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VLDR Velodyne Lidar

Participants
Moriah Shilton SVP, LHA Investor Relations, IR
Anand Gopalan Chief Executive Officer
Drew Hamer Chief Financial Officer
Colin Rusch Oppenheimer
Itay Michaeii Citi
Tristan Gerra Baird
Richard Shannon Craig-Hallum
Aileen Smith Bank of America Merrill Lynch
Call transcript
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Operator

Hello, and welcome to the Velodyne Lidar First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Moriah Shilton. Ms. ahead. go please Shilton,

Moriah Shilton

Gopalan, thank discuss joining XXXX Velodyne on Chief Dr. With and Drew Officer; conference the Hamer, financial on call us company's Anand are call to Inc. Officer. today's Chief you afternoon, Executive us and for Financial today's results. Velodyne's Good first quarter

also today, presentation. like quarter press a release its first I Before you shortly issued we would begin, investor after Velodyne that financial published results. Velodyne XXXX remind to the an market close announcing

differ non-GAAP You cause press velodynelidar.com. the discussion Velodyne's for the that refer the factors may forward-looking from Relations during includes Investor those press of would measures our performance. Please we remind in the to statements. access discuss will related you that presentation and company's call, actual release to could statements. section some release Today's of discussion materially also results to a forward-looking I like to

those You comparable of can and address the in that question possible that analyst ensure releases. as find question. yourselves measures follow-up during quarterly we many nearest limit we one questions to GAAP the financial you request call, To one initial as press reconciliation measures the to please Velodyne's

Anand to call like turn Now, I'd of over Gopalan, to the Velodyne. Dr. CEO

Anand Gopalan

Thank I'm you, joining Anand Moriah. Lidar. for And afternoon. thank you Gopalan, this Velodyne us to everyone CEO of

customers of which sensors sold. our sales, market, multi-year with to with the and and we to to Once that is in a one XX% global XXXX. quarter, continued lidar sensors continued We shift state leading them. the clearly agreements the customers quarter we progress solid make great X,XXX shipped than more in to spot-buys, As our market world, sensor the XXX of position in and in our sensors Velodyne lidar seed under leading the market, the the lidar again, use as producer to of sensors our XX% defining first leadership

as seed to as of with customers X, our evidenced, up continued May February Our XX of the products manufacturing is by strategy the as XX scale both into which our business, market conversion global of XX. as number of leveraging well spot-buy the lidar agreements, spot multi-year from these strong

seeing of as increased to significant at one where May from of XXX lidar X, segments We pipeline look closer reported were the projects this robotics XX, one you are is are and grew commercialization. strength. the seeing ago XXX pipeline XXXX. industrial Velodyne's year in time, we segment, of also projects to at on February projects When we growth up which

projects addition, a XX now component. In our of as include software

veterans. software Vass, aspect business of Safety Board price Vice points at We cooperation, Board, Zarringhalam, of market the is the products the NTSB appointment with Nikon mass market of Directors Hersman, customers. Hamid promoted Chief continue Operating we Officer, also appointed was We and business to team providing Chief In to with built Strategy out Officer, executive Mike Barnhart, as end lidar. adoption broad and Transportation former the seasoned build our and our portfolio of to with complete by technology Lidar the hardware Commercial Chief first solutions strengthened our our President that Corporate quarter, Jellen National of of necessary out Officer. to Velodyne Sinclair James our to We as a board. Deborah Chair drive leader of

the of first commercialization on various projects as R&D wave have XX-years, more working today, inflection across several with are point companies than to technology matured with lidar segments. We mass we at segments for been ramping across lidar the

phase. Our in will ability to crucial scale manufacture and be ship new at this

margin profiles. diverse machines, sales TAMs, the to and which markets, pipelines revenue, which in operate different are autonomous of technologies different lidar time each Our different having many eyes for different

for be at Velodyne a market For example, strong, long viability the they have good and the mapping continue an pace. term ramp considered to linear traditional AV as markets,

new with and break the the these market products finely, in high auto continue to demand interest at be large. To out Our de door. is ADAS savings, are lidar in for your more is accelerated the facto are technology could are and deliver is in rotational of from segment markets, In to operating driving that the cost reference the Safety dynamics automating by vehicles geo-fenced industry architecture players ramping revenue everything, robotics a growing solutions, few who in our commercial that at in growing significant heavy the adopting the construction at potential automotive robustly, and in automation the are is market, applications. a the construction solid plus industrial Further, OEMs. traditional airborne packages advanced ADAS out. drones Companies lidar far and years consumer state machinery. in being to are safety targeted which space, outpacing EV interest machinery in volume environments there large rate

