Microvision, Inc. Q4 FY2024 Earnings Call

Good afternoon, and welcome to the MicroVision Fourth Quarter and Full Year 2024 Financial and Operating Results Conference Call. At this time, all participants are in a listen-only mode. At the end of today's presentation, there will be an opportunity to ask questions via a chat line. Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen. Analysts who publish research may ask questions on the phone line. Please note this event is being recorded. I will now turn the conference over to Drew Markham. Please go ahead.

Thank you, John, and good afternoon. I am here today with our Chief Executive Officer, Sumit Sharma, and our Chief Financial Officer, Anubhav Verma. Also, I'm very happy to welcome to the call our incoming Chief Technology Officer, Glenn DeVoss. Following their prepared remarks, we will open the call to questions. Please note that some of the information you'll hear in today's discussion will include forward-looking statements including but not limited to statements regarding our business, product, and go-to-market strategies, customer and partner engagements, cash, liquidity, and the impacts of our recent financing activities, market landscape, opportunities and program volumes and timing, development and performance of our products and solutions, product sales and future demand, projections of future operations, cash flow and financial results, availability of funds, as well as statements containing words like believe, expect, plan, and other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements. We encourage you to review our SEC filings including our most recently filed annual report on Form 10-K and quarterly reports on Forms 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call and, except as required by law, we undertake no obligation to update this information. In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website at ir.microvision.com under the SEC filings tab. This conference call will also be available for audio replay on the Investor Relations section of our website. Now, I'd like to turn the call over to our CEO, Sumit Sharma. Sumit?

Thank you, Drew, and welcome everyone to this review of our fourth quarter 2024 results. I would like to start by providing an update on our customer engagements for automotive and industrial opportunities we've been working on through 2024. Additionally, I will give an outlook on new engagements in 2025 for potential automotive, industrial, and military opportunities. Still a very exciting time for our technology. First, I would like to begin with our engagements with automotive RFQs and industrial opportunities. There are four areas which we have focused on through 2024. We focus on automotive OEM programs with seven RFQs and a few custom development proposals. In the industrial space, we focused on three areas. Automated guided vehicles, AGVs, and autonomous mobile robots, AMRs. These platforms typically operate in a geofence environment requiring low power perception software integrated solutions, embedded localization, among other features. Number two, collaborative robots. These robots share the environment with humans and operate in a semi-structured environment with humans in charge and again require integrated perception software on the sensor. Number three, mobile autonomous vehicles. These include commercial vehicles for industrial and military applications with multimodal sensor suites. We remain engaged in seven RFQs for automotive programs and make incremental progress. Automotive OEMs are still adjusting to their new timelines for product launch. It is abundantly evident that lidar is an integral part of the sensor suite required to deliver a reliable ADAS experience. What all of us are adjusting to is our updated timelines to launch decisions for their platforms. We continue to explore opportunities for customized development with our OEM engagements. With ripple effects and expected future trade conditions for OEMs and their product timelines, we have remained actively close to them in their process. Their plans for future models of EV and ADAS are taking a parallel priority to their near-term goals of fielding models with traditional powertrains that launch faster at affordable price points. In the AGV and AMR space, we made progress on multiple engagements through 2024 with our MoviaL, with integrated perception application software. This gave us the confidence to enter into an agreement with our partner ZF to increase our production capacity. Basically, we are offering a sub-eight watt sensor which has our perception and application software onboard the sensor, and talks directly to the customer's controllers. This is an advanced solution which is frictionless to our customers to integrate. We continue to make great progress in this space and expect these engagements will lead to commercial wins for us. There are more than twenty well-established companies for this segment that already have their products implemented and are actively looking to upgrade their platforms with MicroVision-implemented industrial ADAS software. The TAM for this segment is lower than automotive, but we have much faster line of sight to significant revenues from multiyear programs from hardware and software solutions. I am very excited about our multiple engagements in this segment. In 2024, we delivered software integrated solutions to multiple potential collaborative robot partners as well. These evaluations are in flight. This is a slower moving segment, evaluation and large commercial agreements. With the current potential, we expect large scale decisions to be more fluid in 2025. We continue supporting and developing strong partnerships. In this segment, we again expect to have lower TAMs but higher margins. This is a segment we will watch through 2025 to add layers of recurring revenue. Another segment we started in 2024 was mobile autonomous robots in military and commercial vehicles with our NIDAR products. The larger opportunities in this segment are for long-term partnerships where we could enable our potential customers with our mature perception software and advance their multimodal platform development. This is an important area for partnership we expect to develop. This allows us to showcase the breadth of our technology in enabling autonomous driving and ADAS outside the traditional automotive OEMs. These partnerships will certainly come with revenue and the broader play is to show that we are already a company with parts that are more valuable than what I see reflected in our market capitalization. This year, we have already started working on expanding our partnership. The world is changing. A new era of opportunity for our advanced technology in military applications has appeared. With expansion expected in defense spending under the current administration, and lots of realignment happening with this sector, our mature technologies in augmented reality, space systems, as well as perceptive lidar solutions will be promoted for defense programs. I would say that it is early times, and we are actively working on pursuing all opportunities. As investors will recall, for over thirty years, MicroVision has delivered technology for various military programs. The company was founded for this segment. We have participated in programs for the U.S. Army virtual copilot program for high resolution full color helmet mounted display; General Dynamics mounted warrior program with helmet mounted display for armored vehicle use; US Army Aviation and Missile Command program for Boeing for binocular helmet mounted display for the Comanche helicopter; US Air Force four-color head mounted display for Air Force eyewear; US military battle command battle lab for head mounted display; and most recently, we were part of the HoloLens product developed for the military. We are very strong in this area and expect to bring a military adviser that will help us partner with larger companies in space for our partnership. I expect to talk about this more as these opportunities continue to develop. I'm gonna keep my prepared remarks brief today as we received a large list of questions from our shareholders and I would like to address that as the main narrative. I would like to now turn the call to Glenn DeVoss, our new CTO. I'm excited that Glenn has joined MicroVision to advance our product solutions, and help us grow to provide more advanced software and hardware integrated solutions for automotive and industrial market segments. Glenn and I have had a chance to get to know each other over the past six months and it has been great to mutually share the excitement for MicroVision. Glenn?

