NASDAQ:CPTN Cepton Q4 2023 Earnings Report Earnings HistoryForecast Cepton EPS ResultsActual EPS-$0.51Consensus EPS -$0.54Beat/MissBeat by +$0.03One Year Ago EPSN/ACepton Revenue ResultsActual Revenue$4.95 millionExpected Revenue$2.00 millionBeat/MissBeat by +$2.95 millionYoY Revenue GrowthN/ACepton Announcement DetailsQuarterQ4 2023Date3/28/2024TimeN/AConference Call DateThursday, March 28, 2024Conference Call Time5:30PM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Cepton Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 28, 2024 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Septon Business Update and Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dennis Chong, Interim CFO. Operator00:00:27Thank you, Dennis. You may begin. Speaker 100:00:32Thank you, and welcome to Sapton's 4th quarter and full year 2023 earnings call and business update. With me today are Junpei, Co Founder and Chief Executive Officer and Mitch Huotini, Chief Commercial Officer. During the call, we may refer to our unaudited GAAP and non GAAP measures in our earnings release. The non GAAP financial measures should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with U. S. Speaker 100:01:13GAAP. Reconciliations for non GAAP measures are included in our earnings release. I would like to remind everyone that comments made in this conference call may include forward looking statements regarding the company's expected operational and financial performance for future periods. These statements are based on the company's current expectations and are subject to the Safe Harbor statements relating to forward looking statements contained in our earnings release and the presentation slides that accompany this call. Actual results for future periods may differ materially from those expressed or implied by these forward looking statements due to a number of risks, uncertainties or other factors, including those discussed in the earnings release or during today's call and those described in our filings with the U. Speaker 100:02:20S. Securities and Exchange Commission. We are not undertaking any commitment to update these statements as a result of future events, except as required by law. As a quick reminder, this call is being recorded, and you can find the earnings release and presentation slides that accompany this call as well as the webcast replay of this call at www.investors.ceptong.com. Now, I would like to turn the call over to Jun. Speaker 200:03:00Thank you, Dennis, and good afternoon, everyone. Thank you for joining Saptown's Q4 and full year 2023 earnings call. We will provide a business update and review our financial results with you. There's quite a bit of news within the industry these past few months and specifically regarding septa. First, I'd like to congratulate our team on exceeding our FY2023 revenue guidance with a record $13,100,000 in recorded revenue and preparing us for growth with the launch of our new LiDAR product, Septon Ultra at CES 2024. Speaker 200:03:46These are 2 major accomplishments that keeps us at the forefront of this industry. 1st, on our latest long range LiDAR product, septon Ultra, demonstrated at CES 2024. Septon Ultra, or Ultra, represents a pinnacle in lidar technology, boasting a remarkable long detection range of up to 300 meters at 10% reflectivity. Ultra high resolution with software definable regions of interest and the distinction of being the world's slimmest adaptive long range lidar. This design enables seamless integration into various vehicle locations, maintaining aesthetic appeal and reducing aerodynamic impact. Speaker 200:04:34At its core, Deptan Ultra leverages our next generation imaging technology, Magnostere, alongside with a proprietary chipset SoC to significantly enhance point cloud quality while minimizing cost, footprint and power consumption. This strategic blend of advanced features is designed to deliver an optimal balance of performance, cost and reliability, making Altra not just a technological marvel, but also a viable solution for mass market adoption across automotive, smart infrastructure and various other applications. Moving on to a piece of industry news that creates significant opportunity and competitive edge for Saptao. In a significant development that has considerable implications for the global lidar industry, a prominent Chinese lidar company on January 25, 2024 was added to the 1260H list of Chinese military companies by the U. S. Speaker 200:05:43Government. This designation, which highlights entities believed to be affiliated with the Chinese military and defense sectors, has underscored the complexities and risks associated with American business engaging in partnerships or transactions with firms listed under such a category. This development has prompted many U. S. Corporations to reassess their supply chain strategies and partnerships aiming to mitigate risks associated with compliance, geopolitical tensions and national security concerns. Speaker 200:06:20We believe this event is a significant opportunity and a catalyst for growth for our company as the stakeholders and partners in the industry seek alternatives to navigate away from the potential risks posed by sourcing from entities on the 1260H list, Saptang as a U. S. Company has emerged