Earnings call transcript: Luminar’s Q4 2024 revenue jumps 45%, stock dips

Luminar Technologies (LAZR) reported its fourth-quarter 2024 earnings, revealing a significant revenue increase but falling short on earnings per share (EPS) expectations. The company’s revenue reached $22.5 million, surpassing forecasts of $17.75 million, while EPS came in at -$1.42, missing the expected -$0.14. Despite the revenue beat, Luminar’s stock dropped 13.26% during regular trading hours but rebounded 7.32% in aftermarket trading.

Key Takeaways

• Q4 revenue increased by 45% sequentially and 2% year-over-year.
• EPS missed expectations significantly, contributing to initial stock decline.
• Luminar shipped over 4,000 Iris sensors in Q4, totaling 9,000 for the year.
• The company unveiled the next-generation Halo lidar platform.
• Stock rebounded in aftermarket trading, reflecting mixed investor sentiment.

Company Performance

Luminar Technologies demonstrated robust revenue growth in Q4 2024, with a 45% increase compared to the previous quarter and a 2% rise year-over-year. The company shipped over 4,000 Iris sensors in the quarter, contributing to a total of 9,000 units for the year. Luminar’s focus on innovation was highlighted by the unveiling of its next-generation Halo lidar platform, which promises improved performance and cost efficiency.

Financial Highlights

• Revenue: $22.5 million, up 45% quarter-over-quarter, 2% year-over-year
• EPS: -$1.42, missing forecast of -$0.14
• Gross profit: $12.5 million (GAAP), $14 million (non-GAAP)
• Cash and liquidity: $233 million at year-end

Earnings vs. Forecast

Luminar’s revenue of $22.5 million exceeded the forecast of $17.75 million by approximately 26.8%. However, the EPS of -$1.42 fell short of the expected -$0.14, marking a significant miss and highlighting ongoing profitability challenges. This discrepancy between revenue and EPS performance reflects the company’s investment in new technologies and restructuring efforts.

Market Reaction

Following the earnings release, Luminar’s stock price fell by 13.26% during regular trading, closing at $7.24. The stock experienced a partial recovery in aftermarket trading, rising by 7.32% to $6.74. This volatility suggests mixed investor reactions to the earnings miss and revenue beat. The stock remains close to its 52-week low of $4.475, indicating ongoing market skepticism. InvestingPro analysis shows the stock trades with a beta of 1.74, indicating higher volatility than the market. Despite recent challenges, InvestingPro’s Fair Value analysis suggests the stock is currently undervalued. Discover more insights and access comprehensive valuation metrics with an InvestingPro subscription, which includes detailed analysis of over 1,400 US stocks.

Outlook & Guidance

Looking ahead, Luminar projects a 10-20% revenue growth for the full year 2025 and anticipates increasing sensor shipments from 9,000 in 2024 to between 30,000 and 33,000 in 2025. The company aims to reach profitability potentially after 2026, driven by the continued development of the Halo platform and upcoming vehicle launches with partners like Volvo and Polestar. While the company maintains a healthy current ratio of 3.01, indicating strong short-term liquidity, InvestingPro data reveals an overall Financial Health Score of 1.53 (WEAK), suggesting continued challenges ahead. The company’s market capitalization stands at $209.77 million, reflecting the market’s cautious stance on its growth prospects.

Executive Commentary

CEO Austin Russell emphasized the inevitability of lidar technology in vehicles, stating, "Lidar in every vehicle is inevitable. It’s just a matter of development progress and time." CFO Tom Fenimore discussed the company’s conservative approach, noting, "We want to be conservative until we see more proof points of a sustained ramp in our customers’ production volume."

Risks and Challenges

• Supply chain disruptions could impact sensor production and delivery.
• Market saturation in the lidar industry may pressure pricing and margins.
• Geopolitical tensions could affect manufacturing and supply chain resilience.
• Achieving profitability remains a key challenge amid ongoing investments.
• Competition from other lidar providers could impact market share and growth.

Q&A

During the Q&A session, analysts focused on Luminar’s collaboration with NVIDIA’s Hyperion platform, geopolitical manufacturing challenges, and the company’s conservative volume projections. Executives clarified development milestones for the Halo platform and discussed the order book’s robustness, reflecting cautious optimism about future growth.

Full transcript - Luminar Technologies (LAZR) Q4 2024:

Aileen McAdams, Head of Investor Relations, Luminar Technologies: Welcome, everyone, to Luminar’s fourth quarter of twenty twenty four business update call. My name is Aileen McAdams, and I’m Luminar’s head of investor relations. With me today on the call are Austin Russell, Luminar’s founder and chief executive officer, and Tom Fenimore, our chief financial officer. As a quick reminder, this call is being recorded. You can find the press release and the presentation that accompanies this call on our website at investors.luminartech.com.

In a moment, you’ll hear remarks from Austin and Tom followed by a Q and A session. Before we begin our prepared remarks and Q and A, let me remind everyone that during the call, we may refer to non GAAP and GAAP financial measures. Today’s discussion also contains forward looking statements based on the environment as we currently see it and as such does include risks and uncertainties. Please refer to the press release and the presentation for more specific, for more information on the specific risk factors that could cause actual results to to differ materially. With that, I’d like to introduce Luminar’s founder and CEO, Austin Russell.

Again, conference. Austin?

Austin Russell, Founder and CEO, Luminar Technologies: Hey. Can you hear me okay?

Aileen McAdams, Head of Investor Relations, Luminar Technologies: Yep.

Austin Russell, Founder and CEO, Luminar Technologies: Oh, perfect. Perfect. Alright. Well, good afternoon, everyone. I’m calling in from, just outside of NVIDIA’s GTC in Silicon Valley, where we’re showcasing some of our lidar and Sentinel software on, and with NVIDIA’s automotive platform to, to OEMs.