Thank you, Sumit. I appreciate the introduction. I'd like to start by saying how excited I am to be with you today and to be joining the MicroVision leadership team as their CTO. Over the course of my career at GE, Delphi, and Aptiv, I've had the opportunity to both lead significant global technology development as well as to manage high-growth automotive business units. As Aptiv's CTO, I led the development of smart vehicle architecture and our advanced autonomous mobility technology, which incorporated radar, vision, and lidar as part of our advanced perception system which powered the 2015 launch of the Las Vegas robo-taxi fleet during CES that year as well as our cross-country autonomous drive that occurred in April of 2015. As president of the Advanced Safety and User Experience Business Unit, I managed the introduction of global large-scale ADAS programs for our leading OEM customers, resulting in the accelerated growth of that business unit into a multibillion-dollar business with annual bookings in excess of five billion. I understand what it takes to identify, industrialize, and then successfully commercialize these disruptive technologies. And this is exactly why I'm joining the MicroVision team. Building on MicroVision's proven technology portfolio, I believe that we are perfectly positioned to not only successfully commercialize our current lidar products within the automotive market, but also able to extend and deliver the complete perception system as well as a rich set of features suitable for the industrial, defense, and commercial vehicle markets. Now to successfully capitalize on these opportunities, we have an important year ahead where we'll be showcasing the complete MicroVision industrial autonomous and advanced driver safety platform which will utilize multimodal perception, with a scalable software-defined set of advanced features. While these adjacent markets represent important near-term opportunities, we remain committed to the automotive ADAS and autonomous applications within the automotive space. MicroVision's technology will be a key enabler to unlocking additional level 2-plus and level 3 features for our OEM customers. Maven, Movia S, and Mosaic are the right products at the right time for the automotive market. As I mentioned earlier, I couldn't be more excited about joining the MicroVision team and being part of this journey. Thank you, and I'll now turn it over to Anubhav to talk about our financials. Anubhav?

