NASDAQ:CPTN Cepton Q1 2024 Earnings Report Earnings HistoryForecast Cepton EPS ResultsActual EPS-$0.58Consensus EPS -$0.56Beat/MissMissed by -$0.02One Year Ago EPSN/ACepton Revenue ResultsActual Revenue$1.95 millionExpected Revenue$4.00 millionBeat/MissMissed by -$2.05 millionYoY Revenue GrowthN/ACepton Announcement DetailsQuarterQ1 2024Date5/13/2024TimeN/AConference Call DateMonday, May 13, 2024Conference Call Time5:30PM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Cepton Q1 2024 Earnings Call TranscriptProvided by QuartrMay 13, 2024 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Good day, and welcome to the Septon, Inc. First Quarter 2024 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. Operator00:00:24It is now my pleasure to introduce your host, Dennis Chang, Interim Chief Financial Officer. Dennis, please go ahead. Speaker 100:00:32Thank you, and welcome to Sapton's Q1 2024 Earnings Call and Business Update. With me today are Junpei, Co Founder and Chief Executive Officer and Mitch Horkini, 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 100:01:16GAAP. 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 100:02:26S. Securities and Exchange Commission. We're 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. Septon.com. Speaker 100:03:00Now, I would like to turn the call over to Jun. Speaker 200:03:05Thank you, Dennis, and good afternoon, everyone. Thank you for joining Saptang's Q1 2024 earnings call. We will provide a business update and review our Q1 financial results with you. First, an update on our latest long range LiDAR product, Septon Ultra. As part of our ongoing efforts to advance automotive safety and efficiency through cutting edge technology, I'm pleased to provide an exciting update on our ULTRA LIDAR system. Speaker 200:03:37We have successfully advanced the ULTRA from its initial concept to the B sample stage much quicker than anticipated, and the performance of the ULTRA B samples has exceeded our expectations. This rapid progression is a testament to our robust R and D capabilities and deep technical expertise, and achieving this key development milestone underscores our commitment to innovation and market leadership. We have demonstrated the Altra's capabilities to OEMs across the 3 continents in Japan, the United States and Europe. These live demonstrations not only validated our LiDAR system's performance under various conditions, but also showcased its versatility and robustness in real world environments. The feedback from these global showcases has been overwhelmingly positive, affirming the Ultra's potential to transform automotive safety standards and its readiness for broader commercial deployment. Speaker 200:04:47Our offshore product features our proprietary imaging technology, Magnosthere, which allows for dynamic field of view, region of interest adjustment and high resolution scanning. This technology has performed above expectations, offering enhanced adaptability and higher data fidelity in the B samples. The advancements in our ultra lidar system mark a pivotal step forward in our mission to drive widespread adoption of lidar technology in automotive applications. As we continue to push the boundaries of what's possible, we remain focused on delivering products that not only meet, but also exceed the rigorous demands of the automotive industry. I've always stated that technology advancements do not create value without commercial traction. Speaker 200:05:41Today, I'm proud to announce that we have secured a series production project with a global OEM in collaboration with CoIto to supply our near range LiDAR sensors. This multiyear OEM project underscores our technology competitiveness and the trust that industry leaders place in our solutions. To jump start this project, Saptown has entered into a significant engineering services contract with CoIto, which includes $10,000,000 in fees for work to be performed in the Q2 of 2024. This contract is designed to support the execution of the new OEM program and accelerate product development, ensuring that we meet and exceed the specific needs of our automotive customers. We expect to have positive cash flow for the 3 months ended Q2 2024, a significant achievement not only for our company, but also within the LiDAR industry. Speaker 200:06:43With that, I'll turn it over to Mitch for more details on our efforts with customer programs. Speaker 300:06:51Thank you, June. Today, I'm excited to share significant developments in our business partnerships and new opportunities that highlight stepped on's growing influence in the global automotive market. As June announced, our significant NRE contract with Kuwaito marks a huge milestone for Septon on multiple fronts. First, we expand our series production awards beyond the North American continent with this win. 2nd, we demonstrate product scalability with this near range lidar win. Speaker 300:07:24And last, but certainly not least, we