Earnings Call Transcript - MVIS Q4 2022

Operator, Operator

Good day. And welcome to the MicroVision Fourth Quarter and Full Year 2022 Financial Operating Results and Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Drew Markham. Please go ahead. Thank you, MJ. I am pleased to be joined today by our CEO, Sumit Sharma; and our CFO, Anubhav Verma. Following their prepared remarks, we will open the call to questions. Please note that some of the information you will hear in today's discussion will include forward-looking statements, including, but not limited to, statements regarding our acquisition synergies, product development and performance, comparisons to our competitors, market opportunity, product sales and future demand, business and strategic opportunities, customer and partner engagement, projections of future operations and financial results, availability of funds, as well as statements containing words like potential, believe, expect, plans, 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 Form 10-Q. 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. Now, I’d like to turn the call over to our CEO, Sumit Sharma. Sumit?

Sumit Sharma, CEO

Thank you, Drew. Welcome everyone to this review of our 2022 fourth quarter and full year results. 2022 was an exciting and eventful year for MicroVision, and I expect 2023 to be an even more pivotal year in our journey. I would like to update you on three areas. First, our product portfolio. Second, our momentum for partnerships and revenue. And third, our competitive outlook. First, let's dive into our product portfolio for 2023. 2022 was the most important year in MicroVision's history. With relentless execution, our team matured our MAVIN product to align with automotive OEM expectations for high volume RFQs happening in 2023. We also executed on our strategy to become a full spectrum ADAS solutions company by joining forces with Ibeo automotive and acquiring assets. The combination of MAVIN and our balance sheet puts the combined company in the best position to help realize the true potential of the Ibeo team. Let me start with the MAVIN update. For long range LiDAR, MAVIN meets and exceeds OEM expectations for seamless roofline integration for high-speed highway pilot. Nobody is offering a mature product with the size, performance, or cost. We challenge MAVIN's best-in-class status, period. Let's put any speculation to rest. Roofline integration is the dominant requirement across RFQ for long range LiDAR for 2023. While our competition is starting these design cycles to deliver on size, cost, and performance, we are ready with the product now that goes to production over the next several years. Programs announced by competitors years ago are still not shipping from their own factories or their tier one partners in any meaningful volumes. As I look at the RFQ in-flight across Europe, North America, and Asia, we are engaged in multiple RFI, RFQ opportunities, with an outlook for more than 20 million long and short range LiDARs by the end of this decade. These opportunities represent less than 10% of the entire fleet expected to ship globally by the end of the decade with a LiDAR. OEMs are publicly embracing LiDAR as the future of ADAS. Automotive OEMs in Europe, North America, and Asia are looking for a long-range LiDAR that is ready for roofline integration, as well as a cost-competitive solution for short range LiDAR. MicroVision is the only company that will offer both. The current cycle is significantly higher in volume than the early small volume partnerships announced to date by all OEMs combined. None of the current partnerships are exclusive, as evident in the multiple solutions being announced yearly by OEMs. This current high-volume opportunity is just the level of big prize we have developed our sensor for. With billions of dollars of revenue potential, the review of technology and partnerships takes a long time. But I'm confident that things will start converging in 2023 for a 2026 production readiness for long range LiDAR and 2025 for short range LiDAR. We have the right products and experienced team in the U.S. and Germany to deliver not only the technology but also strong industrialization know-how with Tier-1 manufacturing partners. As we look forward to 2023, here are the key objectives we expect to achieve. Full year revenue in the range of 10 million to 15 million for our expanded product line portfolio. Design win for LiDAR product with automotive OEM. Start of non-automotive sales with sequential flash LiDAR, partnership with automotive OEM for the sale of auto-annotation software and customization. Demonstrate a scalable drive by wire solution for high speed L3 and L4 safety in November 2023. With our teams now working as a single company, I believe one plus one equals five. MicroVision is the only company to offer multiple LiDAR technology nodes with software for automotive and non-automotive markets. I want to repeat that. MicroVision is the only company that will offer both long range LiDAR that is ready for roofline integration as well as a cost-competitive short-range LiDAR. I expect it to generate revenues from five sources moving forward. First source of revenue, long range LiDAR with MAVIN. In MAVIN, and the mature perception software as a one-box solution, we have the ideal product for high-speed highway pilot. This product is in review for multiple RFI, RFQ currently in-flight. Immediately after we acquired Ibeo assets in January, we updated our technology demos to highlight a significant advantage the one-box solution represents with detection ranges of 300 meters for MAVIN. This is the most important opportunity for recurring revenue, and we believe that we are clearly ahead of our competition technology. I expect 2023 to be an exciting year of partnerships for this product. In the current RFQ cycle, recurring revenues for this product is likely to start arriving in 2026, 2027 based on several OEM programs. Second source of revenue would be from flashlight or industrial sales. Our acquisition of Ibeo assets included their sequential flash-based sensor developed for automotive standards. We expect to bring to market an industrial product based on this LiDAR to address various channels with a more cost-competitive industrial solution. We believe this is a substantial near-term market that can start revenue cycles faster and allow us to offer a competitive performance and price for the industrial market. This flash sensor has a fully developed custom ASIC, which makes us cost competitive and ready for scale. We expect non-automotive sales to start in 2023 and grow significantly from