chain e-commerce. the of by in supply the automation growth significant being driven the is Additionally,

revenue products of We sales of for getting variety doorstep, from port to segments to applications, the a your to all robotics so. do are and across receiving industrial lidar goods our today relating from different using

see to more both cities sell not but the the the make sensors without towards involves heading hardware, renewed effort and autonomy, value across solutions infrastructure world. governments There complete the update aging we safer not just we are of robotics, the privacy. just cities and software, and in future to in helps to lidar smart productive, machines violating personal that Adding systems, these but a by opportunities plus infrastructure increasing bring can to is infrastructure. navigate that We mobile world industrial hardware In intelligence through a customers.

business a of customers. robust robust combines of All Velodyne cohort to for a make this very

categories now see many solutions important We life definer. And products category we the to with mass to Velodyne several develop, those everyday meaningful and of commercialization that are the technology, role. are ramping in an touch It's incredible playing ways. so

Here are few examples. a

dock agreement middle of logistics. for is Gatik multi-year quarter, with lidar the Velodyne's a of a a using fulfillment first part and is for costs, retailers sensor A using the key Gatik, industry that revenue for for in solution expansion using Gatik including sensors by of increased rapid customers the an in help and and centers, redundant sensors and multiple home meet Fortune-XXX robotics. driven all to fulfills daily demand contactless you flow times on-road Gatik between network may e-commerce growth, likely short. generating U.S. suite goods, It for an that locations. deliver chain some as meet automating stores involved delivery. safely Velodyne mile, road goods in orders and We autonomous the of Walmart, were known in customer middle mile reducing supply Gatik First BXB as fully your goods micro that Canada, retail leader efficiently, customers announced AV keeping safety transportation expectation and in delivery you users logistics unprecedented soaring helps road the delivery surprise delivering delivery. to consumers learn today. consumer are

space of talked Systems, and the have forklift the In projects mile and in AGM collection, last logistics a analysis air hardware technology warehouse we agreement provides the about We applications, for with and data. around previously multi-year announced who in first state-of-the-art mobile other delivery. mapping software and quarter, processing mapping,

enable country our are an applications fifth AGM Velodyne rely with future with the energy lidar customers, seven autonomous five serving, in systems achieve operate generation robotics technology we companies of their Knightscope's have well world working for monitoring years, with million April, our robots. across been largest had selected resources. of X zones. the have to example of whom how been robots assessment hours, of different Knightscope, equipped solutions, real sensors power across products time our over and we the on In jointly for that to patrolling ultra-puck one they precise Some time and announced security valuable AGM mapping.

hardware. that are an just customers We for beyond solutions complete from interest potential seeing go sensor increased

congestion introduced transportation you In software rebuild worldwide billion to our proposed to will and may trillion burden. our implemented, a first we modernize systems. hardware There have safe or used reduce solution Biden today, $X.XX is seen As is city segment. annually, will the estimated in intersections data has City the have Smart cities, intelligent IIS everything U.S., When infrastructure enable the of is the data IIS, to invest IIS In growing vehicles, transit roads from this robust earlier for governments the cost to planners. which solution, to by Administration be systems. our infrastructure $XXX help commitment and our

equipped of a New lidar public signed retail be giving Middlesex Advanced the of collaboration part our as technology multiple we over and testing The at individual Transportation. Jersey, this deploy Infrastructure this our project, first can world data same with Center infrastructure know intersections a violating solutions. camera the Also role without and providing vehicles, Smart New Rutgers it Brunswick, and with As play critical IIS time Department in will monitor to moving in clear with privacy, ground industry we IIS sensors New at prime sales announced we a agreement real for and in to analytics, County valuable morning, alpha Mobility connected forward. that edge Jersey Transportation, autonomous spaces, used look

market. to the turn let's Now automotive

bringing becoming to customers solution winning the is right to ultimately clear it for and A needs cost on mass we win. work our with combination as the adoption, ADAS, performance that of for exclusive First have lidar Velodyne their FF is FF point the Future luxury proof EV, safety great flagship supplier ADAS and advanced Faraday selection XX evidenced the to XX. by to lidar be

