NASDAQ:ARBE Arbe Robotics Q4 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-$0.10Consensus EPS -$0.11Beat/MissBeat by +$0.01One Year Ago EPSN/AArbe Robotics Revenue ResultsActual Revenue$0.35 millionExpected Revenue$4.00 millionBeat/MissMissed by -$3.65 millionYoY Revenue GrowthN/AArbe Robotics Announcement DetailsQuarterQ4 2023Date3/7/2024TimeN/AConference Call DateThursday, March 7, 2024Conference 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 Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 7, 2024 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Hello, and welcome to the RB Robotics 4th Quarter and Full Year 2023 Earnings Results Conference Call and Webcast. All participants will be in listen only mode. I would now like to hand the call over to Miri Segal of MSIR. Please go ahead. Speaker 100:00:36Thank you, everyone, for joining us today. Welcome to Arbei's 4th quarter and full year 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, our base co founder and CEO, who will begin the call with a business update. Speaker 100:01:18Then we will turn the call over to Karim Pinto Flomenboim, CFO, who will review the financials. Finally, we will open the call for the question and answer session. With that, I'd like to turn it to Kobi Morenco. Kobi, please go ahead. Speaker 200:01:37Good morning, everyone, and thank you for joining us. I will begin by reviewing some of our recent business highlights. Then Karim Pinter Flumenboin, Arben's CFO, will review financials in more detail and share our outlook. Finally, we will open the call for the question and answer session. Throughout the year, we focused on driving a RADAR evolution with our industry leading solutions. Speaker 200:02:03We are pleased with the progress we have made as we continued to innovate and develop our offerings in 2023. Although some OEMs push their decision timelines into later this year, the anticipation surrounding our offerings is high and we expect to announce significant customer wins in 2024. Industry pipelines have been extended as the auto industry realigned its autonomous driving ambitions with a focus on enabling meaningful level 2 plus and level 3 applications to differentiate their offering and meet customers' needs. As a result, OEMs have redirected their engineering resources and adjusted product roadmap. The dream of safe hands free driving is within reach. Speaker 200:02:58According to Evercore analyst, in 2028, around 70% of all new vehicles will offer hands free driving. The industry is currently selecting the next generation sensor solution to fuel this revolution. We see that the core sensor needed to solve the problem is a high channel count imaging radar like Albase. This demand is well reflected in all RFPs we encounter in the market. 1 of the most exciting developments of Q4 was our announcement of the production version of our radar processor. Speaker 200:03:37It supports the processing of a Reach Point Cloud that is 10 times more detailed than any other radar on the market, offering the 1st radar based solution that is detailed enough to support OEM's ambition to launch Level 3 and higher autonomy applications. Our sophisticated perception radar supports the needs of hands free driving at an affordable price providing unmatched safety that we believe can scale the industry to full autonomy. Also on the product front, we recently announced the availability of our production in 10 chips, which include the transmitter, receiver and processor for the manufacturing of perception made out. This is an important step leading to the production and the revenue phase. Now our chips are in the sorry, now our chipset is in the automotive qualification phase, which is the final step before mass production this year. Speaker 200:04:41The production in 10 ships is already in use by Arvest Tier 1 in their V Sample systems and has been delivered to OEMs for data collection and algorithm development. In January, we were proud to announce an important milestone. Hyren, one of our long time Chinese Tier 1s, announced that it will begin the mass production of state of the art 4 d imaging radars powered by our chipset by the end of this year. In addition, Hyren announced it will start a data collection phase using a vehicle fleet occupied with RV powered imaging radars with plans to cover 1,000,000 kilometers. The goal of the data collection project is to optimize the fusion and perception systems to enable key safety and comfort features. Speaker 200:05:35On top of Hyre, 5 other leading OEMs selected Arben's chipset for perception project. Additionally, our bear received a second order for evaluation systems from a leading Western truck company. This level of commitment from Tier 1s and OEMs marks an important final step before moving into the commercial phase. Shifting gears as part of our growth strategy, we are also targeting the non automotive market, which is moving faster than the traditional auto market. 