Earnings call transcript: Aeva Technologies Q4 2024 sees stock surge 16%

Aeva Technologies, a leader in FMCW LiDAR technology with a market capitalization of $144 million, reported its financial results for the fourth quarter of 2024, revealing significant developments in revenue and strategic partnerships. The company’s stock experienced a 16.04% increase, closing at $3.07, as investors responded to the earnings call and future guidance. According to InvestingPro data, analysts maintain a bullish consensus on the stock, which currently appears undervalued based on Fair Value analysis. The company aims for a revenue target of $15-18 million in 2025, reflecting a substantial growth from the previous year.

Key Takeaways

• Aeva Technologies aims for 70-100% revenue growth in 2025.
• The company unveiled the advanced Atlas Ultra LiDAR at CES.
• Strategic partnerships with Daimler Truck and SICK AG are expanding.
• Stock surged by over 16% post-earnings call.

Company Performance

Aeva Technologies reported a full-year revenue of $9.1 million for 2024, showing a consistent non-GAAP operating loss of $123.2 million, unchanged from the previous year. InvestingPro analysis reveals the company is quickly burning through cash, with a negative free cash flow yield of -82%. However, the company maintains a strong current ratio of 4.32, with more cash than debt on its balance sheet. The company is focusing on reducing operating expenses by 10-20% in the coming year. With a strong liquidity position, including $237 million in available funds, Aeva is well-positioned to pursue its growth targets.

Financial Highlights

• Revenue: $9.1 million for 2024
• Non-GAAP Operating Loss: $123.2 million, unchanged year-over-year
• Gross Cash Use: $112 million
• Total Available Liquidity: $237 million

Market Reaction

Aeva Technologies’ stock rose by 16.04% following the earnings call, closing at $3.07. The stock’s performance is notable given its 52-week range, with a low of $2.201 and a high of $5.49. While the stock has shown recent strength with a 13.5% gain over the past week, InvestingPro data indicates a challenging longer-term trend, with a -40% return over the past year. The positive market reaction reflects investor confidence in the company’s strategic initiatives and future growth prospects. Get access to detailed analysis and 12 additional ProTips about Aeva Technologies with an InvestingPro subscription.

Outlook & Guidance

Aeva Technologies has set an ambitious revenue target of $15-18 million for 2025, indicating a 70-100% increase from 2024. Three analysts have recently revised their earnings estimates upward for the upcoming period, though the company is not expected to be profitable this year. The company is also targeting the industrial robotics and factory automation markets, with expectations of a 1000% increase in industrial sensor shipments in 2025. The start of production for Daimler Truck is anticipated in 2026, with Atlas Ultra for passenger vehicles slated for 2027. Discover comprehensive analysis and valuation metrics in the Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

CEO Suresh Salahyan emphasized the company’s unique position, stating, "We are uniquely positioned to execute given the maturity of our Fortuwater technology." CFO Saurabh Sinha expressed confidence in the company’s financial health, noting, "We feel pretty good about our liquidity."

Risks and Challenges

• Market competition in the LiDAR technology space
• Execution risks in scaling production capacity
• Dependence on strategic partnerships for revenue growth
• Potential supply chain disruptions affecting production timelines

Aeva Technologies’ earnings call highlighted its strategic advancements and robust growth plans, driving positive investor sentiment and a notable stock price increase. The company’s focus on innovation and strategic partnerships positions it well for future success in the competitive LiDAR market.

Full transcript - Aeva Technologies Inc (AEVA) Q4 2024:

Jess, Conference Facilitator: Good day. My name is Jess, and I will be your conference facilitator. I would like to welcome everyone to Ava Technologies’ Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. During the opening remarks, all participants will be in a listen only mode.

Following the opening remarks, we will conduct a question and answer session. As a reminder, today’s conference call is being recorded and simultaneously webcast. I would now like to turn the call over to Andrew Fung, Senior Director of Investor Relations and Corporate Development. Andrew, please go ahead.