the will highway, comprehensive aims HXXX parking state driving lidar sensors solid autonomous power and XX's a urban to Our suite features. FF Velarray deliver autonomy of that system

customers, three collaboration technologies supported we Hyundai bring our major foundational to high core IP. also system. mass with the continue In AV, volume Mobis for such continue OEM level ongoing of production work market, We to as by to new our of lidar strength with

that not reflectivity. have certainly are product We stopping meters today XXX there. But at already hits a we XX%

in be key years. lower for will will primary next center create modality and can its has Velodyne will as our broadest solution the vehicles, autonomy. This product been us approach manufactured the the technology be the us for manufacturability, the to allows cost technology that which front be and AVs and increase Array. the of capture lidar mission XD is to gives higher on building to levels able lidar cornerstone unique backs this Velodyne's space. a lidar performance. We It common platform, lidar are Velabit, versatility applications scale forms and Micro-Lidar and commercialization autonomous technology common perception. without We volume, called new be opportunity industry, this sensing in adoption to and new believe be coming brings and on our safety fully of in of in lidar-based generation The in compromising that strongest that the to smallest sensor emerging engine down at the see affordability and rollout the democratize broad the and cost continues that portfolio to will segment. core This mass farther

sidewalk to As efficiency for off major for in of monitoring we mile use sensor. or we improvements, and Velabit our this planning, feedback or detection tremendous last assist traffic to The technology multiple pipeline a as, show and customers XX applications, industrial positive our for include path are detection projects enables and PAEB. blind rear versatility warehouse that incredible cross over such with Velabit customers, or it and getting spot to obstacle monitoring, traffic safety delivery, with pedestrian urban and

With significantly two conditions, adoption, delivered possible. plus across first camera of the based superior mass pedestrian improve Velodyne's sensors lidar our cars solution the priced as systems, in decisive quarter, democratizing in how advantage a safety demonstrated truly Speaking we we many over as all safety. radar which based of are level for PAEB , lidar affordable performance in can usage PAEB based

with a real world real everyday Over and many up building been with applications Velodyne of a by customers, this. And as to faced pioneer path can that what ultimately, has together lidar future touch to in mission is few solving. continuing them forging has be have lives I the a and And to to incredible a to proud that on by the months, meaningfully. our past safer bringing Velodyne incredible exciting space continues for live incredibly problem working it we business, the defining we and to am this all. continued leader products, technology and coming microcosm always of challenges. of grapple achieved focusing have

to Hamer Now, financials. the to over I'd go Drew turn like to colleague, conversation Thank our over my you.

Drew Hamer

Thank you, Anand.

the with three begins financial to of case of that what date we that sales my in discussions, begin at as with Based discussion cycle and use would part need requirements. purchase development of or they that this forecasts the to then technology, want agreement of added place years I our quarterly volume solution. signed and includes for moment award with anticipated pricing start or design book to to are share with to pipeline. a industrial related benefit as from including process the our agreement. spot-buys, or sales a agreements. this with The ready potential provide sensors and their align sensors in production refer our in review cycle turn the is us, the research outlook, orders When identified multi-year project put Customers the and to along least project cycle incorporating solution production Before these comes multi-year are software generally information customer multi-year Completion lidar potential I a SRP. around spend driving on do production discussing

earlier, X,XXX in sensors the spot-buys, were the the the quarter we sensors to agreements. XXXX, Anand shipped shipped of with XX% As multi-year of XX% mentioned sensors of of were first customers