expect to become cash flow positive this quarter for the first time in the company's history and we believe this is also a first within the LiDAR industry. Large global OEMs are very selective in these early days of LiDAR adoption and we're proud to gain the trust of another global OEM. The commercials associated with this project are expected to be significant, starting with revenue this quarter. Beyond this win, we are actively expanding our market reach with submissions for RFQs from some of the world's largest automotive manufacturers. We've recently completed the final submission for an RFQ to a top 10 global automotive OEM for our long range lidar technology and we expect a formal decision before our next earnings call. Speaker 300:08:18This is a pivotal step towards securing a broader adoption of our lidar solutions in the automotive sector. We've also made our 1st RFQ submission to a top 3 global automotive OEM for both long range and near range LiDAR. As OEMs expand their use of lidar and next generation ADAS offerings to include both long range and near range lidar, Zipton is in a very unique position offering both products, positioning us well for further market share gains. As our LiDAR hardware solutions are hardened for automotive deployment, our software ecosystem is also expanding. Last week, Septon announced StudioViz, our lidar simulator aimed to accelerate OEM development and reduce data collection costs. Speaker 300:09:10Our solution stands out from the pack as we include manufacturing variances into the simulator, a key ingredient that stems from our long standing work with Coedho Manufacturing. StudioViz is just one pillar of our software ecosystem development kit, which will further expand in the coming months years as we further understand OEM challenges and work to include more efficient solutions and value in septon products. We're excited to continue our global roadshow of our highly successful Ultra product and to execute our new OEM series production win. Stay tuned for more good news from Cepton in the coming quarters. Next, I'll turn it back to Dennis. Speaker 100:09:54Thank you, Mitch. Starting with our Q1 results. Total revenue for the quarter was $1,900,000 consisting of $1,100,000 in product revenue and 0.8 $1,000,000 in development revenue. Total revenue increased by 31% compared to $1,500,000 in the prior year comparable period. 1st quarter GAAP net loss was $6,800,000 or $0.43 loss per share, basic and diluted. Speaker 100:10:37Non GAAP net loss was $8,300,000 or $0.52 loss per share, basic and diluted. 1st quarter non GAAP adjusted EBITDA was negative $8,900,000 During the Q1, we recorded a $4,000,000 gain from the GM project cancellation recoveries. This was the initial payments received from Coitou and the cost recovery process is ongoing. As of March 31, 2024, we had approximately $49,200,000 in cash and cash equivalents. Our full year 2024 guidance for revenue is expected to be between 15 $1,000,000 $25,000,000 Our operating expenses are expected to be below $50,000,000 We look forward to seeing everyone at our Annual Shareholders Meeting scheduled on June 17. Speaker 100:11:50And with that, I'd like to open up the call for questions. Operator00:11:57Thank you. We will now be conducting a question and answer Thank you. Our first question comes from the line of Matthew Galinko with Maxim Group. Please proceed with your question. Speaker 400:12:39Hi. Thanks for taking my questions. Maybe firstly, just on the $4,000,000 gain, I just wanted to on the GM cost recovery, I just wanted to clarify, is that a was that a cash payment or was cash received in the Q1? Speaker 100:13:01Yes. The $4,000,000 is a cash payment. It has been received in the Q1. Speaker 400:13:10Got it. Okay. Thank you. And then secondly, can you help us frame for the new production win and congratulations on that. When should we expect or when could we start to expect production revenue from that? Speaker 400:13:30Is that 2026 event or is there anything more you could say about that? Speaker 300:13:38Hey, Matt, this is Mitch. Yes, that's a good question. So, we noted that we'll begin collecting development revenues this quarter, and then sample product revenues are also starting this quarter. For the high volume production revenue, it's most of these programs are typically sourced 2.5 to 3 years ahead of the start of production. And that's the case for this project as well. Speaker 400:14:11Thank you. And one last follow-up question on that would be, I guess, given the $10,000,000 component of that, that sounds like it's hitting in the Q2 2024. Is there do you expect there to be subsequent development revenue around that project in the balance of the year? Or is that going to be kind of a one time thing that maybe we get other slabs of it in future periods prior to high volume production or help us frame if that's a one time thing? Speaker 300:14:54Yes. Again, this is Mitch. It's