Good afternoon, and welcome to indie Semiconductor's First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. At this time, I will turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to indie Semiconductor's first quarter and 2022 earnings call. Joining me today are Don McClymont, indie's Co-Founder and CEO; and Tom Schiller, indie's CFO and EVP of Strategy. Don will provide opening remarks and discuss business highlights, followed by Tom's review of indie's first quarter 2022 results as well as the second quarter 2022 outlook. Please note that we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative about views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our risk factors in our recent annual report on Form 10-K for the fiscal year ended December 31, 2021 and other public reports filed with the SEC. Additionally, the results and guidance discussed today are based on certain non-GAAP financial measures. For a complete reconciliation to GAAP, please see our Q1 earnings press release, which was issued in advance of this call and can be found on our website at indiesemi.com. With that, I'll turn the call over to Donald.

Thanks, Ashish, and welcome, everybody. I'm pleased to report that indie delivered another record quarter in Q1. Building upon our 2021 outperformance, this year is off to a strong start for indie, with increasing broad-based demand for our highly innovative automotive semiconductors and software, underpinned by a strengthening order pattern. Perhaps what is most impressive is our team's operational execution, particularly in the face of continued global supply chain headwinds. indie's performance is a testament to the resiliency of our team, our differentiated product portfolio, our underlying intellectual property and our key industry partnerships. Specifically, during the first quarter, we once again outpaced our addressable markets and grew revenue to a record $22 million, approximately the same level of revenue that we delivered in the entire 2020 calendar year. We expanded gross margin by 710 basis points year-over-year and 110 basis points sequentially. And we gained design win traction across LiDAR, radar, user experience and electrification applications. Our advanced Autotech solutions are being brought to market as the automotive industry approaches a major inflection point. We believe indie is poised to be a major beneficiary of intensifying industry megatrends as automotive customers are demanding a step function increase in electronic performance and complexity. Our highly differentiated semiconductors and software platforms are particularly well suited to meeting this challenge. Stepping back and to put a context around what's at stake here. In a December 2021 report, the United Nations estimated that road accidents are responsible for roughly 1.3 million deaths and 50 million injuries all over the world every year and are one of the leading killers of children and teenagers on a global basis. These statistics underscore the urgent need for greater onboard ADAS capabilities. The UN has set a target to halve this number by 2030, through national and local government actions, but we feel that that's not ambitious enough. As an industry, we have the means to bring to market technologies to enable uncrashable cars and ultimately truly autonomous vehicles. And at indie, we're passionate about leading the way through cost-effective semiconductor and associated software integration. Further, according to our recent Kelley Blue Book Industry Assessment, many of the top automotive technologies recommended for car buyers are ADAS, Automatic Emergency Braking, driver-monitoring systems, Safe Exit Assist, 360-degree camera, Blind-Spot View Monitor and Video Rearview Mirror. These applications all support the UN's mission and are perfectly aligned with indie's existing product portfolio and roadmaps. During the quarter, we commenced sampling of Surya, our LiDAR SoC, which integrates DSP, Analog, mixed signal, MCU, and firmware functionality, augmented by TeraXion world-class lasers and associated technology. I'm delighted to report that we already have multiple customers engaged in this early phase launch, all of whom are investing in their own development based on our Surya platform to support their LiDAR systems. For us, this is an opportunity to capture up to $75 per implementation, enabling a complete $200 BOM, which is 80% less than current discrete architectures. Accordingly, we believe that Surya will catalyze the LiDAR market. At the same time, the complementary design teams we recently acquired from ON Semi and ADI helped us secure a strategic design win with one of the top four global automotive RADAR suppliers in the world. During the quarter, we successfully integrated these two groups, made substantial progress in our development, setting the stage for indie to become the leading supplier of RADAR solutions for all applications within the coming years. This is, in fact, the single largest design win in indie's history and sets the stage for us to similarly capture additional billion-dollar site programs. Turning to user experience, OEMs are increasingly differentiating their vehicles, not in terms of torque and horsepower, but rather via seamless smart integration, lighting, wireless charging, and telemetry features. For example, today, Apple CarPlay is supported on hundreds of vehicle models and is available in more than half of new cars and continually gaining in share, in most cases, enabled by indie's core technologies. During the quarter, we expanded our design win pipeline for wired and wireless charging, commenced preproduction shipments to a leading Korean customer for rapid charging applications, and captured key content with one of the leading US automotive OEMs. Shifting gears, with rapidly increasing oil prices and broader concern for global climate change, consumers are rapidly turning to electric vehicles. Last quarter, EV sales were up 76% in the US compared to a decline of 16% overall for traditional new car and truck sales. In fact, according to a recent CarGurus poll, 40% of Americans now expect to own an electric car in the next five years, up from 32% in February and 30% last year, driven by an increasing demand for fuel-efficient vehicles in response to high gas prices. Along with cyclical factors, the industry should continue to benefit from the long-term structural trend towards electrification. Once consumers make the switch to electric, that shift tends to be permanent, due to the higher performance and compelling economics of electric vehicles. indie will be a major beneficiary of this electrification megatrend, led by our wins at Vitesco, one of the largest European automotive Tier 1s, and with a leading EV OEM, where last quarter we added to our design win scorecard. Generally, our product portfolio sees a far higher attach rate within electric vehicles, given the need for more power-efficient semiconductors and software as well as more innovative EV architectures. Said another way, demand is expected to accelerate for next-generation vehicles, containing increased safety features and an enhanced user experience as the automotive industry shifts towards ubiquitous electrification and autonomy. As a direct result, the average semiconductor content per car is expected to grow from just $500 today to $4,000 over the coming decade. Our product portfolio is particularly well aligned to capitalize on the shifting landscape and steep content growth trajectory. Finally, during the quarter, we extended our market reach by launching a strategic presence in both Japan and more recently in Korea. While we have some content at Nissan, indie has historically not had any footholds at Toyota, Honda, Mazda or Subaru, and we've been underrepresented at Hyundai and Kia. With the establishment of indie sales and technical support centers of excellence now in Tokyo and Seoul, this is the top corporate mandate, and we look forward to providing progress reports, particularly given the massive markets we've just opened for indie. Japan and Korea represent strategic launching sites for leading-edge automotive technologies, and we expect to ramp our highly integrated portfolio across an entirely new class of customers in support of our vision of empowering the global Autotech revolution. I'll now turn the call over to Tom for a discussion of our results and outlook.