as a viable and secure partner and a supplier for LiDARs. This shift not only highlights our commitment to adhering to international regulations and safeguarding our operations from geopolitical uncertainties, but also reinforces our position as a trusted leader in the LiDAR technology sector. Our competitive advantage to offer reliable LiDAR supply amidst these challenging times has further solidified our market presence and opened new avenues for growth and collaboration. Speaker 200:07:15Lastly, I want to briefly touch upon some recent news on the GM series production cancellation and a letter of indication from our Tier 1 partner and shareholder, CoIto Manufacturing, which were both disclosed in more details in our Form 8ks. On December 11, 2023, CoIto informed us that the original equipment manufacturer that awarded CoIto the series production award has decided to rescope its ADAS product offerings. And as a result, all outstanding purchase orders from CoIto to the company that relate to the series production award have been canceled. As is customary, when an automotive program changes, Saptown initiated actions to secure project investment cost recovery related to any delay or cancellation of an existing program. On December 21, 2023, we announced that we have received a non binding proposal from Co CoIto to acquire 100% of the outstanding shares of Saptang not currently owned by CoIto. Speaker 200:08:25Saptang's Board of Directors, via a special committee, is currently evaluating the indication of interest among other strategic options with assistance from financial and legal advisors. No assurance can be given that a definitive transaction with respect to CoIto's indication of interest or any other potential transaction will eventually be consummated. As we have discussed in prior quarters, we are continuing to build our business and delivered yet another record setting quarter for revenue. Step Town remains steadfast in pursuing opportunities in automotive and remains in good position to win additional Series Production Award with sourcing decision on the horizon. With that, I'll turn it over to Mitch for details on our efforts with customer programs. Speaker 300:09:13Thank you, June. Since our last earnings call, Septon has received a dramatic increase of attention from the automotive industry, in part due to the macro events against Chinese LiDAR companies mentioned previously, but more importantly, the launch and demonstration of our new Ultra product. Specifically, we have made significant strides with the top 10 global automotive OEM, previously mentioned as one have been a game changer in advancing this particular automotive RFQ as well as accelerating discussions with other top automotive OEMs. Furthermore, our in-depth collaboration with Koweto as an automotive supply titan has become one of the top driving factors for automotive OEMs to consider the Cepton, Kuwaito solution over other competing solutions. The go to market strategy of Cepton with Coweto as our Tier 1 partner is starting to become an obvious and sustainable winning combination for customers as they solidify their 1st mass production launches using LiDAR technology. Speaker 300:10:30Of course, we have seen some false starts, delays and rescoping as car companies refine their adoption of this new technology, but it is clear that LiDAR is not going away. It's just a matter of time before several OEMs safely launch new ADAS systems, incorporating the tremendous advantages that LiDAR provides. Having a supplier which can sustain this launch learning curve is becoming paramount to OEM sourcing decisions. Next, Septon recently filed an 8 ks disclosing the notification of an OEM series production award. Today, we're not able to disclose any more details on this project outside of those disclosed in the 8 ks, but they will be forthcoming soon as we work together with the OEM and Kuwaito on public announcements. Speaker 300:11:23In addition to our recent automotive developments, I'm pleased to highlight significant progress we made with a major autonomous industrial vehicles OEM using our near range lidar Nova in Q4 of 2023. During the quarter, Septon passed a significant gate review with this early adopter of our near range lidar technology, and we've advanced to the final preproduction phase of this project in 2024 with expected mass production launch in 2025. With this milestone in hand and in partnership with Kuwaito, we now have several other OEMs including shuttle OEMs, heavy equipment manufacturers and smart infrastructure customers with greater interest and higher demand for our near range lidar product in 2024. 2024 will be a decisive year for continued lidar adoption across the automotive landscape. With our new product Ultra and our deepened partnership with Coedo, we are poised to capture market share in this key inflection point of adoption. Speaker 300:12:32Now I'll turn it back over to Dennis. Thank you, Mitch. Speaker 100:12:38Starting with our Q4. Total revenue for the quarter was $5,000,000 an increase of 2 14% compared to the prior year period and up 29% compared to our previous quarter. The increase for the quarter was evenly contributed by product revenue and development revenue. Q4 2023 GAAP net loss was $8,300,000 or $0.52 loss per share, basic and diluted. 