not a one time payment. The development and the milestones will continue, up until that start of production, as I indicated, 2.5 to 3 years from now. It will probably be a bit more lumpy, compared to product sales, but you can see a pretty significant portion, this quarter. Speaker 300:15:19And then there will be follow on development revenue as part of this project. Speaker 400:15:26Great. Thank Operator00:15:30you. Our next question comes from the line of Shadi Madwali with Craig Hallum. Speaker 500:15:39This is Shadi Madwali on for Richard Shannon. I want to start off with a clarification question. The new auto award mentioned in the PR and then on the call, is this the same one mentioned end of March? Speaker 300:15:59Yes. Yes. Yes. It is. Speaker 500:16:03Great. Thanks for that. And then this $10,000,000 fee, it sounds like most of it's going to be recognized in 2Q and then the rest of it throughout fiscal 2024 or is it all going to be recognized in Q2? Speaker 300:16:23Yes. Actually, all of it is recognized within Q2. And then my answer to the previous question, there will be subsequent development revenues on top of the $10,000,000 in the second half of the year. Speaker 500:16:37Okay. That makes sense. And then with the guidance given of $15,000,000 to $25,000,000 for the year, we already know about $12,000,000 of that. To make up the rest of that $3,000,000 to $13,000,000 in revenues, are you able to give some more color on whether this will be made up of primarily NRE or product sales? Speaker 300:17:03Good question, Chadi. It will be a mix of both. As we indicated in the call, we're working on 2 or 3 other OEM projects. Both of those will have significant NRE contracts as well as early sample sales. The details are not signed yet by the customer or by Septon. Speaker 300:17:32And so that's why we have a bit of a range on the forecast as we finalize the timing and the category of those payments. Speaker 600:17:44That makes sense. Speaker 500:17:45Thanks for taking my questions and that's all for me. Operator00:17:55Our next question comes from the line of Kevin Garrigan with Westpark Capital. Please proceed with your question. Speaker 700:18:03Yes. Hey, thanks for letting me ask a few questions and congrats on all the progress. First, I know you guys have previously had 1 GM, but this automotive win in OEM seems a little more secure, if you will. But I'd love to just get your thoughts on how important it is to get that first design win or just to secure a design win. Does it kind of put you in a better position to win these other RFPs that you're fighting for? Speaker 300:18:31Yes, definitely. Good question, Kevin. Since I'm kind of on the forefront of the customer side, I'll answer you first. This is Mitch. Yes, there's a lot of lessons learned from the GM program that go into our product evolution. Speaker 300:18:46You show that you see that showing up in our new Ultra product. So all of the design and manufacturing lessons learned are built into our Ultra product. You see it in our new software ecosystem product called StudioBiz that we announced last week. Again, this is pretty unique in the industry and that it takes into account all the manufacturing variances of building a LiDAR. And then I think maybe one of the last but not least, important lesson learned is the supply chain. Speaker 300:19:18We have we're carrying over some of the suppliers that worked really well on the GM project and finding new suppliers as their product has evolved. So yes, it puts us in a very competitive position for these new RFQs. Speaker 700:19:38Yes. Maybe I can just add Speaker 200:19:39just a couple of sentences over that. We're the few LiDAR companies that had a D sample ready for automotive deployment. And in that, from hardware to software is a complete suite that can be ported over with minor modifications for future project and this elevate us into a very different position in terms of future RFQs and design wins. So it is a big deal really given the history we've worked on. There's really no wasted work there. Speaker 700:20:13Yes. That makes a ton of sense and I appreciate all that color. Okay, perfect. And then my second question, looking at your StudioViz simulation platform, it seems like there's a couple other LiDAR companies that have also come out with some simulation platform. Speaker 600:20:31Was this kind Speaker 700:20:31of something that OEMs were asking a lot of the LiDAR companies provide to kind of speed up ladder development? Speaker 300:20:41Yes, definitely. Some OEMs asked for this, although I'll say many do not necessarily ask for these. It usually comes later on in the development after you win a program. It's a realization that this should have been available earlier or used earlier by the OEM. And so that's a big lesson learned from our program. Speaker 300:21:03We did develop a customized simulator for the 1st OEM award. But rather than repeating that and doing