Thanks, Glenn. We took many transformational steps in 2024 to adapt to the dynamic nature of the industry including macroeconomic conditions and geopolitical factors. The three notable achievements of the company are: number one, expanded near-term revenue opportunities in the industrial and defense sectors as timelines continue to evolve in the automotive industry. Increased automotive OEM competition from China, both in terms of price and features, continue to drive U.S. and European automotive OEMs to quickly find a way to progress their ADAS and EV initiatives. While this means revenues at scale from that industry are delayed, the certainty of lidar adoption—especially given its success in China—has never been higher. To adapt to the changing landscape, we successfully positioned the company to focus on near-term revenue from industrial verticals with a focus on AMR, AGV in the warehouse and factory automation space, and also cobots or collaborative robots. The revenue potential is immediate and significant given the need to reduce cost in this industry. In addition, we're now actively pursuing opportunities in the defense vertical, especially given the focus of the current administration to prioritize defense spending on cutting-edge technologies by leveraging our existing technologies and products in the AR and VR space. Number two, disciplined cost management and added a world-class leadership team. We adjusted the workforce last year to focus resources on near-term revenue opportunities. While the entire market executed several rounds of restructuring to conserve cash, our cash burn continues to be one of the lowest in the marketplace. Also in line with our focus on operational excellence we are thrilled that Glenn has joined us. His experience, energy, and perspective will help usher in transformational advancements in our solutions and go-to-market as we prioritize the expansion of our end markets including industrial and defense. Number three, strengthened our balance sheet with two rounds of investments from a strategic financial partner. With the raised capital, and a further streamlined cash burn, we extended our cash runway into 2026. With near-term revenue opportunities, and our expansion in the industrial and defense sectors, we believe we have improved our timelines to achieve cash flow breakeven. This is the first time in the history of the company that one single investor has committed to invest an aggregate of over ninety million dollars of capital. This ninety million includes a seventy-five million dollar convertible facility entered into in October 2024 and then a subsequent seventeen million dollar common equity transaction executed in February 2025. We believe these back-to-back financing transactions signal a strong vote of confidence. This has also been reflected in MicroVision trading volumes that are significantly higher—three to four times historical levels—driven by both institutional and retail. If I can summarize, securing an institutional financial partner to make an over ninety million dollar commitment signals a strong vote of confidence in MicroVision's future. Last fall, we ran a competitive process to select institutions for a capital raise and received term sheets from multiple quality institutional investors that reinforce the market perception of MicroVision's technology. As a result of this, we have achieved a strong market cap, surpassing several of our peers. We remain one of the highest valued US-based lidar companies with high average daily trading volume and elevated levels of institutional trading. These are all reflective of MicroVision's market position and strong staying power with low cash burn and high revenue potential from automotive, industrial, and defense sectors. Now let's review our Q4 financial performance. For the fourth quarter, revenue was $1.7 million. After backing out the one-time Microsoft revenue in Q4 last year, the revenue grew from $0.5 million to $1.7 million year over year, primarily driven by customers in the industrial vertical. While we did see momentum in industrial verticals, the Q4 revenue came short of our expectations as one customer delayed its decision to 2025 though we remain significantly engaged. On the expenses side, our fourth quarter 2024 expenses were in line with our expectations. For Q4, we had $14.7 million of R&D and SG&A expenses. These include $2 million of noncash charges related to stock-based compensation expense, and $1.7 million in noncash charges related to depreciation and amortization (D&A). Backing out these noncash charges, our R&D and SG&A expenses were only $11 million in the quarter. In line with our expectations, our expenses have trended down sequentially since the first quarter 2024 primarily due to the reductions in force we implemented to focus the company on Maven and Movia products and away from Mosaic and SensorFusion, in response to automotive projects being pushed to the right. We believe our workforce and expenses are well positioned to execute on the current business strategy. The current engineering talent pool is sufficient to remain engaged with the automotive OEMs and simultaneously scale faster with industrial and defense revenue opportunities in the near term. We believe the go-forward annual run rate of our R&D and SG&A expenses will be $48 to $50 million for 2025. CapEx was $0.1 million in line with our expectations. So let's talk about our balance sheet. We finished the year with $75 million in cash and cash equivalents. We're pleased with how our relationship with Hightower has developed over the last six months. In February this year, we raised another round of equity investment from them. Subsequent to these financings, the company now has access to a total of $235 million as of December 31, 2024, with the following components: number one, cash and cash equivalents of $75 million; number two, $114 million availability under our current ATM facility; number three, $30 million of undrawn capital under the convertible note facility; and lastly, the $17 million of new equity capital from Hightower. In addition to that equity capital raise in February, Hightower also converted over 20% of their note into common stock. In addition, the June to August redemption payments on those notes were deferred. We're pleased to have found a strategic partner whose confidence in MicroVision's future has motivated an alignment of economic interest in step with our management team, employees, and other shareholders. This makes the overall cost of capital for the convertible quite attractive. We believe that the benefits to the company spurred by the investments significantly outweigh the cost. We sold about $9 million worth of common stock under the current ATM in the fourth quarter. We have $114 million available. On the convertible note, we have approximately $33 million outstanding that could convert at a fixed price of $1.59. The $30 million second tranche remains undrawn and available for future drawdowns subject to certain limitations. Now let's talk about 2025 targets. We have already secured production commitments from our manufacturing partner ZF to fulfill the anticipated demand from the customer projects we remain deeply engaged in. We expect this demand to be in the $30 to $50 million range just from this vertical only over the next twelve to eighteen months. As we expand our TAM into defense and other related areas and work together with Glenn to expand our solutions and accelerate our go-to-market strategy, we will provide more color on financial and business milestones for 2025 and 2026 in upcoming events. To summarize, we're really excited about 2025 and beyond as MicroVision drives forward with: A) significantly higher TAMs including defense and industrial; B) expansive and broadening solutions advancements; C) a solid balance sheet with superior trading metrics; and lastly D) a well-experienced team to execute the strategy. With this, John, I would now like to open the line for questions.

