker 700:26:41Just, 31% is a great number, but where is the rest of the market? Thanks. Speaker 200:26:50I think so. There is few things here that related to adoption of an imaging radar. So first of all, there is early adopters and we all and as the early adapters are the premium car manufacturers and this is our first target. And also there is the premium adapters in China that again are not the old school car companies but more of the private ones and not the government control. So we are approaching those companies first. Speaker 200:27:32And of course, as I mentioned, we believe that by the end of the day, every car will have an imaging radar, but the first adoption would be on premium cars, on high end cars and on early adopters of new technologies. Speaker 700:27:50Thank you. And I think you just mentioned this, but did you say towards the end of the decade, do you expect imaging radar to be standard on all cars? Speaker 200:28:02Yes. And I should come Speaker 600:28:06Got it. Speaker 700:28:06Okay. Thank you. Operator00:28:11This concludes our Arbe's Q3 conference call. I would like to turn the conference back over to Kobi Marenko for any closing remarks. Speaker 200:28:24Thank you all for joining us today. I'd like to extend my gratitude to our team for their contribution. Whether they are currently serving in Israel's armed forces or fully dedicated to ensuring we continue to execute our business priorities as planned. Israeli babies, children, women and men are currently held in hamak captivity. Our lives will not be whole before each of them is returned home safely. Speaker 200:28:59Throughout this period, we have experienced outstanding support from our customers, partners and investors. We thank you for standing with us. Thank you and goodbye for now.Read morePowered by