Andrew Fung, Senior Director of Investor Relations and Corporate Development, Ava Technologies: Thank you, and welcome everyone to AVA’s fourth quarter and full year twenty twenty four earnings conference call. Joining on the call today are Suresh Salahyan, AVA’s Co Founder and CEO and Surabh Sinha, AVA’s CFO. Ahead of this call, we issued our fourth quarter and full year twenty twenty four press release and presentation, which we will refer to today and can be found on our Investor Relations website at investors.ava.com. Please note that on this call, we will be making forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our most recent Form 10 Q and Form 10 K. In addition, during today’s call, we will discuss non GAAP financial measures, which we believe are useful as supplemental measures of Avis’ performance. These non GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company’s website under the Investor Relations link.

And with that, let me turn the call over to Suresh.

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: Thank you, Andrew, and good afternoon, everyone. Q4 and the start of 2025 have been an incredible period of momentum in our business and I’m excited to update our investors and stakeholders. I think it’s appropriate though to step back and frame how we got here. When we laid out our vision for Ava and building a market leading perception and sensing company nearly eight years ago, we knew it was not going to be easy and the path we were taking with FMCW would ultimately build a platform for the future, but it would take time. Importantly, we built a strong team, understood the challenging engineering problems to overcome, algorithms and software necessary to build, the hardware, semiconductors and silicon photonics to be developed and iterations required to bring multiple generations of a powerful product to market.

If successful, we would have the building blocks required to enable both breakthrough long range perception and micron level precision for broad applications and perception. Richer datasets, faster processing, everything aligned in scalable architecture and protected by a massive wall of significant IP. We knew that this product vision was the only way to unlock the potential promise of autonomy and the other next generation capabilities for our customers across automotive, industrial robotics and other applications. Our team was constantly faced with challenges to overcome along the way and needed an intense drive to deliver on our ambitious goals. I am proud of how we have pulled together time and again to deliver our first commercial product Ares II in 2022 followed by our first integrated ASIC product Atlas beginning of last year.

These were breakthrough milestones in the lidar space as the promise of FMCW lidar was finally being delivered. These products enabled our historic series production wins at Dimatruck, one of the largest commercial vehicle manufacturers globally. We didn’t stop there however, as we have continued to push into a smaller manufacturer, launched the next generation ASIC and have increased the resolution of our market leading Atlas Ultra product line targeting passenger vehicles. Our Atlas Ultra product has now enabled us to bring the power of our platform to the passenger vehicle market and enabled us to be awarded a joint development program from a global top 10 passenger OEM. This award opens up a new market for our products and signals the confidence large global OEMs have in our technology and future.

The joint development program is focused on taking our market leading Atlas Ultra product and fine tuning it to fit within their specific vehicles and packages for use in their stack. The engineering work and milestones for this program are well defined and the team is laser focused on delivering where we have confidence in our success. The objectives of this program are clear and on success enable us to be included as the lidar future in the global OEMs model lineup globally and for geographies outside of China. We expect to complete this program later this year, where we expect this transition to a large scale production award amongst the largest opportunity in the industry and delivering a next generation technology to our customers’ vehicle platform. In summary, 2024 was a year of strong commercial momentum at EVA and we expect to double down on this momentum in 2025.

Let’s now discuss in more detail our recent business developments. We are excited to be selected by a global top 10 passenger OEM for a lighter development program for its next generation global production vehicle platform, where we will jointly work on development, packaging and integration of Aeva’s Atlas Ultra 40 LiDAR for use across the OEM’s global line of passenger vehicles. Over the course of last year, we have discussed our advancements with this OEM, including being down selected to the final stages of the RFQ. Now this development program win represents a key milestone in our ongoing collaboration and it is effectively the first development phase of the Series production program and is focused on the joint B Sample development and packaging of our ADMAS Ultra product for use across the OEM’s broad lineup of vehicle models. This OEM has a long history of using time of flight three d LiDAR.

However, through extensive evaluation and real world testing of AVA-forty lidar, including instant velocity, immediate interference and other advantages over time of flight, the OEM has found that our technology is better able to address a number of key use cases needed for the OEM to successfully expand its operating design domain at higher speeds and scale to higher levels of automation across its vehicle lines and more markets. As such, they are moving to FMCW technology in order to future proof their solution for the next generation vehicles. Importantly, separate and addition to this program, we have also secured a letter of intent from this passenger OEM toward the Series Production Program award decision. And we expect that to transition to a large scale global production program opportunity for EVA later this year. This OEM is a leader in commercializing new technology at scale in the passenger vehicle space.