fourth Now, $X.X XXXX $XX.X quarter was using $X.XX loss million compared the the of shares Non-GAAP in product loss fourth Fourth visibility to million, I Services expenses Revenue Product of stock a net per of sensor COVID-XX, of operating fourth non-GAAP was begin overall fourth to was previously sensor XXX.X $XX.X $XXX.X reduction including XXXX. million was quarter quarter $X.X gross expenses non-GAAP to fourth and $XX.X was quarter to of $XX.X This included compared expenses million and fourth selling financial quarter XXXX $X.X was based compared per was Non-GAAP non-GAAP by GAAP weighted Total sales was a were fourth revenue pipeline. per agreement company's and review. to to per to based compensation included expense. based revenue XXXX expense, $XX.X million in ongoing stock a in million, in million, $XX.X unit was was first of services loss due of quarter quarterly decline increased operating outstanding expenses million the would $XX.X reflects $X.XX. $XX.X of to to $X,XXX compensation operating $X.X expenses, compared and $X.XX loss million and in research net of GAAP GAAP share million. EPS were was loss $X.XX. $X.X million expenses gross and operating profit employer million expenses license the to taxes, stock net million. of $XX.X GAAP The based by share gross $XX.X and $XX.X XXXX expense, GAAP million GAAP and compared per average of million and License stock gross quarter GAAP GAAP million a reduced included non-GAAP XXXX. price calculated for million. million operating million. that is including was and licensing discussed $XX.X of quarter spending net compensation million gross in profit of is of net product included GAAP my Total XXXX loss million, the per of compared the $X.X fee. XXXX million. based The compensation share expense. million, $X.X compared was non-GAAP provided and multi-year operating $X,XXX evolution GAAP fourth operating XXXX. revenue compensation million, net profit the was mix. to response development, GAAP non-GAAP stock fourth expense. included $XX.X of loss loss compared our weighted average like XXXX quarter higher GAAP million XXXX. loss gross reflecting loss, revenue profit of stock $XXX,XXX based expense. for GAAP $XXX.X compensation $XX.X net $X.X quarter share than quarter of net non-GAAP and of

with As in completed from and traded exercise in on outstanding shares million sheet, XXX.X its warrants. publicly million which of balance included were the proceeds short-term quarter March cash XX, the $XX.X $XXX.X Velodyne million. actual investments of

million. yet to opportunity like awarded quarter $X.X the of have of over XXXX, are first At $X billion would we could end review business I of signed through for signed estimate we Now, of a our outlook. for revenue projects the the awarded of that not XXXX, plus, and projects and pipeline

addition, our advanced In percentage the XXs, and EBITDA be total and mid to margin outlook with high more ranging margin continues lidar XX%. solutions. software This underpins scalable long-term top manufacturing than to gross to invest company's priority it the business technology of in in architectures,

We increasing at December agreements multi-year least also anticipate XX to XXXX. our XX, by

is full $XX guidance, to revenue for range XXXX year Now $XX statement and million financial between a expected million.

a Our revenue are we whom actively from global comes shipping customer to products. base

This $XXX product our come reflects COVID-XX, related year we see of basis, to year-over-year, cover will a the and expect will broad in services our On between the XX% we revenues by pipeline, XXXX. San China. lump in our restocking approximately company of $XX expense fixed headwinds, XX% the activity. from are million basis, license visibility for to fewer based of On approximately macroeconomic on based expense. expenses. remaining expected sales reflect items grow expected as reason to based as range expenses a margins of overhead stock the approximately Industrial. we to gross seeing are are These On of include included units gross a Non-GAAP providing public product range. to XX% expense, million. to that shares the rest agreements. sold estimated On increasing of compensation continued anticipated We are $XX XX%. U.S. by by meet elements, spend outstanding to development stock non-periodic are our are to negatively Weighted another and million. fee, and factory such non-GAAP operating these from of Jose. expenses revenue to costs back will and merger be the expectations $XX.X million tax more and product million our India GAAP XXXX a agreement a new of came increased in be charged $XXX,XXX. provided $XXX XXXX the approximately in marketing geographies quarter, for are such include million, for despite uncertainties. $X serve, second-half, various upon basis, with full in and increase This General revenue spot-buys struggling by keep and remain expenses account parts administrative a be margins Other basis, $XX toll GAAP operating year to approximately we in million XXX.X in between we and impacted legal Asia to against approximately million GAAP and Graf which compensation are licensing compares Europe, are million sum one-time multi-year revenue income the due and XXXX, unique $XX.X that programs and revenue be When multi-year the track average macro second Based market for

over Operator? the turn to questions. call would I like Now, for operator to the

Operator

you. Thank Yes.

