Welcome to the Aeva Third Quarter 2022 Earnings Call. [Operator Instructions]. I will now turn the call over to your host, Andrew Fung, Investor Relations. Mr. Fung, you may begin.

Thank you, and welcome, everyone, to Aeva's Third Quarter 2022 Earnings Conference Call. Joining on the call today are Soroush Salehian, Aeva's Co-Founder and CEO, and Saurabh Sinha, Aeva's CFO. Ahead of this call, we issued our third quarter press release and presentation, which we will refer to today and can be found on our Investor Relations website at investors.aeva.com. Please note that on this call we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our Form 10-Q for the quarter ended June 30, 2022. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Aeva's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company website under the Investor Relations link. And with that, let me turn the call over to Soroush.

Thank you, Andrew, and good afternoon, everyone. Over the past quarter, a major focus for us has been ramping deployment of Aeries II, the world's first commercially available FMCW LiDAR offering high performance and reliability. This is resulting in rapidly growing commercial momentum as more customers experience firsthand how the unique capabilities and scalability of Aeva's 4D LiDAR can enable next-generation automation across automotive, industrial and beyond. I would like to highlight some of our key accomplishments in Q3, starting with Slide 5. First, we made meaningful progress in bringing up our manufacturing and shipped Aeries II to more than 25 customers across automotive, industrial and other applications. Interest for Aeva's unique FSCW LiDAR continues to surprise to the upside, and we are working diligently to further scale manufacturing. Second, we have significantly grown the number of engagements we are involved in, and they are across an expanded list of applications, reflecting the unique flexibility of our technology that is attracting more inbound interest. Importantly, Aeries II's combination of high performance and product maturity has enabled us to progress to advanced or RFQ stage on multiple automotive and industrial programs. And with our integration on leading development platforms such as NVIDIA Sim and Intempora, more OEMs now have the ability to validate and implement Aeva's differentiated capabilities. Third, we are on track with our industrial collaborations and continue to target launch in 2024. With Nikon, we signed a joint development agreement in the past quarter for our first high-precision industrial product. This important milestone solidifies the path through production. Elsewhere, we are off to a strong start with our SICK AG collaboration and continue to pursue additional opportunities with industrial automation. Fourth, we continued to strategically build a leading team to bring Aeva 4D LiDAR to mass production. In particular,…

Thank you, Soroush, and good afternoon, everyone. Let's turn to Slide 15, which summarizes our third quarter financial results. Revenue in the third quarter was $1.4 million, driven by progress scaling of Aeries II deployment. Non-GAAP operating loss was $31.7 million in the third quarter, which was largely driven by R&D expenses for product development. Gross cash use, which we define as operating cash flow less capital expenditure, was $27.2 million in the third quarter. Reflecting our ongoing discipline to capital allocation, we ended the third quarter with $350.8 million in cash, cash equivalents and marketable securities. And lastly, our weighted average shares outstanding in the third quarter was 217.9 million. Overall, our third quarter results reflect the ongoing execution of our plan. We continue to be deliberate in our ramp of Aeries II and believe we are on track to further scale manufacturing, support our existing partners and pursue expanding interest for Aeva 4D LiDAR. And with that, I will hand the call back to Soroush for closing remarks.

Thank you, Saurabh. In summary, we are making significant strides in commercializing Aeva's unique FMCW technology already with a rapid pace of increased production, and the customer feedback leaves me even more excited and convinced of the opportunities ahead. I want to thank the Aeva team for their tireless focus and delivering every day. I am confident that with the strong team we have assembled, the growing demand from our customers and our progress to meet the demand, we will continue to execute on our objectives. To our customers and stakeholders, we appreciate our ongoing partnership and look forward to continuing the work to bring perception to everything. Thank you, everyone, for your time today. We will now open up the line for questions.

[Operator Instructions]. And our first question comes from Colin Rusch from Oppenheimer.

It's great to see all of the customer engagement here. And I'm curious what sort of feedback you're getting in terms of the design of the product so far and any of the changes that you might make to the form factor or any other elements from that process.

