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VLDR Velodyne Lidar

Participants
Andrew Chan Head of IR
Drew Hamer CFO
Jim Barnhart COO
Ted Tewksbury CEO
Michael Filatov Berenberg Capital Markets
Mark Delaney Goldman Sachs
Aileen Smith Bank of America Merrill Lynch
Sam Peterman Craig Hallum
Denis Pyatchanin Needham & Company
Call transcript
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Operator

Good day and welcome to Velodyne Lidar Third Quarter 2021 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Investor of Head Chan, Relations. Andrew Please go ahead.

Andrew Chan

Officer and conference call afternoon, financial Drew Chief thank prepared the third you today's on results. Financial Company's the us joining Hamer, run to remarks. XXXX through calls for quarter Good will discuss Lidar's Velodyne

the Q&A. Ted Barnhart, the and Tewksbury, will Officer have Chief Executive Operating We Drew be Officer, incoming Jim Chief available for

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

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

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

Drew. over like I'd to the turn Now, call to

Drew Hamer

last Since XXX our year continuing this the XX the quarter, We customers expert of proven August, on expand and is which welcome innovative and things. we've Virginia further to with November long-term and goal track would a has increasing track a working shipped leadership. experience deep projects, one of than Andrew, in global for an additional governance market pipeline to markets of for our to signed new businesses. We up a the call agreement lead of I welcome who technology whose grown like last robotics at also is Ladies renowned expect will done true we execute market number plan brings to will our project more you leading third for on multi-year only sensors market, our Velodyne. believe looking with this board with will the a to member, leading decades XX, strengthen Ted directors. visionary, Boulet. more our on end. grown and we year new industrial our value and drive in industrial time. She all to am and seasoned X/X XX expertise A in commercialization. We forward and I most is growth to and have saw our pipeline strategic earnings nearly one total Ted shareholders. of the concentration in you, three company. Thank closest in him a corporate Tewksbury activity We've as LIDAR make robotics XX% of record our XXXX experience compared CEO when LIDAR to gentlemen, And of Velodyne executive a than industry, accelerate. our Board the market by

move into today as us customers for giving of volumes orders mass Our are larger first purchase they commercialization. the wave

aggregate have more global year-to-date. reported combined of in quarter are sensors all sensors the We shipping leader, third that our shipping LIDAR the the peers than

than state for third peers. sensors The XX,XXX prior to more more interest in than quarter, in ship XXX expect our XXXX double up XXXX, state least We more shipped quarter. sensors products the continues our over grow. solid new over XX% to at the We significantly than solid

customers In products customers infrastructure looking with our to and vegetation and from their prior our sensors in fashion, use with revenue smoothing based in from demanding a in solid and We continue farms, quarter-to-quarter. are for continues current for are agreement units for state mapping, long-term served Velabit make In the markets our automotive now including for growth Lidar development be such to in OEM solutions in Switzerland modeling high environments, Lidar We management Overall, to continue In volume volatility of up develops and grow. our economic agreement including precision in used relationships projects new use for progress and products potential goals. the what we generation industrial, advances solar both existing XX AV next are portfolio. linear these high energy They robotics we Velabits ADAS to as to customers today forests, and to and late gain momentum. quarter. to XXXX. opportunities extend announced we facilities. robotics anticipate the sensors signed puck shipping the which new in to within additional the have to affordable with in is customers agree our of anticipate surveys. multi-year our In mapping, aerial excited major us use for could include systems. sustainability high have for precision we their Xd a We multi-year support emerging about TOPODRONE, in who samples working with XX renew out Velabit be

We navigation, manufacturers are Move.ai risk also collaborating automation and with to avoidance. enterprise obstacle solutions, avoidance mapping, with including robot grade provide

solution. Smart performance AGM our Cities. the not has Last also Alpha customers our least, mobile prime. AGM as relationships lidar but AGM-MSX type This second who Prime has existing expanded from We is Velodyne. purchased latest systems sensor on our such deployed sensor scanning with systems, Their high

a deployment used Irvine. part Initiative, infrastructure network or IIS intersections solution a at the California, University be Irvine was $X for road as selected of of major intelligent XX where Our in project Cities million it will Smart in