there. Third source of revenue, automotive short-range LiDAR. With the current ASIC development for flash sensor, we expect to offer a 180-degree field of view short-range LiDAR sensor in a compact format or RFQ from multiple automotive OEMs in 2023. Long-term this product would have higher volume than MAVIN at a lower ASP. I expect this product to run on an existing manufacturing line with some customization. Several OEMs on multiple continents have RFQ opportunities in 2023 for this product. I'm very excited about this LiDAR product and the revenue opportunities made possible with our asset acquisition. Fourth source of revenue comes from our validation software suite acquired as part of the asset purchase. OEMs Tier-1 spent hundreds of millions of dollars annually validating various sensors in their vehicles. Real life driving data is required to validate each product. Our validation software suite, which includes auto-annotation, helps reduce OEMs development costs versus using manual annotation. There are two important strategic advantages for this product. First, it lets us connect with OEMs on their need for validation in customizing the software, which informs us of perception features that will be required well in advance of our competition. Second, we generate revenue through the sale of software, and our direct contact with OEM teams on upcoming programs. This is an important product line, and we expect to generate meaningful revenue for us annually. This source of potential revenue will be our drive by wire software and system product in the future. MAVIN also unlocks huge potential for the drive by wire sensor fusion software developed in Hamburg. I expect us to demonstrate a scalable solution for L3 and L4 in November 2023. With these five product lines, we are truly a unique company. Our expansive product portfolio and derisked revenue outlook represent a new model for the LiDAR industry. Our near and midterm revenue outlook is strong and growing. Now I would like to provide an update on our market momentum. The size of the opportunities I've described would be in the billions of dollars for this decade. This requires a lot of reviews of our technology, manufacturability, cost, and value chain partnerships. In 2023, RFQs from multiple OEMs around the globe for both long and short-range LiDAR are underway. We successfully executed on these opportunities. We plan to partner with an automotive Tier-1 manufacturing suitable for such projects. We inherited the Ibeo setup partnership with a flash-based sensor. We continue to explore potential partnerships with our MAVIN product to consolidate and share economies of scale and other advantages. Finally, I would like to update you on our competitive outlook. There's a wide range of questions or concerns we get from investors that I would like to set the record straight. To understand the landscape, we need common context. Our main competitors have announced early deals with OEMs. This is true, but they haven't delivered any real volume to the market even after nearly five years of industrialization. Many went public through a de-SPAC process that is not as rigorous or scrutinized as a conventional IPO. These companies use unconventional communication tactics to the markets, including terms like order book and backlog and other non-GAAP metrics without appropriate 8-K filings or required reconciliations. The reality is that they take small projects for crookes and other developments/testing projects with OEMs and spin them as a broad agreement. All this while their ASP is in the $1,000 range, and experienced Tier-1s are not able to scale their technology. Regulatory bodies like the SEC have already begun to scrutinize and have recently demanded explanations for these communications and disclosures from one such competitor. In response, the competitor admitted to the SEC that their technology has not shown viability yet, and contracts are not guaranteed. These communications with the SEC are public and can be easily obtained from the filings. They cause a lot of market confusion with extensive marketing events and press releases without filing related contracts with the SEC that are material and valuable. I expect right before IA-Munich this September, there will be a similar push with announcements. But again, no 8-K filings. Their strategy is to fake it till you make it. These companies are well capitalized compared to us but have not secured any big contracts that would align with the financial models they have stated publicly. Another sign that these so-called announced design wins, which seemed to have material value for the marketing events, did not include any associated contracts filed with the SEC in the form of 8-K. These young companies raise huge amounts of capital from the market and have really set a bad precedent by immediately turning around to use the cash to launch stock buybacks without positive cash flow as well as buying $80 million mansions in Pacific Palisades. All of us have seen this game of fake it till you make it before. However, these are the rules of our free market. It is important context to have. In contrast, MicroVision is a more disciplined company. Our advantage is in decades of experience innovating and maturing our technology, and our strength is the clarity we endeavor to provide to the market. I am confident about our path forward and the success of our technology should generate. I'm humbled by our investors and their confidence in our company and the tools they have provided us to achieve success. We are up against companies that are well-capitalized but do not have our technology or a path to success. Operating as a disciplined company, in our execution and expenses, is the ultimate act of defiance against immature companies that are well-capitalized but are in significantly weaker positions than MicroVision with OEMs. I want to conclude my prepared remarks by reiterating a few key points. First, 2022 was a very important and productive year for MicroVision delivering on our strategy, groundbreaking technology, and relentless execution while providing clarity to investors. Second, we are gearing up for a pivotal year where we transition the business from technology development to partnerships and revenue focus. Finally, as a disciplined company that executes and delivers to what we communicate to the market, we expect 2023 to be an epic year in MicroVision's history. I want to conclude by saying how proud I am of our global team and allowing us to be well-positioned for an incredible 2023 and beyond. I would like now to turn the call over to Anubhav to talk about our financials. Anubhav?