a custom for each customer, we've come out with this product, which incorporates a lot of the lessons learned and can be used across the customer base. Speaker 700:21:22Okay. Got it. Got it. That makes sense. And then just last question, if I can. Speaker 700:21:28So we've heard a few of your competitors speak about the recent NHTSA ruling for automatic emergency braking systems. I'd love to hear your guys' thoughts on it and kind of what you think it means for the LiDAR industry? Speaker 300:21:40Yes, that's a good point. We didn't talk about that today. I did see it was talked about quite a bit last week by our competitors. It's a huge hallmark for the industry to adopt new technologies like LiDAR. I mean camera and radar, ultrasonic, these are all proliferated about as much as they can be across the automotive landscape to reduce accidents. Speaker 300:22:05So I think it's a key recognition by regulators that pedestrian deaths still aren't going down and that it won't be tolerated forever, right? There are new technologies like LiDAR becoming available. It's becoming cost effective. It's becoming easier to integrate onto the vehicles. So this is just another tailwind for our industry right now. Speaker 700:22:35Yes, got it, got it. Okay, perfect. I appreciate the color. Thanks guys. Speaker 200:22:40Thanks. Operator00:22:43And our next question comes from the line of Gus Richard with Northland Capital. Please proceed with your question. Speaker 600:22:50Yes. Good afternoon all. Thanks for taking the question. Last fall, the OEMs sort of hit the pause button on automation, if you will. And just wondering, it was for a number of different reasons. Speaker 600:23:05Could you kind of talk about the sense of urgency or the progress these guys are making on moving towards adopting LiDAR? What has changed in the last 180 days? Speaker 300:23:23I'll start with that one, Gus. Good question. I think if first of all, there's still a strong appetite for LiDAR from the OEMs. You see that in our RFQ and RFI updates as well as broadly within the industry. I do think and we just talked about the legislation, one of the emphasis points for the adoption of LiDAR is becoming towards safety versus autonomy. Speaker 300:23:51And I think that's something that maybe has shifted a little bit the past 6 months to a year, As we talk about automatic emergency braking and systems like this that can reduce accidents and deaths, This is becoming a key focal point of the industry versus hands free driving and some of the more convenient features that these systems were aimed at 3, 4 years ago. Speaker 600:24:22Got it. And then, sir, any update on GM and after the rescope, are they going to move forward? What are their plans for using your LiDAR? Speaker 300:24:39Yes, that's a good question. We can't go into too many details on what GM strategy is. I know it's been a bit quiet on their front the past 6 months. I wouldn't really say it's because of their autonomy systems. I think they're still working on these systems, but they obviously the downturn in the EV cycle is probably impacting some of their priorities. Speaker 300:25:06We still are we're showing off the Ultra product to all of the OEMs that includes General Motors. All of the lessons learned from our last 4 years of working with them puts us in a very good position to once they announce their next consumer products that use LiDAR and we're confident they will, that we're really well positioned to support them again. Speaker 600:25:32Got it. And then I guess the last one for me and I'm not sure you can provide much of an update, so don't ask anyway. The Kuwaito offer to buy Septon, can you provide us with any update on where that stands and what's going on in that area? Speaker 200:25:50Yes. Gus, Jun here. Thanks for the question. Yes, we it's been a few months since we received the initial offer, and there's not too much detail I can disclose, but we're actually actively working on this process. It's a 2 big public company, so it was a pretty complicated process that needs a little bit more time. Speaker 200:26:16But again, I assure you that we are working on it. Just there is no details that we're ready to disclose publicly for that. I'll just have to stay tuned for further news. Speaker 600:26:27Got it. Thanks so much for that update. That's it for me. Operator00:26:36Thank you. We have reached the end of our question and answer session. And with that, I would like to turn the floor back over to CEO, Junpei, for any closing comments. Speaker 200:26:47Yes. Thanks again, everyone, for attending our quarterly conference call. As you have witnessed, Saptang is working on the cutting edge technology and making continuous commercial progress. So we'll keep you updated as we have more exciting news coming our way. Thank you. Speaker 200:27:02Thank you very much. Operator00:27:06This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCepton Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) 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.comURGENT: Someone's Moving Gold Out of London...People who don’t understand the gold market are about to lose a lot of money. Unfortunately, most so-called “gold analysts” have it all wrong… They tell you to invest in gold ETFs - because the popular mining ETFs will someday catch fire and close the price gap with spot gold. April 27, 2025 | Golden Portfolio (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. 