North to We of concept continue expand America. IAS proof our across deployments

$XX the were loss was to $X.X average and a License expenses and GAAP and mix to of full loss lower of XXXX. gross a business were the in outlook. $X.X down loss the weighted second of a expenses will million I quarter. million our the quarter, for our the XXXX. revenue million, compared results then lines. GAAP ramp million massive sensor prior non-GAAP revenue million to price of ongoing was across weighted evolution $X,XXX operating product and of $X,XXX toward review third $XX.X expenses $XX customers services quarter second than first million. million product consistent prior year quarter second million and provide months' guidance $X.X GAAP our was the second financials, Product consumer nine selling affordable quarter compared compared non-GAAP was average ASP compared $X.X per $XX.X Due compared our non-GAAP operating they for million expenses of was and commercialization. toward revenue $XX.X to in $XX.X to from slightly the state sensor The was to performance within million. combination million XXXX quarter quarter and gross quarter our non-GAAP and million for in in million, gross Total $XX.X million, Crucial Now loss our operating GAAP the gross per reflecting $XX.X ensuring quarter. $X.X $X.X of of as solid sensors and second operating

of sales $XX.X including expenses $XX.X marketing, merger taxes. GAAP XXXX $XX.X compensation expenses David professional a in operating included and Third Hall, the conduct compares taxes, general Hall, in second million our a This Martha Graph company's stock-based against and employer that the our million to Company. the which with of current expenses are operating expense, with committee's was investigations audit including to Chief Included charged in $X.X stock-based Company's expenses former quarter by was stock and and Officer accelerated former the million administrative included employer related the compensation of of expense, Marketing which legal Industrial. million based quarter majority vesting GAAP into and compensation of Chairman connection Director

ending was of the GAAP to loss $XX.X was was loss per $X.XX. $XX.X XXXX, quarter September non-GAAP non-GAAP months $XX.X XX loss net of million. GAAP Non-GAAP and was net was XXXX a million. $X.XX, million. second net this $XX.X was For share per figure net million This loss million. net loss GAAP loss nine and $X.X share compared

net for the GAAP EPS share was was quarter of XXXX XXXX $XXX.X third loss quarter per and Second $X.XX, calculated $X.XX. share per using non-GAAP million. is loss shares of outstanding net average weighted

cash on million. $XXX.X and short As completed of investments sheet. shares our September in million outstanding were XX term quarter actual the $XXX.X We balance with

nine of million million revenue months revenue, million the in million in September nine This and including For compares XX September $XX.X XX ended which product fee one-time XXXX, to $XX.X services revenue. $XX.X license comprised was was stocking ending months XXXX, $XX.X a $XX revenue, $XX.X for million nine nine XX to total $XX.X to in the product million of million, was months million. XXXX $XX.X and the loss for compares million $XX a net $XXX.X months loss September loss. services ended the non-GAAP ended million GAAP licensed million loss XX September $XX GAAP and XXXX of non-GAAP revenue. was net and This was net net in

units we $XX in million. guidance, Revenue at is a to million XX,XXX growth compared to $XX range ship least expect XX% Now and as year between over XXXX. full for expected A to XXXX XXXX. of

consistency mass purchases acceptable. first commercialization are samples within performance R&D were who had with As our natural my product This of remarks, where us with now moving wave customers I historically, customers lines. we mentioned is our are the earlier from expecting evolution in a done the test of various into

customer We are production expectations. meet to refining performance engineering delivery our and and processes

customer the into a sales $X.X of XXXX. out on fourth of quarter of quarter the million first As result and of product quarter shifted XXXX this focus approximately third satisfaction

basis, of to reflects due On offshore approximately expected non-recurring expense. include gross X% On in million GAAP ongoing aren't to are and signed. expected weighted removal to the expected million delays COVID-XX. range XX%. be are contribution expenses reflects volume between a $XXX margins compensation non-GAAP Non-GAAP to fees from moving This also basis, that gross stock-based already mix are ASP and $X.X in a manufacturing forecast revenue Our between any to million. operating $XXX engineering margins negative