Anubhav Verma, CFO

Thanks, Sumit. 2022 has indeed been a transformational year for us. Not only did we take a giant leap forward with the launch of MAVIN for our customers last year, but we also announced the combination with Ibeo. This deal further positions us well to become one of the most experienced LiDAR hardware and software companies in the market. I'm pleased to report that we achieved all the milestones we had laid out in 2022. Also, we continue to show tremendous financial discipline as a mature public company in Q4 2022 net cash used in operating activities of only 8.4 million. This equates to an annualized net cash used in operating activities of under 34 million on a run rate basis, which is slightly better than our guidance of 40 million. As a mature public company, we will continue to differentiate ourselves from our competitors through financial discipline, transparency, and guiding to metrics that we believe are realistic and achievable. Before we talk about full year '22 financial results in a bit more detail, I would like to discuss how the Ibeo acquisition significantly accelerates our trajectory and transforms our roadmap into the future with new products and access to new customers. Based on our current suite of products and visibility, we will be providing our financial outlook for one year out that is 2023. Additionally, I will be providing several details and inputs to help investors quantify the impact of the Ibeo acquisition and model the business through the end of this decade. The Ibeo acquisition is indeed an inflection point for MicroVision. Our teams worked around the clock to close the acquisition much sooner than our expectations. We are very pleased and excited about the 250 employees in Hamburg and Detroit, who became a part of our 100-plus team based in Redmond and Nuremberg on January 31, 2023. Operationally, our teams have already demonstrated the seamless integration of MAVIN with Ibeo's perception software, paving the path to future integration in our custom ASIC. We now have strengthened our position as a formidable LiDAR hardware and software company with 350 employees and a very strong talent pool of hardware and software engineers spread across four offices in the U.S. and Germany. This acquisition now positions us as the only LiDAR company in the market, able to offer such an extensive product portfolio to a broad range of industries. Number one, our biggest market focus continues to be in ADAS, with the addition of perception software, we are better positioned than ever to compete for design wins this year. Number two, our anticipated revenue stream is now expanded with revenue-ready products like the short-range flash-based sensor for non-automotive customers in a large market comprising industrial, smart infrastructure and robotics applications. And third, high margin revenue from auto-annotation software providing validation of sensors for OEMs and Tier-1s. Our IP portfolio is strong and deep and now consists of an impressive 735 patents, more than any of our peers. We also now have over 50 years of combined experience developing technologies that our current LiDAR solutions are built on, which is far more than our very young LiDAR peers in the market. I'm very pleased to continue demonstrating our financial rigor and discipline strategically deploying capital to execute this opportunistic transaction to acquire Ibeo for a purchase price of €15 million. This investment brought us an experienced and highly talented team of engineers, targeted customer relationships and a broad product portfolio. In fact, we're now benefiting from the past R&D investments done by Ibeo of over €200 million deployed over several years. This considerably reduces our go-to-market timeline and allows us to leverage these products to generate high margin revenue for the go-forward company. Our updated investor presentation on the MicroVision website includes helpful information about us and our markets. Now, let us talk about how the size of the market we compete in now has significantly increased due to this transformational deal. Let's talk about the biggest market, which is the ADAS market. We're now seeing that OEMs may be looking for a comprehensive LiDAR sensor panel with vendors providing both long range for high speed highway pilot and multiple short range for 360-degree view. L2+ is expected to require one long range LiDAR and two short range LiDARs per vehicle, while L3+ is expected to require two long range LiDAR and four short range LiDARs for vehicle. While we continue to hear ASPs from our peers at around $1,000, our design and ethic enables us to price our LiDAR at $500 depending on volumes greater than 10 million units. We believe short-range LiDAR will have an ASP of about $200, and we believe it will have larger volumes than long-range LiDARs. If