[Operator Oppenheimer. begin from And the session. now question Instructions] with first Colin will Rusch the We question-and-answer comes

Colin Rusch

guys. much so Thanks

some looking are you're ramping five programs? timeframes on Can move times you they for starting your speak know and development level on things? ADAS. those to customers at Or to the the we those over Are and you slippage expected? level the their four, as road You as towards cadence see cycle

Anand Gopalan

question, Thanks for Colin. the

level level programs, at happen. four, seeing couple of look things different a are we we As five

seeing we as on We our major a linear ramp expected, are continue stay in track methodical to and customers their programs fashion.

in You and cities on. then cities will the more in year, roll one a with so year, see out next of systems follow these and couple

that So stays plan on track.

lidar lidar we in other large into to of players seeing as smaller technology, our five and customers being these course, three the the technology broadly, have. systems deployed systems But for designed these outlook that the space many The continues over our being mass into this next getting their out consolidation volume same, with to and are thing, the of roll be major we in customers years. consolidated

Colin Rusch

cost additional can are That’s automated that a looking with side, And started opportunities you suppliers you that. designing seen working more. component online super have helpful. come then guys Clearly, just little as out? cost the bit lines support for seeing on meaningful You've

Just go of cost cost understand the us your the forward as here. lowering structure structure help we cadence and

Anand Gopalan

choices architecture I you these important all this an starts level. think we in really applications, made. across Yeah, The why of lidar cost part will strongly the feel know, make at is what and have adopted the we

an And some holding we really good stead, made choices towards we adoption. of the us move as mass perspective in have architecture are from

entire in talked AV state of see that, And are at used is scalability. to lower way continue technology The not our the and making as common the that we further, other ability much now point a to and solid off further core just about the products product thing its started a but the Micro-Lidar we've to including performance improved push it's our result with do cost expect our that that call segment. platform across that products. portfolio, Array we that But

lidar second end you well cost come for segment down out AV will we see entire technologies generation as across So, of mapping the that products. reason, the as of roll

Colin Rusch

guys. much so Thanks Okay.

Anand Gopalan

you. Thank

Drew Hamer

you. Thank

Operator

question And & Rajvi next you. the Thank from Gill with Needham comes Co.

Unidentified Analyst

on of Hi. Dennis a taking This behalf is Gill. question Rajvi

and kind guys gross about key downgrade. speak don't Can you the spread of guidance some of a could basically mind, you speak a year provide change? more revenue this of the full maybe and color of margin bit more the the little about If the bit the drivers you about

Drew Hamer

Yeah.

things, two there. the of That's the really is first revenue. kind key So just questions

-- is, the the revenue of So a spread here. bit it's back-end loaded

we're we the kind markets open year, to to end get for up. of the range. out the line We looking But sight have as good low other of into of

world see we back we a as so, their back of and that of anticipate we the become executing ramp have deployment to more in successful Europe in to the start regions vaccinations, them. start and bit multi-year could online up purchases other spot-buys with their little of agreements come And against they

are upside, In kind addition, revenues have could which of that we It of second, here upside a of fourth targeting. for of also in, that in which and guidance come the also also targeted, the us year. we're number projects upper we will third larger provide range allow could that will the come see and the quarter potential to hit the revenue

we'll So it's will close revenue ratio this really and an deals. provide. just, higher we time to here, confidence for these can pass get But a opportunity is now,

relates first manufacturing sales, to On it in whole affects we manufacturers. still year, offshore that our to the and gross unit transition contract we're the margins, as had your lower our quarter, of and the

get all contract anticipate of continue There aware like Europe we're the we the So, that COVID-XX as we here also can manufacturers, I to out seeing Thailand had absorb are costs or going to a increased in risk further potentially contract that transfers higher cases. and overhead QX, continue into as and countries Japan, QX think had and manufacturers. to kind is those of there, we to well transfer

but because originally a little people take these a longer It them so them. it won't we it more we to travel And transfers get expected. done, those accelerate countries challenging might makes get little than and completed, can't doesn't to it bit bit mean

Unidentified Analyst

non-auto follow-up, which And what could we you to make first, top-line excited? speak my and a Thank of kind then the regard of see that about maybe you. pipeline most for the with parts could you pipeline hit of pipeline aspects little design you. Got the bit

Anand Gopalan

to as are your tremendous to well. goods growth delivering supply in start fastest general. robotics this pipeline free I chain live in of the post-COVID across in growing The entire see segment. can of definitely in world I our industrial doorstep. in, parts Drew frankly we see we We and the the that accelerated jump feel around

applications, agriculture, such in it other smart and as on. see so also We forklifts, and

and very provide this products seen adoption have to this of fast time software We pick is is to our pipeline the ability And up exciting at of end shorter, providing where lidar further, by that's clearly a many a providing revenue the not because pipeline, hardware our solutions. And exciting see the part company. parts to today. also applications exists but clip. of our we customers, software we're opportunity value opportunity, actually involve add ability really hardware, a have to more growth And a for the just also we

Unidentified Analyst

Thanks. you. Thank Great. I'll in back the get queue.