So good traction there. And, as a recap of today’s news, you know, excited to be able to get out there by the down performance, this quarter, and a strong finish to your end from a sales standpoint, commercial momentum perspective, and achieving the product around Luminar Halo. Excited to jump in with regards to not just what this year was, but also what 2025 has to offer and also as we look to scale up our lidar shipments by more than 200% this year. First, I wanna start today off with a little bit of a refresher of a State of the Union around lidar and Luminar before we get into some of our achievements, for this past year and what’s ahead. So at the beginning of this last year, I described how Luminar had stand at or or stood at the crossroads of two different realities.

The core of our business had never been stronger, with our technology proven and Aira successfully industrialized for a global production vehicle. Yet at the same time, we all knew the broader automotive market was challenged on timely launches of new vehicle platforms. Of course, today, you know, we stand having successfully launched in the first global production vehicle with the Volvo EX 90 being shipped with leading class technologies for the first time at global scale, like Luminar and NVIDIA, to show the world what’s possible. Of course, later on last year, you know, after the kickoff of the beginning, we unveiled Halo, during Luminar Day to be able to show how we’re gonna scale it to global stage. We’ll talk a little bit more about that.

So those in the automotive industry know and fair to say that it’s undergoing a seismic shift with the introduction of new technologies, you know, ranging from electric powertrains to advanced compute to lidar on new vehicle platforms. And introducing any one of those kinds of technologies to future vehicles is a major undertaking, much less multiple at the same time into what automakers are calling software defined vehicles. This is a monumental, undertaking with complexity that cannot be overstated, while also driving significant disruption up and down value chains. And it’s no secret that this result was such that many automakers had taken longer than their initial targets a few years ago to launch these new vehicle platforms as they collaborate with a differentiated supply base and develop centralized vehicle software systems from scratch. With that said, one thing is very clear.

Compared to a few years ago or even recent history, more automakers than ever are planning to integrate things like lidar, AI, and advanced computing into their next generation vehicle lineups, with the majority of them expecting to do so by the end of the decade. The question is no longer if lidar is a relevant technology for the industry, but rather when it will become standardized across vehicles, just like other safety enhancing technologies in the past like radars, cameras, airbags, seat belts, or even today, new technologies like GPUs in vehicles. And unlike the electronics industry with quick pace roll ins and outs of products, the automotive industry is one of those very high barrier to entry but also very high barrier to exit industries. It takes a substantially more conservative and decisive approach to integrating and rolling out new technologies. Time and time again, it’s generally a ten to twenty year adoption cycle to when the first new technologies are introduced to when they start to become standardized or even eventually mandated on vehicles.

We witnessed it with everything from mobilized vision technologies to what’s happening with, you know, the recent compute integrations to, say, for example, automatic emergency braking capabilities. So the automotive industry is not like that in the sense that, say, your next generation phone or tablet or VR headset is introduced in consumer’s hands year after year. These technologies take years to be able to be developed, much less to automotive grade qualifications, tested, validated, and integrated into platforms, and especially when those technologies are safety critical like lidar. This is a highly complex process, and people’s lives are at stake in the industry, so it moves at a very deliberate pace. And I truly believe that just like those other technologies introduced to automotive that you described before, lidar in every vehicle is inevitable.

It’s just a matter of development progress and time. And this sentiment has been echoed by industry leaders, you know, that we’ve seen both privately, to us as well as publicly, on a number of occasions. And with a recent example, being, for example, Nissan, just on their most recent earnings call, they specifically spoke around revolutionizing autonomous driving technologies and next generation collision avoidance features, utilizing lidar for widespread standardization, first with them and then the broader industry. And I’m frequently asked the comparison is made of what’s the differentiation specifically for Luminar and Luminar’s technology and Lidar. And, you know, it’s it starts off with, I would say, what we see in the industry is a little bit of a bifurcation, to what you would call a kind of a premium segment for the market and then a more lower cost commodity segment for the market, that particularly, we see gains some traction notably in China.

And, you know, as a reminder, one of the things that makes Luminar’s lidar unique is the fact that we built our own technology from the chip level up at a different kind of wavelength of light versus using more commodity off the shelf, proponents at nine zero five nanometers. We use them at fifteen fifty nanometers. That allows us to output orders of magnitude more pulse energy into the environment than nine zero five nanometers while maintaining eye safety, whereas nine zero five nanometers is substantially limited. That allows us to detect even some of the hardest to see objects at distances past two fifty meters in all kinds of lighting conditions and stands in stark contrast to our competitors technologies, which can generally only see those kinds of difficult to see objects at a fraction of the distances, limiting the kind of speeds the vehicles can operate as well as not maximizing the safety capabilities that can be achieved. And while some of those shorter perception distances can be helpful for lower speed autonomous driving applications, they’re insufficient to ultimately safely maneuver at higher speeds.

And that’s the fundamental difference that our lidar enables and what is required to ultimately unlock level three autonomy going beyond just the base assist design and capabilities. Of course, it still significantly and further enhances with the extra performance of the capabilities you can expect from a safety standpoint, for level two and beyond. Now what’s happening, right now in the market is that automakers and some of these platform providers, other companies, are more so initially using the lidar for these assisted driving capabilities while they develop those autonomous level three capabilities to ultimately be able to enable drivers to take their hands off, eyes off, and, you know, what, use your phone, work on your laptop, watch a movie, take a nap, you know, whatever it may be in your vehicle. And we’re starting to see some of those, you know, in global markets as well as the the the China market, in particular, exciting to see that, you know, there’s some significant adoption there as the those OEMs moving very quickly. You know, but that said, on one hand, the low performance lidar is okay for now for some of those vehicles, particularly in China, that can support level two applications, you know, when drivers remain actively engaged and the cost is fairly low, but it not be sufficient to ultimately unlock a higher level of performance and capabilities, higher levels of safety, and higher speeds.