We and a and approximately expense related will XXXX. public by expenses. due a XX% are On - operating expected million. legal income GAAP of to $XXX.X GAAP expenses administrative to estimated million anticipated Weighted $XXX,XXX. expense. $XX other include increased for when will compensation the expenses increase tax to stock-based XXXX approximately shares are general outstanding are expenses Primarily expect in On basis, to company compared Average basis, be be approximately year

yet business quarter from pipeline signed in signed and would review order for of the not At XXXX, I for billion. of approximately approximately a plus the to an estimate of through have our with projects we we end revenue $X.X projects outlook. opportunity awarded opportunity like could the million Finally, third that $XXX of are XXXX,

certain are As our rollout their we with are in of customers progressing schedules. solution seeing variability their rollouts, lidar

into reduced data through XXXX these financial my Jim formal get remarks. guidance, ramp outlying call. is the numbers. have will their our XXXX providing to XXXX rates reflected project ramp now questions. take business outlook the they Tewksbury maintaining allow metrics. are Ted opportunity pipeline This Operator, their earnings initial while years. As quarter Ted, some fourth updated I anticipate our concludes in address CEO and rates these This ready in to new We projects, and time plus aggregated This

Operator

Rusch instructions] ahead. go [Operator from First Oppenheimer. Colin Please of question

Unidentified Analyst

are the some I and operating with is you markets you wanted variability wanted Hi, rollout question. for provide about design for been last Colin, How the sort environment those good end Kristen your context now. markets? innovation among final That to how differs Thank right of around so on helpful. the customers afternoon. some remarks of your on and combat customers? if hand times that just you just made the the be ask that those of to this now in about you in And year would thank of really have pace hand for seeing schedules, cycle much you. could end to sort follow-up This taking

Drew Hamer

Fair enough.

year, final kind question this is sorry, because the own has the I - I I'm each pace sectors, other the solutions our have going maybe about nicely, different see design two the multi-year of tends projects a mile increased guess to then, at in out, design or to and and that that to markets, as agreement, those could time the be the be markets, a industrial the number solutions, our we and startup as years to substantially space, the of to pipeline their in in design win certainly about Each we're markets completion different of its think most. markets When pipeline, we some first, in of has entered I'm lot from very the market they mapping automotive years fact, last for delivery well further the the the what start with Drew. of the five away tend four start manufacturing production. is industrial talking the pace. of be in solutions And of that increasing, seeing the

lidar, five industrial space, still much Velodyne the and real space take we're that the years for shift and larger Lidar movement rapid to four longer right they a and automotive is there's it a investment So rapid to much really, by movement, to a Velodyne feeling we're there's still is out. tend in commercialization feels so and revenues the seeing for now be more or require going like a

Unidentified Analyst

And in consolidation. then as wondering seeing customers indications back this any are of We're But environment? helpful. on competitive quality, certainly platforms? can you you any if you're working touch also seeing with customer the engagement, on come and industry changes other That's some focusing really after

Drew Hamer

customers, it's basis ensured in volume our production, that that we're they're leader the allowed focus belief we're is we on deliver after is the the one they that or open looking take evolution in or it's sensor, consistent QX along something us revenue only to. sensors out Yes, senor accounting out. they every now to getting higher that a performance into the sure the what up beyond. that to box, quarter lot a and the our position making quality of of they something it to they And closing that when meeting we've that in our given they has put forward, of definitely the are space was expect. feedback that lead lot customers and And on basis, customers the us that that kind come this requirement, we're some and to move that which quarter, customers It's a a the opened go to Being is are this relationships XXXX they a opportunities had was more higher sensors, on deals are We've each those box. into sensors the the then additional much the out of fact that consistent us and us our the as to impact to with current that our buying when quality say, time we should continued forward sensors coming be existing going of Velodyne they same products going as want lines, they performance is And the is has from doing know receive where not have during something the appreciated. let but that them. reason have regular company of and in of but also really with consistent should those Barnhart, and to that's are who back effort because Jim those want on also spent a created assistance in of some of

Unidentified Analyst

I could you. Thanks your more we're ask for ramping looking one of component as you about at mass fit that. And that commercialization. do first in How Thank and want availability just I feeling are production? wave confidence if in. to

Drew Hamer

one. to you that Jim, want take

Jim Barnhart

question Excellent here. is yes Kristian. Sure, Jim this

them As rolling working advanced now. XX-months we course, are suppliers we're right seeing forecasts increased with availability lead a times, our of giving on

everyone as basis. see the manufacturers, them. since but daily components excuse as surprises make nothing quarter production seeing to addressing least suppliers. that the contract there in. We we're to regular on is with yet. needs overcoming we sure our out we're with looking a for having advance And out me see at shortages, we're customers, we as has getting pre our And shortages as that are And a and director We're reach we the in there, well constraint is the nature our the are some here our with - gated production but working suppliers

from to do far, we're mitigate this to say of we've working It rather tactical we I say with a at just we point. so like been that, chain, the demand continuity able customers and regular clear all to But continue have sending to And supply to to we've basis. able And on supply continuing being is make keep that. been doing that those our them sure signals and them. able to

Unidentified Analyst

Great. it Thank much. I'll you over. so turn

Operator

Berenberg. Filatov Michael ahead. of Next question, Please go

Michael Filatov

it's I going revenue a my year? question, pretty guys. take straightforward be for increasing guess one. to you Do next Thanks anticipate

Drew Hamer

Yes.