Sure. Yes. Thanks, Colin. Thanks for the question. So first of all, I think the feedback so far has been quite positive. Actually, we're seeing interest from folks to implement a number of our sensors on their platforms so that they can leverage our unique capabilities, right, such as the instant velocity, which is important especially for detecting hazards before they become an issue, right, as well as some of the unique 4D perception features such as Ultra Resolution, right? And to your question about the form factor, actually, so with Aeries II, since we are dramatically reducing the size of the unit sensor, our Aeries I system, it's actually -- it's not the first time that I think the customers are realizing, "Oh, wow, the maturity and the size, in addition to the performance, for an FMCW technology, which was never possible before, is now possible with what Aeva is driving and delivering." So that, I think is, I believe, some of the feedback and the surprise, the positive side for what we have seen so far. And this is also, again, across automotive and ADAS, all the way through to high levels of automation as well as some of the industrial applications, right? So that's what I can say. And I think separately also, we are also talking to some of the OEMs who initially actually had decided to go with some of the time-of-flight or 3D solutions for some of the pilot programs but now are really looking for better capabilities in both performance, reliability as well as the ability to deliver. So hopefully that answers your question.

Our next question comes from Antoine Chkaiban from New Street Research.

Soroush, Saurabh, can you maybe comment a bit on the production ramp? It's really great to see that you increased production by 300% versus the end of last quarter. And so I was wondering, is everything playing out as planned? How do these things compare to your original expectations both in terms of volume and costs?

Yes, sure. Thanks for the question. So I think, overall, actually, we are progressing as we have planned on the shipments with the units. As I mentioned, the initial shipments really started at the end of Q2, and we started this ramp-up process in Q3. So overall, we are pleased with the ability to really ramp that up so far by that 300% -- over 300% that I mentioned since the beginning of the quarter. And at the same time, of course, we're nowhere near done, right? So we are continuing to make progress ramping up that output with the supply chain and working closely with our manufacturing partners, and the operations teams are really focused on driving all of that. And at the same time, we're actively working on securing the additional capacity to meet the growing demand that we have seen. And this is across automotive, again, but also some of the stuff on -- industrial stuff that is coming into picture more and more now. So that's -- overall, we feel pleased and also confident with the progress we have made and continue to work on increasing that output quarter-over-quarter moving forward.

And our next question comes from Suji Desilva from ROTH Capital Partners.

Soroush, Saurabh, congrats on the progress. So as -- Soroush, as these customers make decisions in the coming months, as you said, and potentially select Aeva, would you be able to clarify which customers have selected you? How will that communication take place? And as you ramp up this production, the 300-plus percent, I presume there's some visibility into the units that would be expected from those wins. So how would you communicate -- that would be a pipeline or some metric that annually or so forth that helps us understand how you have commitments to that production?

Yes. Sure, Suji. So a couple of questions there. So overall, as you pointed out, yes, we are seeing an increased number of engagements. We're now multiple across automotive in late stages, including RFQ. So I think we are seeing an interest around adopting our technology. What we're looking at here is programs that are generally from 2025 and onward from SOP target. And in terms of who these kind of -- some of these customers are, to your question, obviously, the customers we're working with here are amongst really the top players in their respective fields both in automotive as well as in industrial. So -- and as I mentioned, you noted, we expect some of these decisions to happen in the coming months. And as we secure those wins, of course, we'll be communicating those and the details to the extent that we can. And to your point about metrics, of course, we are evaluating a number of metrics as we progress forward. And we'll dive on what makes the most sense to share with the broader community as well.

And our next question comes from Arvind Ramnani from Piper Sandler.

So I just had a question. Certainly, two years back, the competitive environment was quite active with a number of players. And certainly, kind of the chatter in the space has kind of died down over the last 6 months or so. Can you just give us -- and we're just kind of looking at it externally as investors. But if we were to sit into the rooms of decision-makers who are buying LiDAR technology, can you just give us a sense of how some of those conversations have evolved as it pertains to the competitive environment?

