Thank you for standing by. My name is Gail and I will be your conference operator today. At this time, I would like to welcome everyone to the AEye Q4 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I'll now turn the conference over to Jeremy Apple. Please go ahead.

Good afternoon, and thank you for joining AEye's fourth quarter 2024 earnings call. With me today are Matt Fisch, Chief Executive Officer; and Conor Tierney, Chief Financial Officer. Earlier today, AEye announced its financial results for the fourth quarter and full year of 2024. A copy of this press release can be found on the Investor Relations section of the company's website. Today's discussion may include forward-looking statements as defined in the securities laws and regulations of the United States with reference to future events, operating results, or performance and are based on our current expectations and assumptions. Any forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances. Our actual results may differ materially from those contemplated by these forward-looking statements. You can find more information about the risks, uncertainties, and other factors in the reports AEye filed from time to time with the Securities and Exchange Commission, including in the most recent periodic report. The statements to be made are as of today only, and AEye does not intend to update any forward-looking statements regardless of any new information, future developments, or otherwise, except as may be required by law. In addition, we will be discussing non-GAAP financial measures on this call, which we believe are relevant in assessing the financial performance of the business. These measures are presented as supplemental information only and should not be considered as substitute for financial information presented in accordance with GAAP. You can find reconciliations of these metrics to the most directly comparable GAAP measures within the press release. Now, let me pass the call over to Matt.

Thanks, Jeremy, and thank you all for joining us today on our fourth quarter 2024 earnings call. We appreciate your continued support and interest in our company. 2024 was a transformative year for AEye marked by critical milestones including a new product launch, extended financial runway, increased engagement with OEM customers, and expansion into new markets. Apollo, our compact software defined LiDAR sensor, has been a significant impetus to our ongoing progress. We first unveiled Apollo last June at the Auto Lidar Tech Conference in Suzhou, China. Since then it has undergone stringent evaluations by OEMs and has begun field testing in additional market sectors. Throughout 2024, we made innovative improvements to Apollo that delivered breakthrough advancements to its sensing capabilities. This past October, we announced that Apollo demonstrated unparalleled high resolution long range detection capabilities at 1 kilometer. Importantly, Apollo has the unique ability to deliver high resolution detection from behind a windshield for high speed automotive ADAS use cases. During the CES show last month, we officially launched Apollo in the U.S. and the response has been overwhelmingly positive. We successfully demonstrated Apollo's capabilities through live test drives, proving that an in-cabin behind the windshield implementation is not only feasible but also highly effective. Apollo's unique attributes provide OEMs with a proven solution to alternative roof-mounted LiDAR systems that are more complex and higher in cost. Until now, a behind-the-windshield implementation was not considered viable due to the performance and size constraints of existing LiDAR solutions. I'm proud that our talented team at AEye cracked the code and set a new bar with Apollo. Based on market enthusiasm for Apollo, we were able to raise growth capital and extend our cash runway to mid-2026. With these added financial resources, our strategic partnerships, and capital light business model, we have secured the longevity to ramp Apollo into high volume production. As we said on our third quarter call, we expected to ramp the first Apollo manufacturing line with our global Tier 1 partner. This is now proceeding according to plan and the first units are expected to come off the line in the first quarter of 2025. Our relationship with this strategic supplier validates AEye's ability to deliver LiDAR solutions at substantially reduced costs, opening the door to new opportunities with global OEMs. We are also working to produce the first fee samples of Apollo, which is a critical step in the OEM quoting process and also provides a production ready solution for non-automotive customers. Positioning Apollo for mass production remains our top priority for 2025 and we look forward to sharing more details soon. We remain actively involved with global OEMs, expanding our level of engagement to include rigorous testing of Apollo for upcoming programs. Our software-defined architecture, which offers the ability to modify the product quickly in a matter of days, not weeks or months, has received accolades from our OEM and other partner engagements. This important capability accelerates the customer's development process, delivering a significant advantage in both time and cost. Turning to NVIDIA, our evolving partnership with this industry leader is helping us to gain access to new OEMs. We have proven that Apollo meets NVIDIA’s rigorous Hyperion autonomous driving platform specifications. An accomplishment which we believe is unmatched in the LiDAR industry. Global OEMs use NVIDIA's Hyperion platform as a foundation for developing their autonomous driving and ADAS systems. Integration onto this platform grants AEye direct exposure to these OEMs and will help them adopt our LiDAR solutions with confidence. Importantly, due to its industry-leading range and resolution, Apollo is gaining traction across a wide variety of sensing applications beyond the automotive space, including in security, rail, and intelligent traffic systems. For example, in security applications, Apollo's long range sensing capabilities at high resolution, even in low visibility conditions, make it stand out over alternative options. Thanks to our partners at ATI and LighTekton, we are field testing Apollo for these types of applications in China and are also making similar progress with another partner in the EU. We will continue to explore high value use cases outside of automotive to capture new growth opportunities for Apollo. In closing, I'm incredibly pleased with our accomplishments in 2024, achieving technological and strategic advancements with Apollo while successfully raising capital to bolster our financial foundation. Through our capital-light model and disciplined execution of cash reduction initiatives, AEye has the lowest cash burn rate in the industry, providing a remarkable level of resilience for our business. Heading into 2025, we are well-positioned to meet demands from OEMs which view LiDAR as essential to the future success of their roadmap. With that, I will turn the call over to Conor to provide more color on our financial performance.