Michael Filatov

great. Okay,

Drew Hamer

we the in already next this with So go have, we through we've in to, plus number provided needs based do, we are we received expect talked and that we and the people rest customers, some in on year. a we've that them place, all changed for from they're to we POS the as months, the feedback some XXX had customers we there of of the contracts sell the two, conversations three we here What forecast get and that sensors what to in this of from we've expecting have expecting. that what be they

So taken NRE the portion. we've out

So be of it'll tell in that then have customers a to bit those about lumpy. close, a longer had contract, to us little take NRE, tend and we're they're we've a the piece have going finding to they'll and past,

be and to And continue anticipate will extent that we product our QX, came in who of you're and these now a revenues growth upside some from focused come things to stay in, present from themselves. they the other in at expecting is items, opportunistically one-time do you We're we're those So going the in the customers. revenues we're on that of and is to as what then we now, we'll right take And in if as product product and what licensed ours. year, revenues of maintain the going types our sensors have somebody of 'XX looking kind forward to out this at we customer relationships really one-time then to to you year. licensed quality And fee those revenues kind beyond we restocking leave take had of an go kind that nice last delivery of look the and growth. though NRE some see

Michael Filatov

Got it. answer. Thank you for thorough the

non-GAAP and level mean, revenue mind. target Just again, gross following the guidance you kind up on lowered in of have have do of you a sort margin I that, guys curious I'm

So maybe the when line is you threshold expecting a timeframe, to a reach expecting reach expect EBITDA breakeven. level, you're income on revenue to breakeven operating return or or target you're

Drew Hamer

that. our do it's It's with the avoidance will with getting the the of of to the of done not continuing mix product the it we're XXXX doing, of work some have that contribute will does we're products, to guidance. something belief in the increase So, volume. our But offshore, getting that it be work also which production it,

So Board, - out for we 'XX. subject to providing we expect XXXX year, a on everything that be maybe But breakeven plan, our and 'XX that getting thorough now should we're that's even come giving we we're to we Ted better again, everything that that to should into have out go next as as review. be we going review of the

Michael Filatov

leave it. Alright, Thank you. it I'll Got there.

Operator

The question, Please of you. ahead. Mark Thank Goldman next go Delaney Sachs.

Mark Delaney

well. on questions. afternoon, to for as and Ted's good I'm the taking thanks Yes, pleased

experience with us? I so share maybe the for start so far, and may views what Tad, with you question a any be with your And initial led you talk to about Velodyne take to hoping to job able your was and

Ted Tewksbury

Sure, sure.

than team. an forward rolling have The the just unanimously And you and Velodyne introduction has company is, pioneer all, was of market units looking up the demonstrated to how am really the this Velodyne all as other manufacture dive to been first the the across selected areas. product the lidar It only truly combined. industry the let do portfolio is the very the leader. all Board. position a scale. I'm for and a my be sleeves a to the shipped more know, is I excited deep all attracted at the and to in competitors And undisputed to working thank importantly, of company with the business by is reason, really very Velodyne broadest company member honor simple that's ability for Drew for company generous I So Velodyne me and which technology say in the sensory team to

looked so And I an opportunity to build enormous foundation. that at on saw just strong and that

you growth, Velodyne know scaling which revenue, profitability record of with who a is and and those in I needs technology and my that value, background, innovative For have businesses, shareholder of track proven what driving today. familiar building are my view, exactly you'll

the potential a was as look said Velodyne perfect company's working this I reality. that make fit. I before, to with So to a And and the forward team unlock

Mark Delaney

that handle you, now you how firstly, few a consistency the a Thank in up if the you understand I to and identify remediate it from Do talk the with consistency hoping issue I'm causing Thanks. product? could you ask could it? Have mentioned the you to a a better come the about issue question. timeline good fix what's other second the fully with did was have and Even product with different issue? if dimensions. the remarks. Maybe prepared