1 of our Tier 1, Sensra, recently announced that it has significant customer orders for its Eugene Imaging Radar, which is based on our chipset. Speaker 200:06:21These orders include an American Autonomous Transportation Global Manufacturer, a robotized professional outdoor power equipment manufacturer, as well as a key player in the transportation sector. We view this achievement as a strong validation of our technology. Collaborating with Sensra in the non automotive market increases our total addressable market and accelerates our time to market. Finally, we are initiating a dual listing on the Tel Aviv Stock Exchange to enhance our trading volume. At the same time, we plan to issue bonds to the public to secure working capital to support a predicted production ramp up in 2025. Speaker 200:07:07This proactive and strategic approach underscores our commitment to optimizing investor value and fortifying our financial position in a dynamic market landscape. In summary, we are encouraged by our progress during the past year as well as the progress of our Tier 1. Despite selection process and OEM program delays that are out of our control, we see that customers are excited about our solutions and the possibilities we can achieve together. We believe that Abe remains strongly positioned as the long leading radar supplier in those OEMs and we expect to announce 4 customers wins in 2024. Additionally, our approach in targeting new areas around the non automotive industry is providing to be successful and we see faster go to market opportunities in these markets. Speaker 200:08:07RBAC continues to innovate and we believe we can lead a safe and smooth evolution. Now I would like to turn the call over to our CFO, Karine, to go over the financials. Speaker 300:08:17Thank you, Kobi, and hello, everyone. Let me review our financial results for the Q4 and the full year of 2023 in more detail. Total revenue in the Q4 was $350,000 compared to $150,000 in the Q4 of 2022. For the full year of 2023, total revenue was $1,500,000 compared to $3,500,000 in 20.22. Backlog as of December 31, 2023 is $1,000,000 and is expected to be recognized as revenue during 2024. Speaker 300:08:57Negative gross margin for Q4 2023 was 54 point 5% compared to a negative gross margin of 45.6% in Q4 2022. Gross margin for the full year of 2023 decreased to negative 2.6% compared to a positive 63.5% in 2022. The margin decrease was primarily related to low annual revenue as we shifted our focus on to chips for production. Moving on to expenses. In Q4 2023, we reported total operating expenses of $11,900,000 compared to $14,000,000 in Q4 2022. Speaker 300:09:46The decrease in Q4 2023 was primarily driven by a reduction in research and development expenses, favorable exchange rate offset with an increase in share based compensation. Operating expenses for the full year totaled to $46,800,000 compared to $50,000,000 in 2022. The decrease reflected our advanced production stage and the finalization of costs related to this production maturity stage and to a lesser extent, favorable exchange rates and the reduction in D and O insurance rates, partially offset by an increase in share based compensation. Operating loss for the Q4 of 2023 was $12,100,000 compared to $14,100,000 in the Q4 of 2022. Operating loss for the full year of 2023 was $46,900,000 improvement of $800,000 compared to 2022. Speaker 300:10:55Looking at adjusted EBITDA in Q4 of 2023, a non GAAP measurement, which excludes expenses for non cash share based compensation and for non recurring items, was a loss of $8,200,000 compared to a loss of $11,500,000 in the Q4 of 2022. Adjusted EBITDA for the full year of 2023 amounted to a loss of $32,500,000 a $5,500,000 improvement from 2022 and within our projected guidance. Net loss in the Q4 of 2023 decreased to $9,300,000 compared to a net loss of $11,100,000 in the Q4 of 2022. Net loss for the full year of 2023 was $43,500,000 compared to 40 point $5,000,000 in 2022. 2023 net loss included financial income of $3,400,000 resulted mainly from deposit interest and foreign exchange revaluations. Speaker 300:12:09Moving to our balance sheet. As of December 31, 2023, Arbe had $44,000,000 in cash, cash equivalents and short term bank deposits with no debt. With respect to our 2024 guidance, our goal of achieving 4 design ins with automakers remain unchanged as we observe continued strong interest in our market leading offering. We have strengthened our positioning in all our RFQ engagements, even though the OEMs have shifted their decision timelines from late 2023 to 2024. The 2024 annual revenue are expected to be in line with those of 2023, followed by revenue growth in 2025. Speaker 300:13:04These revenue projections are based on the intention to be in full production in the second half of twenty twenty four, as well as our decision to exclusively focus on getting our chipsets into production. We are committed to maintaining a strong and well managed balance sheet, focusing on cost effectiveness and the ability to fund our revenue growth. Adjusted EBITDA for 2024 is projected to be in the range of $30,000,000 loss to $36,000,000 loss. Now we will be happy to take your questions. Operator? Operator00:13:48Thank you very much. We will now begin the question and answer session. Today's first question comes from Gary Mobley with Wells Fargo Securities. Please go ahead. Speaker 400:14:20Hi, everyone. Thanks for taking my question. I think last quarter you highlighted how perhaps as much as 20% of your workforce was called the military duty, hit the war. Maybe you can give us an update on where that stands today and how that's affecting your R and D activity? Speaker 200:14:41Yes. So during Q4 we had around 20% of our team in military reserve. In January, most of them came back home and came back to work. And right now we have less than 5% of our employees on reserve duty. Definitely Q4 I would say was our less productive quarter ever, but people try to compensate in hard work. Speaker 200:15:17And overall we were able to achieve all of our milestones with the customers. And right now, we are back to almost normal, at least to the new normal. Speaker 500:15:31Okay. If I