Arbe Robotics Ltd. Q4 FY2024 earnings call

• Business highlights: Focused on radar evolution, innovation, and delivering cutting-edge solutions. Collaborations with Zenseact, NVIDIA, HiRain technologies, and a leading European truck manufacturer. Fundraising of nearly $17 million. Progress in product development and customer relationships.
• Financials: Reviewed fourth quarter and full year 2024 financial results, including revenue, expenses, margins, and balance sheet details.

In the fourth quarter of 2024, total revenue was $0.1 million compared to $0.35 million in the fourth quarter of 2023. For the full year of 2024, total revenue was $0.8 million compared to $1.5 million in 2023. Backlog as of December 31, 2024 was $0.3 million. Gross margin loss for Q4 2024 was $0.2 million, and for the full year 2024 it was a $0.8 million loss. Operating expenses in Q4 2024 were $12.6 million vs $11.9 million in Q4 2023, and full year 2024 operating expenses were $48.9 million vs $46.8 million in 2023. R&D expenses in Q4 2024 were $9 million vs $8.4 million in Q4 2023, and full year 2024 R&D expenses were $35.1 million vs $34.1 million in 2023. Operating loss in Q4 2024 was $12.8 million vs $12.1 million in Q4 2023, and full year 2024 operating loss was $49.7 million vs $46.9 million in 2023. Adjusted EBITDA in Q4 2024 was a loss of $9 million vs $8.2 million in Q4 2023, and full year 2024 adjusted EBITDA was a loss of $33.3 million vs $32.5 million in 2023. Net loss in Q4 2024 was $12.2 million vs $9.3 million in Q4 2023, and full year 2024 net loss was $49.3 million vs $43.5 million in 2023. As of December 31, 2024, Arbe had $24.6 million in cash, cash equivalents and short-term bank deposits; post-fundraising in January 2025, cash was above $70 million.

• 2025 annual revenue expected in the range of $2 million to $5 million, weighted towards the end of the year.
• 2025 adjusted EBITDA projected to be in the range of $29 million loss to $35 million loss.
• Goal to pursue four design-ins with automakers in 2025.

• Broader economic shifts leading to short-term delays in automakers' rollout of advanced driver assist systems.

Q: Thanks Kobi. Thanks Karine. Congrats on the funding's and the position here. As we look at the 2025 revenue forecast, toward the end of the year, which [technical difficulty] the $1 million-plus revenue quarters that you're expecting as you go into the 2026 ramp?

A: Well, as we said, there is two or three leading projects that are in the final stages of maturing. One is Tianyi, the non-automotive. One is the trucks in Europe, and the third and most important one is with HiRain with the car manufacturer – with the Chinese car manufacturer. All of them, we expect to start shipping chips as soon as we will have full production.

Q: Okay. That helps. Great. And the update on the – I guess, as opposed to the end of 4Q, the current cash balance and the share count?

A: Yes. So currently, it's above $70 million, about $73 million, and the current cash count is the 85.7 million... shares count.

Q: 85.7 million. Okay. Got it. And then lastly, maybe, Kobi, the China EV market, can you update us on the opportunity there? We know that market is doing well. Where might you see initial traction there?

A: So I think, as you said the Chinese market is – especially on the EV is doing well. And I think all of the Chinese car manufacturers that were focusing on launching first generation of self-driving services, which is more or less advanced adaptive cruise control are now looking into achieving kind of hands-free eyes of driving. And for that, they are looking for radar like an imaging radar together with the camera to solve the problem.

Q: Hi, everyone. Thank you for taking my questions. Kobi, could you just sort of describe to us a little bit of the – what's happening within the OEMs that you're having discussions with? To what extent are they evaluating other offerings from OEMs? Or do you feel like you're already on the strong path to converting these discussions into wins over the next, call it, 12 months?

A: I think – so let's divide it between China and the rest of the world. On the rest of the world, all of the evaluations are in the final stages. We are short listed in most of them with one competitor and some of them with two competitors. Again, it's not us, of course, it's Magna our Tier 1. And the other chipsets that are available in the market is NXP that the radar is done by Continental and Valeo that the chipset is done by Mobileye. We know that we have advantage on both of them in terms of performance or price. So with Continental, we have a better performance and more or less same price. With Mobileye, we have same performance more or less and much – and a huge advantage on price.

Q: And maybe for Karine, you've obviously given your 2025 EBITDA outlook. Can you just help us understand the glide path for OpEx to the extent you can over the next couple of few years?

A: So as we mentioned, it's between $29 million to $35 million guidance, which is middle range is about $32 million, $33 million of OpEx. We expect this to be quite similar for the next couple of years. And maybe just to add the additional investments, which we carry in our next generation and related costs associated with it. So additional increase in investment between $5 million to $15 million over those two to three years coming in addition to our ongoing OpEx expenses.