Operator

Thank you. question Michaeli Itay And the comes from from Citi. next

Itay Michaeli

Good Thanks. everybody. afternoon, Great.

of to gross over the gross the can anything color the just next couple question the margin. And think on where years, has guess the of any going might fourth changed? the Just in see margin you lay if back say in year, you first quarter trajectory Drew, transfer? to share I given the you let's think exit and try the about

Drew Hamer

kind trajectory to the the expecting coming I going of we're it's kind where linear ranges of coming through be to year, we year. so of think Yeah, originally discussed, at those probably, out approaching be a

to of average the you the such hit we gave for can going as kind low and starting out year. full you high So

Itay Michaeli

Got it.

secondly, revenue greater the there. just because from spending development the multi-year that new of higher there? product seeing It's details And hope helpful. or launch? sort agreements, on elaborate That's on the the Okay. of more curious that visibility of based opportunities of an kind in more product sort you R&D, what around of about acceleration could Is kind you're

Anand Gopalan

as going not our additional couple there's that's and I that's that opportunity about. that hardware, opportunities innovation to use would solutions definitely well. I part then happening there's as new Sure. the definitely the talked deliver backs develop it's incredible development, we of in on further say to just we like uptick technologies technology investment solutions, at provide exciting, but for just on would really faster R&D lidar of are the I applications provide seeing lidar. happening We're say that and number seeing areas to hardware we're architectures that mean, rate. tremendous a market, to And around seeing drive are software and of in some and a an And a expansion

So that on so the huge that's can capture driving our are opportunities upside into that coming increased investment the we part, pipeline.

Itay Michaeli

That's helpful.

links? Just one. end Is any expect of a additional you sneak color to those ADAS? is non-auto or one quick expect kind what robotics it market which year-end, by you in additional terms awards of Five

Drew Hamer

Yeah, in anticipate we we're those we're larger be some that just you actually we the are expecting than honestly. all And to that a others. spread have across markets going pipeline described, they'll see that

it's that strong there very conversations think going relevant opportunities. I on around ADAS are So some very some

We different that some with I couple are conversations something it's we coming robotic different are be across their market. also going that to with on solutions, think strong markets spread, And to opportunities be then, now a people lidar, that at solutions. to that nice in use price to have a incorporate going people of have point a that's forming of can it going

Itay Michaeli

Excellent. That's very helpful. Thank you.

Anand Gopalan

you. Thank

Operator

And you. Baird. Gerra Thank the Tristan comes next question with from

Tristan Gerra

good Hi, afternoon.

what's guidance? units? you decline low Is your for pricing that the you had implying the XX% for to last teens increase year, about that this year? your in think With mentioned forecast about the whether expectation ballpark a of I embedded call in on in you is

Anand Gopalan

thing. think definitely linear guidance, again, seeing a will be I that Yeah, we're it the

saw have trend is you to down we those go quarter last that at the and levels. yes, continue lowers So was they for will but example, ASP, quarter, this

Tristan Gerra

Okay.

the lidar. adoption coming unit the increase year, I this given past standpoint, adoption How down at the XXX So solid percentage, you that that the then than this are have increasing digit should lower to at unit double from units how the we acceleration two? you've next lidar is the fair which Velabit, year? you've As do look in reconcile I if been rate, state for is growth the a should targeting exceeding but XXX mean, see price in a rate that? for growth described actually year? And, we a an assume year-over-year, it we look

Drew Hamer

the ASP state will can [ph] volume the lower solid Yeah, ASP, prices, so pick to sold to double year. we are -- a we because as the volumes at are this expecting accordingly. least continue down, up, at come lower starts that so the They sensors, they'll to

representing year, revenue, will this product as we metrics, average affects into portion of which weighted the a out ASPs. So affect see overall that we larger do get that which

Anand Gopalan

is, I are we Drew I are lidar there opportunities seeing solid think state we several and add color both around to the Yeah, as that the described, would are the only that technology, Velabit. Velarray

acceleration So of adoption an definitely that applications. will see across of we many to different technology, continue

definitely So, I that's think happening.