go back Speaker 400:15:33to the last earnings call, I believe you highlighted 11 major OEMs that were in final stages of selection and you expected about 5 or 6 of these to conclude with final decisions. It sounds like now you're counting on 4 of those to go to final decision in calendar year '24. So maybe you can give us sort of an update there in terms of like the total pool of OEMs that are still in various stages of selection? Speaker 200:16:04The pool didn't change. So we spoke about 11 OEMs on Q4. Actually it's now 12, another RFP was opened with an OEM that last year did not stop this process yet. We haven't closed any RFP since we started participating in RFPs or since our Q1 began submitting proposals with our chipset. And the other way around, I think we are very, very close to major wins during the end of this quarter, early next quarter. Speaker 200:16:49As time goes by, the decisions are in the final stages and we hope to be able to announce major news before end of Q1, at least before we will report our Q1. Speaker 400:17:11Okay. Last question for me if I can. It sounds like more of the same with respect to China that is China will be the 1st geography to really adopt and embrace L2 plus autonomous driving. Maybe you can just speak to some of the impediments that you're seeing in terms of direct customer or consumer adoption for L2 plus autonomous driving outside of China? Speaker 200:17:36Yes. So China I think right now looking on this market in 2 segments. There is the luxury car segment that of course would be launched 1st in 2025, but this is very, very narrow volume and most of those OEMs are focusing on launching radar together with LIDAR, sometimes even 2 LIDARs for L2 plus L3. But the main segment, I would say, is the mainstream in China. And they're trying to launch this kind of services only with radar. Speaker 200:18:23We spoke about high end fusion project. We can say that at least 2 major OEMs are doing this kind of projects as well. Fusion of radar, imaging radar, our imaging radar with cameras in order to support level 2 plus plus level 3 application without a LIDAR. Because on the mainstream of China, the LiDAR price is too expensive. Even the Chinese LiDARs are too expensive. Speaker 200:18:55And we believe that imaging radar will have a significant role in those launches. Operator00:19:07The next question comes from Joshua Buckhalter with TD Cowen. Please go ahead. Speaker 600:19:15Hi, everyone. This is Rene on for Josh today. Just a few questions from me. Speaker 300:19:21To start, can Speaker 600:19:22you watch some of the main drivers of slower adoption and push out? Is it slower for RV or the imaging radar space in general? And then are there any implications to the slower 2024 ramp on your expectations for 2025 and 2026 or are there separate decision trees? Speaker 300:19:44Can you repeat your too close to the microphone. So can you repeat your question, please? Thank you. Speaker 600:19:51Yes, sure. Is this better? Can you hear me better now? Speaker 200:19:54Yes, now it's much better. Speaker 600:19:57Okay. Sorry about that. Just to start, I think, can you walk through the main drivers of slower adoption and push outs at the OEM level? We've seen this across other sense like LiDAR, but is it slower for RBE or imaging radar in general? And then can you talk about the implications of a slower 'twenty four ramp and 'twenty three on your 2025 and 2026 Speaker 200:20:28expectations? Okay. So I think that we are suffering from the same from the main problem of the industry. So the full stack of level 2 plus level 3 or software defined vehicles that can run this kind of software and do all of the updates and improve the ADAS systems over the year over time. This all stack is pushed because it's too complicated than the OEMs basically sold at the beginning. Speaker 200:21:06But what we see clearly is that majority of the OEMs putting a lot of R and D efforts on this area, maybe more than before. They are shifting part of their investments in EVs into those R and D projects. All of them wants to control this stack and to compete on this stack and offer the customers a better and safer experience for highway autopilot and then for Uber and Autopilot. So we see that this pushing the industry is across the board even it's influencing the ramp up of the central compute and other sensors. As of our revenues, our 25 revenues are built mainly from China, which we believe that will ramp up earlier and we know it will ramp up earlier and from non automotive applications. Speaker 200:22:15So we don't see a real influence on our 25 revenues. It's mainly on the shift in 'twenty four. And also we believe that in 'twenty six, we will see major wins that we will have this quarter and next quarter will be in our revenues in 'twenty six. So overall, I think that the main shift is the main delay is in 'twenty four revenues, which were which are shifted a bit to 25. We have enough cash to pass this hiccup and we believe that on the long run Albev will be a leader player and a very strong company. Speaker 600:23:13Great. Thank you for that color. I guess on that, you've previously mentioned a preliminary order for about $11,600,000 from WayFoo and the 304,000 chipsets from hiring, I think, were tens of 1,000,000 of dollars. Are these expected to like when can we expect these to layer into the model and are they waiting final OEM decisions before revenue recognition? Speaker 200:23:41Yes, we are waiting for final OEM approval before recognition and also in chipset you need to deliver deliver the chipset in