And that’s really where Luminar comes into play. We’re ultimately building lidars that you can have those capabilities to be fully realized. And, you know, this is where we get to see significant adoption, you know, from the Western world OEMs, representing, you know, on the order of 90% of the global volume, to establish these kinds of cases and something we’re very excited about. So, of course, I think it’s important to say that as software for level three and higher capabilities to solve for and lidar’s full value is continue to be realized, we believe that that premium segment around lidar will ultimately be, you know, a a critical part of the ecosystem and a winner here. And that’s further supported, I would say, by, beyond just the performance capabilities, substantial cost reductions within what we have, like, with Luminar Halo, to be able to enable even broader widespread adoptions that ultimately surpass the other segments.

Now at Luminar, we firmly position as a leader within this high performance category with our fifteen fifty nanometer technology, And we believe that it’s really the only viable solution for looking ahead, what the requirements are for level three and beyond. And at the same time, the only solution is gonna maximize the safety capabilities for the vehicle. So this leadership position that we have in the industry is underscored by the traction we continue to see with our automaker partners and particularly with our next generation lidar, Luminar Halo. Our Iris product was there to be able to show what was possible as we developed it and successfully launched it with Volvo. And now Luminar Halo is poised to lead the industry in performance, size, and cost.

Its performance is multiples better, than those of our previous generation of products, and size a fraction thereof, it’s a multiple of the efficiency, and it’s all in a highly efficient package for seamless integration. And in working with our numerous automaker partners over the past several years, we’ve not only learned and developed the performance specifications and requirements for the products of lidar more generally, we’ve also gained an incredible amount of design and manufacturing know how and IP and have learned the distinct advantages disadvantages of every single iteration of the at the component level up, you know, from the five different generations of lidar products that we’ve gone through. So, again, ultimately, Luminar Halo is gonna be the key enabler for what we believe to be a wide spread mass adoption of lidar, and certainly in the Western world. And we’re making solid progress with our OEM partners. So we’ve demonstrated, you know, Luminar’s halo’s performance now to several OEMs and are actively engaged in coordinated development efforts.

And this is something that, we highlighted in the presentation of now. We actually have fully integrated samples of Luminar halo, to be able to to showcase, you know, with, you know, more mature point clouds that we’re continuing to develop. And today, we’re also beginning to see green shoots in the industry. You know, we’ve seen a first shift to the left by an automaker asking to pull forward the lidar rollout relative to their lidar, relative to their prior lidar plan, with an earlier vehicle platform. And we’ve been working with this automaker for several years and are excited about what’s ahead.

So the thing is what makes this possible is all around the accelerated development timeline for Luminar Halo, as well as our decision to simplify our overall product portfolio. Historically, we developed a number of different lidar related products simultaneously, you know, between the iris family of products, as well as what we have been working on in the background with Halo. With Iris initially there to be able to, primarily serve Volvo and the requirements there before, it’s forked off to, you know, dozens of other companies that we’re able to provide it to. And then, subsequently also, Iris Plus, you know, with our our lead OEM customer in that

: respect. So I would say this, is that from

Austin Russell, Founder and CEO, Luminar Technologies: a development standpoint, now with the work on Iris largely complete and Iris Plus, as, as as I mentioned, before, you know, and, from the announcement and as we’re talking about here, is transitioning to be halo from our lead customer with Iris Plus. We now have a unified platform together that is a superset of all the different OEM requirements for what’s needed in the lineup. And that allows us to have a singular product as opposed to a bunch of different variations of the same kinds of, of product, to be able to simplify our development efforts significantly, saving on cost, enhancing efficiency, enhancing speed, among other things there. This also gives us an opportunity to transition customers with Iris into series production to Luminar Halo on mid cycle refreshes. So as a result of all of those factors, we’re really all in on Halo and excited to be moving full speed ahead.

: So I would say this,

Austin Russell, Founder and CEO, Luminar Technologies: is that from a broader perspective, you know, we had historically built Luminar to be able to have the capability to develop multiple products simultaneously around the lidar side. We know as of last year from some of the different restructuring actions that we take to streamline the organization. We’ve implemented it. They’ve been largely effective and, you know, haven’t materially affected the, the overall development timeline from what we’ve had. In fact, it’s actually streamlined and sped things up in many respects.

And when it comes down to it this year, as we shift towards from developing, all these different kinds of lidar products that one unified lidar platform, we think there’s gonna be some opportunities for dramatic efficiency improvements, that we’re gonna get to realize this year. And, again, why why make this move now in terms of a a broader strategic shift in our business model? It’s all because we’re able to get our customers and our key customers on board with the Halo platform, you know, moving full speed ahead in the same direction with shared requirements. And that’s something that we’ve been working for, frankly, many years on, to be able to do and align those requirements and expectations. So we’re gonna be talking a little bit more about that, and I’ll have more to share over the coming weeks and months, about, you know, how we will reinvent Luminar, you know, more radically as an organization under this new kind of business model, less around custom developments for OEMs and more with that shared unified platform.

And really, this becomes possible because we had invested nearly $2,000,000,000 over the past decade to be able to create, industrialize and launch an entire technology platform and ecosystem and coming from the semiconductor all the way up to the lidar, up to the software levels, and have some of the best engineering and technical talent in the industry, as well as technology on the shelf because

: of those investments. So we’re now on the

Austin Russell, Founder and CEO, Luminar Technologies: other side of that investment curve, which allows us to be able to realign the business without materially affecting near term deliverables, revenues, etcetera. So in concert with our board of directors, we’re in the throes of developing that that new strategic plan for Luminar under this new business model of that unified platform and look forward to sharing more. Lastly, before I turn it over to Tom, I want to take a moment to review some of our key achievements from a business milestone standpoint and highlight some of the impressive work for the Luminar team in 2024. At the beginning of last year, we outlined four business milestones to achieve by year end. Number one was passing the final run at rate production audit to achieve a global start of production with Volvo and ramp accordingly.