With annual vehicle volumes in the millions and the potential to be the primary feature across geographies outside of China, we believe the opportunity for the series production program upon conversion from this development phase is expected to be massive and likely one of the largest in the automotive industry, which could cement our position as a market leading company globally. We’re excited to be awarded this development program with this OEM and are planning for Atlas Ultra start up production starting in 2027. Beyond this top 10 OEM win, we are seeing increased momentum for our funnel with other global passenger and commercial vehicle OEMs that are advancing toward FMCW technology for their vehicle platforms. Specifically, we are increasing our joint activities with other passenger OEMs, including another top 10 passenger OEM through the RFQ process and two other commercial vehicle OEM opportunities with significant volume potential based on our Atlas and Atlas Ultra platforms and with targeted SOPs between 2027 to 2029. More broadly, interest to leverage FMCW technology is rising across the industry as its decisions incorporating geographic considerations.

We believe AVA is in a strong position with our products and cost competitive solution. Moving now to update for Diamond Truck on the production program. We are progressing well with Diamond Truck having delivered on all of ABA’s milestones for the program in 2024. As the exclusive long range and ultra long range LiDAR supplier for the OEM’s autonomous truck production program, AVA40 LiDAR is the primary detection sensor and we have been working closely with Diamond Truck and its subsidiary Torque to achieve their key milestones towards a safe and scalable commercialization of autonomous trucks. I’m happy to share that this relationship continues to deepen in 2025.

We recently expanded our collaboration with Torque to include sharing of sensing data and a Freightliner vehicle platform. This will enable even closer collaboration between our teams as we work together advancing the safety architecture for autonomous trucks and enabling Torque’s virtual driver software to make safer and more intelligent decisions. So in short, Ava remains on track for a start of production in 2026 to support Diamond Truck’s market entry by 2027. Turning now to the latest developments around Avos products. We unveiled Atlas Ultra at CES this past January.

This is our newest and most powerful automotive grade 40 lidar that is designed to meet OEM requirements for level three and higher speed applications. Compared to our Atlas products, Atlas Ultra offers three times the resolution and the capability for a wider field of view all in 35% slimmer packaging, which opens up even more integration options with minimal impact to vehicle styling and aerodynamics. Like other Ava LiDAR products, Atlas Ultra leverages our proprietary LiDAR on chip architecture, which integrates all optical components, including transmitter detector and lenses onto a silicon photonics module. This along with no use of fiber or exotic materials allows us for highly automated manufacturing process and ability to mass produce at affordable costs. Andas Ultra also utilizes our custom AVAX1 SoC or system on chip processor, which enables seamless integration of data acquisition, point cloud processing, scanning and application software into a single mixed signal processing chip.

Our X1 SoC also powers AVUS advanced perception algorithms that leverage PowerPoint velocity data for object detection and semantic segmentation. We are already working on integrating Atlas Ultra with key partners such as the global top 10 passenger OEM and plan for additional availability to automotive customers later this year. At CES, we also showcased the industry’s first functional behind windshield integration of an FMCW LiDAR in collaboration with an automotive partner. This enables a high LiDAR positioning for optimal long range detection with seamless integration, minimizing impact to vehicle design and aerodynamics. The in cabin integration is enabled by our FMCW LiDAR on chips, small form factor, low power consumption and passive cooling, which help maintain good road visibility and passenger comfort.

Our operational demonstration vehicle utilizes a co developed custom formulitic glass from YI by AGC that is compatible with AVA’s unique FMCW wavelength to maintain long range detection and point cloud quality. Feedback from leading OEMs following real world on road demonstrations have been very positive and has already led to deeper engagements. Switching now to industrial developments, where we are growing rapidly with major applications of our products with industry leaders such as Nikon and SIG AG for the $10,000,000,000 plus market opportunity in industrial robotics and factory automation. This is possible now in 2025 because of the completion and our core technology components, including our core vision lidar on chip module and excellent SoC for industrial applications. In particular, late last year, we partnered with SICK AG to incorporate AVAS FMCW technology into its portfolio of high precision contactless sensor solutions.