order to be able to recognize it. We expect that we as the hiring stated by the end of this year, last quarter of 2024, they will be in full production with our rate out. So it means that they will start we will start shipping them shipped and majority of the revenues from those preliminary orders we believe are going to be recognized in 2025. Speaker 600:24:19Great. Thank you. And that's all for me. Operator00:24:23Thank you. The next question comes from Suji Desilva with ROTH MKM. Please go Speaker 700:24:29ahead. Hi, Colby. Hi, Corinne. In the press release, you talked about a production intent chipset and there's auto qual being conducted. Is that being conducted by you or a Tier 1 or a potential customer? Speaker 200:24:42No, no. Basically as you know our fab is global foundries and global foundries are doing for us also a full turnkey solution of taking the chips to production. So the chips are in final stage of automotive qualification. They are running the automotive qual. In the prequel, we saw that they are fine. Speaker 200:25:09And we finished all of the preliminary tests and we are now running on the formal stage of last stage of automotive qualification and we hope to start shipping full qualified production chips by end of Q2. Of course in the beginning in the first few 2, 3 months the volume will be low because it takes time for ramp up in automotive, but in 2025 we will be in full capacity and be able to supply any volume that is needed in the market. Speaker 700:25:48Okay. All right. Thanks, Kobi. And then my other question is on the competitive landscape, if you could update us on the traditional radar competitors and maybe some of the more software centric models and what you're seeing in various geographies and OEMs in terms of the competition? Speaker 200:26:04We are not seeing those kinds of companies in the competition. The other way around what we see more and more is OEMs that's stating that in the RFP the minimum requirement is a minimum high channel count that as much as we know there is other than us maybe 1 or 2 players that are able to meet this qualification and all of those software centric or software radars are not qualified to those RFPs in RFQs that wants to support Level 2 plus Level 3. Those solutions are very good for low end ADAS to meet the challenges of NCAP, but not for real solving the problems of radar. So if we are looking on the competitive landscape, I think that in the last quarter, our situation improved dramatically. So from one end, there's no new competitor. Speaker 200:27:19From the other end, there is clear understanding almost in every OEM that we are meeting that high channel count above 16x16 is a must for a year more than 27.5. So right now, as it was announced there is a radar of us that is based on our chipset and a radar that is based on the chipset of Mobileye. Those are the only solutions that we know that are available in the market. It might be that someone is working on something too that we don't know. But all of the solutions with software or with less channels are not qualified for next generation solutions. Speaker 500:28:06Okay. Thanks, Tobey. Operator00:28:09Thank you. The next question comes from Jamie Perez with R. F. Lafferty. Please go ahead. Operator00:28:14Hey, Speaker 500:28:16Hey, everybody. Good day. Thanks for taking my question. The order that you received from the Western Truck Company, can you give us a little bit color? Is it a pre production order, test order? Speaker 500:28:27So you could give a little we appreciate if you give a little bit color on that. Speaker 200:28:32So the preproduction, the preliminary order that we got from Hiren is mainly focused on OEMs that Hiren already won their central ECU and they assume that the best radar to connect to this central processing unit is our radar are in a final stages of nomination with the OEM for this project. Speaker 500:29:04Now is this going to be a main radar or back or redundant part of the redundant system? Speaker 200:29:11No, it would be the main radar. Speaker 500:29:13The main radar. Okay, thanks. Now, I mean, also focusing on the automotive market since the automotive market has been a little bit choppy lately due to weak demand. And on your press release, you mentioned you're going to look for other markets that maybe have a shorter lead time and less choppiness. Could you give a little color on your non automotive strategy? Speaker 200:29:36Yes, there is so of all, our non automotive strategy was there from the beginning. But what we see is that Sensra are gaining a lot of traction with their products, mainly in robotics, in transportation and even in Homeland Security. And we believe that we will see major revenues from this non automotive market already in 2024 and of course in 2025. Speaker 500:30:16Right. Okay. That's all the questions I have. Thanks. Thanks for taking my questions. Operator00:30:22Thank you very much. This concludes our question and answer session. I'd like to turn the call back over to Mr. Koby Maranko for any closing remarks. Speaker 200:30:32Thank you. We were very pleased to have you join us today. To our employees and partners, your continued dedication is deeply appreciated. We look forward to updating you on all this progress in the coming months. Look out for updates as we prepare for several investor events. Speaker 200:30:50We'd love to meet you in person for additional discussion. Please contact us at investors. Alvarobotics.com or visit our site to schedule a meeting. Thank you all. Operator00:31:02The conference has now concluded. Thank you for attending today's presentation. You may nowRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallArbe Robotics Q4 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.comTrump’s Secret WeaponHave you looked at the stock market recently? Millions of investors are scrambling trying to figure out what's coming next. But here's the truth… This is just the beginning. 