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There are 8 speakers on the call. Operator00:00:00Good day, and welcome to the Septon, Inc. First Quarter 2024 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. Operator00:00:24It is now my pleasure to introduce your host, Dennis Chang, Interim Chief Financial Officer. Dennis, please go ahead. Speaker 100:00:32Thank you, and welcome to Sapton's Q1 2024 Earnings Call and Business Update. With me today are Junpei, Co Founder and Chief Executive Officer and Mitch Horkini, 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 100:01:16GAAP. 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 100:02:26S. Securities and Exchange Commission. We're 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. Septon.com. Speaker 100:03:00Now, I would like to turn the call over to Jun. Speaker 200:03:05Thank you, Dennis, and good afternoon, everyone. Thank you for joining Saptang's Q1 2024 earnings call. We will provide a business update and review our Q1 financial results with you. First, an update on our latest long range LiDAR product, Septon Ultra. As part of our ongoing efforts to advance automotive safety and efficiency through cutting edge technology, I'm pleased to provide an exciting update on our ULTRA LIDAR system. Speaker 200:03:37We have successfully advanced the ULTRA from its initial concept to the B sample stage much quicker than anticipated, and the performance of the ULTRA B samples has exceeded our expectations. This rapid progression is a testament to our robust R and D capabilities and deep technical expertise, and achieving this key development milestone underscores our commitment to innovation and market leadership. We have demonstrated the Altra's capabilities to OEMs across the 3 continents in Japan, the United States and Europe. These live demonstrations not only validated our LiDAR system's performance under various conditions, but also showcased its versatility and robustness in real world environments. The feedback from these global showcases has been overwhelmingly positive, affirming the Ultra's potential to transform automotive safety standards and its readiness for broader commercial deployment. Speaker 200:04:47Our offshore product features our proprietary imaging technology, Magnosthere, which allows for dynamic field of view, region of interest adjustment and high resolution scanning. This technology has performed above expectations, offering enhanced adaptability and higher data fidelity in the B samples. The advancements in our ultra lidar system mark a pivotal step forward in our mission to drive widespread adoption of lidar technology in automotive applications. As we continue to push the boundaries of what's possible, we remain focused on delivering products that not only meet, but also exceed the rigorous demands of the automotive industry. I've always stated that technology advancements do not create value without commercial traction. Speaker 200:05:41Today, I'm proud to announce that we have secured a series production project with a global OEM in collaboration with CoIto to supply our near range LiDAR sensors. This multiyear OEM project underscores our technology competitiveness and the trust that industry leaders place in our solutions. To jump start this project, Saptown has entered into a significant engineering services contract with CoIto, which includes $10,000,000 in fees for work to be performed in the Q2 of 2024. This contract is designed to support the execution of the new OEM program and accelerate product development, ensuring that we meet and exceed the specific needs of our automotive customers. We expect to have positive cash flow for the 3 months ended Q2 2024, a significant achievement not only for our company, but also within the LiDAR industry. Speaker 200:06:43With that, I'll turn it over to Mitch for more details on our efforts with customer programs. Speaker 300:06:51Thank you, June. Today, I'm excited to share significant developments in our business partnerships and new opportunities that highlight stepped on's growing influence in the global automotive market. As June announced, our significant NRE contract with Kuwaito marks a huge milestone for Septon on multiple fronts. First, we expand our series production awards beyond the North American continent with this win. 2nd, we demonstrate product scalability with this near range lidar win. Speaker 300:07:24And last, but certainly not