Arbe Robotics Q4 2024 Earnings Report

Arbe Robotics EPS Results

• Actual EPS: -$0.11
• Consensus EPS: -$0.10
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: -$0.07

Arbe Robotics Revenue Results

• Actual Revenue: $0.10 million
• Expected Revenue: $0.40 million
• Beat/Miss: Missed by -$301.00 thousand
• YoY Revenue Growth: N/A

Arbe Robotics Announcement Details

• Quarter: Q4 2024
• Date: 3/5/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, March 5, 2025
• Conference Call Time: 8:30AM ET

Arbe Robotics (NASDAQ:ARBE), a semiconductor company, provides 4D imaging radar solutions for tier 1 automotive suppliers and automotive manufacturers in China, Hong Kong, Sweden, Germany, the United States, Israel, and internationally. It offers 4D imaging radar chipset solutions that address the core issues that have caused autonomous vehicle and autopilot accidents, such as detecting stationary objects, identifying vulnerable road users, operation at poor lighting conditions, and eliminating false alarms without radar ambiguities. The company was founded in 2015 and is headquartered in Tel Aviv-Yafo, Israel.

Arbe Robotics Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good morning, everyone, and welcome to the Arbei Robotics Fourth Quarter and Full Year twenty twenty four Financial Results Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Mary Segal, CEO of MSIR.

[Operator]

Please go ahead.

[Miri Segal-Scharia, Founder & CEO at MS-IR LLC]

Thank you, operator, and everyone for joining us today. Welcome to our base conference call. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the Investor Relations section of the company's website. Today, we are joined by Kobi Marenko, Arbe's Co Founder and CEO, who will begin the call with a business update.

[Miri Segal-Scharia, Founder & CEO at MS-IR LLC]

Then we will turn the call over to Corinne Pinto Flomenboim, CFO, who will review the financials. Finally, we will open the call for the question and answer session. With that, I'd like to turn it over to Coby Marengo. Coby, please go ahead.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

Good morning, everyone, and thank you for joining us. I will begin by reviewing some of our recent business highlights. Throughout the year, we focused on driving a radar revolution by innovating and delivering cutting edge solutions that set new industry standards. Our commitment to pushing the boundaries of radar technology with our industry leading solutions remains strong. We take pride in the progress we have made in both product development and customer relationships expanding and enhancing our offerings.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

Many top car manufacturers are actively selecting their radar suppliers this year and we are confident that our chipset will play a key role in those discussions. In 2024, '1 of the top 10 global auto OEMs selected our chipset for its next generation imaging radar. Zentak, a Swedish AI and software company and Alvest T1 Sensrad have announced a joint exploration of four gs high resolution imaging radar to enhance safety in automated driving. We were thrilled to announce the collaboration with NVIDIA where together we are revolutionizing vehicle safety and autonomy. We are proud to showcase this groundbreaking technology at the CES exhibition in Las Vegas in January.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

Our high resolution radar integrates with NVIDIA's in vehicle computing platform to transform radar based space mapping. These technologies combine to redefine vehicle perception and decision making paving the way for what we believe will be safer and smarter mobility solutions. We look forward to future collaboration with NVIDIA. In September, HiReN Technology is one of our key team ones announced that it is in fact tracking of the development of an ADAS system for a Chinese auto manufacturer using our chipset effectively replacing lidar from the current system. The ADAS system is anticipated to enter serial production by Q4 twenty twenty five pending final approval from the OEM.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

Additionally, in 2024, we announced a collaboration with a leading European truck manufacturer to integrate our automotive grade imaging radar technology into its next generation sensor suite. This marks a significant milestone in the manufacturer transition to an advanced implementation stage. It is important to mention that our radar technology addresses the unique challenges of the trucking market such as larger size of truck, longer breaking distances and higher impact potential. Moving on, Sensual has announced that it is signed a framework agreement worth an estimated $7,300,000 to supply 40 imaging radars powered by AOVEST technology to Tianhe transportation technology in China for vehicle world cloud integration technology. This framework agreement follows an extensive year long evaluation of our advanced chipset technology.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

