indie Semiconductor, Inc. Q2 FY2025 earnings call

• Total revenue for the second quarter was $51.6 million, above the midpoint of the outlook. - Automotive market analysts are more optimistic with global light vehicle sales forecasted to grow in 2025. - Flagship 77 gigahertz radar chipset is near production ramp with positive feedback from lead Tier 1 customer. - Vision processor iND880 entered production at a leading Chinese OEM for a camera monitoring system and secured additional design wins in China's electric vehicle market. - In-cabin user experience products had notable wireless charging design wins in Japan, India, etc. - Announced the strategic acquisition of emotion3D, a leader in perception software for automotive vision applications, with $20 million cash at closing and potential earn-out of $10 million over approximately an 18-month period.

indie achieved total revenue of $51.6 million in the second quarter, which was above the midpoint of the outlook. In the automotive segment, there were progressions in radar and vision design wins. The vision processor iND880 entered production at a leading Chinese OEM for a camera monitoring system and secured additional design wins. In industrial markets, iND880-powered cameras were shipping in humanoid robots. For in-cabin user experience, there were notable design wins in wireless charging. The Photonics group secured design wins in quantum communications, and the acquisition of emotion3D was announced.

• For the third quarter of 2025, expected revenue is in the range of $52 million to $56 million. - Continued progress towards achieving profitability with focus on operating expenses. - Acquisition of emotion3D is expected to have a meaningful positive gross margin impact across the ADAS product range.

• Policy volatility which creates hesitation in OEM decision-making. - Regulatory changes around new public offerings for technology companies in China could impact plans.

Q: Curious on the Emotion acquisition and if it's the first instance of software licensing revenue for indie?

A: Yes, this is really the first major ingression into generating a meaningful, licensing stream from the software that runs on our processors. We have made money from software deployments in the past, but it's been mostly in the form of license fees and support fees.

Q: Update on radar and vision design wins, magnitude of ramp and impact of tariffs?

A: The larger share of where we would ship radar components is outside the U.S. There are some cases where it would cross into that border, but it's relatively limited. In terms of the magnitude of this, remember, these products are high ASP and they are typically going to be 4 per car. So we should easily be in the sort of $25 to $30 range of ASP per car that's shipped. The ramp could go significantly quickly. And the lead customer that we have who is facilitating the drop into the market is well positioned in that space and has a large market share.

Q: Update on Bosch and Ficosa timing, CFO hunt?

A: The programs that we're depending on are all on track. Bosch is at the point now where we're beginning to see trickle orders coming in from those guys, for those programs. Ficosa remains a little bit delayed as it was in the case when we reported last quarter. CFO search is ongoing. Nothing to report yet.

Q: Photonics and quantum customers, road map, production expansion?

A: We've seen the greatest interest initially in quantum communications for the quantum key distribution, and we have many active engagements going in that space, also which have already generated some revenue. The same goes for quantum compute applications with 5 of the 6 techniques that can be used to make quantum computers relying heavily on optical components, all of which we're able to supply. All the proposed product that we have for quantum areas are already existing products actually with some existing capacity. So we are -- we can ramp up the production as needed.

Q: Emotion3D acquisition, how soon revenue can be generated, market size for photonics and quantum?

A: We will run them on our chips, and we will sell them alongside each other, but we don't intend to give them away. Little too early to tell. They're quite small right now. They have some very good wins. The total quantum photonics market is expected to be between $3 billion and $5 billion by 2030.

Q: Cash burn and cash use after buyback and acquisition?

A: We are largely on track with the cash burn from operations that we mentioned in the last quarter of around $25 million. We burned around $10 million this quarter. We have $15 million to go over the course of the next 2 quarters, which should get us over the line. The cash burn for the acquisition is about $20 million, which is in addition to that. And as such, nothing really has changed relative to where we were last quarter.