least, we expect to become cash flow positive this quarter for the first time in the company's history and we believe this is also a first within the LiDAR industry. Large global OEMs are very selective in these early days of LiDAR adoption and we're proud to gain the trust of another global OEM. The commercials associated with this project are expected to be significant, starting with revenue this quarter. Beyond this win, we are actively expanding our market reach with submissions for RFQs from some of the world's largest automotive manufacturers. We've recently completed the final submission for an RFQ to a top 10 global automotive OEM for our long range lidar technology and we expect a formal decision before our next earnings call. Speaker 300:08:18This is a pivotal step towards securing a broader adoption of our lidar solutions in the automotive sector. We've also made our 1st RFQ submission to a top 3 global automotive OEM for both long range and near range LiDAR. As OEMs expand their use of lidar and next generation ADAS offerings to include both long range and near range lidar, Zipton is in a very unique position offering both products, positioning us well for further market share gains. As our LiDAR hardware solutions are hardened for automotive deployment, our software ecosystem is also expanding. Last week, Septon announced StudioViz, our lidar simulator aimed to accelerate OEM development and reduce data collection costs. Speaker 300:09:10Our solution stands out from the pack as we include manufacturing variances into the simulator, a key ingredient that stems from our long standing work with Coedho Manufacturing. StudioViz is just one pillar of our software ecosystem development kit, which will further expand in the coming months years as we further understand OEM challenges and work to include more efficient solutions and value in septon products. We're excited to continue our global roadshow of our highly successful Ultra product and to execute our new OEM series production win. Stay tuned for more good news from Cepton in the coming quarters. Next, I'll turn it back to Dennis. Speaker 100:09:54Thank you, Mitch. Starting with our Q1 results. Total revenue for the quarter was $1,900,000 consisting of $1,100,000 in product revenue and 0.8 $1,000,000 in development revenue. Total revenue increased by 31% compared to $1,500,000 in the prior year comparable period. 1st quarter GAAP net loss was $6,800,000 or $0.43 loss per share, basic and diluted. Speaker 100:10:37Non GAAP net loss was $8,300,000 or $0.52 loss per share, basic and diluted. 1st quarter non GAAP adjusted EBITDA was negative $8,900,000 During the Q1, we recorded a $4,000,000 gain from the GM project cancellation recoveries. This was the initial payments received from Coitou and the cost recovery process is ongoing. As of March 31, 2024, we had approximately $49,200,000 in cash and cash equivalents. Our full year 2024 guidance for revenue is expected to be between 15 $1,000,000 $25,000,000 Our operating expenses are expected to be below $50,000,000 We look forward to seeing everyone at our Annual Shareholders Meeting scheduled on June 17. Speaker 100:11:50And with that, I'd like to open up the call for questions. Operator00:11:57Thank you. We will now be conducting a question and answer Thank you. Our first question comes from the line of Matthew Galinko with Maxim Group. Please proceed with your question. Speaker 400:12:39Hi. Thanks for taking my questions. Maybe firstly, just on the $4,000,000 gain, I just wanted to on the GM cost recovery, I just wanted to clarify, is that a was that a cash payment or was cash received in the Q1? Speaker 100:13:01Yes. The $4,000,000 is a cash payment. It has been received in the Q1. Speaker 400:13:10Got it. Okay. Thank you. And then secondly, can you help us frame for the new production win and congratulations on that. When should we expect or when could we start to expect production revenue from that? Speaker 400:13:30Is that 2026 event or is there anything more you could say about that? Speaker 300:13:38Hey, Matt, this is Mitch. Yes, that's a good question. So, we noted that we'll begin collecting development revenues this quarter, and then sample product revenues are also starting this quarter. For the high volume production revenue, it's most of these programs are typically sourced 2.5 to 3 years ahead of the start of production. And that's the case for this project as well. Speaker 400:14:11Thank you. And one last follow-up question on that would be, I guess, given the $10,000,000 component of that, that sounds like it's hitting in the Q2 2024. Is there do you expect there to be subsequent development revenue around that project in the balance of the year? Or is that going to be kind of a one time thing that maybe we get other slabs of it in future periods prior to high volume production or help us frame if that's a one time thing? Speaker 300:14:54Yes. Again, this is