Second was launching a TPK facility for additional capacity and improved cost. Number three was to unveil our next generation lidar, who later unveiled as Halo, and deliver samples to customers. Four was to expand ecosystem around our lidar. And I’m happy to say that we’ve delivered across all four of these key business milestones at a company level. We achieved the start of production for Volvo with EX90 this past year, and we’re also awarded the Volvo ES 90, which is the sedan, so to say, equivalent of the EX 90, which will go into production this year.

We also launched an expanded industrialization partnership with TPK in our transition to an asset light model for industrialization. We hosted a very successful Luminar Day where we unveiled this next generation lidar, Luminar Halo, and generated the first point cloud from Luminar Halo since while demonstrating its capabilities to customers and feedback has been tremendously positive. We did all of this while aggressively working to restructure costs as part of the business. And of course, while not without its challenges, I’m immensely proud of the Luminar team for all that we’ve achieved last year under the kind of broader macro circumstances.

: I have the utmost confidence in

Austin Russell, Founder and CEO, Luminar Technologies: our ability to execute for 2025. And today, we’re gonna be outlining a few of those key milestones achieved by the end of the year. So you can be able to to take a look. The the first and foremost is to be able to, continue to ramp the production delivery of the iris, you know, related sensors for series production customers and achieve those economies of scale, you know, with, over 200 growth associated with, our deliveries into the market. The second one was meeting the key requirements for Halo, for our customer contracts and execution.

And number three was to be able to streamline the business with the new business and operating model that we described as we have that unified product portfolio going from what developing, five different variants, you know, of of products at the same time to one with Luminar Halo. And that’s gonna help accelerate our efficiency as a business and path to profitability as well. So we remain very confident in our strategy and execution. Our technology leadership remains unparalleled in the high performance lidar space. Our customer relationships are progressing well, and while we’re pragmatic about the near term industry challenges, we’re very optimistic about the market’s long term expansion.

And as the industry continues to shift towards safer vehicles and towards level three autonomous driving capabilities, we firmly believe Luminar is exceptionally well positioned to capitalize on this enormous opportunity ahead. And with that, I’ll turn it over to Tom to discuss financials. Thank you.

Tom Fenimore, Chief Financial Officer, Luminar Technologies: Great. Thank you, Austin. Let’s start by reviewing Q4 financial results. Revenue for the quarter came in better than expected at $22,500,000 up 45% quarter over quarter and 2% year over year. The primary driver of this revenue growth was higher sensor sales, both to Volvo and non series production or adjacent market customers.

During Q4, our sensor sales to adjacent market customers increased substantially, mainly due to a large order from one of our customers. While we expect this customer will continue to generate significant revenue in the longer term, we expect the shipments during the most recent quarter satiated their near term demand. During Q4, we shipped over 4,000 Iris sensors to our customers and over 9,000 for the calendar year. The vast majority of these sensors were shipped to Volvo. Moving on to gross margin.

For the quarter, we reported positive gross profit of $12,500,000 on a GAAP basis and $14,000,000 on a non GAAP basis. Three factors drove our positive gross margin. First, we reversed $10,000,000 of NRE contract losses accrued in prior quarters related to our IRIS plus development work. As Austin mentioned in Q4, we transition our lead IRIS plus customer to Luminar Halo development, allowing us to terminate this IRIS plus development work and reverse that contract loss accrual. The second factor that drove pro, positive gross margin was planned production downtime at our Mexico facility to align our production with our customers demand.

This allowed us to ship sensors from inventory that were already marked down to ASP levels. We estimate this was an approximately $4,000,000 benefit to gross profit during the quarter. The third factor was the previously mentioned large sensor shipment to an adjacent market customer, which was done at significantly higher ASPs than what we sell for We estimate that this was about another $4,000,000 benefit. Some of these factors like production downtime will not repeat going forward and others like sensor sales to non series production con- customers will repeat but will be choppy on a quarter to quarter basis. However, we are encouraged that we generated a positive gross profit during the quarter.

While reaching gross profit positive is an important milestone for us, we are guiding to be modestly gross margin negative for each quarter in 2025, and I’ll discuss more of that later. Now, to discuss and give an update on our cost actions as well as our OpEx. Last year, we announced two major restructurings, one in April and one in September that allowed us to significantly improve our cost structure. The April actions were expected to achieve $80,000,000 in total cost savings, about half in cash, half in stocks by the end of twenty twenty four. And the September actions were expected to achieve an additional $80,000,000 almost entirely in cash by the end of twenty twenty five when fully implemented.

These actions have started to yield demonstrable results in our financial performance. Relative to Q1, before our cost actions were implemented, our non GAAP OpEx, a good proxy to measure these cash savings, declined by $72,000,000 on an annualized basis. Our quarterly stock based compensation approximately for the stock savings declined by about $80,000,000 on an annual basis over the same time period. Moving on to cash in our balance sheet. We ended the year with $233,000,000 in cash and liquidity, which includes $183,000,000 in cash and marketable securities and $50,000,000 on an, on an, an, an, an, an, an, an,

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Tom Fenimore, Chief Financial Officer, Luminar Technologies: an, an, an, an This, year end, actual numbers were in line with our guidance. Including the two zero nine available on our equity finance program, which reflects a $75,000,000 upsize we’re going to do shortly after earnings. This amounts to total access to liquidity of $442,000,000 Our change in cash during the quarter was $16,000,000 1 point 6 million dollars well below the $52,000,000 from Q3. This improvement was primarily driven by proceeds from our equity financing program, which amounted to $48,000,000 to the quarter, and was partially a function of timing as we only did 6,000,000 in Q3. The proceeds generated under this program during the quarter continue to demonstrate our access to the capital markets and remain an avenue we can pursue to bolster our liquidity if and when needed.