Thanks, Matt. In the fourth quarter, we continued to build on strong operational momentum that defined our performance throughout 2024. Our disciplined approach to cost management allowed us to outperform our cash burn guidance for both the quarter and the full year. At the same time, we strengthened key strategic partnerships that are expanding our market opportunities and positioning us for long-term growth. A clear highlight this year has been our success in raising capital. We ended the fourth quarter of 2024 with $22.3 million in cash, cash equivalents, and marketable securities. Moreover, we successfully leveraged market enthusiasm for our technology to raise an additional $12.7 million thus far in 2025. Based on current forecasts, this extends our runway to mid-2026 as Matt noted. To put this in perspective, since the beginning of the fourth quarter of 2024, we raised approximately $18 million, which represents nearly a full year of runway at our current cash burn rate. Our strong balance sheet and liquidity should give us ample runway to reach high volume production for Apollo and weather delays in automotive OEM quoting activities. Our manufacturing line with our Tier 1 partner is already ramping up and on track to deliver B samples in the first quarter of 2025. We are heartened by the increased interest that we are seeing for Apollo, underscored by the success of our U.S. launch at CES. Apollo's distinct advantages in range and performance combined with its competitive low cost form factor are attracting attention from customers across multiple sectors including security, rail, and intelligent transportation systems. We're hearing from many OEMs that LiDAR technology is essential to their platforms and the enthusiasm we are seeing from industry leaders further validates Apollo's potential as a game-changing technology. Additionally, our evolving partnership with NVIDIA is unlocking new opportunities with automotive OEMs and is supporting our path to commercialization in the automotive sector. I'd like to address our differentiated capital-light model on Slide 8. As you can see, we have very low cash burn and operating expenses compared to our peers and I am pleased to report that we have reduced our net cash burn for the seventh consecutive quarter. Excluding new net financing of $4.6 million, our cash burn for the fourth quarter was $4.8 million, down from $5.6 million in the third quarter and beating our guidance of $4.9 million. Now turning to our fourth quarter's financial results on Slide 9. Fourth quarter's GAAP operating expenses were $9 million, up sequentially from $7.6 million in the third quarter 2024. This was primarily due to higher one-time payroll costs and increased rent expenses resulting from a favorable non-cash adjustment in the prior quarter. These increases were partially offset by lower professional fees. Fourth quarter's non-GAAP operating expenses were $6.8 million, up sequentially from $6.1 million in the prior quarter due primarily to higher one-time payroll costs, which were partially offset by lower professional fees. We reported a GAAP net loss of $8.5 million or $0.93 per share in the fourth quarter versus a GAAP net loss of $8.7 million or $1.01 per share in the third quarter of 2024, beating our internal expectations for the quarter. The decrease in GAAP net loss is mainly due to lower financing related costs in the fourth quarter which were partially offset by the higher payroll and rent related drivers as noted above. On a non-GAAP basis, our net loss was $6.3 million or $0.69 per share in the fourth quarter compared to a non-GAAP net loss of $6 million or $0.70 per share in the prior quarter. Net cash used for operating activities decreased to $4.8 million in the fourth quarter from $5.4 million in the third quarter of 2024. Again, we closed the fourth quarter with $22.3 million of cash, cash equivalents and marketable securities. Including capital raised subsequent to the close of the quarter, our total potential liquidity, which includes cash on hand and our ELOC and ATM facilities is approximately $80 million. Turning to our guidance on Slide 10. We expect cash burn for the full year 2025 to be $25 million, slightly up versus 2024, primarily due to increased investments required to ramp Apollo to high volume production. We also expect a sequential increase in costs in the first quarter related to seasonal factors such as one-time payroll related costs. After the first quarter, we expect cash burn to improve each quarter for the remainder of 2025. Overall, we are encouraged by our performance in 2024. With a strong balance sheet, industry-leading technology, and an extended cash runway, we are well-positioned for sustained growth in 2025 and beyond. With that, I'll pass it back to Matt to wrap things up.