Mitch. It's not a one time payment. The development and the milestones will continue, up until that start of production, as I indicated, 2.5 to 3 years from now. It will probably be a bit more lumpy, compared to product sales, but you can see a pretty significant portion, this quarter. Speaker 300:15:19And then there will be follow on development revenue as part of this project. Speaker 400:15:26Great. Thank Operator00:15:30you. Our next question comes from the line of Shadi Madwali with Craig Hallum. Speaker 500:15:39This is Shadi Madwali on for Richard Shannon. I want to start off with a clarification question. The new auto award mentioned in the PR and then on the call, is this the same one mentioned end of March? Speaker 300:15:59Yes. Yes. Yes. It is. Speaker 500:16:03Great. Thanks for that. And then this $10,000,000 fee, it sounds like most of it's going to be recognized in 2Q and then the rest of it throughout fiscal 2024 or is it all going to be recognized in Q2? Speaker 300:16:23Yes. Actually, all of it is recognized within Q2. And then my answer to the previous question, there will be subsequent development revenues on top of the $10,000,000 in the second half of the year. Speaker 500:16:37Okay. That makes sense. And then with the guidance given of $15,000,000 to $25,000,000 for the year, we already know about $12,000,000 of that. To make up the rest of that $3,000,000 to $13,000,000 in revenues, are you able to give some more color on whether this will be made up of primarily NRE or product sales? Speaker 300:17:03Good question, Chadi. It will be a mix of both. As we indicated in the call, we're working on 2 or 3 other OEM projects. Both of those will have significant NRE contracts as well as early sample sales. The details are not signed yet by the customer or by Septon. Speaker 300:17:32And so that's why we have a bit of a range on the forecast as we finalize the timing and the category of those payments. Speaker 600:17:44That makes sense. Speaker 500:17:45Thanks for taking my questions and that's all for me. Operator00:17:55Our next question comes from the line of Kevin Garrigan with Westpark Capital. Please proceed with your question. Speaker 700:18:03Yes. Hey, thanks for letting me ask a few questions and congrats on all the progress. First, I know you guys have previously had 1 GM, but this automotive win in OEM seems a little more secure, if you will. But I'd love to just get your thoughts on how important it is to get that first design win or just to secure a design win. Does it kind of put you in a better position to win these other RFPs that you're fighting for? Speaker 300:18:31Yes, definitely. Good question, Kevin. Since I'm kind of on the forefront of the customer side, I'll answer you first. This is Mitch. Yes, there's a lot of lessons learned from the GM program that go into our product evolution. Speaker 300:18:46You show that you see that showing up in our new Ultra product. So all of the design and manufacturing lessons learned are built into our Ultra product. You see it in our new software ecosystem product called StudioBiz that we announced last week. Again, this is pretty unique in the industry and that it takes into account all the manufacturing variances of building a LiDAR. And then I think maybe one of the last but not least, important lesson learned is the supply chain. Speaker 300:19:18We have we're carrying over some of the suppliers that worked really well on the GM project and finding new suppliers as their product has evolved. So yes, it puts us in a very competitive position for these new RFQs. Speaker 700:19:38Yes. Maybe I can just add Speaker 200:19:39just a couple of sentences over that. We're the few LiDAR companies that had a D sample ready for automotive deployment. And in that, from hardware to software is a complete suite that can be ported over with minor modifications for future project and this elevate us into a very different position in terms of future RFQs and design wins. So it is a big deal really given the history we've worked on. There's really no wasted work there. Speaker 700:20:13Yes. That makes a ton of sense and I appreciate all that color. Okay, perfect. And then my second question, looking at your StudioViz simulation platform, it seems like there's a couple other LiDAR companies that have also come out with some simulation platform. Speaker 600:20:31Was this kind Speaker 700:20:31of something that OEMs were asking a lot of the LiDAR companies provide to kind of speed up ladder development? Speaker 300:20:41Yes, definitely. Some OEMs asked for this, although I'll say many do not necessarily ask for these. It usually comes later on in the development after you win a program. It's a realization that this should have been available earlier or used earlier by the OEM. And so that's a big lesson learned from our program. Speaker 300:21:03We did develop a customized simulator for the 1st OEM award. But rather than repeating that