Innoviz Technologies Ltd. Q1 FY2025 earnings call

• Record Q1 revenues of $17.4 million and gross margin of 40% achieved.
• Entered into an approximately $80 million NRE payment plan in December, with an extension to ~$95 million last week.
• Partnered with Fabrinet for mass production of InnovizTwo platform, leveraging Fabrinet's automotive grade manufacturing capabilities.
• Existing Level 3 and Level 4 programs on track, with accelerating robotaxi deployments, including VW's ID. Buzz shuttles to be equipped with InnovizTwo LiDARs.
• Growing collaboration with NVIDIA on Hyperion platform and progress with major OEMs.
• Strong traction in automotive and non-automotive applications, with samples shipped and software/hardware kits developed for smart city, safety, etc.

In Q1, Innoviz reported record revenues of $17.4 million, which is approximately 3x sequentially and 2.5x year-over-year. Gross margin was approximately 40%, both at record highs. The revenues were driven by a combination of NRE payments from key customers, with an extended NRE payment plan to approximately $95 million. The NREs formed a significant portion of the revenues, and the bulk of cash payments from the plan are expected in 2025 and 2026. Revenues also benefited from sales of LiDARs to new and existing customers.

• Expect more than twofold revenue increase in 2025 to $50 million to $60 million, back-end loaded due to customer timelines.
• Expect margin fluctuations.
• Continued focus on tightly managing expenses to drive down cash burn.
• Target 1 to 3 new programs in 2025.
• Previously noted $20 million to $50 million in additional NRE bookings, with a portion already locked in.

• U.S. tariffs situation remains dynamic, but currently expected to have limited impact. Innoviz is monitoring the situation closely and leveraging Fabrinet's multiple manufacturing locations for flexibility.

Q: On robotaxis, what share and market position does Innoviz think it will have in the broader set of AVs globally (excluding China)?

A: Omer Keilaf stated that working with strong platform players like Mobileye, the new deal between Uber and Volkswagen will help scale faster. With the removal of barriers on autonomous taxis on the road, first mover advantage is important, and Innoviz expects to be a meaningful player.

Q: On financials, about gross margin and NRE programs' typical margins and what was unusual in Q1's margin?

A: Eldar Cegla said Q4 gross margin was 8.9% and Q1 was 40% due to the relative percentage of NRE versus units, with NREs positively influencing gross margin.

Q: On tariffs, which category LiDAR shipments fall under and preemptive actions?

A: Omer Keilaf said Innoviz doesn't fall under the 25% auto-specific tariffs, and Fabrinet's multiple global facilities provide flexibility.

Q: On partnership with NVIDIA on Hyperion platform, factors positioning Innoviz and if it's the reference LiDAR?

A: Eldar Cegla explained NVIDIA's Hyperion platform, with InnovizTwo being part of it in daily discussions with NVIDIA and customers.

Q: On product shipments and non-auto efforts?

A: Omer Keilaf said Fabrinet will increase capacity, and non-auto efforts are through integrators approaching customers, with LiDAR displacing existing technologies in some applications.

Q: On robotaxi RFQs and pipeline, and smart applications market size and software spending?

A: Omer Keilaf said pipeline is 50-50 between Level 3 OEMs and technology companies for robotaxis, and Innoviz's software will evolve to provide tools for partners in non-auto applications.