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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. Operator00:00:00Hello, and welcome to the RB Robotics 4th Quarter and Full Year 2023 Earnings Results Conference Call and Webcast. All participants will be in listen only mode. I would now like to hand the call over to Miri Segal of MSIR. Please go ahead. Speaker 100:00:36Thank you, everyone, for joining us today. Welcome to Arbei's 4th quarter and full year 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, our base co founder and CEO, who will begin the call with a business update. Speaker 100:01:18Then we will turn the call over to Karim Pinto Flomenboim, CFO, who will review the financials. Finally, we will open the call for the question and answer session. With that, I'd like to turn it to Kobi Morenco. Kobi, please go ahead. Speaker 200:01:37Good morning, everyone, and thank you for joining us. I will begin by reviewing some of our recent business highlights. Then Karim Pinter Flumenboin, Arben's CFO, will review financials in more detail and share our outlook. Finally, we will open the call for the question and answer session. Throughout the year, we focused on driving a RADAR evolution with our industry leading solutions. Speaker 200:02:03We are pleased with the progress we have made as we continued to innovate and develop our offerings in 2023. Although some OEMs push their decision timelines into later this year, the anticipation surrounding our offerings is high and we expect to announce significant customer wins in 2024. Industry pipelines have been extended as the auto industry realigned its autonomous driving ambitions with a focus on enabling meaningful level 2 plus and level 3 applications to differentiate their offering and meet customers' needs. As a result, OEMs have redirected their engineering resources and adjusted product roadmap. The dream of safe hands free driving is within reach. Speaker 200:02:58According to Evercore analyst, in 2028, around 70% of all new vehicles will offer hands free driving. The industry is currently selecting the next generation sensor solution to fuel this revolution. We see that the core sensor needed to solve the problem is a high channel count imaging radar like Albase. This demand is well reflected in all RFPs we encounter in the market. 1 of the most exciting developments of Q4 was our announcement of the production version of our radar processor. Speaker 200:03:37It supports the processing of a Reach Point Cloud that is 10 times more detailed than any other radar on the market, offering the 1st radar based solution that is detailed enough to support OEM's ambition to launch Level 3 and higher autonomy applications. Our sophisticated perception radar supports the needs of hands free driving at an affordable price providing unmatched safety that we believe can scale the industry to full autonomy. Also on the product front, we recently announced the availability of our production in 10 chips, which include the transmitter, receiver and processor for the manufacturing of perception made out. This is an important step leading to the production and the revenue phase. Now our chips are in the sorry, now our chipset is in the automotive qualification phase, which is the final step before mass production this year. Speaker 200:04:41The production in 10 ships is already in use by Arvest Tier 1 in their V Sample systems and has been delivered to OEMs for data collection and algorithm development. In January, we were proud to announce an important milestone. Hyren, one of our long time Chinese Tier 1s, announced that it will begin the mass production of state of the art 4 d imaging radars powered by our chipset by the end of this year. In addition, Hyren announced it will start a data collection phase using a vehicle fleet occupied with RV powered imaging radars with plans to cover 1,000,000 kilometers. The goal of the data collection project is to optimize the fusion and perception systems to enable key safety and comfort features. Speaker 200:05:35On top of Hyre, 5 other leading OEMs selected Arben's chipset for perception project. Additionally, our bear received a second order for evaluation systems from a leading Western truck company. This level of commitment from Tier 1s and OEMs marks an important final step before moving into the commercial phase. Shifting gears as part of our growth strategy, we are also targeting the non automotive market, which is moving faster than the traditional auto market. 