4th quarter 2023 non GAAP net loss was $6,400,000 or $0.41 loss per share, basic and diluted. Speaker 100:13:34Q4 2023 adjusted EBITDA was a negative $7,100,000 Now on to our full year 2023 results. Total revenue for 2023 was $13,100,000 an increase of 76% compared to the prior year and above the full year 2023 revenue guidance provided in our Q3 2023 earnings release. We achieved full year gross margin of 27%. Our full year GAAP operating expenses were $54,300,000 Excluding stock based compensation expenses and non recurring loss on impairment of property and equipment, Our non GAAP operating expenses were well below the $50,000,000 we communicated in our Q3 2023 earnings release. Full year GAAP net loss was $48,500,000 or $3.08 loss per share, basic and diluted. Speaker 100:14:54Full year non GAAP net loss was $38,900,000 or $2.47 loss per share, basic and diluted. And the full year adjusted EBITDA was a negative $41,200,000 As of December 31, 2023, we had approximately 56.4 $1,000,000 in cash, cash equivalents and short term investments. Lastly, we're not offering 2024 guidance at this time. We expect to provide an update on the full year guidance at our Q1 earnings call. And with that, I'd like to open up the call for questions. Operator00:15:46Thank you. We will now be conducting a question and answer Our first question comes from the line of Shadi Mehtwali with Craig Hallum. Please proceed with your question. Speaker 400:16:36Hey, this is Shadi Mittwally on for Richard Shannon. Thanks for taking my question guys. I have a question regarding the final round of sourcing with the top 10 OEM. Can you give any details whether this is an exclusive or competitive process? Speaker 300:16:54Yes, Chadi. This is Mitch Hortini, Chief Commercial Officer. Basically, you're asking, okay, is it exclusive or competitive? It's still competitive process at this point for that particular opportunity. Speaker 400:17:15Did that OEM give you guys any indication of how many other companies are left in that process? Speaker 300:17:23No, no. They didn't give us any particular number. Speaker 400:17:29Okay. Makes sense. And then just one more question. What's the timeline for the decision and shipment with the top 3 OEM? And then is this an OEM that has announced lighter suppliers in the past? Speaker 300:17:45The timeline, we can't disclose the commercials of the RFQ we received. But just in general, a lot of the RFQs coming out in the automotive industry right now are have the start of series production in the second half of the decade, in the 2026 to 2028 time frame. And then the second part of your question, have they already announced LiDAR suppliers? A lot of OEMs have had various projects with other LiDAR suppliers the past several years. Yes, this OEM was previously working with another LiDAR supplier. Operator00:18:36Our next question comes from the line of Kevin Garangan with Westpark Capital. Please proceed with your question. Speaker 500:18:47Yes. Hey, guys. Thanks for letting me ask a few questions and congrats on the progress. Just for the first one, just a quick clarification. The RFQs the RFQ that you mentioned and then the final sourcing, those are both for passenger vehicles, correct, not any trucking? Speaker 300:19:03That's correct. Speaker 500:19:05Okay, perfect. And then has the IOI from COYTO caused any of your discussions with OEMs to kind of change at all? As in have some that they now be waiting on the sidelines until a final decision is made or some actually like the idea of a bigger Tier 1 kind of player to source in the LiDAR and have accelerated some discussions? Speaker 300:19:30Yes, definitely Kevin. This is Mitch again. Yes, it's an obvious topic that comes up especially in deep final discussion with the OEMs. I think overall it's a positive. It's seen as a positive for Septon and for Kuwaito. Speaker 300:19:45There are concerns in the industry about the longevity of LiDAR companies and I think that's coming to the surface for many OEMs. And so this proposed letter that we received is definitely a positive in front of the customers. Speaker 500:20:06Okay, perfect. Thanks, guys. Operator00:20:12Thank you. Our next question comes from the line of Gus Richard with Northland Capital. Please proceed with your question. Speaker 600:20:21Yes. Thanks for letting me ask a couple of questions. Just when the industry goes through a Rescope, can you talk about sort of what it means to you guys financially? How do they size any remunerations associated with that kind of thing? Not specific numbers, just how does one think about that? Speaker 200:20:49Are you asking about the GM rescoping? Speaker 600:20:53Yes, I am. So when there's a rescope, scope, usually the vendors get money back from money spent. And I'm just wondering, industry practices, what's the magnitude? What does it look like? Is it proportional to your what you've spent on development, etcetera? Speaker 200:21:12Yes. We're certainly trying to recover all the money we have spent invested in the program, but there are a lot of intricacies in the process. Mitch, you want to add something. It's not something of a concrete number we can give out at this point, but it's certainly a nontrivial number. Speaker 300:21:33Yes. It's not