Jim Barnhart

that the Jim. actually This in cases using is beyond question. yes, in original intent. the good We quarter found are sensors applications in out customers Sure, some

temperature the seeing other type request. For ultra-pucks them on we different where the for high accuracy the both surveying for as requests, customers were to cases automotive the well originally back as some we're temperature mapping ultra-flex even we're use. released puck, seeing in tighter like they're it, with sensors call anticipation freezing concerned VLPXX, as of applications like And for being use and to more for the example, cases, starting in are

of We well firmware to cases, go shipment, all were modified to on should enable freezing we did temperature product us actually I to sensors, families, the sure we're what customers them, And, we positive the that now it's that the was as we positive actually more taking prepared Other were some that. understood and cases, the were the doing, how while really conforming individual have really his that but case what we we're for. made their the has sure mentioned we shipping So pause some quite looking we're say, did actually in feedback fact made release customers enable what as in sure we their been both And changed the we as will to we on on and informed are feedback we use the higher conscious to case made out is shipments components we to to customers mentioned, And just to we've product, Drew fact bottom some well from engineering that the in kept is, of I operations. actual remarks delay appreciated well. operations. are shipping Drew feedback needs. temperature the line they producing type received going for be to their production them the process what the for of refining what practices the say requirements. as employees conforming that making appreciate needs them. again from that customers that And the use to been been positive sure very amongst They

going the we're quarter, really the key coming double really to and on we the that continuing approach QX it's holistic third together So down all quality, forward. in

positive far momentum So ahead Go Nick. is that there. quite

Operator

All you. Thank right.

come will ahead. Aileen question go of Next America. from Bank Smith, Please

Aileen Smith

questions. taking the for Thanks Good afternoon, everyone.

number the I for this pipeline. X.X projects pointing just million the XXX quarter, last projects million away that square in and projects theoretical you're that XXX to had wanted you I have with one the to were possible quarter, units, on units you a units. First this X versus with think citing you of presentation

change quarter-to-quarter? you incremental explain can that the are really other those multi-year RFQ And understand high we X.X think are million how programs. the stages? much markets. more volume do non-automotive you coming sensors But missing or winning RFI or by projects of in so And you're end spot are are from that the the the then more I some changing that from in contract as terms called are

Drew Hamer

of is to there's want this nothing careful, - first just So our I all, missing. be

this you are it specifically. our to pipeline. comes information the them customers, from we gathering We provide from And

necessarily and So normal presented. the the share out needs. tracking we're in - a seeing you're based are And upon of business dynamics of you that when this I business the customer where opportunities isn't this currently it any with a pipeline pipeline, that goes is

that restructure there'll forward business reduced they've though customer has of evaluate business amount RFI to pre they less category, into they projects, even continued where three, a of planning future, achieve where the indicated declining. customers change end, the capabilities for conversations volumes a that the a but of too, impacted with that moving would focuses be be better volume chunk out, are four And buying on gotten big for that as with into business. anticipate might model a their with be projects, they There number still that numbers. hope launching, the understand are from they've this who segments. front total seeing those areas so they're of the to of expecting direct A net year which number saw the and of of we where purchases they're - two, and decided they're their they've they've the change those as sensors our have their as in entering also quarter this So on is big result a and business their spend about to came of actually changes priority other their saying they're customers one the in

a set what and as so up with us that these contact customers on are basis can talking lines regular about to and the very we're production their meet launching, needs. needs again, close As them are, they're their we

seeing So we're what also the that is pipeline. affected in

But normal It's provide This and disclosure. why to we future. of So this people lidar that is we it. the That's for a living, understand it's in think is the right so pipeline. breathing continued business. a lot opportunity the potential

Aileen Smith

versus of price. selling the helpful. wanted that your that's price the I but your And also was specifically, third these a average question units think are I'm I sensors, about understood, units yet weighted of lower in but ask the first absolute solid average price when selling And to lower looking numbers are the some much the the And and much from at great, total of quarter. first and right, lower, sold quarter, your comparable, to Okay, was state then in XQ to comparison were percentage probably quarter the around XQ. mix

substantially that older will products. price, we to across that missing a and are something? Is So your lead of some us interpretation? more you're potentially conclude dropping legacy fair that Or