We believe that there are significant opportunities for growth in the non automotive market and we are happy to support Sensrad in delivering unparalleled radar solutions and driving innovation forward in such key markets. While the decision making process and development timelines are longer than initially expected, We have not received negative responses or missed any opportunities and the total addressable market continues to expand. Based on our current engagement and our ability to secure and execute contracts with leading OEMs, we estimate that by 02/1930 we can ship around 5,000,000 imaging radar chipsets to our customers. I'd like to elaborate on our successful fundraising initiatives which resulted in a total amount of nearly $17,000,000 This includes $33,000,000 raised through an Underwriting Register Direct offering, which included the exercise of a $4,000,000 over allotment option by the underwriters closed in January 2025 led by Canaccord Genuity. Dollars twenty one point five million released to the company in January 2025 from the escrow account following the conversion of convertible bonds issued on Tel Aviv Stock Exchange in 2024.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

Dollars '15 million raised in underwriting public offerings that closed in November 2024 led by Canaccord along with $500,000 raised in January 2025 from the exercise of warrants issued as part of the November 2024 offering. We are delighted to share that AWM Special Situations Fund, one of our largest shareholders, has invested in our recent fundraising round for the third time. In addition, we are happy to welcome the new investors who participated and believe in the future of Arotech. This funding provides the financial support needed to accelerate our growth, enhance the development of the next generation of our radio solutions and reinforce our market leadership. With a strong balance sheet that helps ensure our financial stability, we believe we are in a great position to grow our global presence and gain more OEM and Tier one relationships.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

In conclusion, we are pleased with the progress we have made over the past year along with the achievement of our Tier one partners and recent collaborations with key players like NVIDIA. We look forward to sharing more as we continue to move forward. Now, I'd like to turn it over to our CFO, Corinne, to go over the financials.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

Thank you, Colby, and hello, everyone. Let me review our financial results for the fourth quarter and full year 2024 in more detail. Total revenue in the fourth quarter was $100,000 compared to $350,000 in the fourth quarter of twenty twenty three. For the full year of 2024, total revenue was $800,000 compared to $1,500,000 in 2023. Backlog as of 12/31/2024 is 300,000 Gross margin loss for Q4 twenty twenty four was similar to the gross margin loss in Q4 twenty twenty three at a level of $200,000 loss.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

Gross margin for the full year of 2024 was $800,000 loss compared to a $0 gross margin in 2023. Year over year gross margin reduction is mainly related to a low level of revenue and to the increase in labor costs. Moving on to expenses, in Q4 twenty twenty four, we reported total operating expenses of 12,600,000 compared to $11,900,000 in Q4 twenty twenty three. Operating expenses for the full year of 2024 totaled $48,900,000 compared to $46,800,000 in 2023. The operating expenses increase was primarily a result of non cash share based compensation expenses.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

In addition, the increasing production ramp up related costs, the doubtful debt provision and to a lesser extent the increase in labor costs were offset by a decrease due to the finalization of costs related to our advanced production stage and the savings in our D and O insurance. Twenty twenty twenty four compared to $8,400,000 in Q4 twenty twenty three. R and D expenses for the full year of 2024 were $35,100,000 compared to $34,100,000 in 2023. Operating loss for the fourth quarter of twenty twenty four was $12,800,000 compared to a loss of $12,100,000 in the fourth quarter of twenty twenty three. Operating loss for the full year of 2024 totaled $49,700,000 compared to $46,900,000 in 2023.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

Looking at adjusted EBITDA, a non GAAP measurement, which excludes expenses for non cash share based compensation and for non reoccurring items, in Q4 of twenty twenty four was a loss of $9,000,000 compared to a loss of $8,200,000 in the fourth quarter of twenty twenty three. Adjusted EBITDA for the full year of 2024 amounted to a loss of $33,300,000 slightly below 2023 adjusted EBITDA with a loss of $32,500,000 Net loss in the fourth quarter of twenty twenty four was $12,200,000 compared to a net loss of $9,300,000 in the fourth quarter of twenty twenty three. Net loss for the full year of 2024 was $49,300,000 compared to a loss of $43,500,000 in 2023. Net loss in 2024 included financial income of $300,000 compared to our financial income of $3,400,000 in 2023. '20 '20 '4 full year financial income resulted from interest deposits and warrants revaluation income, partially offset by bond financing expenses.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

Moving to our balance sheet. As of 12/31/2024, Arbe had $24,600,000 in cash, cash equivalents and short term bank deposits. During January 2025, we raised gross proceeds of $54,500,000 30 3 million dollars of which related to underwritten public offering and $21,500,000 were related to the portion released from escrow due to the conversion of our convertible bonds, thus providing us with a robust balance sheet. With respect to our guidance, Arbez's leading radar technology remains a top priority for key decision makers in the automotive industry. Recent cash infusion totaling $17,000,000 further underscore investors' confidence in our market potential and growth trajectory.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

While broader economic shifts have led to short term delay in automakers rollout of advanced driver assist systems, decision timelines have been extended. As a result, RBAC continues to engage closely with industry leaders advancing through RFQ stages and strengthening its position for adoption. We continue with our goal to pursue four design ins with automakers in 2025. '20 '20 '5 annual revenue are expected to be in the range of $2,000,000 to $5,000,000 and will be weighted towards the end of the year. Adjusted EBITDA for 2025 is projected to be in the range of $29,000,000 loss to $35,000,000 loss.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

Now, we will be happy to take your questions.