public information, but I think you can think of it as some proportion of our OpEx the past 3 or 4 years since we announced that project. That was a pretty significant work stream for our company. So, there were significant investments and that's what's being asked for. Speaker 600:21:55Got it. And then in terms of the combination trucking company, Speaker 100:22:04when so when would you expect that to go into production? Speaker 300:22:09Yes. I'll just refer back to my answer to the first question. Most of the RFQs and awards right now are starting production in the 2026 to 2028 timeframe. So it would fall somewhere in that timeframe. Speaker 200:22:23Yes. But again, I refer back to our 8 ks filing. That's as much as information as we can publish right now and we'll follow-up with more press releases as we're allowed to release more information. Okay, Speaker 600:22:38fair enough. Last one for me. This Chinese entity that is sort of on the entities list, if you will. Where are you going up against this company at any of the top 10 companies, OEMs that you've been working with? Is this a significant reduction in the competitive environment? Speaker 600:23:05Where are you seeing these folks? Speaker 200:23:07Yes. I'll start first and then Nish can add more. There are as you can see in this LiDAR landscape, quite a number of LiDAR companies in competition for any program out there. So you can expect this Chinese LiDAR company as well as us and many others are always competing with each other in any of the LiDAR programs that's active. So, it is a fair assumption that we've been competing in a number of projects. Speaker 200:23:41And yes, the current situation is they are put on this 1268 list and there's 1 fewer in many of these combinations at many places. So Mitch, you want to add some more? Speaker 300:23:56I don't think I have anything to add. Speaker 200:23:57Yes. Yes. That's Speaker 600:24:01Okay. Very good. That's it for me. Thanks so much. Operator00:24:06Thank you. Our next question comes from the line of Matthew Galinko with Maxim Group. Please proceed with your question. Speaker 700:24:16Hey, thanks for taking my questions. I guess first one is on the smart tolling project you've talked about. I think at pretty significant length over the last couple of quarters. I didn't hear I think much about it today, but just hoping you could update us on where the rollout stands and potential for prodding the scope and expansion of the smart tolling practice in general for your business? Speaker 300:24:47Yes. Thanks, Matt. This is Mitch. Good question. Yes, you're right. Speaker 300:24:51We didn't necessarily highlight that today, but we did continue significant shipments in the Q4 that shows up in our product revenue numbers for the tolling application. And we continue to support those big tolling operators in the U. S. Market as they expand both in the U. S. Speaker 300:25:10And also bid on some international opportunities. So that's very much an active market that we're supporting. Speaker 700:25:21Got it. Thank you. And I know you're not specifically providing an outlook particularly on revenue, but I was wondering if you could give us some sense of your thoughts around spending at least over the next 2 quarters or if not for the next year, just on directionally what we should be expecting on OpEx? I think you had kind of declines last 3 quarters at least on GAAP. So should we expect kind of the same trajectory given the rescoping at GM or is it just subject to whether you sort of get to the final decision on any of these OEM selections? Speaker 100:26:07Hi, it's Dennis Chang here. For the OpEx at this stage, we're not expecting any increase. So it's probably less than our 2023 numbers. I guess with our Q1 results, we'll be providing some update. Speaker 500:26:30Okay. Thank you. Operator00:26:36Thank you. There are no further questions at this time. I'd like to turn the floor back over to Junpei for closing comments. Speaker 200:26:44Thank you very much. It's been an exciting year 2023. So we look forward to another even more productive year of 2024 with new products and new projects and new technology, of course. Stay tuned for further updates from Saptang. Thank you very much. Operator00:27:05This concludes today's teleconference. You may disconnect your lines at this time. Thank you forRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallCepton Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Cepton Earnings HeadlinesKoito Manufacturing Completes Acquisition of LiDAR Innovator Cepton, Inc.January 7, 2025 | tipranks.comCEPTON INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Cepton, Inc. - CPTNDecember 6, 2024 | businesswire.comTrump’s treachery Trump’s Final Reset Inside the shocking plot to re-engineer America’s financial system…and why you need to move your money now.April 27, 2025 | Porter & Company (Ad)Cepton (NASDAQ: CPTN) Advances Lidar Commercialization Amid Acquisition by Koito, OEM PartnershipsNovember 12, 2024 | theglobeandmail.comCepton Inc. Faces Operational Challenges Amid Koito Merger ConstraintsNovember 10, 2024 | markets.businessinsider.comCepton reports Q3 results, moves forward on merger with KoitoNovember 8, 2024 | proactiveinvestors.comSee More Cepton Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Cepton? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Cepton and other key companies, straight to your email. Email Address About CeptonCepton (NASDAQ:CPTN) provides lidar-based solutions for automotive, smart cities, smart spaces, and smart industrial applications in the United States, Japan, China, and internationally. The company offers autograde lidar sensors, including Cepton Ultra, a slimmest lidar with MagnoSteer technology and proprietary ASIC chipset, enabling a combination of 300-meter range at 10% reflectivity and 0.05° resolution; Vista-X, a compact lidar solution with a range of up to 200m for long-range applications in ADAS L2+/L3, AV L4/L5, and suitable for smart infrastructure applications; and Nova, an extremely-small form factor lidar solution with a range of up to 30m for near-range applications in ADAS L2+/L3, AV L4/L5, and suitable for smart infrastructure applications. It also provides industrial grade lidar sensors, such as Vista-P, a compact lidar solution with a range of up to 200m for long-range applications in ADAS L2+/L3, AV L4/L5, and smart infrastructure applications; and Sora-P, an ultra-high scan rate, compact, and quasi line-scanning lidar solution that delivers high-fidelity profiling of objects moving at high speeds for free flow tolling and other industrial applications. The company was founded in 2016 and is headquartered in San Jose, California.View Cepton ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 8 speakers on the call. Operator00:00:00Septon Business Update and Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dennis Chong, Interim CFO. Operator00:00:27Thank you, Dennis. You may begin. Speaker 100:00:32Thank you, and welcome to Sapton's 4th quarter and full year 2023 earnings call and business update. With me today are Junpei, Co Founder and Chief Executive Officer and Mitch Huotini, Chief Commercial Officer. During the call, we may refer to our unaudited GAAP and non GAAP measures in our earnings release. The non GAAP financial measures should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with U. S. Speaker 100:01:13GAAP. Reconciliations for non GAAP measures are included in our earnings release. I would like to remind everyone that comments made in this conference call may include forward looking statements regarding the company's expected operational and financial performance for future periods. These statements are based on the company's current expectations and are subject to the Safe Harbor statements relating to forward looking statements contained in our earnings release and the presentation slides that accompany this call. Actual results for future periods may differ materially from those expressed or implied by these forward looking statements due to a number of risks, uncertainties or other factors, including those discussed in the earnings release or during today's call and those described in our filings with the U. Speaker 100:02:20S. Securities and Exchange Commission. We are not undertaking any commitment to update these statements as a result of future events, except as required by law. As a quick reminder, this call is being recorded, and you can find the earnings release and presentation slides that accompany this call as well as the webcast replay of this call at www.investors.ceptong.com. Now, I would like to turn the call over to Jun. Speaker 200:03:00Thank you, Dennis, and good afternoon, everyone. Thank you for joining Saptown's Q4 and full year 2023 earnings call. We will provide a business update and review our financial results with you. There's quite a bit of news within the industry these past few months and specifically regarding septa. First, I'd like to congratulate our team on exceeding our FY2023 revenue guidance with a record $13,100,000 in recorded revenue and preparing us for growth with the launch of our new LiDAR product, Septon Ultra at CES 2024. Speaker 200:03:46These are 2 major accomplishments that keeps us at the forefront of this industry. 1st, on our latest long range LiDAR product, septon Ultra, demonstrated at CES 2024. Septon Ultra, or Ultra, represents a pinnacle in lidar technology, boasting a remarkable long detection range of up to 300 meters at 10% reflectivity. Ultra high resolution with software definable regions of interest and the distinction of being the world's slimmest adaptive long range lidar. This design enables seamless integration into various vehicle locations, maintaining aesthetic appeal and reducing aerodynamic impact. Speaker 200:04:34At its core, Deptan Ultra leverages our next generation imaging technology, Magnostere, alongside with a proprietary chipset SoC to significantly enhance point cloud quality while minimizing cost, footprint and power consumption. This strategic blend of advanced features is designed to deliver an optimal balance of performance, cost and reliability, making Altra not just a technological marvel, but also a viable solution for mass market adoption across automotive, smart infrastructure and various other applications. Moving on to a piece of industry news that creates significant opportunity and competitive edge for Saptao. In a significant development that has considerable implications for the global lidar industry, a prominent Chinese lidar