Tristan Gerra

you Thank much. Great. very

Operator

Richard question the you. with from And is Thank next coming Shannon Craig-Hallum.

Richard Shannon

my well. for Thanks as guys. Hi, questions taking

Can a the and in you XX see kind this here. are still as ADAS? retrenchment going use discuss around there? is what's you of investor ADAS my see higher the presentations, there? of you projects Could Do number down situation help understand it just lidar us on couple think here. a I of quarter the come XX is And we by from provided as I to right your projects if projects here? Or question quality caught of in first numbers, of that you number on quarters, last down

Anand Gopalan

along Yeah, is the as that. think much evaluation pray of what further better, their as technology, really of I seeing is projects in the quality customers lidar, are the a defined key getting you're

broadly, I ADAS by very traditional set see into fast adopters the offerings. part see So at very we leapfrog and you call robust in, would Combined as are a adopt these lidar and would And say settle lidar both getting see of are and in move fast actually rate. I and -- players retrenchment players two where are ADAS also you adopting players the buckets. existing we the Future technology, really opportunities progress, fast leaders looking just to OEMs that the systems Faraday come that What we sophisticated market, like seeing especially creating pack make EV more better ADAS better traditional to defined. of ADAS don't that opportunities level the Further, three good incorporate in that, continue around them. the seeing with in the are electrification lidar

seeing So, you move those forward. buckets both are

at this lidar a for the So all -- the ADAS broadly, see I retrenchment we would as usage in of market. say don't

Richard Shannon

for Okay. Helpful Thanks that. perspective on that.

the Are discussions caught outside see I year? some in we the automotive? of of if are projects Can quarter sense the agreements automotive? the down a software, on signed right at Are some these more is of the Can the of how here looking is going? of you advanced far end by give any of question next opportunities seeing all increasing that Second numbers us that. you number are

Anand Gopalan

base Yeah, to in us and opportunities seeing faster, is, for industrial much software. is of both a part software, opportunities where set broad the segment, are to we're revenue But the for as we time exciting seeing I in both hardware non-automotive. provide and for automotive said really us before,

multi-year So into future. will opportunities certainly, we signed we in these see believe of agreements some that the near materialize

that, the across In commercial solution, addition that segment, talked see publicly And is earlier announced organizations we Smart to focused software DOT, our companies. have and first where city our ability on about. different infrastructure is really, City we work intelligent the again, we hardware today which this to state solution

the not provide possible, that valuable to or the intersection, really hardware city the whether space. companies lidar retail, a can this solution, but mine public data that that these makes entire have just data or it's also We ability to exists, including the it's the analytics whether platform use

pushing So, incorporate and Velodyne's software. around and segments both compute, we different are that forward creating these hardware, fast, products

Richard Shannon

software on within you progression comment too? the auto And Okay. the could of specifically space

Anand Gopalan

Yeah.

the installed. think, we've the software progression I as of on hardware the talked is space, the of always in backs auto about

opportunities installed So ADAS as we continue and software systems, to there. see see into traction these for get we

in nighttime braking and system camera especially state-of-the-art that lidar-based, the for lidar-based the system, in of radar we the emergency showed comparing the is it the things over the of first camera significant you advantages, system, this base with systems. quarter year see automatic could One radar where

deep conversations, we our you very three, part level sorts lidar this led solution of some applications, software level could as but As level around not where PAEB two the imagine, on of just can not two, the but hardware, offering. plus has again to just, provide

in installed progress with So will time the hardware when be there. combined But ultimately, gets the ads for paid lots to software great revenue of on the vehicles.

to And the be critical so that path. that continues

Richard Shannon

Got it.

for detail. all that's me. Thanks for Okay. the And

Anand Gopalan

you. Thank

Operator

Instructions] [Operator Aileen And you. America. comes from question with Bank Smith Thank next the of

Aileen Smith

guys. afternoon, Good

shortfall annual First was year. versus you notable think revenue going upon reported in at revenue outlined September million, what we outlook, question, since it's public $XXX pretty I XXXX XXXX. look a that But that of it's when last also lowest plus the you've the

multi-year I more R&D looks think to project-based near-term associated we try lidar. be the that chain headwinds all some as a there's But appreciate air lidar XXXX make of to it with you can gap structural like semiconductor shift supply shortages from disruptions. contract commercial and could

So what the be why And would are why a out not characterization targets or still confidence that valid? financial fair that for outlined gives you of XXXX? year some you've

