NOVEMBER 08, 2022 / 9:30PM, VLDR.OQ - Q3 2022 Velodyne Lidar Inc Earnings Call
Theodore L. Tewksbury - Velodyne Lidar, Inc. - CEO & Director
Sure. Great question. And it really the answer depends on the market. So lets start with automotive. So automotive really breaks down into 2
subsegments. Youve got Level 4 and Level 5 AVs, including robotaxis, autonomous shuttles and so forth. And then youve got ADAS. So we have a very strong position with AVs with our Pucks, our Ultra Pucks and particularly with
our Alpha Prime, our 128 laser device, which is really a best-in-class category leader for AVs, and weve talked about that on past calls.
We continue to see strong demand for that product. However, weve continued to see the volume rollout of AVs, whether its robotaxis or autonomous
shuttles, continue to push out to the right. So most of the demand that we have there is for early deployments, pilot deployments and so forth. And so that those shipments on a quarterly basis tend to be very lumpy. We havent really hit
the production yet, and I think production is still going to be pretty far out in the future, probably towards the middle or back half of the decade.
As
far as ADAS is concerned, as weve talked about in prior calls, really the gating obstacle to volume deployments there is price, prices of lidar for L2+, L3. ADAS needs to come down to sub-$500 levels,
$300 to $400 being kind of the sweet spot. And thats why we dont have those products today. In fact, nobody in the industry has those products today. And thats why our second pillar is focused very aggressively on developing those low-cost technologies. So that ADAS is really going to start to take off once we can introduce those next-generation products, which will be ready for when those ramps arise.
Its for those reasons, for those the delays in the automotive market that we have really chosen to focus on what we call the early autonomous
markets, which is industrial, robotics and intelligent infrastructure, including intelligent traffic systems. Those markets exist today, and we are shipping into them as we speak. And so in those markets, we continue to see very strong demand from
our customers, and that accounted for the strong $12.5 million billings we saw in Q3 as well as the $13 million to $15 million of billings that well see in Q4, and we expect that to continue to grow.
Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst
Okay. So just to confirm and clarify like within industrial robotics and infrastructure, youre not seeing any hesitation from customers just given the
macro in terms of future activity or sort of billings engagement with your customers and billings as well.
And then just for my follow-up, Ill ask it right now, which is, as we think about sort of Im not asking a question about the merger itself, but as you start to prepare for it and we look at your portfolio, how are you
sort of intending to talk to your customers about the product portfolio itself, particularly in relation to sort of being making customers comfortable about that the product that they are choosing today will be part of a combined portfolio in
the future?
Similar sort of question but in relation to the outsourced manufacturing of Thailand with Fabrinet, does it fit into the overall plans in the
long run of the combined company?
Theodore L. Tewksbury - Velodyne Lidar, Inc. - CEO & Director
Okay. Let me start with the billings question. Were seeing very strong demand across the board. As I mentioned, were going to have
were guiding to 12 $13 million to $15 million in Q4. And I should mention that were seeing more demand were still seeing more demand than we can supply. I indicated in the prepared remarks that were
making tremendous progress in overcoming some of the supply chain constraints, but were still seeing much more demand than we can supply. So we went into Q4 with very strong backlog, and so Im very optimistic about future billings
growth.
As far as the merger, Id rather not get into details regarding the how were going to combine the product road maps or supply
chains and so forth. That whole discussion is going to have to await the closing of the deal, which will hopefully happen in the first quarter by March, may get prolonged into the second quarter. But well come back to you at that stage and
provide more detail on your questions around customers and supply chain. Suffice it to say that theres a lot of complementarity between our customers and our markets, which should ease that process.
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