we simply use this ASP estimate applied to the projected number of vehicles expected to come out of production, we estimate that the total LiDAR market could generate at least $82 billion of cumulative potential revenue through 2030 for the entire market. We have seen our competitors talk about a TAM of $150 million by 2030, while we believe that that a big market may be possible. Our estimates are based on a more rational and mathematical model. Please note that we have not even considered any revenue coming from the L4, L5 capabilities, which we plan to access or tap into with our sensor fusion chip that would fuse with MAVIN LiDAR and an array of radars to enable safety at the lowest cost to enable L3, L4 features down the road. In the near-term, we are highly focused on the monetization of the L2, L3 opportunities with strategic investments in the technology to enable L4 features towards the latter half of the decade. The non-automotive market, while we have seen a variety of estimates from our peers and reputable business consulting firms, we have estimated on a similar basis the cumulative revenue potential through 2030 to size the total non-automotive market. For industrials, we expect this market to be at $2.5 billion in 2025 expected to grow at an estimated 20% CAGR. If we sum up the total sales in the industrial market, we expect the total cumulative revenue to reach $32 billion by 2030. Extending the same match to the non-automotive smart infrastructure sub-segment, we expect this market to be at $2.8 billion in 2025 and grow at a 30% CAGR. By 2030, we estimate the total sales in this market to be cumulative of $46 billion. Lastly, for robotics, we expect this market to be at $1.8 billion in 2025 and grow at a 50% CAGR. If we sum up all these three sub-verticals within the non-automotive market, we expect the total cumulative revenue potential or size of the market to be at $115 billion. Let's discuss the third market, which is the validation and auto-annotation software. This is a specialized market with not a lot of players competing. As a reminder, this software provides ground truth data generation to reference against the sensors OEMs are trying to validate. The key advantage of our validation software platform is that it enables sensor suites including MicroVision LiDARs and third-party LiDAR to process and detect surrounding 360 degrees. A modular approach enables different sensor setups and setups for any use case. Additionally, we employ parallel processing due to our cloud-based architecture. While it is hard to estimate the TAM for this software, we estimate that we may be able to conservatively generate $200 million to $300 million in revenue through 2030. We believe the demand for this software will increase in the upcoming quarters as OEMs strive to validate more and more sensors. Now let's distill down to what it means for us as a company and our business outlook. Our 2023 financial objectives, we expect revenue of $10 million to $15 million. This revenue will include MAVIN sales to OEMs, flash-based sensor sales to non-automotive customers, and reference software sales to OEM and Tier-1 validation partners. We expect a high gross margin as a large portion of this revenue relates to software solutions. From an expense standpoint, we expect the net cash used in operations to be between $50 million and $55 million, which is the net effect of the cash coming from the incoming revenue and our increased cash operating expenses due to the acquisition. While there may be some cost synergies available between the two companies including IT and some consolidation opportunities, our focus is on accelerating revenue for 2023. While we do not provide long-term guidance, the following measures of success can help investors build a model for MicroVision. We are increasing our internal targets to $3.5 billion to $5 billion cumulative revenue potential through 2030, up from the $2 billion to $4 billion, primarily due to the increased opportunities and the markets I described earlier. For automotive, we expect to sell more short-range flash-based sensors at $200 per piece. This brings incremental revenue stream on top of the MAVIN. For non-automotive, we expect that we will be able to capture 1% to 2% of the total market size of $115 billion translating into $1 billion or $2 billion in revenue for us. For the validation business, as we described, we expect to capture $200 million to $300 million in revenue through 2030. Adding these incremental revenues on top of our core product, we expect on the conservative side an addition of $1.5 billion more revenue compared to our prior estimates of market opportunity. This higher revenue should correspondingly translate into incremental EBITDA potential as well. I'm very pleased that an investment of $15 million as a purchase price for