Free cash flow for the quarter was negative 60 2 million dollars slightly higher than the negative 50 8 in Q3. The increase was almost entirely driven by $8,000,000 of higher cash interest during the quarter from our August debt transaction. We expect to file an amended S3 and prospectus supplement associated with the extension of our equity finance program and stock to be granted to one of our strategic suppliers over the next few days. I wanted to touch base on our order book. In the past, we disclosed forward looking order book as an alternative financial metric that we updated annually as a means by which the investment community can measure our commercial progress and opportunity.

Now that we have achieved series production, we are no longer going to update this on an annual basis and instead replace it by disclosing, our sensors shipped, which we believe is a better metric to measure our progress. This is consistent with what other lidar companies that have reached series production stage have done. For full disclosure, our forward looking order book as of 2024 would be lower relative to 2023. However, we believe this is a temporary phenomenon due to the halo transition with our key customers from the Iris family. As a reminder, we establish a very high order book for what was included in the order book and not.

Specifically, only serious production awards or equivalent were included and we exclude customer contracts that are only in the development stage. While reception for Luminar Halo has been significant, the product still remains in the development phase with a number of series production award opportunities pending completion of certain technical milestones. To be absolutely clear, we continue to work with all of our customers from last year, have not lost any customers and we expect the decline in the order book in 2024 to be temporary as we complete the outline developments, milestones for Luminar Halo and hopefully with anticipated better economics. Our commercial opportunity for Halo remains strong. We have entered into Luminar Halo development contracts with two major automakers since our last earning calls and have secured a series production equivalent contract with a major construction and off highway machinery manufacturer.

More details to come here shortly on those. Moving on to 2025 guidance. For 2025, we expect a full year, our full year revenue growth to be in the range of 10 to 20%. This growth will be almost entirely driven by a greater than three times forecasted increase in our sensors from approximately 9,000 in 2024 to a range that we’re currently forecasting of call it 30 to 33,000 this year. This growth in sensor shift will be offset by the lower revenue from the non automotive customer we discussed on our Q3 call and basically the full year impact of that renegotiated contract.

We are being conservative in our revenue guidance and are basing our 2025 censorship that a rather significant call it about a 50% haircut to the latest IHS latest forecast. We want to, you know, we’re, we want to be conservative until we see, you know, a more proof points of a sustained ramp in our customers production volume. For the first quarter, we expect revenue will decline quarter over quarter and be closer to Q3 twenty four than Q4 levels. This is driven by basically the lower, sequential center sales to that non series production customer we discussed earlier. In the past, we talked about reaching a mid 30,000,000 revenue run rate on a quarterly basis.

Given the recalibrated contracts as well as lower, you know, assumed volume for series productions, we don’t think that that is going to happen this year. We expect to generate a negative non GAAP gross margin on a quarterly basis throughout this year, driven by the lower sensor sales to non series production customers, as well as resumption of our series production facility in Mexico and some modest tariff headwinds. More specifically, we expect negative quarterly gross loss to average about $5 to $10,000,000 per quarter. While we made progress on improving our sensor economics and COGS overhead through various cost reduction efforts, the unfortunate reality is that the lower than expected production volume remains a major hurdle for us in achieving the necessary economies and scales to achieve sustainable positive gross margin. We may generate positive gross margin from time to time like we did this most recent quarter, but this will be highly dependent on censorship to non series production customers which remain lumpy.

I briefly want to address the current tariff environment. Geopolitical tensions are creating significant certainty for companies with global supply chains like Luminar. At this point in time, we have determined that our lidar sensors we ship from Mexico to The US are likely subject to the most, to the recently implemented tariffs. That said, even if we take no op, actions to mitigate this exposure, we expect the impact on our gross profit to remain relatively modest. However, it is important to note that we remain one of the only lidar suppliers with a global footprint across North America and Asia, and we are actively exploring alternatives to modify our production footprint accordingly.

For 2025, we expect non GAAP OpEx will decline from the mid 50,000,000 range in Q1 to the mid to high 30,000,000 range by the end of the year as we continue to make progress on our cost reduction efforts. We expect to end fiscal year twenty five with greater than 150,000,000 of cash and liquidity, which includes cash and marketable securities and our $50,000,000 line of credit. We expect to issue on average about $30,000,000 per quarter. It’ll be a little bit higher, a little bit lower depending upon the quarter, under our equity financing program. For fiscal year twenty five, we expect our free cash flow to improve driven by our cost reduction efforts.

This brings me to my final topic of our capital structure and cash runway. I’ll start with an update on our debt profile. In August of last year, we executed an exchange transaction which reduced our convertible debt by nearly $150,000,000 while also raising $100,000,000 of new debt capital. Since August, our convertible debt declined by $38,000,000 through early conversions of our 02/1930 convertible bonds, leaving about $237,000,000 outstanding on our convertible debt that matures in 02/1930. In total, our debts now stands at approximately five forty million versus $625,000,000 a year ago.

We plan to start chipping away in a disciplined manner at the remaining $2.00 $3,000,000 of convertible debt maturing in 2026 and doing in a way that we don’t think is going to materially impact our cash or liquidity profile. We believe our current cash and liquidity position and equity financing program provides us with sufficient runway through at least 2026. I mentioned in the past that we may require an, approximately an additional $100,000,000 of additional capital to reach profitability beyond that. We continue to execute aggressively in our cost reduction plan to lower that potential funding requirement. While we’re in no rush to execute a transaction in the near term, we are also evaluating our options for raising additional capital and will continue to actively monitor the markets.