1 of our Tier 1, Sensra, recently announced that it has significant customer orders for its Eugene Imaging Radar, which is based on our chipset. Speaker 200:06:21These orders include an American Autonomous Transportation Global Manufacturer, a robotized professional outdoor power equipment manufacturer, as well as a key player in the transportation sector. We view this achievement as a strong validation of our technology. Collaborating with Sensra in the non automotive market increases our total addressable market and accelerates our time to market. Finally, we are initiating a dual listing on the Tel Aviv Stock Exchange to enhance our trading volume. At the same time, we plan to issue bonds to the public to secure working capital to support a predicted production ramp up in 2025. Speaker 200:07:07This proactive and strategic approach underscores our commitment to optimizing investor value and fortifying our financial position in a dynamic market landscape. In summary, we are encouraged by our progress during the past year as well as the progress of our Tier 1. Despite selection process and OEM program delays that are out of our control, we see that customers are excited about our solutions and the possibilities we can achieve together. We believe that Abe remains strongly positioned as the long leading radar supplier in those OEMs and we expect to announce 4 customers wins in 2024. Additionally, our approach in targeting new areas around the non automotive industry is providing to be successful and we see faster go to market opportunities in these markets. Speaker 200:08:07RBAC continues to innovate and we believe we can lead a safe and smooth evolution. Now I would like to turn the call over to our CFO, Karine, to go over the financials. Speaker 300:08:17Thank you, Kobi, and hello, everyone. Let me review our financial results for the Q4 and the full year of 2023 in more detail. Total revenue in the Q4 was $350,000 compared to $150,000 in the Q4 of 2022. For the full year of 2023, total revenue was $1,500,000 compared to $3,500,000 in 20.22. Backlog as of December 31, 2023 is $1,000,000 and is expected to be recognized as revenue during 2024. Speaker 300:08:57Negative gross margin for Q4 2023 was 54 point 5% compared to a negative gross margin of 45.6% in Q4 2022. Gross margin for the full year of 2023 decreased to negative 2.6% compared to a positive 63.5% in 2022. The margin decrease was primarily related to low annual revenue as we shifted our focus on to chips for production. Moving on to expenses. In Q4 2023, we reported total operating expenses of $11,900,000 compared to $14,000,000 in Q4 2022. Speaker 300:09:46The decrease in Q4 2023 was primarily driven by a reduction in research and development expenses, favorable exchange rate offset with an increase in share based compensation. Operating expenses for the full year totaled to $46,800,000 compared to $50,000,000 in 2022. The decrease reflected our advanced production stage and the finalization of costs related to this production maturity stage and to a lesser extent, favorable exchange rates and the reduction in D and O insurance rates, partially offset by an increase in share based compensation. Operating loss for the Q4 of 2023 was $12,100,000 compared to $14,100,000 in the Q4 of 2022. Operating loss for the full year of 2023 was $46,900,000 improvement of $800,000 compared to 2022. Speaker 300:10:55Looking at adjusted EBITDA in Q4 of 2023, a non GAAP measurement, which excludes expenses for non cash share based compensation and for non recurring items, was a loss of $8,200,000 compared to a loss of $11,500,000 in the Q4 of 2022. Adjusted EBITDA for the full year of 2023 amounted to a loss of $32,500,000 a $5,500,000 improvement from 2022 and within our projected guidance. Net loss in the Q4 of 2023 decreased to $9,300,000 compared to a net loss of $11,100,000 in the Q4 of 2022. Net loss for the full year of 2023 was $43,500,000 compared to 40 point $5,000,000 in 2022. 2023 net loss included financial income of $3,400,000 resulted mainly from deposit interest and foreign exchange revaluations. Speaker 300:12:09Moving to our balance sheet. As of December 31, 2023, Arbe had $44,000,000 in cash, cash equivalents and short term bank deposits with no debt. With respect to our 2024 guidance, our goal of achieving 4 design ins with automakers remain unchanged as we observe continued strong interest in our market leading offering. We have strengthened our positioning in all our RFQ engagements, even though the OEMs have shifted their decision timelines from late 2023 to 2024. The 2024 annual revenue are expected to be in line with those of 2023, followed by revenue growth in 2025. Speaker 300:13:04These revenue projections are based on the intention to be in full production in the second half of twenty twenty four, as well as our decision to exclusively focus on getting our chipsets into production. We are committed to maintaining a strong and well managed balance sheet, focusing on cost effectiveness and the ability to fund our revenue growth. Adjusted EBITDA for 2024 is projected to be in the range of $30,000,000 loss to $36,000,000 loss. Now we will be happy to take your questions. Operator? Operator00:13:48Thank you very much. We will now begin the question and answer session. Today's first question comes from Gary Mobley with Wells Fargo Securities. Please go ahead. Speaker 400:14:20Hi, everyone. Thanks for taking my question. I think last quarter you highlighted how perhaps as much as 20% of your workforce was called the military duty, hit the war. Maybe you can give us an update on where that stands today and how that's affecting your R and D activity? Speaker 200:14:41Yes. So during Q4 we had around 20% of our team in military reserve. In January, most of them came back home and came back to work. And right now we have less than 5% of our employees on reserve duty. Definitely Q4 I would say was our less productive quarter ever, but people try to compensate in hard work. Speaker 200:15:17And overall we were able to achieve all of our milestones with the customers. And right now, we are back to almost normal, at least to the new normal. Speaker 500:15:31Okay. If I go back Speaker 400:15:33to the last earnings call, I believe you highlighted 