As mentioned, SICK is one of the top leaders in sensor solutions with revenues of nearly $3,000,000,000 annually. Specifically though, in the multi billion dollar market of high accuracy displacement sensors, SICK sells more than 250,000 sensors a year, which are used across a broad range of industrial robotics and factory automation applications. Ava sensors bring a number of major performance size and cost advantages versus current solutions such as more reliable micron level precision across many operating conditions or the ability to measure both short and long standoff distances with the same small sensor. And because of AVOS’ ability to directly measure velocity, we believe our technology would open up new capabilities that bring the possibility to expand the use of PAVOS sensors across the industrial precision market. Having now substantially completed our validation with SICK, we’re now moving to commercial deployments beginning in Q3 of this year.

Turning now to our key objectives, I would like to first provide a quick recap of our 2024 goals before sharing more about our 2025 objectives. We set challenging objectives for 2024 and I am proud to say that we have achieved essentially all of them. With regards to the goal for two additional production wins, we secured an industrial win with the indoor lab and a global top 10 passenger OEM development program. Our other goals from maturing our production product to finalizing our supply chain and exceeding our financial metric targets with over 100% revenue growth were all successfully achieved. Looking to 2025, we expect the work accomplished last year will enable AVA to build on our momentum this year.

Our focus is on further driving the adoption and commercialization of FMCW technology, while continuing to maintain strong financial discipline. Specifically, we target winning two additional programs in 2025 beyond the top 10 passenger OEMs. Second, we are on schedule to complete and release the C Sample of our Atlas product to key customers this year. This key milestone will keep us on track for our 2026 startup production for Diamond Truck. Third, we are working to expand substantially in industrial robotics and factory automation.

For Ava’s unique FMCW technology has the potential to transform the industry. We are seeing significant interest from some of the global leaders in the space with potential for materially higher deployments to the tune of at least 1000% for EVA in 2025. Fourth, we plan to complete our automated and automotive qualified production line with capacity for 100,000 plus units annually. This critical step will not only better position EVA to meet the increasing near term interest for our 40 LiDAR, but also our upcoming commercial deployments. And fifth, we aim to achieve these objectives with a strong focus on financial growth this year.

As Saurabh will discuss later on, we believe we have the ability to achieve record revenues for the company this year with approximately 70% to 100% year over year growth in 2025. At the same time, we expect to reduce our operating expenses this year by approximately 10% to 20% year over year. In summary, Ava is working on multiple significant commercial opportunities in 2025 and with our unique 40 Lidar, the strong team and liquidity position, we believe we are in a good position to execute on our objectives and capitalize on the growing momentum around FMCW. With that, let me turn the call over to Saurabh to discuss the financials.

Saurabh Sinha, CFO, Ava Technologies: Thank you, Soroush, and good afternoon, everyone. I would now like to discuss Aeva’s full year 2024 financial results. Revenue

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: for

Saurabh Sinha, CFO, Ava Technologies: the year 2024 was $9,100,000 representing growing sensor shipments to automotive and industrial customers including for the Daimler truck program. Full year non GAAP operating loss was $123,200,000 consistent with our plan to keep it flat from the prior year. 2024 gross cash use was $112,000,000 which comprises of operating cash use of $106,900,000 and capital expenditures of $5,100,000 AVA ended the year with total available liquidity of $237,000,000 which includes $112,000,000 in cash, cash equivalents and marketable securities and $125,000,000 in undrawn facility. This facility has conditions to draw that are fully met and can be drawn at management’s sole discretion. We believe AVA’s total liquidity positions us to continue executing on our existing production programs as well as securing additional wins.

And as more industries look to FMCW technology, EVA is in a unique position to drive this adoption. We will continue to be strategic in how we invest and believe we can simultaneously scale manufacturing to support increasing deployments and pursue new business while also lowering total spend. Turning to our financial outlook for the full year 2025. We target growing our revenues to be in the range of $15,000,000 to $18,000,000 this year, which is an increase of approximately 70% to 100% year over year in 2025 and continues on a similar strong 100% plus year over year revenue growth trajectory that we achieved in 2024. The higher revenue is expected to be driven by the ongoing scaling of product shipments to automotive and industrial customers.