company on January 25, 2024 was added to the 1260H list of Chinese military companies by the U. S. Speaker 200:05:43Government. This designation, which highlights entities believed to be affiliated with the Chinese military and defense sectors, has underscored the complexities and risks associated with American business engaging in partnerships or transactions with firms listed under such a category. This development has prompted many U. S. Corporations to reassess their supply chain strategies and partnerships aiming to mitigate risks associated with compliance, geopolitical tensions and national security concerns. Speaker 200:06:20We believe this event is a significant opportunity and a catalyst for growth for our company as the stakeholders and partners in the industry seek alternatives to navigate away from the potential risks posed by sourcing from entities on the 1260H list, Saptang as a U. S. Company has emerged as a viable and secure partner and a supplier for LiDARs. This shift not only highlights our commitment to adhering to international regulations and safeguarding our operations from geopolitical uncertainties, but also reinforces our position as a trusted leader in the LiDAR technology sector. Our competitive advantage to offer reliable LiDAR supply amidst these challenging times has further solidified our market presence and opened new avenues for growth and collaboration. Speaker 200:07:15Lastly, I want to briefly touch upon some recent news on the GM series production cancellation and a letter of indication from our Tier 1 partner and shareholder, CoIto Manufacturing, which were both disclosed in more details in our Form 8ks. On December 11, 2023, CoIto informed us that the original equipment manufacturer that awarded CoIto the series production award has decided to rescope its ADAS product offerings. And as a result, all outstanding purchase orders from CoIto to the company that relate to the series production award have been canceled. As is customary, when an automotive program changes, Saptown initiated actions to secure project investment cost recovery related to any delay or cancellation of an existing program. On December 21, 2023, we announced that we have received a non binding proposal from Co CoIto to acquire 100% of the outstanding shares of Saptang not currently owned by CoIto. Speaker 200:08:25Saptang's Board of Directors, via a special committee, is currently evaluating the indication of interest among other strategic options with assistance from financial and legal advisors. No assurance can be given that a definitive transaction with respect to CoIto's indication of interest or any other potential transaction will eventually be consummated. As we have discussed in prior quarters, we are continuing to build our business and delivered yet another record setting quarter for revenue. Step Town remains steadfast in pursuing opportunities in automotive and remains in good position to win additional Series Production Award with sourcing decision on the horizon. With that, I'll turn it over to Mitch for details on our efforts with customer programs. Speaker 300:09:13Thank you, June. Since our last earnings call, Septon has received a dramatic increase of attention from the automotive industry, in part due to the macro events against Chinese LiDAR companies mentioned previously, but more importantly, the launch and demonstration of our new Ultra product. Specifically, we have made significant strides with the top 10 global automotive OEM, previously mentioned as one have been a game changer in advancing this particular automotive RFQ as well as accelerating discussions with other top automotive OEMs. Furthermore, our in-depth collaboration with Koweto as an automotive supply titan has become one of the top driving factors for automotive OEMs to consider the Cepton, Kuwaito solution over other competing solutions. The go to market strategy of Cepton with Coweto as our Tier 1 partner is starting to become an obvious and sustainable winning combination for customers as they solidify their 1st mass production launches using LiDAR technology. Speaker 300:10:30Of course, we have seen some false starts, delays and rescoping as car companies refine their adoption of this new technology, but it is clear that LiDAR is not going away. It's just a matter of time before several OEMs safely launch new ADAS systems, incorporating the tremendous advantages that LiDAR provides. Having a supplier which can sustain this launch learning curve is becoming paramount to OEM sourcing decisions. Next, Septon recently filed an 8 ks disclosing the notification of an OEM series production award. Today, we're not able to disclose any more details on this project outside of those disclosed in the 8 ks, but they will be forthcoming soon as we work together with the OEM and Kuwaito on public announcements. Speaker 300:11:23In addition to our recent automotive developments, I'm pleased to highlight significant progress we made with a major autonomous industrial vehicles OEM using our near range lidar Nova in Q4 of 2023. During the quarter, Septon passed a significant gate review with this early adopter of our near range lidar technology, and we've advanced to the final preproduction phase of this project in 2024 with expected mass production launch in 2025. With this milestone in hand and in partnership with Kuwaito, we now have several other OEMs including shuttle OEMs, heavy equipment manufacturers and smart infrastructure customers with greater interest and higher demand for our near range lidar product in 2024. 