Thanks, Donald. indie delivered strong first quarter results, once again exceeding our guidance and analyst expectations. In fact, Q1 represents our fourth consecutive quarter of outperformance versus plan, post indie’s IPO last summer. Revenue for the period was up 171% year-over-year and 16% sequentially to a record $22 million, beating our outlook for revenue growth to be up 160% to 170% year-over-year. Gross profit was $10.4 million, translating into a 47.4% gross margin, up 710 basis points year-over-year and 110 basis points sequentially and versus our 47% guidance. Operating expenses were on forecast at $26.9 million, against guidance for $27 million and up from the prior period with R&D investments of $20.2 million, as we accelerated product development. Likewise, we increased our SG&A spending to $6.7 million to expand our marketing capabilities and implement some of the final elements of public company infrastructure. As a result, our operating loss was $16.5 million, better than analyst consensus estimates. Interest, other expenses, and taxes were negligible. Thus, our net loss was also $16.5 million with a loss per share of $0.11 on a base of 148.1 million shares. Turning to the balance sheet. We invested $900,000 in working capital and made a $10 million payment to analog devices for our similar carve-out, exiting the period with $193 million in cash and limited debt. Looking forward and based on strong order visibility, set customer ramps and new product launches, we plan to sustainably outpace indie’s addressable markets over the forecast horizon. Specifically, for the second quarter of 2022, we anticipate revenue growth on the order of 172% to 183% year-over-year and in the range of $25 million to $26 million, putting indie on pace for another record quarter. At the midpoint of this range, we are on a greater than $100 million annualized revenue run rate. Further, we expect gross margin expansion to the 48% range with $30 million in operating expenses, comprising $23 million in R&D and $7 million in SG&A, as we increase our product development investments in response to pent-up customer demand, particularly in radar and extend our sales and marketing capabilities globally. Assuming no other net expense or taxes below the line and approximately 149 million shares outstanding, we expect a net loss of $0.12 per share. Finally, as Donald outlined, indie is uniquely positioned to capitalize on the strategic Autotech opportunity and translate our design win momentum into a highly profitable business model. Given our visibility, scalability, and planned operating leverage as revenue growth far outpaces OpEx, we are well on our way to reaching profitability in the back half of next year, representing a key next step on our path to realizing indie's long-term targets of 60% gross and 30% operating margins by 2025. With that, I'll turn the call back to Donald for his closing comments.

Thanks, Tom. To summarize, as our Q1 outperformance and strong growth reflect, indie is continuing to execute on the business plan we stated at our IPO, and we couldn't be more excited about the opportunities ahead. In particular, we see multiyear tailwinds that will drive steeper demand for our solutions, including the global automotive semiconductor market being expected to grow from $36 billion last year to $62 billion by 2026. The transport experience fundamentally changing for both drivers and passengers as enhanced safety and better in-cabin features are deployed and as OEMs announce worldwide EV investments over the next five years that will exceed $250 billion, in some cases committing to shift their entire car portfolio to electric within a short amount of time. We expect indie's differentiated semiconductor sensor and software technologies to play a major part in the next wave of automobiles, enabling us to help save lives in the process, dramatically enhance the in-cabin experience, and generate significant value for our shareholders. That concludes our prepared remarks. Operator, let's open the call for Q&A.