Thanks, Conor. After a transformational year marked by incredible progress across the business, we are unwavering in our commitment to innovation, execution, and financial discipline. With Apollo's successful market entry and our extended cash runway, we are well-positioned for future growth. I'm incredibly proud of the AEye team and their commitment to improving road safety and saving lives. Thank you for your time today. We appreciate your continued support and confidence in our vision. We will now open the call for questions.

Okay. So your first question comes from the line of Brian Kinstlinger with Alliance Global Partners. Please go ahead.

Hi, this is Kevin for Brian. Thanks for taking our questions. Could you speak a little bit more about the non-automotive opportunities that AEye is exploring?

Sure. Hey Kevin, this is Matt, and thanks for joining us today. It's great to have you on the call. Just to put things in context here, when we talk about Apollo, this is really a next-generation LiDAR solution from both a market perspective and also from an AEye perspective as well. So what we talked about on the call, two things. Number one, it's got incredible range and can detect objects at very high resolution. Second, the form factor, which is also important for automotive, is incredibly small. I mean, if you were to look at one of these Apollo units, it has a very similar profile to my cell phone. So why has it sparked so much interest on the non-automotive side? Well, if you think about some of the news today relating to safety and security, seeing very far in poor lighting conditions and high resolution allows us to detect very small objects, for example. Security, perimeter security, safety at airports where it's important to see where there’s something that doesn't belong in a particular area. Because of Apollo's performance, first and foremost, it's been incredibly popular in that space. Since our CES showcase, we have had so much interest there. We're on the ground now testing with this particular type of use case across China, the U.S., and Europe, and things are happening very quickly in that area. Last but not least, Apollo is a unifying product for us. It's a set of hardware that works both in automotive and non-automotive markets because of our software defined LiDAR. We just need to program it differently in each case and we've been able to react very quickly, getting out there in the field across three continents in only six weeks’ time.

Great. Thanks. Just one more, does greater liquidity give you more confidence in meeting OEM financial due diligence requirements?

Hey Kevin, this is Conor. I'll take that one. Actually, I'm glad you asked the question because this is fresh in myself and Matt's head right now because we recently went through this process with an OEM and it does for sure. As part of that process, we walk the OEM through our projections, also through our liquidity, and that was an important factor in just getting them comfortable that we would have the resources ultimately to get to high volume production. Obviously, part of that liquidity is a major thing. And as I alluded to on the call earlier, we have $30 million right now in cash and cash equivalents, and then another $50 million in equity instruments. That's an important contributing factor in getting OEMs comfortable that we have the runway to get there. I think the other part of that is our cost structure and our capital-light model; every dollar that we raise, we're able to stretch further. That’s really important in this environment, especially with high interest rates and the challenging automotive industry. Last year, we were able to operate very leanly. We brought Apollo to market in less than six months, and we've kept the burn rate below $25 million. So we're executing at a very low burn rate.

Your next question comes from the line of Casey Ryan with WestPark Capital. Please go ahead.

Good afternoon, gentlemen. Good progress in the quarter. So congratulations on that. I had a couple questions. A lot of times we're talking about high volume and low volume. Are you able to frame what high volume means? I think other companies have framed it in certain ways, but is there a number that we say high volume means north of 10,000 or north of 1,000 or some level that we can sort of imagine?

Hey, great, definitely appreciate the question. Let me start on this one. Let's put it in context first of all, I'm the only CEO in the LiDAR space who came from the automotive industry. Outside of China, we have what would be described in automotive terms as a handful of development programs. This is low volume, meaning in the thousands—maybe there are hundreds of vehicles or a couple of thousand vehicles out there actually running today. The transition to high volume means that an OEM will come and issue what's called an RFQ or a request for quote or what we're calling a mass production vehicle award, which generally starts in the tens of thousands of units and quickly ramps up above 100,000 per year, let's say. We haven't seen any of those in the U.S. or Europe yet. At that point, you're going to see us come flying out of the gate as a company because we work with a Tier 1 that has experience delivering 100,000 or more units in a given year. That’s a specialized expertise that comes from many years of practice and learning. I can assure you that when the RFQs and automotive production contracts come out, we will have a massive advantage because of our collaboration with a Tier 1 that knows how to operate at that level. OEMs will take that factor into account on the purchasing and supply chain side very seriously. No matter how good you are technically, the ability to produce in 100,000 quantities or more annually is absolutely critical in automotive, and we're set to excel when we reach that point.

And just to add to what Matt said, the other important point is our product was built with manufacturability in mind. We built the product thinking about high volume production. Not everybody can work with a Tier 1. There's a diligence process that has to happen up front, and the Tier 1 knows that you can scale to millions of units, which is why forming a partnership with the Tier 1 acts as validation.

Yes. Conor’s referring to his over three years spent with Continental building our supply chain.