Drew Hamer

quarter of first we first almost in Well, all, over we shipped look had X,XXX. we In quarter, that shipped. this over units X,XXX the

volumes the we because of a seeing are state number price. shipping. solid we're substantially. up at are an in sensors the that It's a So affected And increase those shipped bit lower are

average people a with unit with as are some traditional at doing course, those we bought you're we customers when commitments have started volume relates And contracts do to impact. commitments normal a are So it volume of there price have ASP, sensors, volume, with certain going that's then weighted volume, customers. an to the the rotational role, those

or not take starts come as sold there between units sold sequential that going further rotational to at But volumes also linear a But are will be see into movement a that to we price time dynamic forward, We not low linear an price that on try isolated inside And some and quarter they're versus and some thing. one quarters. that the go see out to higher we're go expect forward, solid it basis, expecting as It's lower others. down so get go may sensors we'll - do at really prices and that are see we this we coming basis. shipped. as the of number play. in to We'll mix continuing the we And state up. ASP we're will

the us need and they'll give coming decreases As the some appropriate volumes that increase, are from offset that'll to the we the ASPs contributions of business.

Aileen Smith

third quarter. quarter first XQ guys that of base accretive out you XQ, of but from mixed of base were on in third which actually of in units basis. X,XXX clarification, units I a versus XXX units, the state That's was both the X,XXX referencing I the XXX a solid a Okay, in quarter the a around think versus out as for

So those your products, you down across imply I'm products away taking some on price trying those to rotational would so more selling of that price square that were other average that units.

Drew Hamer

There have on purchasing. those because they're the that reductions increased price been customers some units, volumes have

volume things more a happening sensors unit at up see we rotational could we an be of also should like this think look basis well But sequential it'll agreement, I price not it'll, basis, see versus it's could to but ASP said, happening, quarters. be basis. go be on - price in we a future linear like something will on those as those So in there on going I some

Aileen Smith

for Thanks helpful. That's questions. taking great. Okay, the

Drew Hamer

joining Thank call. the you for

Operator

Thank you. The next Please question Group. Peterman, comes from Craig-Hallum Sam Capital ahead. go

Sam Peterman

there's it your $X.X the look that your Hi year-over-year, pretty not graph, pipeline, million expecting huge look Drew. whole deck Thanks bit first on for be of where the are is as to one pretty strongly - at, to and of years. if kind shows what trending units. going that projects million down kind just you But quite a ADAS the And questions. a you're yet like your similar slide on of X that it's is prior change pipeline at doesn't a ADAS My to where looks taking percent same quarter-over-quarter in versus from ADAS quarters investor my year-over-year. it and in later in up

I'm what curious on there can into give and that? your if just into you any thinking seeing And reconcile what you're is ADAS color from customers? So how us going you

Drew Hamer

Yes.

we seeing space, we've an indicated. ADAS moving And those years. as tremendous area So evaluating projects could the five quickly and we're getting as carefully to four, from three customer we're take a the are while customers, shifting very basis, space. pretty They aren't regular the it's activity are where on priorities ADAS on industrial

as The shifting. are OEM's forward. of changing are projects priorities - we their So some their priorities Lidar commitment seeing and that varying we those into they're solutions. to We'll have incorporating go are

Sam Peterman

ADAS just for - one curious on - you talked how be that looking I'm provide Okay. and that's your with I XXXX could then RFI if color around that this last clarified great. Asia on update Or around And solid-state you in then quarter or OEM, believe, in and agreement would product. then. is sure any more your I'm is any not stage? an key about an a for

Drew Hamer

them, on project on have We've - actually That's up basis with Yes. calls we're of work that. that point can And one work It's those to set we focusing RFI, on the getting and Asia. in sensors close have regular we with the signed where awarded them with RFQ close and them stage an operation daily to the to with category. that we a and very and OEMs them. move a partner,

Sam Peterman

Pipeline for additional Okay. Velabit. could seeing projects you're went eight substantial coming wins activity from? Then where a you or here on that bit. pipeline color for curious if markets up eight any I'm last are on one quick some give those and into me your the

Andrew Hamer

Yes.

So product we the to don't really that for the us moving market. until that interest customers of And keep availability are it amount from to have XXXX. commercial seeing It's along. planned has enormous a priority top demand we for Velabits about a us for get made to production,

kind that in in to response across solution. product really and robotics demand the lot seeing them. out it's delivery the drones a industrial all of like and like last shops. the that, activity even A activity as OEM between the lot of board deliveries, down mile for get of the the that tremendous things customers. are we it's break newer industrial customers a the for spaces to using us We and from market even there's our There's And interesting, in of

spread widely across really get seeing buying to the the in very that markets, it and moving it's aggressively beat So we're interest all standards. that, we're that their to

Sam Peterman

Okay, thanks.