11 major OEMs that were in final stages of selection and you expected about 5 or 6 of these to conclude with final decisions. It sounds like now you're counting on 4 of those to go to final decision in calendar year '24. So maybe you can give us sort of an update there in terms of like the total pool of OEMs that are still in various stages of selection? Speaker 200:16:04The pool didn't change. So we spoke about 11 OEMs on Q4. Actually it's now 12, another RFP was opened with an OEM that last year did not stop this process yet. We haven't closed any RFP since we started participating in RFPs or since our Q1 began submitting proposals with our chipset. And the other way around, I think we are very, very close to major wins during the end of this quarter, early next quarter. Speaker 200:16:49As time goes by, the decisions are in the final stages and we hope to be able to announce major news before end of Q1, at least before we will report our Q1. Speaker 400:17:11Okay. Last question for me if I can. It sounds like more of the same with respect to China that is China will be the 1st geography to really adopt and embrace L2 plus autonomous driving. Maybe you can just speak to some of the impediments that you're seeing in terms of direct customer or consumer adoption for L2 plus autonomous driving outside of China? Speaker 200:17:36Yes. So China I think right now looking on this market in 2 segments. There is the luxury car segment that of course would be launched 1st in 2025, but this is very, very narrow volume and most of those OEMs are focusing on launching radar together with LIDAR, sometimes even 2 LIDARs for L2 plus L3. But the main segment, I would say, is the mainstream in China. And they're trying to launch this kind of services only with radar. Speaker 200:18:23We spoke about high end fusion project. We can say that at least 2 major OEMs are doing this kind of projects as well. Fusion of radar, imaging radar, our imaging radar with cameras in order to support level 2 plus plus level 3 application without a LIDAR. Because on the mainstream of China, the LiDAR price is too expensive. Even the Chinese LiDARs are too expensive. Speaker 200:18:55And we believe that imaging radar will have a significant role in those launches. Operator00:19:07The next question comes from Joshua Buckhalter with TD Cowen. Please go ahead. Speaker 600:19:15Hi, everyone. This is Rene on for Josh today. Just a few questions from me. Speaker 300:19:21To start, can Speaker 600:19:22you watch some of the main drivers of slower adoption and push out? Is it slower for RV or the imaging radar space in general? And then are there any implications to the slower 2024 ramp on your expectations for 2025 and 2026 or are there separate decision trees? Speaker 300:19:44Can you repeat your too close to the microphone. So can you repeat your question, please? Thank you. Speaker 600:19:51Yes, sure. Is this better? Can you hear me better now? Speaker 200:19:54Yes, now it's much better. Speaker 600:19:57Okay. Sorry about that. Just to start, I think, can you walk through the main drivers of slower adoption and push outs at the OEM level? We've seen this across other sense like LiDAR, but is it slower for RBE or imaging radar in general? And then can you talk about the implications of a slower 'twenty four ramp and 'twenty three on your 2025 and 2026 Speaker 200:20:28expectations? Okay. So I think that we are suffering from the same from the main problem of the industry. So the full stack of level 2 plus level 3 or software defined vehicles that can run this kind of software and do all of the updates and improve the ADAS systems over the year over time. This all stack is pushed because it's too complicated than the OEMs basically sold at the beginning. Speaker 200:21:06But what we see clearly is that majority of the OEMs putting a lot of R and D efforts on this area, maybe more than before. They are shifting part of their investments in EVs into those R and D projects. All of them wants to control this stack and to compete on this stack and offer the customers a better and safer experience for highway autopilot and then for Uber and Autopilot. So we see that this pushing the industry is across the board even it's influencing the ramp up of the central compute and other sensors. As of our revenues, our 25 revenues are built mainly from China, which we believe that will ramp up earlier and we know it will ramp up earlier and from non automotive applications. Speaker 200:22:15So we don't see a real influence on our 25 revenues. It's mainly on the shift in 'twenty four. And also we believe that in 'twenty six, we will see major wins that we will have this quarter and next quarter will be in our revenues in 'twenty six. So overall, I think that the main shift is the main delay is in 'twenty four revenues, which were which are shifted a bit to 25. We have enough cash to pass this hiccup and we believe that on the long run Albev will be a leader player and a very strong company. Speaker 600:23:13Great. Thank you for that color. I guess on that, you've previously mentioned a preliminary order for about $11,600,000 from WayFoo and the 304,000 chipsets from hiring, I think, were tens of 1,000,000 of dollars. Are these expected to like when can we expect these to layer into the model and are they waiting final OEM decisions before revenue recognition? Speaker 200:23:41Yes, we are waiting for final OEM approval before recognition and also in chipset you need to deliver deliver the chipset in order to be able to recognize it. We expect that we as the hiring stated by