Drew Hamer

Yeah.

base the customers for thing these is for able to them forecast with year, we still across about. provide pickup, actively second-half of interested for the broad where back a with deep that key these forward forward the of production about to on able to to having see world we'll get pace they starts Aileen contracts, the here hopefully fact again, XXXX. conversations we'll agreements be are baseline, And be us, moving the different that accelerate, as the in the and in and expectations discussions, they are So of that talking a we're looking

take kind in the and should starts headwind. there's start other a back. market take here to So second-half feel of air the start the more it's really, anything that come to vaccinations the things hold really if gap, shape macro as of it's really we it the in to and And year,

Anand Gopalan

mind that. companies to in sit about still as market. of the We we here today, we the to all talk Just highest color that, add have revenue should that in keep we lidar the while some

pipeline maximum product of applications, produced broad the projects portfolio, in a space. set shipped of and have as number across a units broader We the of the largest

that hit as that products we us agreements, customers and these can this the we in our these outlined what multi-year scale? these manufacture relationships So can I and we in deliver is the sign scale numbers confidence deep think at will and the with we future, gives and

Aileen Smith

And margin. question helpful. another ask to Okay, that's around then, I the wanted gross

relative are that pushed something so complete as we to is And that going of Some And today long-term, then fixed company to also little plus of achieved leverage XX% it revenue of trying that versus on fabulous or XX% how more you shifting counterintuitive, the you out describe that driving of are margin partners. bridging bit comments or and factors in the the think you your margin public is volume a upon outlined model should that thinking some about what with out about like point Arrays certain you think Micro-Lidar can the understand the manufacturing this next above is we and be targets the to be XX% with to sourcing. expansion, along is, based manufacturing? this I'm that gross versus shift going costs? year level COVID? business transition be COVID the the cost pressure the low a I this been little get country year. a as think But can levels there going towards you it's and volume forward, about delayed may can have manufacturing [indiscernible] bit, Again, certain Or, a which we towards year with if

Anand Gopalan

And feel transitions products. these these that build well. keep start of step as can a transitions, real free in I as and are ship and So, Again, we to make Drew then jump in volumes mind functions. not we

to work So you have and an way entire transition to starting building from your lidar. subsystems

So margins And to that talked will those transitions have gross are ability yeah, really transitions able are these to switch driving to we be we our about. targets get move those completed, that we about. as towards talking the

margins. mix and factories. Micro-Lidar the our rewards also products factories as the and being transferred both using And Array, these gross of our the more Micro-Lidar Array, the will as evolves production in In are product more the are of things the ASICs, in part of see you well partner the that as into terms

it the happening. complicated, time, that -- more think many the At different portfolio laid of for we the a that absolutely because ASICs build plants across again, it is line is broad same I the valid. we is So, and have products The still product we out are the transition ship. Micro-Lidar we Array

And have will have Array, on XXXX continue of despite we benefit of talked product overseas about the end we line Micro-Lidar manufacturing is progress entire by the transition that, we the to COVID. before make will to As happening. and

Drew Hamer

margins giving into upward of share trend kind we XXXX, XXXX out year, that go direction the We come of will the should as that gross of a continue and as of that, you be linear that out by a we beyond. and so

Aileen Smith

Okay. for the Great. taking Thanks question.

Operator

back this to question-and-answer closing management over would session. you. to conference the for turn I Thank concludes And any our like comments.

Anand Gopalan

you. Thank

because revenue of defining in more producer the this be units the off are we have ship than we and all build Velodyne started multiple to the world, clearly together leading is the in market. combined, other lidar ones highest As players the And we lidar Lidar space, the we the saying, and categories. happens put product in

We have of portfolio products. broad a

robust across a products of have many pipeline applications. different We

your we ability and for grow, applications have questions. in and offerings We including done meet these all be in very have all software time demand, bringing up to we of we are across you to to that of whether the to uncertainties have product the high forward this, continue to our With continue to Thank today. continue first consistently, scale the our and so safety, all lidar-based we as execute, finally, to inevitable manufacturing the pioneer ability And of exist and much leadership fast different our marketplace. and as that our software moving of in your announced the with confidence very part customers.

Drew Hamer

you. Thank

Operator

you. Thank has for conference The now attending Thank you presentation. concluded. today's

lines. not You disconnect may your