Thank you. We will now be conducting a question-and-answer session. Your first question comes from Suji Desilva, Private Investors. Please go ahead.

Hi, Suji Desilva, ROTH Capital. So Donald, Tom, congratulations on the strong execution and progress here.

Thanks.

Thank you.

Yes, no problem. Tom, thanks for sharing the aspirational gross margin goal of 60% for mid-2023. Can you discuss the key elements and expansion drivers leading up to that target? You've been consistently performing well on gross margin, and I'm interested in how you plan to maintain that momentum.

Yes, sure. It's actually a combination of things. It's the move from first generation to second, to third generation pricing, scale is a factor and the new product launches coming on board. All of those things culminate to help us thus far to move to 47 and then we'll click to move to 48 and then, ultimately, to the long-term target at 60%.

Okay. Helps to have that color. Thanks. And then maybe for Donald, the sensor wins you've had are pretty impressive; radar, you're going to tee up some lighter ones as one. Well, can you just give us a sense how you approach the market or customers differently perhaps than some of the point product competitors that are out there or maybe you don't, but just any color there on your approach to the sensor market, since you sell a kind of range of products? It will be helpful to understand from a differentiation perspective.

Yes. I mean, the market across each individual sensor modality is slightly different. But generally speaking, what we found in each market was that there were relatively few players in the market who had perhaps invested over time. And we felt and actually, more importantly, our customers felt that their appetite to continue investment to give the performance and cost points that they needed for the long term were somewhat lacking. And generally speaking, we came with very new technologies, very innovative ways of solving the same problem, and it created the opportunity for us to become a new player in that market. I mean, particularly, I'd single out the radar design win as falling into that category. It really is one of the very most premium design wins that can be achieved in the automotive market at all. And so, our approach to having the appetite and the willingness to invest in new technologies has really been instrumental for us. Additionally, across the different sensor modalities, as we're positioning ourselves as a one-stop shop for all kinds of sensors, really what became apparent is that once they pick us for one sensor, they want to use us for all of the sensors because, effectively, a large amount of the software back end is common to all of them, which saves them a lot of money in their OpEx and their development costs for their whole sensor portfolio.

Lastly, looking ahead, there are two opportunities in the cabin that I find interesting, and I would like your insights on them. The first is driver monitoring. I'm curious about how that develops and the potential opportunities there. The second opportunity is in-cabin wireless charging. While there are some solutions available, I'm wondering why adoption has not been as widespread as expected. What are the main factors that could be addressed to encourage more adoption? Thank you.

Well, the first one is an easy answer. I mean, we are already involved in DMS and in fact, OMS as part of our vision portfolio. And we'll give more details on that in the fullness of time. In terms of in-cabin wireless charging, I mean, we see it ramping up. We see it accelerating also. And, I mean, generally speaking, I would say that the automotive market is quite slow to adopt as a significant cost adder. But once you've had it in your car, you can’t go back. I just went through that anecdotally myself. My lease expired, and I was desperately trying to make sure that my new car would be delivered with the wireless charger inside, because once you've had it, it's hard to give it up. I don't like the cables wrapped around my gear stick.

Next question comes from Ross Seymore with Deutsche Bank. Please, go ahead.

Hi everyone. Thank you for allowing me to ask a question and congratulations on the strong execution once again. Donald, I would like to discuss the scale of the design wins you have achieved. You mentioned that the sensor win is the largest in the company's history. We've previously talked about how you have been invited to bid on increasingly larger deals. Can you quantify, perhaps by a percentage increase rather than a dollar amount, the scale of the design wins you're currently securing? Additionally, regarding both the size and scope of these wins, are you being invited to compete in just one area with larger design wins, or is it the diversity across various sectors that is contributing to your growth?

I mean, certainly, it's the breadth also. We have many activities, which are running right now, which are of the same order of magnitude as that first flagship win that we talked about. And in terms of quantifying it, it's between two and three times the size of the largest design win that we had previously.

Thank you for that insight. Tom, could you explain what led to the increase in gross margin quarter-over-quarter? You mentioned an increase of a little over 1 point and have provided guidance pointing to future growth. While I understand the roadmap to reaching 60 and the various factors involved, what initial steps are you implementing in the short term to progress on that journey?