2024 will be a decisive year for continued lidar adoption across the automotive landscape. With our new product Ultra and our deepened partnership with Coedo, we are poised to capture market share in this key inflection point of adoption. Speaker 300:12:32Now I'll turn it back over to Dennis. Thank you, Mitch. Speaker 100:12:38Starting with our Q4. Total revenue for the quarter was $5,000,000 an increase of 2 14% compared to the prior year period and up 29% compared to our previous quarter. The increase for the quarter was evenly contributed by product revenue and development revenue. Q4 2023 GAAP net loss was $8,300,000 or $0.52 loss per share, basic and diluted. 4th quarter 2023 non GAAP net loss was $6,400,000 or $0.41 loss per share, basic and diluted. Speaker 100:13:34Q4 2023 adjusted EBITDA was a negative $7,100,000 Now on to our full year 2023 results. Total revenue for 2023 was $13,100,000 an increase of 76% compared to the prior year and above the full year 2023 revenue guidance provided in our Q3 2023 earnings release. We achieved full year gross margin of 27%. Our full year GAAP operating expenses were $54,300,000 Excluding stock based compensation expenses and non recurring loss on impairment of property and equipment, Our non GAAP operating expenses were well below the $50,000,000 we communicated in our Q3 2023 earnings release. Full year GAAP net loss was $48,500,000 or $3.08 loss per share, basic and diluted. Speaker 100:14:54Full year non GAAP net loss was $38,900,000 or $2.47 loss per share, basic and diluted. And the full year adjusted EBITDA was a negative $41,200,000 As of December 31, 2023, we had approximately 56.4 $1,000,000 in cash, cash equivalents and short term investments. Lastly, we're not offering 2024 guidance at this time. We expect to provide an update on the full year guidance at our Q1 earnings call. And with that, I'd like to open up the call for questions. Operator00:15:46Thank you. We will now be conducting a question and answer Our first question comes from the line of Shadi Mehtwali with Craig Hallum. Please proceed with your question. Speaker 400:16:36Hey, this is Shadi Mittwally on for Richard Shannon. Thanks for taking my question guys. I have a question regarding the final round of sourcing with the top 10 OEM. Can you give any details whether this is an exclusive or competitive process? Speaker 300:16:54Yes, Chadi. This is Mitch Hortini, Chief Commercial Officer. Basically, you're asking, okay, is it exclusive or competitive? It's still competitive process at this point for that particular opportunity. Speaker 400:17:15Did that OEM give you guys any indication of how many other companies are left in that process? Speaker 300:17:23No, no. They didn't give us any particular number. Speaker 400:17:29Okay. Makes sense. And then just one more question. What's the timeline for the decision and shipment with the top 3 OEM? And then is this an OEM that has announced lighter suppliers in the past? Speaker 300:17:45The timeline, we can't disclose the commercials of the RFQ we received. But just in general, a lot of the RFQs coming out in the automotive industry right now are have the start of series production in the second half of the decade, in the 2026 to 2028 time frame. And then the second part of your question, have they already announced LiDAR suppliers? A lot of OEMs have had various projects with other LiDAR suppliers the past several years. Yes, this OEM was previously working with another LiDAR supplier. Operator00:18:36Our next question comes from the line of Kevin Garangan with Westpark Capital. Please proceed with your question. Speaker 500:18:47Yes. Hey, guys. Thanks for letting me ask a few questions and congrats on the progress. Just for the first one, just a quick clarification. The RFQs the RFQ that you mentioned and then the final sourcing, those are both for passenger vehicles, correct, not any trucking? Speaker 300:19:03That's correct. Speaker 500:19:05Okay, perfect. And then has the IOI from COYTO caused any of your discussions with OEMs to kind of change at all? As in have some that they now be waiting on the sidelines until a final decision is made or some actually like the idea of a bigger Tier 1 kind of player to source in the LiDAR and have accelerated some discussions? Speaker 300:19:30Yes, definitely Kevin. This is Mitch again. Yes, it's an obvious topic that comes up especially in deep final discussion with the OEMs. I think overall it's a positive. It's seen as a positive for Septon and for Kuwaito. Speaker 300:19:45There are concerns in the industry about the longevity of LiDAR companies and I think that's coming to the surface for many OEMs. And so this proposed letter that we received is definitely a positive in front of the customers. Speaker 500:20:06Okay, perfect. Thanks, guys. Operator00:20:12Thank you. Our next question comes from the line of Gus Richard with Northland Capital. Please proceed with your question. Speaker 600:20:21Yes. Thanks for letting me ask a