[Operator]

And our first question today comes from Suji Desilva from Roth Capital. Please go ahead with your question.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Hi, Coby. Hi, Kareem. Congrats on the fundings and the position here.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

As we look at the '25 revenue forecast, toward the end of

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

the year, which total the $1,000,000

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

plus revenue quarters that you're expecting to go up to 26 ramp?

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

Sorry, Suji, you were breaking. Can you repeat?

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

So which programs, Karim, are you expecting to help drive $1,000,000 plus revenue quarters toward the end of the year?

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

As we said, there is two or three leading projects that are in the final stages of maturing. One is Tiani, the non automotive. One is the cracks in Europe. And the third and most important one is with the higher end with the car manufacturer with the Chinese car manufacturer. All of them we expect to start shipping chips as soon as we will have the full production.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

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

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

Yes.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

So what was the question? What is

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

the current cash down?

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

The current

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

cash down? Current, you mean now post the raising?

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Correct. Post the raise, yes.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

So currently it's above $70,000,000 out $73,000,000 And the current cash count is $85,700,000

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

Share account.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

Share account.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

All right, great.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Yes. 85.7%. Okay, got it. And then lastly, maybe, Coby, the China EV market, can you update us on the opportunity there? We know that market is doing well.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Where might you see initial traction there? Thanks.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

So I think as you said the Chinese market is especially on the EP is doing well. And I think all of the Chinese 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.

[Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Okay. All right. Thanks.

[Operator]

Our next question comes from George Diona Riches from Canaccord Genuity. Please go ahead with your question.

[George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity Group]

Hi, everyone. Thank you for taking my questions. Kobe, 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 twelve months?

[George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity Group]

Thank you.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

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 shortlisted in most of them with one competitor and some of them with two competitors. Again, it's not that of course, it's Magna or Tier one. And the other chips that are available in the market is NXP that is the radar is done by Continental and Valeo that chipset is done by Mobilize.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

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 Mobilize we have same performance more or less and a huge advantage on price.

[George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity Group]

Thank you. And maybe for Karim, 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? Thank you.

[Karine Pinto-Flomenboim, Chief Financial Officer at Arbe Robotics]

So as we mentioned, it's between $29,000,000 to $35,000,000 guidance, which is middle range is about $32,000,000 30 3 million dollars of OpEx. We expect this to be quite similar for the next couple of years. And maybe just to add additional investments which we carry in our next generation and related cost associated with it. So additional increase in investment between $5,000,000 to $15,000,000 over those two to three years coming in addition to our ongoing OpEx expenses.

[George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity Group]

Thank you very much.

[Operator]

And ladies and gentlemen, at this time, I'm showing no additional questions. We'll be concluding today's question and answer session. I'd like to turn the floor back over to Arbe's CEO, Kobi Maranco for closing remarks.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

We were so pleased to have you join us today. To our employees and partners, your continued dedication is deeply appreciated. We look forward to updating you further on Harvey's progress in the coming months. Look out for updates as we prepare for several investor events including the ROTH Conference in Dena Point California on March 2017. We'd love to meet you in person for further discussions.

[Kobi Marenko, CEO, Co-Founder & Director at Arbe Robotics]

Please contact us at investorsalderobotics dot com or visit our site to schedule a meeting. Thank you all.

[Operator]

Erl. And ladies and gentlemen, with that, we'll conclude today's conference call. We do thank you for attending today's presentation. You may now disconnect your lines.

Participants

Executives

• Kobi Marenko, CEO, Co-Founder & Director
• Karine Pinto-Flomenboim, Chief Financial Officer

Analysts

• Miri Segal-Scharia, Founder & CEO at MS-IR LLC
• Suji Desilva, MD & Senior Research Analyst at Roth Capital Partners, LLC
• George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity Group