That concludes our prepared remarks. I’d once again like to thank the entire Luminar team for a great 2024 and continued execution progress. With that, I’ll hand it back over to Aileen to start our Q and A session.

Aileen McAdams, Head of Investor Relations, Luminar Technologies: Thanks, Tom. We’re now gonna get into our Q and A with our analyst community. Our first question is going to come from Josh Patwa

: at JPMorgan.

Josh Patwa, Analyst, JPMorgan: Thank you for taking my questions. Austin, great to see you at the GDC. In that vein, I’m wondering if there’s any news regarding the reference architecture for NVIDIA’s Hyperion platform and if Luminar is expected to continue as the reference lidar sensor as it was on earlier NVIDIA platforms. Thanks and I have a follow-up.

Austin Russell, Founder and CEO, Luminar Technologies: Absolutely. And, I think as as we mentioned earlier is that, you know, we’re in progress right now of shifting the broader customer base that we’ve had across the board, which is, you know, what, like, over a dozen different partners, you know, from the IRS family of products over to Luminar Halo. And, so I I think we certainly expect to be able to, you know, be in the lead to be driving this when it comes to, you know, Hyperion platform or other kinds of partners that we’ve been working with accordingly, for the Halo transition as well. Ultimately, Halo’s gonna be driving significantly better economics and as opportunity for, I would say, more widespread and mainstream adoption, whereas, Iris was really sort of proving out what was possible. But, the key is that, it’s not these aren’t some theoretical efforts there too.

We’re very excited to be showcasing some of these capabilities already as it stands today. And, if any of you guys are at GTC, we encourage you guys to come by and see it live with us at NVIDIA, at our booth there.

Josh Patwa, Analyst, JPMorgan: Great. That that’s very helpful. Just as a follow-up, historically, we’ve heard from Luminar and some of your industry peers about a metaphorical barrier preventing Chinese suppliers from securing global OEM contracts, you know, due to escalating geopolitical tension. However, a recent success by one of your Chinese counterparts suggest that the competitive landscape might be more complex than we would have previously anticipated. Curious if you could just discuss the competitive dynamics, particularly regarding, you know, which competitors you encounter most frequently during the sourcing processes.

And it would also be helpful if you could highlight areas where Luminar excels and where it may face challenges compared to the competition. Thank you.

Austin Russell, Founder and CEO, Luminar Technologies: Yeah. Absolutely. And, as it relates to the China market in particular, I think that, well, to the credit of, of China, you know, there has been significant and rapid development, you know, within that market for lidar adoption, where, you know, what, there’s now millions of vehicles, you know, being shipped accordingly, even with some of the more lower performance, lidar technologies that are equipped on those. And I think that’s a little bit of a foreshadow for what happens in the Western world. But I would say more broadly, I think, the Western and Eastern ecosystems around it have different kinds of product requirements, when it comes to an OEM standpoint, different kinds of performance requirements, different kinds of safety requirements, and different kinds of capabilities they ultimately wanna be able to deploy.

I also think that, you know, really the the the Eastern world has been moving more quickly, you know, for the initial adoption than the Western world, whereas the Western world is gonna be the thing that ultimately delivers most of the volume being responsible for on the order of 90% of the global volume. Our goal is to sort of position ourselves as the Western world leader, and we see is there is sort of a dividing ecosystems there. I think over the last three years, it’s actually become probably significantly more divided and isolated. And I think this is largely what OEMs are preparing for in a dividing world. There’s a lot of conversation around, you know, hey.

We don’t want anything with a single line of, you know, Chinese code in it, you know, for example, where they’re saying that it could be at risk of, well, their entire vehicle platform if they start doing other kinds of development engineering work in China. With that said, I I think that there’s obviously, some kind of speculation of if there there really haven’t historically been any, production wins, you know, for companies within China. You know, outside of that in a material capacity, I there there there aren’t today either as far as we’re aware. But, but that you know? So maybe, I heard a lot of different things.

I don’t always believe everything that’s that you read. But, but that said, when it comes down to it, I think, to the credit of the Chinese ecosystem there, it starts to show what is possible. We’re gonna continue to position ourselves as the premium player in the market, and I think that’s gonna really continue to resonate from for the greatest level of safety application and the biggest level of widespread adoption, for the Western world. And, that’s what we’re doubling down on.

Josh Patwa, Analyst, JPMorgan: Understood. That’s great color. Thanks. Thanks, Austin, and good luck.

Austin Russell, Founder and CEO, Luminar Technologies: Thank you.

Aileen McAdams, Head of Investor Relations, Luminar Technologies: Thanks, Josh. Our next question is going to come from Winnie Dong at Deutsche Bank.

Tom Fenimore, Chief Financial Officer, Luminar Technologies: Hey, Winnie.

Winnie Dong, Analyst, Deutsche Bank: Hi. Thanks for taking my question. Question, the first one is on the Luminar milestones that you’re looking for this year. I was wondering if you can elaborate on maybe some sort of specific customer development you might be looking for. Is there any specific number of contracts that you might be hoping to get for SOP, during this year?

Austin Russell, Founder and CEO, Luminar Technologies: Yeah. And I and I’d say between all of our, key, you know, OEM customers, you know, everything from, you know, Volvo to Nissan to Mercedes to, you know, beyond it, you know, for all the other ones that we’ve we’ve talked about in the technology customers. There there’s generally more detailed milestones, you know, from a product standpoint that are included in those in terms of what’s needed, to ultimately successfully launch with them. And the the key is of what we’ve been doing is basically now with a lot of the work being done from the Iris family of products, transitioning that over to Halo and establishing those milestones. So we already have those, for, you know, some of those key OEMs and contracts in place today.