Revenues are expected to be back end loaded in the year. As we mentioned earlier, we see opportunity to reduce our spend in this year 2025. This is due to completion of certain major engineering activities and our overall maturing the commercialization of our products. As such, we are targeting non GAAP operating expenses, which excludes stock based compensation and other potential non recurring charges to be in the range of $95,000,000 to $105,000,000 a reduction of approximately 10% to 20% on a year over year basis. We are at a very exciting time in the company’s journey as we begin to scale deployments and meet the growing interest for our four d LiDAR technology.

We believe our available liquidity enables us to execute on our plan. With that, let me turn the call back to Soroush for closing remarks.

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: Thank you, Saurabh. Twenty twenty four was a transformational year at Ava, beginning with our Major Production Program award from Diamond Truck to multiple industrial wins and the start up for commercial deployments. Ava has taken a leadership position in driving the growing adoption of FMCW LiDAR across a broad range of applications. I would like to thank the Ava team for their immense work that they continue to do in realizing these accomplishments. Looking forward, I am really excited about what lies ahead for our company in this year.

We are uniquely positioned to execute given the maturity of our Fortuwater technology and the company’s financial position. With our first top 10 passenger OEM program and other auto and industrial opportunities, the number and depth of our engagements have never been stronger and we believe that Ava is on the path to emerge as a leader in our market. With that, we will now open the line up for questions.

Jess, Conference Facilitator: Thank We will go first to Colin Rusch with Oppenheimer and Company.

Colin Rusch, Analyst, Oppenheimer and Company: Thanks so much guys and congratulations on all the progress.

Suji Desilva, Analyst, Roth Capital: With the

Colin Rusch, Analyst, Oppenheimer and Company: industrial applications, clearly there are a myriad number of them and they’re fairly sizable. Can you talk a little bit about initial targets outside of metrology, if there are any and what the cycle time is in terms of design wins and then when we might start to see some revenue off of those wins? And I guess since we’re doing one question, the secondary piece would be if you can give us an update on manufacturing progress from here?

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: Yes, Colin, happy to answer that. This is Dhruv speaking. So, as you pointed out, we are actually beyond automotive, which was a big update today. We are really excited about the opportunity that’s ahead of us for robotics, especially, and also the factory automation space. So in that space, as we have talked about, across our products, as I mentioned at the beginning of the call, we spent the past number of years laying the foundation for creating the products at a platform, the perception platform, including our key core technology pieces with our two silicon chips, right.

So the optical core vision as well as the ExOne SoC. And with that, we’ve been able to actually put this product together in a way that can be applied to automotive and industrial applications. Now that these are substantially complete, this is the year that we are really excited about that we’re starting to actually increase those sales and be able to actually commercially deploy those across the markets. So within the industrial sector, just to give you an idea, these applications, the industrial automation, robotics and factory automation, we see an opportunity just for the sensing supplier, one similar to us, to be in the $10,000,000,000 plus market per year opportunity. Now obviously, SiC is one of the leading players in this space.

Nikon is another in the metrology space. So we are working across with these players and others to start to deploy our first kind of industrial precision products. And for this, the opportunity is quite massive. SIG by itself does about $3,000,000,000 of sales annually. That’s in the multiple $10,000,000 of sensors.

But if you kind of peel down and look at what is actually actionable and marketable for our specific sensor set, in the kind of high accuracy or precision displacement sensing, SiC itself does about 200,000 or 300,000 units per year, right? So right there is where we see a critical opportunity for AVA. And so this market, because it is already in existence, it is one that is ripe for disruption. It is one that is really exciting for us. So we are part of a SIG to actually transition their portfolio of sensors from other types of technologies such as fracture light or others more and more towards FMCW based sensors as it relates to high accuracy and displacement sensing.