Right. Okay, terrific. Just focusing on automotive some more, what do you see in the market regarding people putting out bids and looking for partners for solutions? What's your perception about the level of vehicles? Are they sort of Level 2? Are they actually Level 3? What's the mix because it feels like we don't have many Level 4 or Level 5 on the road, outside of maybe the Waymo vehicles. What’s your sense about the appetite for capabilities in cars?

Right. Yes, yes. What we're seeing is pretty broad. We know there's one EV maker that hasn’t spoken kindly about LiDAR. But outside of that, we mentioned last quarter, we’re involved with several OEMs, and every one of them has a Level 3 program in the roadmap that includes LiDAR. There’s been a mix of OEMs that have said so publicly in the last two months and some that have just said so indirectly, that they are committed to eyes-off, hands-free, and eyes-free driving—a clear reference to Level 3. The sweet spot we're seeing is Level 3. Additionally, NVIDIA has the Hyperion platform tied to several OEMs, and we’ve performed exceptionally well in that space. Current generation LiDAR needs to see at 300 meters, which covers high speed driving, and this is where NVIDIA is focusing. They've been vocal about this as well, and we’re using them as a proxy for OEM demands for their next solutions. Several OEMs are engaged with us on Level 3 programs, and each one has a roadmap that includes LiDAR.

Okay, terrific. Speaking of opportunities outside of consumer automobiles, I want your take on trucking, RoboTaxi, and bigger vehicles. Do those present exciting opportunities or are they less interesting due to potential unit sizes in those markets? How much effort are you putting into non-passenger car markets?

Right. Look, we’re highly applicable across all of these markets. Trucking and buses, for example, have a lot of weight to slow down. They need to brake earlier than a passenger car. Seeing far and at a great distance is crucial for heavyweight vehicles on the highway. In the RoboTaxi domain, we see significant expansion. Apollo will be very applicable in that space, so we aren't limited to just the passenger vehicle market. Furthermore, our device is very software adjustable. We’re conducting scenarios from one OEM to another, providing turnaround times and proof of concept software in a few days, allowing us to move very quickly in that regard. We want to be open to all markets.

Okay. And then two last questions. What do you think for passenger cars, sort of like the unit count? For Level 2, it’s often one sensor per car. I’ve heard Waymo has several, and the average might be between one and six. But with your solution, we might not need as many. What do you think your average per vehicle count might be regarding total cost or total revenue opportunity per vehicle?

Yes. Different markets have wildly different volumes. RoboTaxi is at one end, which may have multiple LiDARs per vehicle versus passenger vehicles which may have fewer, but significantly higher volumes. While we pursue all spaces, we shine in long-distance highway driving. In the passenger vehicle space, there's considerable competition to roll out a Level 3 driving service. Typically, you might see one or two LiDAR units in those vehicles, but the volumes are much higher compared to RoboTaxi. The solution we rolled out operates at 300 meters inside the cabin, meaning our small design tucks neatly near the top of the windshield without complicating vehicle design. The glass won't hinder range, and our 1,550 nanometer laser technology enables simpler vehicle design, which benefits us with a significant demand on the passenger vehicle front—lower per car but much higher volumes.

Yes. The R&D spend for the fourth quarter is likely around half of our overall spend. The cash is expected to be slightly higher in Q1 attributable to some bonuses paid out, which is a one-time item. A normalized spend is roughly about 50% of the overall operating expenses.

I'll take the question on future spend briefly. We've got an important quarter ramping our B samples. This is essential for formal series production quoting for automotive. We're focusing heavily on Apollo go-to-market activities. We're starting to consider what's next, particularly in response to NVIDIA’s challenges. The greatest shift is in our go-to-market activities and integration work on the customer side.

You seem more geographically fluid, pursuing opportunities in China, the U.S., and Europe, while many vendors seem regionalized. Is this perception accurate? Do you believe you have more welcome opportunities across significant regions?

Yes, that’s a great observation. Our core philosophy is to expand and scale through partnerships. It starts with our Tier 1 manufacturing partner, which has a global footprint. We can manufacture in Texas, Mexico, or Taiwan. Our partnership with ATI and LighTekton ensures local manufacturing in China. This, combined with partners in regions, allows us to address engineering problems and software upgrades efficiently, giving us a global presence. So yes, we do focus on partnerships to achieve this breadth.

Okay, perfect. That’s helpful. Thank you for your time. It’s an exciting start to the year, and we look forward to following you.

Thanks, Casey.

Thanks, Casey. Take care.

And that concludes our Q&A session for today. I will now turn the call back to AEye CEO, Matt Fisch. Please go ahead.

Great. Thank you, Operator. Thank you all again for joining our call today. We look forward to providing further updates on our progress in our first quarter call. Have a great day. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Have a nice day, everyone.