Thank you. At this time, we will be conducting a question-and-answer session. Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen. Analysts who publish research may ask questions on the phone line. For analysts to ask questions on the phone line, please press star one on your telephone keypad. You may press star two if you'd like to remove your question from the queue. One moment, please.

Good afternoon, everybody. Thank you for the exciting update. I was curious if we could start with how much of that would we characterize as commercial shipments versus say some sort of R&D work done in conjunction with partners?

Hi, Casey. Thank you for your question. The $1.7 million in the fourth quarter was primarily revenue derived from the sale of sensors to our customers. There was very minimal NRE in this. The NRE that we were expecting to get in Q4 we expect has been pushed out into 2025 because of the customer's decision.

Okay. Terrific. And would you describe the $1.7 million—whatever portion was sort of commercial—was that sorted to a single customer or potentially to multiple customers? Because that would be exciting if it were.

Correct. So it was to multiple customers, not just one. However, the number of customers that comprise this $1.7 million is fewer than ten because our strategy has always been to pursue high-volume industrial customers because that significantly drives a higher ROI. We can get those revenues without inflating our SG&A expenses, and that has been the model of the company to go after industrial customers with significantly higher volume estimates to either retrofit their existing robots or for new robots that are going to be deployed in the future.

Okay. Terrific. That's helpful color. The mention of defense opportunities for the company is exciting. I have two questions around that. Is it fair for us to think those opportunities are related to ground-based or movable objects, or are they also aerial objects? I'm trying to understand how big the opportunity is if it's multi-theater essentially.

Let me take that one. If you think about our core products, the core product we've been working on for five years since I've been CEO is the lidar product with the perception and expanding that into platforms and automotive. With the team we have in Hamburg combined, we have something we can offer to people developing vehicles that are non-automotive. In the military space, there are multiple programs on this, so we engaged on that last year. Primarily that's the product we're working on. But, of course, the pedigree of the company—twenty-five years plus before that—is display systems. Given the current environment, as opportunities arise, we want to make sure that all the assets of the company are made available for potential revenue.

Okay. Perfect. Nothing missile-related, right? Just ground-based and directly related to soldiers?

We've actually never gone direct. I think if you think about the size of the company, we build one part of the subsystem of something larger, so we tend to work with partners that can be part of the bigger program. As I mentioned earlier, we intend to bring on some military advisers to help us through the process.

Okay. Alright. Terrific. Circling back, less than ten but more than one commercial customers in Q4 is pretty exciting. For those opportunities, are you finding that you're competing against many of the well-known names in the industry, or is MicroVision being sought out for unique capabilities? What's the competitive nature of these wins in terms of building relationships?

Customers know who the parties are, and I won't comment on any specific company's confidential information. One thing from my general view is that with potential future trade barriers, working with Chinese-based companies has ups and downs. Having a company here at home gives some customers additional comfort, and that can narrow the set of competitors. But generally, they look at who makes a lidar, who has software, and how well you integrate. They want choices and don't want to lock themselves in because program lifetimes are long. Typically, there is more than one company involved. They try to understand uniqueness, but also what's reliable and proven. In our case, offering long life, low power, software-integrated sensors with perception onboard—not requiring additional ECUs—are the kinds of value propositions we promote. We remain competitive; others will have different unique points. There are fewer companies with our specific combination of features and software integration.

Terrific. Thank you for all that color. I think you're painting a very positive outlook for 2025. I'll drop off the line now.

Our next question is from Jesse Solbinson of DeBoral Capital. Please proceed.