And so we see that as quite a large opportunity and we have talked about it on this call as well, which in which we’re planning to actually increase our industrial segment sensor shipments by nearly about 10x or 1,000 this year. So that’s just to give you an idea of kind of the scale that we’re going after and we think this is just the beginning. We think the run rate and the opportunity for this, if we’re able to execute in the next couple of years, could be quite massive, providing us opportunity potentially of in the $100 plus million type range per year business. So that is a very exciting thing for us. And the reason that I think I would say we are seeing traction in this area, this is not the same as maybe others in the space when they talk about LIDAR for industrial.

This is something that’s quite different. The unique advantage for AVA there is really around accuracy, micron level precision in a non contact way at kind of long standoff distances. And that’s something that’s really time of flight or three LiDAR is not even in the business of doing so. And that’s why we are excited about it. So I hope that answers your question.

Thanks. And can you just address the manufacturing question

Colin Rusch, Analyst, Oppenheimer and Company: for a second just in terms of your progress in manufacturability and preparation to ramp as you start to see some of these opportunities materialize?

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: Yes, absolutely. So as you pointed out, we have been focused heavily on increasing our manufacturing capacity. Obviously, it’s important for us to be able to meet the growing demand of our products to hit these targets that I mentioned, the 1000% for the industrial sensor. So one of our goals this year actually is to install and complete our manufacturing production line with a capacity of 100,000 units per year. And if you may recall from last year, we set a goal to really secure our final assembly, manufacturing as well as make a dedicated manufacturing line of Fabrinet for our core module.

So all those, as I mentioned on the call, are done now. We’re now kicking into the next gear to really start being able to have the manufacturing capacity that is at much higher scale and then be able to satisfy the demand that we’re seeing from these various markets across the whole industrials. Thanks so much guys.

Jess, Conference Facilitator: We will go next to Suji Desilva with Roth Capital.

Suji Desilva, Analyst, Roth Capital: Hi, Soroush. Hi, Sohrab. Congrats on all the progress here. Taking into consideration your comments about OpEx, being able to bring it down some of the product after maturing, I’m wondering if also that applies maybe to some of these large programs like the Daimler truck program. Could you characterize the 25 kind of effort left versus maybe 24 perhaps with the heavy lift and there’s less risk in what’s left between now and program start ’26, ’20 ’7 or whether there are still some significant milestones and challenges remaining?

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: Yes. Hey, Tuji. This is Arushi. Happy to answer that. So obviously, as you mentioned, we have substantially completed a significant chunk of the efforts as it relates to our first launch of our product for Atlas.

This is a year in which we’re working on releasing a final C sample, which is the I would say, key milestone for us to be able to commercially deploy this at scale. There’s no coincidence that we’re actually if you go back and look at it, pulling it forward, the installation of our manufacturing line capacity from 26,000 to 25,000, including to be able to get that to 100,000 units per year because it’s because of the growing demand that we’re seeing across automotive and industrial. So with DynaTruck, we have delivered on every milestone either on time or ahead of time last year. I think we have had a really successful partnership in production since when we announced this at the beginning of last year, and we continue to do so as we go forward. So majority of the development work is complete.

A good chunk of the manufacturing line installation is done. We’re now increasing that, making a full automated line for our final assembly and being able to hit these types of numbers that we’re talking about. So as that relates to our spend, it’s obvious and goes without saying, this is the year that we are looking to set out record revenues for the company. As I mentioned, 70% to 100% year over year. We’re not just making this out of thin air.

We have set those goals last year. We exceeded them. Now we are back here again, are setting these goals this year and hope to do the same. And at the same time, this year, we’re looking to reduce our spend. Part of that is because of the fact that we are substantially complete with our product development.

Some of the one time or engineering type costs including silicon development that can be costly are now getting behind us. And we’re maturing as a product, we’re maturing as a company. So really excited now to kick into high gear and start scaling our products. And on top of that, keep on some of our momentum with wins in automotive and others. So pretty exciting year for us to book ahead for.

Suji Desilva, Analyst, Roth Capital: Yes. And a great progress and a great setup for the ’25. And then my other question is on the OEM program and the ’27 target for start of production. I just was curious, first of all, is that an L3 car program? And second of all, as you talked about $1,000,000,000 lifetime value, maybe ten years straight line, Is ’26 the beginning of that contribution part of it or because we’re ’27 really the first year you’d get some kind of one tenth of that sort of run rate beginning.