couple of questions. Just when the industry goes through a Rescope, can you talk about sort of what it means to you guys financially? How do they size any remunerations associated with that kind of thing? Not specific numbers, just how does one think about that? Speaker 200:20:49Are you asking about the GM rescoping? Speaker 600:20:53Yes, I am. So when there's a rescope, scope, usually the vendors get money back from money spent. And I'm just wondering, industry practices, what's the magnitude? What does it look like? Is it proportional to your what you've spent on development, etcetera? Speaker 200:21:12Yes. We're certainly trying to recover all the money we have spent invested in the program, but there are a lot of intricacies in the process. Mitch, you want to add something. It's not something of a concrete number we can give out at this point, but it's certainly a nontrivial number. Speaker 300:21:33Yes. It's not public information, but I think you can think of it as some proportion of our OpEx the past 3 or 4 years since we announced that project. That was a pretty significant work stream for our company. So, there were significant investments and that's what's being asked for. Speaker 600:21:55Got it. And then in terms of the combination trucking company, Speaker 100:22:04when so when would you expect that to go into production? Speaker 300:22:09Yes. I'll just refer back to my answer to the first question. Most of the RFQs and awards right now are starting production in the 2026 to 2028 timeframe. So it would fall somewhere in that timeframe. Speaker 200:22:23Yes. But again, I refer back to our 8 ks filing. That's as much as information as we can publish right now and we'll follow-up with more press releases as we're allowed to release more information. Okay, Speaker 600:22:38fair enough. Last one for me. This Chinese entity that is sort of on the entities list, if you will. Where are you going up against this company at any of the top 10 companies, OEMs that you've been working with? Is this a significant reduction in the competitive environment? Speaker 600:23:05Where are you seeing these folks? Speaker 200:23:07Yes. I'll start first and then Nish can add more. There are as you can see in this LiDAR landscape, quite a number of LiDAR companies in competition for any program out there. So you can expect this Chinese LiDAR company as well as us and many others are always competing with each other in any of the LiDAR programs that's active. So, it is a fair assumption that we've been competing in a number of projects. Speaker 200:23:41And yes, the current situation is they are put on this 1268 list and there's 1 fewer in many of these combinations at many places. So Mitch, you want to add some more? Speaker 300:23:56I don't think I have anything to add. Speaker 200:23:57Yes. Yes. That's Speaker 600:24:01Okay. Very good. That's it for me. Thanks so much. Operator00:24:06Thank you. Our next question comes from the line of Matthew Galinko with Maxim Group. Please proceed with your question. Speaker 700:24:16Hey, thanks for taking my questions. I guess first one is on the smart tolling project you've talked about. I think at pretty significant length over the last couple of quarters. I didn't hear I think much about it today, but just hoping you could update us on where the rollout stands and potential for prodding the scope and expansion of the smart tolling practice in general for your business? Speaker 300:24:47Yes. Thanks, Matt. This is Mitch. Good question. Yes, you're right. Speaker 300:24:51We didn't necessarily highlight that today, but we did continue significant shipments in the Q4 that shows up in our product revenue numbers for the tolling application. And we continue to support those big tolling operators in the U. S. Market as they expand both in the U. S. Speaker 300:25:10And also bid on some international opportunities. So that's very much an active market that we're supporting. Speaker 700:25:21Got it. Thank you. And I know you're not specifically providing an outlook particularly on revenue, but I was wondering if you could give us some sense of your thoughts around spending at least over the next 2 quarters or if not for the next year, just on directionally what we should be expecting on OpEx? I think you had kind of declines last 3 quarters at least on GAAP. So should we expect kind of the same trajectory given the rescoping at GM or is it just subject to whether you sort of get to the final decision on any of these OEM selections? Speaker 100:26:07Hi, it's Dennis Chang here. For the OpEx at this stage, we're not expecting any increase. So it's probably less than our 2023 numbers. I guess with our Q1 results, we'll be providing some update. Speaker 500:26:30Okay. Thank you. Operator00:26:36Thank you. There are no further questions at this time. I'd like to turn the floor back over to Junpei for closing comments. Speaker 200:26:44Thank you very much. It's been an exciting year 2023. So we look forward to another even more productive year of 2024 with new products and new projects and new technology, of course. Stay tuned for further updates from Saptang. Thank you very much. Operator00:27:05This concludes today's teleconference. You may disconnect your lines at this time. Thank you forRead morePowered by