Yes. So, we had some really good cost reduction initiatives kick in. Also, candidly, our mix is just getting better. As we move forward and increasingly, our mix becomes ADAS based, we tend to command much higher gross margins in that area. So that's yet another catalyst to gross margin expansion as we go forward. And it was one of the contributors last quarter. And then, as you have probably gleaned, we like to guide relatively conservatively to give ourselves room, given the environment that we're in these days. So there was an element of that as well.

That’s it. And if I could sneak in one last one. Any sort of sand in the gears additionally in this quarter versus the prior quarter, as far as supply chain management, those sorts of things? It doesn't seem to be slowing you down and you deserve kudos for that. But is it getting better, worse, or staying about the same?

Overall, things are improving compared to about a year ago when conditions were quite tight. Currently, there are still some bottlenecks in certain areas. At the start of this quarter, there was concern over COVID shutdowns in China, which led to some temporary disruptions, but we have moved past that now. It's also worth mentioning the impact of the war in Ukraine; however, we have not experienced any direct consequences from it, whether regarding the supply of renewable gases to our facilities or the availability of cable harnesses, which are primarily produced in Ukraine and Russia. Our discussions with customers actively involved in that area indicate they have been very quick to adapt, either maintaining production in western Ukraine or relocating to other factories within weeks. While the situation remains tight and will likely continue to be challenging for at least the next two quarters, it is definitely an improvement compared to last year.

Next question, Craig Ellis with B. Riley. Please, go ahead.

Yes. Thanks for taking the question and congratulations on the good execution guys. Donald, I wanted to start with you and see if I could get you to give us a little bit more color on what you're seeing with the customers that are sampling Surya? Just given how important that product is strategically, can you give us some insights on what's resonating with customers and how they're testing and reacting to the product and the solution?

The reaction has been phenomenal. We have been heavily oversubscribed in terms of getting samples into the market. We believe the reason for this is the combination of high-end digital back-end DSPs with our advanced mixed signal technology. Customers are quickly trying to build their systems around it. In terms of a solution available in the market, we are essentially the only option in that space. The feedback from those who have been using expensive FPGA systems has been outstanding. This makes a significant difference in cost, as will the TeraXion laser technology that we will be deploying alongside it.

Got it. And a somewhat related question, the company has completed TeraXion, the ADI Symeo deal, the ON Radar deal. Can you just give us some qualitative color on how well you think the integration of those deals is going? And then use that as a springboard to talk about your further appetite for M&A and to the extent that you would like to do something, is there a particular size range that you're looking at or a particular technology that you would be looking for?

Yes, the integrations have been quite successful. TeraXion's integration went flawlessly as it was a well-managed company from the outset. Similarly, the ON Semi and Symeo teams contributed significantly to our radar offering. The results speak for themselves, as we've secured a major design win as a result of this. We approach integrations by forming strong teams to ensure easy access to our systems, improving where necessary, and maintaining successful operations as is. Overall, we are very satisfied with the progress made. Looking ahead, we have everything we need to execute our plan effectively. However, we remain open to seizing opportunities in the market, especially given the current macroeconomic conditions, which are presenting some appealing prospects. With more options available, we can raise our entry standards, enhancing our overall talent pool. While we aren't specifically searching for particular technologies at this time, we may pursue transactions that are financially sound and immediately beneficial.

Next question comes from Cody Acree with Benchmark.

Thank you, everyone. I appreciate it. Donald, could you provide some insight into your revenue performance for the first half, whether it be by product, application, or customer? Any detail would be helpful.

We generally do not break down our revenue by customer or product. Nevertheless, our growth has been consistent across all our offerings, each of which has its unique characteristics. We expect this trend to continue moving forward. The foundation of business we established as a private company is driving our growth, and the design wins and new developments we report every quarter will enhance our future performance. We are confident in our plans and believe we are in a strong position. Over the past four quarters, we have consistently exceeded expectations and delivered on our commitments. We are pleased with our product areas and customer relationships, and the feedback we are receiving from our customer base has been overwhelmingly positive.

That's great. Thank you. And then just any cost applicability of your products into the industrial markets? Obviously, they have a much more attractive design cycle. Any thoughts there?

We get asked a lot. We really do because there is sort of a kinship between industrial and automotive. But we feel really it's in the company's best interest and also in our customers' best interests that we focus wholly on automotive for the foreseeable future. That gives a certain power to the company in the respect that we do the right things for our customer base, and we're not conflicted by some other customer base which may have different goals, shall I say.

Thank you. I would like to turn the floor over to management for closing comments.

Well, thanks everybody for attending. See you next quarter and in the interim, see you at the next investor conferences that we'll be announcing in due course. Thanks again.

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.