the end of this year, last quarter of 2024, they will be in full production with our rate out. So it means that they will start we will start shipping them shipped and majority of the revenues from those preliminary orders we believe are going to be recognized in 2025. Speaker 600:24:19Great. Thank you. And that's all for me. Operator00:24:23Thank you. The next question comes from Suji Desilva with ROTH MKM. Please go Speaker 700:24:29ahead. Hi, Colby. Hi, Corinne. In the press release, you talked about a production intent chipset and there's auto qual being conducted. Is that being conducted by you or a Tier 1 or a potential customer? Speaker 200:24:42No, no. Basically as you know our fab is global foundries and global foundries are doing for us also a full turnkey solution of taking the chips to production. So the chips are in final stage of automotive qualification. They are running the automotive qual. In the prequel, we saw that they are fine. Speaker 200:25:09And we finished all of the preliminary tests and we are now running on the formal stage of last stage of automotive qualification and we hope to start shipping full qualified production chips by end of Q2. Of course in the beginning in the first few 2, 3 months the volume will be low because it takes time for ramp up in automotive, but in 2025 we will be in full capacity and be able to supply any volume that is needed in the market. Speaker 700:25:48Okay. All right. Thanks, Kobi. And then my other question is on the competitive landscape, if you could update us on the traditional radar competitors and maybe some of the more software centric models and what you're seeing in various geographies and OEMs in terms of the competition? Speaker 200:26:04We are not seeing those kinds of companies in the competition. The other way around what we see more and more is OEMs that's stating that in the RFP the minimum requirement is a minimum high channel count that as much as we know there is other than us maybe 1 or 2 players that are able to meet this qualification and all of those software centric or software radars are not qualified to those RFPs in RFQs that wants to support Level 2 plus Level 3. Those solutions are very good for low end ADAS to meet the challenges of NCAP, but not for real solving the problems of radar. So if we are looking on the competitive landscape, I think that in the last quarter, our situation improved dramatically. So from one end, there's no new competitor. Speaker 200:27:19From the other end, there is clear understanding almost in every OEM that we are meeting that high channel count above 16x16 is a must for a year more than 27.5. So right now, as it was announced there is a radar of us that is based on our chipset and a radar that is based on the chipset of Mobileye. Those are the only solutions that we know that are available in the market. It might be that someone is working on something too that we don't know. But all of the solutions with software or with less channels are not qualified for next generation solutions. Speaker 500:28:06Okay. Thanks, Tobey. Operator00:28:09Thank you. The next question comes from Jamie Perez with R. F. Lafferty. Please go ahead. Operator00:28:14Hey, Speaker 500:28:16Hey, everybody. Good day. Thanks for taking my question. The order that you received from the Western Truck Company, can you give us a little bit color? Is it a pre production order, test order? Speaker 500:28:27So you could give a little we appreciate if you give a little bit color on that. Speaker 200:28:32So the preproduction, the preliminary order that we got from Hiren is mainly focused on OEMs that Hiren already won their central ECU and they assume that the best radar to connect to this central processing unit is our radar are in a final stages of nomination with the OEM for this project. Speaker 500:29:04Now is this going to be a main radar or back or redundant part of the redundant system? Speaker 200:29:11No, it would be the main radar. Speaker 500:29:13The main radar. Okay, thanks. Now, I mean, also focusing on the automotive market since the automotive market has been a little bit choppy lately due to weak demand. And on your press release, you mentioned you're going to look for other markets that maybe have a shorter lead time and less choppiness. Could you give a little color on your non automotive strategy? Speaker 200:29:36Yes, there is so of all, our non automotive strategy was there from the beginning. But what we see is that Sensra are gaining a lot of traction with their products, mainly in robotics, in transportation and even in Homeland Security. And we believe that we will see major revenues from this non automotive market already in 2024 and of course in 2025. Speaker 500:30:16Right. Okay. That's all the questions I have. Thanks. Thanks for taking my questions. Operator00:30:22Thank you very much. This concludes our question and answer session. I'd like to turn the call back over to Mr. Koby Maranko for any closing remarks. Speaker 200:30:32Thank you. We were very pleased to have you join us today. To our employees and partners, your continued dedication is deeply appreciated. We look forward to updating you on all this progress in the coming months. Look out for updates as we prepare for several investor events. Speaker 200:30:50We'd love to meet you in person for additional discussion. Please contact us at investors. Alvarobotics.com or visit our site to schedule a meeting. Thank you all. Operator00:31:02The conference has now concluded. Thank you for attending today's presentation. You may nowRead morePowered by