What’s the more realistic expectation?

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: Yes, sure. Happy to maybe push on the top 10 win here with the passenger program that we talked about. So as I mentioned on the call a little bit, we’ve been working with this OEM for quite some time now over the past year or two years. The past year has been quite intensive, really extensive collaboration together. But before I dive into that, maybe we have to zoom out for a second.

So you also you have to understand that this OEM has had significant experience with time of flight already, time of flight lidar. And throughout their experience and lessons learned, they’re now realizing what they need and what may be missing. And in short, they’re looking now to move past Timoflight towards FMCW technology. So given both the lessons learned and the challenges as well as the significant advantages they see that they can gain by going to FMCW, we think that’s a win win situation and importantly crucial signal for the passenger OEM space of what we think is to come as a major shift for the OEMs as they start to transition to FMCW LiDAR technology. And we hope and we believe EVA is going to play a key role for that as a leader in FMCW.

Now together, we’ve done a lot of work since past year. They have a valid technology firsthand on extensive real world testing, on road testing. We’ve talked about this over the past year or so, a few months. We have passed a number of audits, maturity as a Director of One supplier and done a lot of technical analysis, gone through thousands of requirements together and gone through the final stages of our SKU that we down selected we were down selected for, as we mentioned, last year. So the combination of all that is what is these two agreements that we talked about.

One is the award by this top 10 passenger OEM for the development agreement. This is intended for developing a solution that fine tunes our Avast Ultra product in a way that fits across their global production vehicle platform, which includes multiple lines of vehicles. And the work is effectively the kind of first phase of the production program and really focused on joint B Sample development for us to be able to get them to use it across their lineup of vehicles. So this OEM has obviously serious vested interest in Skin in the Game with AVA as well as with NRE contribution to help make sure that we are successful. And in addition to that, the second piece is we have gone a step beyond that with this top passenger OEM and have been able to secure a letter of intent from the OEM for a large scale production program aboard this year, which we believe is a very strong indication of the OEM’s plan for next generation as well as our collaboration together.

So overall, we’re feeling confident about that. I think the objectives and the milestones are clearly laid out as I mentioned. We know what needs to happen. The team is laser focused here right now and is understood what we need to do and we have high confidence to be able to close it out together in the next number of months here. So that’s what I would say about kind of our activities and kind of how we got here.

But to answer your question about kind of timing in SOP, we have mentioned on this call and earlier today that our target for the Atlas Ultra SOP, which obviously ties in to what we’re talking about here is 2027 and we expect that from production ramp to market entry to follow that.

Jess, Conference Facilitator: We will take our next question from Mason Wain with Morgan Stanley.

Colin Rusch, Analyst, Oppenheimer and Company: Great. Thanks guys. I just wanted to ask, given some of the additional wins and engagements, how are you feeling about the level of cash right now? It looks like the cash burn last year was kind of similar to what’s on the balance sheet today. Spending will be a little bit lower this year, but just is there a cash number you feel comfortable operating the company at?

You expect to be able to have to draw on that facility before we kind of start to get to scale over the next couple of years?

Saurabh Sinha, CFO, Ava Technologies: Hey, Mason, this is Surab. So happy to answer that question. As I mentioned in my prepared remarks, our total liquidity available is two thirty seven million dollars one hundred and 12 million dollars is on the book from the balance sheet and the remaining $125,000,000 is in the form of undrawn facility where the conditions to draw have been fully met and now it is that management’s sole discretion to draw at any point in time. So we feel pretty good about our liquidity. It’s a multi year runway to take us all the way to production.

And as you see that we are while we are increasing revenues, we are decreasing cost. And as Surush mentioned earlier in the call that there are certain heavy lifts on the R and D front, particularly the silicon development and maturity of the product, those activities are coming down as you would expect as you reach maturity. So we feel pretty good about it. We don’t have any debt. And at the same time, we look at the whole ecosystem of lidar companies and others, we feel we’re in a very good position from the balance sheet strength and the liquidity to execute on our plan and with more customers.

Colin Rusch, Analyst, Oppenheimer and Company: Okay, excellent. Thanks and congrats on the progress.