Hey, everyone. Thanks for the update here and for taking our questions. First, I was wondering about the ZF contract you mentioned—thirty to fifty million over twelve to eighteen months. Could you provide a little more clarity on exactly what that represents, what kind of product you expect to deliver, and whether this is an ongoing recurring delivery contract or some type of lump sum agreement?

Jesse, to clarify: the $30 to $50 million is what we expect as demand from our customers in the next twelve to eighteen months for that vertical. To fulfill that demand, we have secured production commitments from ZF, our manufacturing partner, to ensure we have uninterrupted supply. For many industrial customers it's a priority to make sure a supplier can deliver at scale and on predictable schedules. That's why we locked production commitments with ZF so that when demand arrives, we're able to fulfill it reliably.

Great. Thanks for the explanation and for securing that production capacity. Looking at automotive RFQs, you mentioned continued engagement with several OEMs and delays. Could you give an update or a realistic timeline for RFQs converting into revenue-generating contracts?

I think generally the RFQ timelines for start of production are moving out. Technical evaluations continue, and on the OEM side there's churn among suppliers and tier ones. Programs themselves are experiencing elongation in timelines. Technical evaluations go deep and new items can emerge, and the commercial decision timing is less clear than in prior years. It's very hard to predict when those decisions will be made or whether an award will result in production. There are many variables, and while everybody wants wins and announcements, it's difficult to forecast which RFQs will reach production and when.

Understood. It's a developing process across the industry. One last question: MicroVision seems to be expanding perception solutions—are there strategic opportunities to accelerate growth via acquisitions in complementary technologies like sensor fusion or software? Are you actively evaluating M&A opportunities and how would you approach that?

To give context, we acquired the iBEO team several years ago, which helped build our perception core. That perception core is mature—developed jointly with Audi years ago. We've since built application software for different customers. The multimodal concept—radar, camera, lidar—is the broader space. Our preference is to build efficiently and cheaply internally, but if the right opportunity comes along that accelerates customer programs or strengthens our capabilities, we would consider it. Right now our focus is to get revenue, establish partnerships, and build sustainable paths to growth.

To recap what Sumit described, the company's strategy is to become an ADAS solution provider for industrial and commercial vehicle space as well. The idea is to build a full solution to offer customers, either organically or inorganically.

Great. I appreciate the answers. Thanks for taking my questions.

I will now read questions submitted through the webcast. Thanks, John. Right. So the first question we have is: Sumit, what are the factors that delayed the signing of this industrial deal?

If you think about industrial customers, they often get less attention from bigger companies. You can go to another lidar company and buy something off the shelf, but we provide perception running inside the sensor on our SoC. This is a very big advantage because at low power the sensor includes perception. Providing that much software onboard and all the interfaces requires collaboration with the customer; it's their application. They want to understand how the sensor works, how noise behaves, and why the point cloud looks as clean as it does. They must qualify the entire system, and that qualification process takes time. Qualification timelines often exceed initial expectations because these are larger decisions—thousands of units rather than hundreds. Industrial customers require extensive qualification to ensure robustness and long life. That has been the biggest factor in the delay: the full-blown qualification process and their expanded timelines.

The next webcast question is: Can you comment on the recent deal announcements by several other lidar companies with global OEMs? If MicroVision had the best sensor with the lowest price point, why did the company not win these RFQs? Is it too late for MicroVision? How does MicroVision plan to differentiate itself from competitors, including Chinese lidar players?

I'll start to give context and then turn it to Glenn for a broader perspective. The question of 'best in class' is nuanced. OEM decisions are based on cost, fidelity, power, size, features, small object detection at range, industrialization, and financial health of the supplier. We can get to a technically green evaluation quickly, but the commercial and industrialization aspects, as well as the supplier's financial stability and runway, are part of that procurement decision. As engineers, we value technology, but customers evaluate many other factors before deciding. I'll hand it to Glenn to add more perspective.

To build on Sumit's comment: you're seeing continued commitment to using lidar in advanced systems—level 2-plus and level 3. Some announcements reflect organizations solidifying parts of their approach across their portfolio, but adoption at scale and production-level integration is still developing. Over the last decade this kind of pattern repeats. For us, it's important to focus on the right customers and opportunities that will bring volume, not just engagement or announcements. We have Maven, Movia, and Movia S coming, and I believe these are the right products as OEMs solidify broader plans. Announcements from others are not a concern for us at this point; much is still to play out and we remain focused on winning production opportunities with the right value propositions.