Ibeo assets can potentially yield $1.5 billion entire revenue opportunity through 2030. Now let's discuss Q4 and FY '22 results. For the fourth quarter, Microsoft communicated to us that there were no units delivered in that quarter. As we have stated previously, our revenue recognition is directly tied to the number of units delivered by Microsoft, hence no revenue was recognized in Q4. As a reminder, this revenue is attributable to the contract executed in April 2017 with Microsoft for using our technology in their AR display products HoloLens 2. As of December 30, we have an unapplied $4.6 million balance left on this contract liability. Our agreement with Microsoft continues to be in effect with an expiration date of December 2023. Please note that no cash has been received for this revenue in the last several quarters as we received an upfront cash payment of $10 million at the contract signing in 2017 and apply recognized revenue against that prepayment. We had shipped some LiDAR samples to customers in Q4 2022, as we previously announced. We did not build or recognize revenue for these shipments as we shifted our focus to the acquisition of the Ibeo assets, which would allow us to ship an integrated product with perception software as part of it. The shipped samples in Q4 were thus deemed to be a part of our tests and evaluation program. In terms of expenses, this was one of our most efficient quarters, with our cash burn being only $8.4 million per quarter. This was in line with our expectations as I had provided in our prior call. Q4 R&D expenses totaled $7.6 million compared to $6.5 million last year. The increase was primarily driven by higher salaries, benefits, non-cash stock-based compensation, and higher non-direct labor expenses. SG&A expense totaled $6.4 million in the fourth quarter this year as compared to $6.6 million last year. The decrease was primarily due to higher non-cash stock-based compensation, higher salary and benefits, offset by higher marketing and consulting expenses last year. For the full year, I'm very pleased that the $38 million cash used in operating activities was well in line with our guidance. The annualized fourth quarter net cash used in operating activities came in just under $34 million. This demonstrates our strong financial discipline. In these times of uncertainty and weaker macroeconomic conditions, MicroVision stood out and beat competitors in terms of maintaining a healthy burn rate and headcount with a strong balance sheet. We have been prudently investing and not following the aggressive spending model as most of our peers who now have to announce some headcount initiatives. CapEx in the fourth quarter of 2022 was $2.3 million, which was driven by buildouts and tenant improvements in the new facility that we moved into at the beginning of this year. We expect to recover this investment through the contractual incentive payment agreed to be paid to us by the incoming tenant in our previous building. Going forward in 2023, we expect CapEx to settle back to its original levels. Now let's talk about our cash position. As discussed during our Ibeo acquisition call in December last year, we took advantage of the ATM facility to finance the Ibeo acquisition. In 2022, we utilized our ATM program for net proceeds of $14 million. In January 2023, we raised an additional $12.5 million under this program. Hence, we raised a total of $26.5 million from the beginning of 2022 to today. With this, we now have approximately $42 million to $43 million currently available under this ATM program. As of January 31, 2023, we have already made a payment of €10 million towards the purchase price of €15 million for the asset purchase agreement. After making those payments, we had approximately $78 million in liquidity including investment securities at the end of January 31, 2023. We plan to make the remaining payment on the acquisition of €5 million less the deductions in purchase price in the second quarter this year. Based on our current operating plan for 2023 and beyond, we anticipate that we have sufficient cash and liquidity to fund our operations. Looking ahead, we're excited about 2023 as we march forward on our path to $10 million to $15 million in revenue this year from the streams we described. Our core areas of focus include revenue from automotive customers, including MAVIN with perception software, LiDAR sales with non-recurring engineering revenues from OEMs, sales of flash-based LiDAR for non-automotive customers and the sale of auto-annotation software for automotive OEM validation work. To summarize, we're really excited about 2023 and beyond. With our milestones and key focus on winning RFQs, we will be proving to the market our unique value proposition as a well-positioned LiDAR company. I would now like to open the line for questions.