Operator

be Please Baird. go will question Next ahead. Gerra from Tristan of

Unidentified Analyst

what and recognition [ph] Tristan. car that into actualization? Maybe object can this beyond efforts just talk Tyler platform you putting off, software extends Hi, on first maybe you're for into the about is

Drew Hamer

Yes.

So we of have be incorporated actually products got systems. - we've already built out into those a kind platform of can that a

into working we have XXXX with on and beyond. develop then some as that that very are additional kind And to our work agreement. We to we'll that customers development of features can that them we want plans continue require and and out identify towards go would we they incorporate work the as any functionality to closely and feedback so closely commercial a

Unidentified Analyst

XXX-degree then maybe point do be? Okay. the in what for timing my And inflection follow-up, if you that you of see applications a so, then would inflection Great. expect what would And in? Lidar shipments? that And rebound

Drew Hamer

rebound A sensor. rotational in

So actually of a haven't seen rotational the we sensors. decline demand in the

in we're steadily are We very Puck actually a our - number selling of sensors.

unit quarter, Our had this uptick to Aileen earlier. contributing Alpha Puck the volumes, kindly pointed out nice sensors as actually a

which the with our We sensors, number chips. ASIC and a will next-generation engaged are Lidar our also MLA around use customers of

a to closely our some of automotive-grade they're today sensors those So we defining that be tests will capability, working their very that moving that have use vehicles. they're should and and sensors us on number with customers of of kind want that towards running work how on

Velodyne a agreements our to expect And rebound think incorporate product don't solid-state sorry, much it do customers And to it - for a a products. to really Lidar, market-leading I as as solutions. strong as it's do we our we well continue as products. have with so be And Velodyne product into

in it So surround to where autonomous solutions, some I gives it interesting the want so to them more solutions use robotics, solutions. the vehicle sensor. use we're a from where them sensor whether a and automotive it they an others dynamic And in we're also IIS with see solid-state where want with gives gives use just data in AV, can them Velabit. them, again, see then one one you'll view intersection a sensor, that the people Velarray, sorry, a it's vehicle data it also full because them an gives seeing the rotational And that whole think the or seeing intersection, people more

So also drones, puck A lot in do and and mapping. we're have rotational sensors, lights, topographical them mapping. put them really - our use of to and use then they'll our they'll we on people

We it backpacks. a customer also who's have using for

neighborhoods as well. on backpacks they use walk the So mapping they and and them neighborhoods people's the in them put do around

people to be very still a much to sensors rotational are as able well seeing a that want with product really them as that sensor. go So option solid-state giving

Unidentified Analyst

All thanks right. color. the for Great,

Operator

question from Needham Company. Raj go & Next Gill of ahead. Please comes

Denis Pyatchanin

everyone. This for afternoon Raj. is Good on Denis

of versus previous of due one the consistency? of my supplier here issue to ask the I can for them, mix kind just in-house outsourced And to guidance seeing much was that your having current want reduction versus of challenges you first we're component production? question, So you're improving that the talk this from about how

Andrew Hamer

Yes.

manufacturers. usually are speak components have what of we is house. of don't we But the produced by contract sensors number that So being previously to a particular of out our specifically in-house versus shared our

are So our other our products, even now of Ultra contract being Pucks, VLS-XXXs a manufacturers. by number produced Pucks, our

started of offshore delays previous haven't the looking we about products, move as we've been as However, talked at because many those we of quarters. in able our solid-state to

to back in will done up, being Although and they then San a the then being those components they're States assembly. come assembled newer products here stood the continue the and Jose produced to the number as of And be offshore, are United final for facility.

was is generally second So there it, missed there done think please? the repeat to it. and I a I across sorry, spilt you line. Would like the I'm question

Denis Pyatchanin

Sure.

to So the the semiconductor you component XX% then just of are to how for we versus ones this here reduction versus essentially, to had - and that moving trying consistency versus that due guys production? affecting so are XX.X% volume this much from shortages guidance or industry last improve of issue quarter, entire the was

Drew Hamer

mostly consistency the do an It's it NRE But shortages that production to It's it's or very improving just also forecast. none actually finding customers. expectation that supplier has anything difficult of with for around our of - to we're nature.