And, you know, that’s where we’re getting the rest of them over. You know, that really I would say the focus right now is around maturing the different, component level subassemblies, you know, for it, some of which we already have production intense subassemblies. Other ones we’re still developing, to be able to get to that stage. So, we also ultimately will want to have, halo, product samples in the hands of our, very key customers, by year end.

Winnie Dong, Analyst, Deutsche Bank: Yeah. Just just maybe a follow-up to that. As you as you look into to streamline the operations, I’m just curious how that is going to, you know, impact your current series production of Volvo or perhaps not. I’m just curious how that change will happen. Yeah.

Tom Fenimore, Chief Financial Officer, Luminar Technologies: So, Winnie, we’re doing this in a way where it shouldn’t have any material impact on this. You know, you rewind to where we were three years ago, we were developing three products at once, Iris, Iris Plus Halo. Most of the work on Iris is substantially done by the end of the year. I wouldn’t say it’s going to be 100% done, but I would say, you know, there’s going to be, I would say more maintenance level type of work on that. Iris Plus as we talked about, we’re no longer working on that.

We transition our lead customers there directly to Halo. So as we kind of get towards the end of this year, there’s going to be one product that the team’s going to be working on, which is Halo. And so that, that is going to allow us to free up, I would say, you know, even more resources, streamline the operations more, really narrow our focus and it shouldn’t really impact, any of the execution or any of the production on IRIS.

Winnie Dong, Analyst, Deutsche Bank: Thank you. And then in terms of the OpEx and the cost reduction, thanks for providing the call on outlook. Can you give us a bit more detail in terms of, you know, the incremental actions that, you know, will be done this year to drive out that cost? I

Tom Fenimore, Chief Financial Officer, Luminar Technologies: think it’s yeah. Yeah. If you go back to what we announced in April, that is substantially complete. When you look at what we did in September, I would say we’re about halfway done there. And, you know, I would say the remaining half will be, you’ll see that kind of ramp up in terms of the savings and ramp down in the app backs through the rest of the year.

And then because we’re been able to stop the work on IRIS plus that’s going to kind of be the, you know, the next catalyst to kind of streamline the organization even further for continuing and even more cost savings than what we’ve talked about historically.

Winnie Dong, Analyst, Deutsche Bank: Got it. Very helpful. Thank you so much.

Aileen McAdams, Head of Investor Relations, Luminar Technologies: Thanks, Winnie. Our next question is gonna come from Federico Merendi on for John Babcock from J. P. Morgan or from Bank of America.

Federico Merendi, Analyst, Bank of America: Good afternoon, everybody. So from the press release, I gather that your free I mean your cash burn might be around $200,000,000 in 2025. So that leaves you roughly with $100,000,000 at the end of the year excluding the credit sorry, the credit facility. So and Tom, I think you said that, you will need 100 additional million dollars to reach profitability. So does it mean that you will reach profitability sometime at the end of 2026?

Tom Fenimore, Chief Financial Officer, Luminar Technologies: Yes. Like, I first of all, I think your math is generally you know, accurate and in line with the guidance that we’d give it. I think ’26 in terms of reaching profitability, maybe a little bit too soon. I think we really need to get halo to the market given the better than expected sensor economics. So I think it, you know, it shouldn’t be too long after ’26 for us to get to that level.

That $100,000,000 we’re doing what we can to kind of continue to chip away at our cost structure to reduce that amount. As we’ve said historically, I don’t think we’re going to be able to get it all the way to zero, but we’re making good progress there to really minimize our additional capital needs to get the profitability.

Federico Merendi, Analyst, Bank of America: Understood. And, you mentioned that, you’re commencing operation with TPK, which from understanding is in China. And

Tom Fenimore, Chief Financial Officer, Luminar Technologies: But we said Asia. We haven’t necessarily said China.

Federico Merendi, Analyst, Bank of America: I think the 10 k you mentioned that the operation are in China. No?

Tom Fenimore, Chief Financial Officer, Luminar Technologies: We purposely said in our press release now Asia and we purposely said China.

: We’ve said that

Tom Fenimore, Chief Financial Officer, Luminar Technologies: we’re constantly evaluating, you know, our manufacturing footprint and supply chain and, you know, we’ll give updates on what that looks like, you know, some point later this year.

Austin Russell, Founder and CEO, Luminar Technologies: So, but Also to clarify, d DBK is, Taiwanese. Yes.

Federico Merendi, Analyst, Bank of America: No. I I I I hear, you know, that, but from what I remember, your 10 ks, you mentioned that previously it was in China. But so my my end question was, so how are you going to mask the tariff risk or potential bans from, foreign technology in The United States?

Tom Fenimore, Chief Financial Officer, Luminar Technologies: Yes, so the latter that in terms of the ban of technology in The United States, that’s something that we’re, you know, that is, I would say, a materially impact or material risk at this time for us. The tariffs and like look, the tariff landscape seems to be changing on a daily basis. So that’s something we’re looking at. Historically, not to geek out too much from a tariff side, our, the product we made in Mexico, you know, has a Mexican country of origin. You know, we’re looking at ways to kind of, you know, mitigate that tariff impact, in the near term here.

If we’re unable to mitigate it, you know, it’s gonna have a modest impact on our gross profit, not an immaterial one, modest, not based upon where everything today is significant, but we’re constantly looking at our manufacturing footprint and how we define our product to minimize that tariff impact both in the near and longer term.

Federico Merendi, Analyst, Bank of America: Thank you very much, Guy.