Operator, Operator

Thank you, Anubhav. At this time, we are conducting a question-and-answer session. Our first question today comes from Andres Sheppard of Cantor Fitzgerald.

Andres Sheppard, Analyst

Hi, good afternoon, guys. Congrats on the quarter. And thanks for taking our question. Anubhav, maybe you can just remind us again on your capital needs for the future, with the $83 million in liquidity currently, when do you anticipate needing additional capital? Thank you.

Anubhav Verma, CFO

Thanks, Andres. Based on our current operating forecasts, we think that we are well-funded through the middle of next year. Obviously, as you can imagine, the cash burn expected this year is between $52 million and $55 million in 2023, and we are expecting incoming revenue of $10 million to $15 million. So that puts us in a very good position. Our cash burn continuing to remain one of the best in the industry helps us position well from a balance sheet strength standpoint.

Andres Sheppard, Analyst

Got it. Thanks, Anubhav. That's very helpful. And maybe just walk us through your plans to ramp up in 2024. Is that still the case? And do you see kind of those revenues gradually improving over time? Any visibility there would be helpful? Thank you.

Anubhav Verma, CFO

Yes. We're actually very excited about 2024. We expect growth from the auto-annotation software, which will have high contribution margin revenue that we expect to increase or improve in 2024, mainly because OEMs will need our software for validating their sensor data. The sales of sensors to non-automotive markets seem to be picking up steam in 2023 and 2024 as the market expands, which will give us more momentum between this year and next year as we ramp up production. The last stream of revenues expected to come from MAVIN sample sales and the one-box solution in the years to come, coupled with non-recurring engineering revenue from the OEMs as well. These are the three revenue streams to think about between 2023 and 2024, which we expect to be an even stronger year than 2023 based on where things stand today.