Next question: Do you think NHTSA's requirement for U.S. automatic emergency braking due by 2028 is unrealistic? When is the latest date an OEM would need to sign a series production deal to ensure their cars meet this requirement for 2028? Can MicroVision lidar sensors enable OEMs to meet this?

The NHTSA requirement for 2028/2029 is achievable, but it will vary by OEM and platform. The initial focus of the ruling was vulnerable road users—pedestrians—so systems must be able to detect and respond appropriately. OEMs have a portfolio of vehicle platforms; some will be relatively simple to update, typically higher-content, higher-end platforms, and those may be able to comply with software changes. Lower-end or value segment vehicles that are vision-only today may struggle to meet the required discrimination without additional sensors. There may be negotiations or staging between regulators and OEMs to avoid disrupting vehicle platform plans, but fundamentally the technology is there. LiDAR can be a tremendous advantage because of its ability to discriminate and determine object position and range, but each OEM will have a different path to compliance.

Next question: How does MicroVision plan to compete with FMCW lidar technology given its increasing adoption by OEMs and recent announcements by some vendors? Are there plans to transition or integrate FMCW technology into MicroVision's product portfolio?

I'll start. OEMs will choose solutions that are lowest cost with the highest fidelity for their needs. The debate between time-of-flight and FMCW often centers on relative velocity. OEMs already have radar on cars for velocity measurements. From a practical standpoint, FMCW requires particular laser technologies that today have cost and manufacturing challenges at automotive scale. Power consumption, thermal management, miniaturization, and cost are significant considerations. If a sensor consumes much higher power it affects packaging and placement and may require additional cooling. We made a conscious decision to pursue time-of-flight because of energy efficiency, power, size, and practical integration into vehicles. That doesn't mean FMCW has no place, but physics and manufacturing economics matter for automotive adoption at large scale.

To add, lidar will operate in a sensor suite alongside radar and cameras. Radar provides very accurate relative velocity; cameras provide classification. Each modality operates in its sweet spot. Time-of-flight lidar is proven and robust with lower power consumption, which helps with packaging and placement. In a multimodal perception system, time-of-flight lidar gives what you need from the lidar modality while radar and camera supply complementary information. For these reasons, time-of-flight remains a strong approach for many OEM use cases.

Next question: How does the recent announcement of cooperation between Volkswagen, Valeo, and Mobileye impact MicroVision as those three parties look to cooperate to enhance driver assistance by integrating hardware and software sourcing together?

I'm familiar with the parties involved. The announcement—branded as a surround-camera-based system—combines multiple cameras and several radars running on Mobileye's compute. What's interesting is that it sets a floor for ADAS capabilities in value-segment vehicles by providing a robust camera-plus-radar baseline for level 2 functionality. That raises the floor for ADAS content and means OEMs will look to differentiate above that baseline with level 2-plus and level 3 offerings. That's positive for MicroVision because it increases the need for more advanced modalities like lidar in higher-content systems as OEMs try to differentiate their higher-end vehicles. In short, the announcement helps commoditize a baseline ADAS system and creates space for differentiating technologies—like lidar—to address higher levels of autonomy and capability.

Next question: If MicroVision were to see an increase in deep demand for AR products, when would the company communicate that to the market? Let me take that question. Since AR is a sector we're pursuing opportunities in, any material purchase orders or any significant transaction—such as an offer to purchase our IP or other assets related to AR and VR products—would be communicated to the market in accordance with our disclosure obligations. Next question: It is publicly known that Microsoft previously had a contract with MicroVision for HoloLens 2 and that the headset is based on HoloLens 2 technology. As your intellectual property was used in HoloLens 2, would other parties be interested in starting a collaboration again?

We have received questions about this before. Historically we have focused capital on lidar, but display and AR technology are still part of our capabilities. I personally have experience in AR and believe there's substantial IP and expertise in the company beyond just display technology. We can address problems in existing systems and develop next-generation technologies. There are several system-level challenges in headsets, such as motion sickness and eye tracking, and we believe we can contribute beyond display components. We can offer reference designs and system-level solutions including perception integration that can enhance AR experiences. We stand ready to collaborate and to offer solutions for existing and next-generation headsets. Thanks, Anubhav. I think we have gone over the hour. We again thank you to all our investors for joining us on our Q4 earnings call. We look forward to speaking with you again very soon. Thank you so much.

Thank you. This concludes today's conference.