and doing a custom for each customer, we've come out with this product, which incorporates a lot of the lessons learned and can be used across the customer base. Speaker 700:21:22Okay. Got it. Got it. That makes sense. And then just last question, if I can. Speaker 700:21:28So we've heard a few of your competitors speak about the recent NHTSA ruling for automatic emergency braking systems. I'd love to hear your guys' thoughts on it and kind of what you think it means for the LiDAR industry? Speaker 300:21:40Yes, that's a good point. We didn't talk about that today. I did see it was talked about quite a bit last week by our competitors. It's a huge hallmark for the industry to adopt new technologies like LiDAR. I mean camera and radar, ultrasonic, these are all proliferated about as much as they can be across the automotive landscape to reduce accidents. Speaker 300:22:05So I think it's a key recognition by regulators that pedestrian deaths still aren't going down and that it won't be tolerated forever, right? There are new technologies like LiDAR becoming available. It's becoming cost effective. It's becoming easier to integrate onto the vehicles. So this is just another tailwind for our industry right now. Speaker 700:22:35Yes, got it, got it. Okay, perfect. I appreciate the color. Thanks guys. Speaker 200:22:40Thanks. Operator00:22:43And our next question comes from the line of Gus Richard with Northland Capital. Please proceed with your question. Speaker 600:22:50Yes. Good afternoon all. Thanks for taking the question. Last fall, the OEMs sort of hit the pause button on automation, if you will. And just wondering, it was for a number of different reasons. Speaker 600:23:05Could you kind of talk about the sense of urgency or the progress these guys are making on moving towards adopting LiDAR? What has changed in the last 180 days? Speaker 300:23:23I'll start with that one, Gus. Good question. I think if first of all, there's still a strong appetite for LiDAR from the OEMs. You see that in our RFQ and RFI updates as well as broadly within the industry. I do think and we just talked about the legislation, one of the emphasis points for the adoption of LiDAR is becoming towards safety versus autonomy. Speaker 300:23:51And I think that's something that maybe has shifted a little bit the past 6 months to a year, As we talk about automatic emergency braking and systems like this that can reduce accidents and deaths, This is becoming a key focal point of the industry versus hands free driving and some of the more convenient features that these systems were aimed at 3, 4 years ago. Speaker 600:24:22Got it. And then, sir, any update on GM and after the rescope, are they going to move forward? What are their plans for using your LiDAR? Speaker 300:24:39Yes, that's a good question. We can't go into too many details on what GM strategy is. I know it's been a bit quiet on their front the past 6 months. I wouldn't really say it's because of their autonomy systems. I think they're still working on these systems, but they obviously the downturn in the EV cycle is probably impacting some of their priorities. Speaker 300:25:06We still are we're showing off the Ultra product to all of the OEMs that includes General Motors. All of the lessons learned from our last 4 years of working with them puts us in a very good position to once they announce their next consumer products that use LiDAR and we're confident they will, that we're really well positioned to support them again. Speaker 600:25:32Got it. And then I guess the last one for me and I'm not sure you can provide much of an update, so don't ask anyway. The Kuwaito offer to buy Septon, can you provide us with any update on where that stands and what's going on in that area? Speaker 200:25:50Yes. Gus, Jun here. Thanks for the question. Yes, we it's been a few months since we received the initial offer, and there's not too much detail I can disclose, but we're actually actively working on this process. It's a 2 big public company, so it was a pretty complicated process that needs a little bit more time. Speaker 200:26:16But again, I assure you that we are working on it. Just there is no details that we're ready to disclose publicly for that. I'll just have to stay tuned for further news. Speaker 600:26:27Got it. Thanks so much for that update. That's it for me. Operator00:26:36Thank you. We have reached the end of our question and answer session. And with that, I would like to turn the floor back over to CEO, Junpei, for any closing comments. Speaker 200:26:47Yes. Thanks again, everyone, for attending our quarterly conference call. As you have witnessed, Saptang is working on the cutting edge technology and making continuous commercial progress. So we'll keep you updated as we have more exciting news coming our way. Thank you. Speaker 200:27:02Thank you very much. Operator00:27:06This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.Read morePowered by