Andres Sheppard, Analyst

Got it. Thanks, Anubhav. And maybe just one last question for Sumit. Can you give us an update on potential partnerships with OEMs? Any updates there and when do you expect you might have a partnership materialize? Thank you.

Sumit Sharma, CEO

As I iterated throughout the entire call, 2023 is a year of convergence. I think most of them have settled in and all the products that are going to need the RFQ cycles are ongoing. Where we end up converging is hard to determine. I’ll give an example. There was something specific for an OEM for the auto-annotation software, something that was expected to close for this call. Due to some bureaucracy within the company, it got delayed, but I feel confident it will happen. The turnaround decisions depend on the OEMs, but I feel very confident that decision will get made in 2023. These are significant decisions with big volume. We have products that OEMs have reviewed multiple times, and now comes the commercialization part. I feel confident 2023 is going to be a conversion path.

Anubhav Verma, CFO

Thank you, Sumit. The next question is, could you please provide a succinct definition of drive by wire and why its demo is significant to prospective OEMs? Is it relevant to the RFQ process?

Sumit Sharma, CEO

Drive by wire requires a special license; you can't do these demos on an open road. Instead, scenarios can be tested in a controlled environment. These tests are crucial because they ensure a vehicle can safely navigate challenging situations autonomously. The term 'drive by wire' signifies control over a vehicle being managed by a computer, even with a driver present. This type of demo helps validate our technology's capabilities, and adequately demonstrates that we can execute in high-stakes scenarios.

Anubhav Verma, CFO

Thank you, Sumit. The next question is about the steps forward with Ibeo specific customers and their contracts.

Sumit Sharma, CEO

When Ibeo’s insolvency was announced, it affected many involved. It was a surprise, but we intend to stabilize our core team and leverage relationships built during prior engagements. We are actively working to resurrect those contracts and have begun engaging again with those OEMs that were previously involved. I am optimistic that our combined strengths with Ibeo’s knowledge will facilitate a pathway to enhance our connections with global OEMs.

Anubhav Verma, CFO

That’s right, Sumit. The addition of Ibeo’s operations strengthens our momentum in both OEMs across the Atlantic, which makes us very excited about the future. We have just added more engineers. Is this going to have an impact on the cash burn? Yes, this will add to our standalone cash burn. However, even with increased spending, our cash burn remains significantly more manageable than our peers who are facing much larger outflows. Our cash burn rate continues to remain manageable, and we believe our strength lies in our ability to allocate resources effectively across the board without compromising our financial health. The next question involves Luminar's recent announcements. Do we have any views around their new product launch, and what does a 300-meter ranging facility mean?

Sumit Sharma, CEO

To be honest, I haven't looked at it in depth. The 300-meter demo is significant; we have showcased similar capabilities with MAVIN. But let’s be clear, indoor measuring tools don’t reflect real-world complexities. Seeing how systems react in diverse situations while actually moving is what counts. Overall, the emphasis is on validation through comprehensive data rather than isolated metrics.

Anubhav Verma, CFO

Thank you, Sumit. The next question is also related to Luminar: How does their AI engine compare to MicroVision's, and what’s the competitive landscape like?

Sumit Sharma, CEO

I’m not familiar with their product specifics, but our strategy focuses on integrating perception algorithms directly into our ASIC. This lowers costs while maximizing our sensor's KPIs. Our combined expertise with Ibeo demonstrates how we can optimize our solutions for OEMs in a perfect blend of performance and cost-effectiveness.

Anubhav Verma, CFO

We are now out of time. We appreciate your ongoing support and attendance at our fourth quarter earnings call.

Operator, Operator

Thank you. This concludes today's conference. All parties may disconnect and have a great day.