because we like about or in pipeline should we And who felt QX contracts. talking we're expected. and in QX, are believing that the had than So us they're certainly taking to it that in of customers longer long-term forward have they some move

in we decided we've to it of the as have take So guidance. the out that we're upside as we an forecast, hand go part, the into leaving signed unless and agreement

Denis Pyatchanin

it so offshore, you on moving issues some is as to some so in current the production the Can that color improving? worse? speak regards issues the situation we what's more these same or quarter, with of provide Is then say going essentially? it you And the would and of is Great. getting on

Drew Hamer

Jim let I'll speak to that.

Jim Barnhart

once etcetera, And transfer for manufacturers the facility. It's then Yes. in mean, instructions offshore. hand is the And the well. the as we we our issue moving we strategy the progressing with are, see main what initial that's of to to process continuing this any don't with that - actually, prototyping production. interesting in-house center development state pilot technical we're done, the manufacturing off up contract have I production our I to documentation Jim. package do

Operator

question from Filatov Next [Operator Instructions] Michael of Berenberg. comes

Michael Filatov

one the to I for me. Sorry, the year. negative that was to margin XX%, just That another confirm, X% gross full looking just - is positive correct? guidance non-GAAP for

Drew Hamer

to negative negative XX%. X% it's No,

Michael Filatov

you. Got Okay. for clarifying that. Thanks

what XXs, the down for looking expectations of revenue bit. quite original and full-year driver that? obviously margin the sort revenue mean margins spec change at primary what you this back of driver at the million of the Just and XXXX year? was significant guidance as is the a now I again, characterize if would are $XXX quite something And it's look that for in it the you main in and

Drew Hamer

Yes.

of into we're for back to the provided from during throughout the us, that's of year. pushing versus in projects is, the of some that then is when primary weren't at COVID of some For customers the down three these everything these the definitely honestly, driver, the the in - when the programs numbers two, We've some. being expecting that that. down, pushing main that into or of came company not we slowing for for were the were actually, The that this sort today resulting beginning we we what impacted the of - saw to quarters get here creating merger, we slowing thing difference guidance even seeing impact there a to dynamic XXXX now were we're just locked the end year, so year was versus of where year been out, course, year, we out that year. this first and by it of next And the

lot to starting thing we up So projects with this now, a where those piece, taking is and of we that and the are into course, in us it's those people I XXXX. And for those coming gotten numbers look again, by we're in there forward NRE out, that come then to the key are current lastly, back that they back, as were back with vogue to forecast of forecast think pick they're pipeline consistently us sharing everybody.

Michael Filatov

So that Does seems based imply become realized? that $XXX see shifted or have we on million said, back. gotten what that of you things could just kind revenue it year in two, like the plus next

Drew Hamer

is back. of earlier, all It - shift about business, what talked and that of components Ted case. we different we that come we given the And have seen be as the to having would evaluating on careful things benefit especially the want the be really of,

right certainly cleaned every of they're to I are single project intentions with our a what So what looking gain through in and better deny but up we pipeline, at. projects are those where having forward, or customers going that giving deep their to will, with conversations we're understanding you now, verify if you again, when speak you so deck, we're that at we going their can't of

Michael Filatov

much. very Thanks right. All

Operator

question-and-answer the session. remarks. now the to turn for management concludes I'll That closing call back

Drew Hamer

with what reiterate, will near to exciting very joining you also unit joining is I and customers thank working The we're expect have forward. to excited of the generator to about our our Okay. key Well, Again, you honor seeing seeing Ted it, to looking in be to activity that everybody, for It's thank, with increasing. for Lidar industrial want company. that very at going with volumes call want really are just be we're in just we revenues. want today. forward the working I our to I least very much excited we because Velodyne him the we're term,

as satisfy of out products, it we're ability then the forward produce quality to and of companies ways forward, of to one that its go consistency, future, out start need into level that as expect. other looking closer our be other the technology can't scale us to our get build the allow because to to we production, and we'll boxes get to a able And their As evolved solutions. we will that needs projects to check customers components in in of being customers' all proven Lidar they able to has various use their Lidar having in of order be to that sensor

you have we for your forward. with forward as So thank good all much a you talking look evening. And go more time Bye-bye. hope to We you very today.

Operator

concludes attending. Thank conference. you That for today's

may now You disconnect.