Austin Russell, Founder and CEO, Luminar Technologies: We also mentioned 60% of our product content comes from Thailand as opposed to Mexico. So that’s just one other factor there too that as we kind of think about the broader landscape, we don’t want to make any harsh reaction as things keep changing every week. But, you know, we’ll we’ll, I think as Tom mentioned earlier, we’re really the only company, from a LIDAR standpoint that has the truly global footprint. You know, ultimately, stuff in China, we believe will be produced for China. You know, stuff outside of that in, you know, Asia or Mexico or as that situation evolves, the river will go to different parts in the Western world.

So I think that’s that’s gonna be an important part. We have the flexibility to sort of go with the ebbs and flows of the global trade ecosystem to be able to shift according to this crazy web of geopolitics and tariffs that, we have to deal with and everyone has to deal with.

Federico Merendi, Analyst, Bank of America: Thank you, Ashley.

Aileen McAdams, Head of Investor Relations, Luminar Technologies: Thanks, Federico. Our next question is going to come from Morgan Long, on for Mark Delaney from Goldman Sachs.

Tom Fenimore, Chief Financial Officer, Luminar Technologies: Hey, Morgan.

Morgan Long, Analyst, Goldman Sachs: Hey, guys. Thanks so much for taking the questions. So well understood on the comments around, the order book disclosure. But can you try to help us better understand the implications on the backlog from the change from going, from Iris Plus to now doing the Halo platform and how that change changes like the quoting process with customers at all?

Tom Fenimore, Chief Financial Officer, Luminar Technologies: It really doesn’t change a lot, the quoting process here. You know, what happens here is because Halo is in an earlier stage of product development. And we have, I would say, you know, a more strict than others in the industry definition of what we include in the order book. We only include something in the order book if it’s an official series production award or equivalent. Halo has to kind of, you know, meet certain development milestones that are defined in our, you know, development contracts with our customers.

And, you know, when, you know, hopefully when we meet those, then that’s when they kind of, you know, reconvert back into the series production award category. So, you know, by our technical definition, because, you know, Halo, it hasn’t gone through the development process yet to get the series production more. It wouldn’t be our inner order book. But as we continue to do that, it should be replenished. The other thing I would highlight there is, Halo is, you know, going to have better unit economics than Iris or Iris Plus.

So as a replenish, it’s hopefully replenishes it at better longer term economics for the home

Morgan Long, Analyst, Goldman Sachs: team. Okay. Very helpful. And then I just wanted to double check that there’s been no change, to the timeline for HALO. Is that still expected end of twenty twenty six?

Tom Fenimore, Chief Financial Officer, Luminar Technologies: Yeah. Generally in that time frame. And so I think it’s, you know, it’s, I would say end of twenty six for, you know, targeted 2020, you know, targeted vehicle lines that have SOPs in 2027.

Morgan Long, Analyst, Goldman Sachs: Got it. Thank you very much.

Aileen McAdams, Head of Investor Relations, Luminar Technologies: Thanks, Morgan. Our last question is gonna come from Tyler Anderson on for, Richard Shannon at Craig Hallum.

: Hi, everyone. Thanks for taking my questions.

Tom Fenimore, Chief Financial Officer, Luminar Technologies: Hey, Tyler.

: I I just got here a little bit late, but for the ramp in development going on for the new Volvo, when how should we think about the ramp, like, timeline for that?

Tom Fenimore, Chief Financial Officer, Luminar Technologies: Are you are you referring to the, to the ES90? Yeah. Yeah. So I, you know, what I would say is, IHS has a, you know, in our opinion, a pretty aggressive volume ramp for the, for the ES90. In the guidance we’ve given, if you look overall, we’ve assumed about a 50% haircut to IHS.

Don’t get me wrong. I hope IHS is right and we’re wrong. But we want to be more conservative until we see a more sustainable ramp. And so I would say what’s embedded in our 2025 guidance, I would say is, is not a significant ramp in, in, in ES 90. We are prepared to do it.

When we see the customer demand, we have the capacity in place, but we’re not forecasting a significant one like IHS is in that, for the ES90. And I would say the EX90, we’ve, we, you know, that’s what started production in April of last year. We have seen, you know, a ramp up there doing Q4 and then the early parts of ’20 ’5. There is the potential for an even more higher production volume once the new China facility comes in, but I’ve we’ve been more conservative on what that ramp would have looked like as well.

: Awesome. Thank you. I appreciate it.

Austin Russell, Founder and CEO, Luminar Technologies: Absolutely. And I think, you know, we’re also trying to be super conservative more generally. We’ve also we’ve sort of learned from previous years that, you know, we we’d rather under promise and over deliver, you know, when it comes down to it. So that’s why the haircut to volumes. I mean, obviously, it’s still pretty significant growth, you know, with, over 200%, and more than that that we would expect, that we’re kind of guiding to from a series production center delivery standpoint, that that would be driving the revenue.

Obviously, the overall corporate revenue was was was, more moderated because of another kind of onetime renegotiation of a non series contract that that he talked about, from but that’s no that’s news from, you know, six months ago or whatever. When it comes to, you know, the growth there, IHS would be what the equivalent of, like, 500% growth compared to the 200% growth that we’re guiding to. So, I think it’s all all upside from here as we, you know, launch with ES 90, and we’re counting down the handful of, of months here. And then, Polestar three as well, among other vehicles. So this is kind of the the EX 90 was the vision and the start of the wave, and now it’s coming in and scaling up.

So excited to make it happen.

: Awesome. Great to hear it. Thank you, guys.

Federico Merendi, Analyst, Bank of America: Tyler.

Aileen McAdams, Head of Investor Relations, Luminar Technologies: Thanks, Tyler. That marks the end of our Q and A session. I’d like everyone or I’d like to thank everyone for sticking around, and participating in the call and for the analysts that asked the questions, and investors and other folks who’ve joined us. We look forward to talking to you guys next quarter. Thank

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