Tyler, Analyst, Craig Hallum: Thank you.

Jess, Conference Facilitator: We’ll move next to Richard Shannon with Craig Hallum.

Tyler, Analyst, Craig Hallum: Hi, this is Tyler on for Richard. Thank you for taking my questions. I was wondering, what is the general area that the top 10 OEM is located in for their headquarters? And in which geographies ex China are they operating in? And is there any cadence to the different model ramps or any kind of way you could describe the size of this opportunity?

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: Yes, yes. Happy to do that, Tyler. I think, obviously, I have to be careful here. I think we just announced this, so we don’t want to get out of ourselves too much. I can tell you this is a obviously a top 10 OEM, a super obviously well known brand with global presence.

I don’t think I can tell you the exact headquarters, but in general, I can tell you that they have significant business globally. What we see with this OEM is, as I mentioned, is they’re making in the millions of vehicles per year and they’re importantly really one of the top leaders in introducing new technology, right. So we think that that combination together with AVA’s ability to provide this really unique FMCW technology and along the way really prove out its maturity and scalability is going to be a major win win situation, not just for the two companies, but we also see this as an opportunity for us to jointly bring this technology to the passenger vehicle market similarly to what we’re doing with Diamond Truck on the commercial vehicle market. So we are really excited about that. Diamond obviously is a leader in their respective commercial vehicle field and we see that the opportunity here with this OEM also is to be in a leading position in the passenger vehicle field.

So we’re looking to work together and really build up that potential of the scale. As you alluded to the side, so as I mentioned on the call, millions of vehicles sold, we see the opportunity the production program to be across multiple vehicle model lines. We see that for some of these key model lines, we expect it to be as a standard future for lidar. So if you run the math, this potential opportunity would be quite massive, as I mentioned in the call, it would be amongst the barges in the industry. And we expect the size to be at least similar to what was the Dimitruck program, which is $1,000,000,000 plus revenue opportunity.

So we’re really excited by this, but again, we see this as a stepping stone and not at all as a destination. And we’re just getting started here in Q1. So looking forward to providing more updates as we go along.

Tyler, Analyst, Craig Hallum: That’s fair. Thank you for answering. I had one more. For the manufacturing, is this enough to get you going for the next couple of years or does that need to be adjusted as we move forward until like end of twenty twenty six and beyond?

Suresh Salahyan, Co-Founder and CEO, Ava Technologies: Yes. So as we mentioned earlier, our goal is to obviously install manufacturing capacity in the hundreds of thousands of units to really be able to satisfy the demand that we see in the market from our customers. Our target this year is just to start this year for our manufacturing capacity install, but I can tell you that our line as it’s being installed, is already able to go north of $200,000 as we install that and able to expand that. And that’s something we already have plans for as we go around installing this manufacturing capacity. So our ability to produce at significant volumes for each, this is just one line is going to be crucial.

And one of the reasons we can do that is actually because if you look at our system, what we have been able to do with Avis and then Avis Ultra is reduce the components that goes inside of lidar, let’s say if you compare it to and contrast it to, but let’s say a typical lidar or time of flight technology, You may have many tens or hundreds of components and modules, where what we see with FMCW, what we have done at AVA has been able to reduce that to a handful of key modules. And that significantly reduces the complexity of the product. We have had very positive feedback from the OEMs. It has contributed to some of the success that we’ve had so far. Some have even commented that this is kind of reduced to the max in terms of complexity at the system level.

So we see that opportunity to be able to really make this for us to make this fully automated is not going to be that much of a huge challenge for us. So that’s why from the beginning of the design, we’ve been able to actually get the system level complexity to a level where it’s straightforward to be able to manufacture in automated fashion. All of that, what I’m saying is ability for us to increase our capacity system level is already in our plans and it’s something that we know how to do. And then our focus is on scaling our manufacturing at the module or silicon level to match that up, which obviously that is something that is also a known quantity that we know how to do. So hopefully that answers your question.

Jess, Conference Facilitator: It appears we have no further questions at this time. This will conclude the AVA Technologies fourth quarter and full year twenty twenty four earnings conference call. We thank you for your participation. You may disconnect at any time.

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