Yes, Arvind. So I mean, overall, we're having a number of conversations across the board with both OEMs and passenger commercial vehicles and mobility. And some of the partnerships also that we've had, that we have talked about, for example, with Nikon, SICK and others continue to make good progress, and we hope to actually continue to strengthen those. But overall, the decisions are really around -- the discussion is really around our progress that we've made with the OEMs in terms of delivering Aeries II. And at this point, of course, the biggest factor has been around, "Hey, can you deliver a technology of such a performance?" And our answer with Aeries II so far has been yes, and we are seeing that feedback from the customers. Of course, as I mentioned also in -- to Colin earlier, we are also having discussions with some of the folks that had made some of the initial decisions around pilot launches with time-of-flight solutions to really upgrade for the next-generation sensor technology. And I think this, in general, is really increasing the recognition for the industry for the fact that what is out there today is not quite sufficient. And to achieve higher level of automation, to continue improving the safety and increase overall volumes across the vehicles, they need to move on to next-generation technologies such as FMCW. And with the progress we've made with a number of innovations, the patents and also now our ability to deliver on manufacturing, we're further establishing and solidifying our position as the leader in FMCW technology, and we continue to do that.

And our next question comes from Joe Moore from Morgan Stanley.

I wanted to ask about -- you mentioned in the slide deck the LiDAR-on-Chip platform for industrial automation by next quarter. Can you talk about the applications for that? Is that for the existing couple of customers that you talked about in industrial? Or does that open up new opportunities for you?

Yes, thanks, Joe, for the question. So actually, this is quite interesting. We see this LiDAR-on-Chip technology platform as really a foundational perception platform that can go into many different applications in industrial and some of the others. So obviously, for example, this is the approach we're taking in our partnership with Nikon in which we have now solidified that path through the milestones all the way through production. We are making good progress on that. There, the application really is around inspection and metrology for automotive manufacturing, aerospace manufacturing and some of the others. But the same core chip technology with obviously tuned algorithms for those applications can achieve micron-level precision, which is not really possible, to our knowledge, with any time-of-flight or 3D solutions, right? And we continue to see also interest from folks around other applications, both around manufacturing, for example, volume -- electronics, things like that as well as some of the players that are looking to deploy that in some of the other applications in the industrial field. So at the end of this year, we're on track to finish that development of the LiDAR-on-Chip platform for the industrial applications. And we expect to continue -- expect that completion to continue to drive additional inbound and potential new businesses for us that we can use -- leverage to expand across the industrial fields.

[Operator Instructions]. Our next question comes from Sam Peterman from Craig-Hallum Capital Group.

I wanted to ask on the Nikon JDA that you talked about. Can you describe in a little more detail just how this differs from, I guess, kind of the previous announcement you made about your work with them and kind of why you took the path of JDA versus maybe other options that were available?

Yes. Sure, Sam. I can take that one. So obviously, yes, we announced an initial kind of collaboration framework with Nikon. With this joint development agreement, we have now further solidified our milestones all the way through to production, right? So we've continued to make good progress with Nikon since announcing of the initial collaboration. The JDA really defines important next steps toward development milestones, including sample development, validation all the way through to production. And that's the solidification that we have done. This also gives us added confidence that we are tracking well to our target of the accelerated SOP from '25 now to 2024 with the JDA and the progress we're making. That's number one. Number two is, with the LiDAR-on-Chip model development completion by the end of this year, again, we expect to leverage that to -- both for the Nikon program as well as expanding our reach across partners to do that.

And our next question comes from Kevin Garrigan from WestPark Capital.

Just to ask one part of Suji's question a different way. The 25-plus customers that you shipped Aeries II to already, you mentioned broad applications, but are majority of customers kind of more industrial customers? Or is the customer base kind of split evenly between industrial and automotive?

Yes, that's a good question, Kevin. So overall, actually, this is -- obviously, this is the 25 customers, but we need to ship beyond that. But this actually is more automotive rather than industrial because we had a strong backlog in demand from the automotive customers that we're now fulfilling and continue to fulfill. And -- but at the same time, as I said, there is additional inbounds from industrial -- from industrial applications that we will continue to also fulfill now that some of the initial deliveries have been made. But initially, it was more automotive. That's right.

And at this time, there are no further questions. This now concludes today's conference call. Thank you all for attending.