Arbe Announces Q1 2024 Financial Results
Arbe Robotics (NASDAQ: ARBE) announced its Q1 2024 financial results. Revenues dropped to $0.1 million from $0.4 million in Q1 2023. The company reported a negative gross margin of 194%, down from a positive 11% last year. Operating expenses increased to $12.5 million, leading to an operating loss of $12.8 million and a net loss of $12.8 million. The company ended Q1 2024 with $5.4 million in cash and $30.3 million in short-term deposits. Major highlights include collaboration with leading OEMs, integration with NVIDIA's Omniverse Cloud APIs, and progress towards dual listing on the Tel Aviv Stock Exchange.
The company expects 2024 revenues to be similar to 2023, with growth anticipated in 2025 as they ramp up production. The adjusted EBITDA loss for 2024 is projected to be between $30 million and $36 million.
- Collaboration with leading OEMs and integration with NVIDIA's Omniverse Cloud APIs.
- Nearing full automotive qualification for chipsets and advancing towards volume production.
- Progress towards dual listing on the Tel Aviv Stock Exchange to enhance trading volume.
- Arbe remains debt-free with $5.4 million in cash and $30.3 million in short-term deposits.
- Projections indicate revenue growth in 2025 with a ramp-up in production.
- Revenues dropped significantly from $0.4 million in Q1 2023 to $0.1 million in Q1 2024.
- Negative gross margin of 194% compared to a positive margin of 11% in the previous year.
- Operating expenses rose from $10.7 million in Q1 2023 to $12.5 million in Q1 2024.
- Operating loss increased to $12.8 million from $10.6 million in Q1 2023.
- Net loss surged to $12.8 million compared to $9.9 million in Q1 2023.
- Adjusted EBITDA indicates a projected loss of $30 to $36 million for 2024.
Insights
The financial performance for Q1 2024 reflects critical challenges for Arbe Robotics. Revenues dropped to
The operating loss surged to
For retail investors, the immediate financial outlook appears bleak, with projected EBITDA losses between
Arbe Robotics is pushing forward with advanced radar technology, critical for autonomous driving and ADAS systems. Their chipset, integrated into the HiRain LRR610 radar, positions Arbe at the forefront of high-definition radar solutions. Noteworthy is NVIDIA's inclusion of Arbe's Perception Radar in its ecosystem for autonomous systems, highlighting the technology's relevance and potential industry impact.
The radar’s capability of tracking pedestrians and vehicles in adverse conditions aligns well with the new NHTSA safety standards. Moreover, the integration efforts with Horizon Robotics' AI processor reflect a strategic move to enhance their technological footprint in the autonomous driving landscape.
While the technical milestones are promising, the path from development to widespread adoption and revenue realization is complex. Investors should consider the timeframes for mass production and the substantial financial investments required to bring these solutions to market.
Arbe Robotics is strategically positioning itself within the high-growth market for autonomous driving solutions. The selection of their technology by a global leader for a robotaxi fleet, scheduled for 2025, underscores the long-term potential. Additionally, their involvement with top-tier OEMs and key players like Magna and Sensrad indicates strong industry recognition.
The dual listing on the Tel Aviv Stock Exchange (TASE) aims to enhance trading volume and liquidity, which could positively impact investor sentiment. However, the significant decline in Q1 revenues and the adverse gross margin might delay the expected market traction. The need for consistent revenue generation and prudent cash management will be critical as they advance towards full production in 2024's latter half.
For retail investors, while the mid-to-long-term prospects look robust given the market trends and technological advancements, immediate financial risks and uncertainties necessitate cautious optimism.
Key Q1 and Recent Company Highlights:
- A global leader in autonomous driving selected the HiRain LRR610 radar, powered by the Arbe chipset for its robotaxi fleet scheduled for mass production in 2025.
- Arbe's finalized chipsets, which are nearing full automotive qualification, are advancing to volume production, with our Tier 1s actively completing the radar hardware and software for design validation tests and preparation for serial production.
- During the first quarter, we actively supported leading OEMs in their evaluation and RFP/RFQ processes in collaboration with our Tier 1s: Magna, HiRain, Weifu, and Sensrad. We believe the demand for high-channel count solutions is widespread across the board, and the Arbe solution is recognized as the radar with the largest channel array by leading OEMs.
- A large Japanese automotive client is working to complete a massive data collection initiative with Arbe radar solution this year, as part of the development of an advanced ADAS/AD architecture.
- NVIDIA has brought together a select group of advanced digital sensors from industry leaders, including Arbe's Perception Radar, to create a rich ecosystem of simulation tools and applications as part of the Omniverse Cloud APIs, designed to accelerate the path to autonomy.
- Horizon Robotics, the premier provider of computing solutions for ADAS and AD, presented the integration of Weifu's 4D Imaging Radar, powered by the Arbe chipset, with Horizon's Journey 6 Automotive AI processor, as part of their partner ecosystem at the 2024 Beijing International Automotive Exhibition.
- Arbe's technology provides the leading solution for tracking pedestrians and vehicles in challenging weather and lighting conditions. We believe this capability is crucial for meeting the requirements of the NHTSA's new federal safety standard, which mandates automatic emergency braking (AEB), including pedestrian AEB, for all passenger cars and light trucks by September 2029.
- HiRain achieved a significant milestone by successfully developing state-of-the-art post-point cloud algorithms, including clustering, tracking, classification, and free space analysis, for its LRR610 radar powered by the Arbe chipset. These innovations have been piloted with leading OEMs, showcasing their potential impact on automotive safety.
- Arbe is in the process of dual listing on the Tel Aviv Stock Exchange (TASE) to enhance trading volume. Concurrently, the company is advancing towards a convertible bonds issuance on the TASE, to secure sufficient working capital and to support Tier 1s, customers, and anticipated production ramp up in 2025.
"In the first quarter, most leading OEMs progressed towards selecting high-definition radar systems leveraging a high channel count chipset. This validates the indispensability of our technology for safe, hands-free driving," stated Kobi Marenko, Chief Executive Officer. "We are proud to offer a pivotal sensor that empowers OEMs to adhere to the latest NHTSA safety standards, enabling crucial AEB functionalities and advanced safety features such as night-time pedestrian and vehicle detection."
First Quarter 2024 Financial Highlights
Revenues for Q1 2024 were
Negative gross margin for Q1 2024 was
Operating expenses in Q1 2024 were
As a result, our operating loss in Q1 2024 was
Net loss in Q1 2024 increased to
Adjusted EBITDA, a non-GAAP measurement which excludes expenses for non-cash share-based compensation and for non-recurring items, for Q1 2024, yielded a loss of
Balance Sheet and Liquidity
As of March 31, 2024, Arbe had
Outlook
- Our goal of achieving 4 design-ins with automakers remains unchanged, as we observe continued strong interest in our market-leading offering.
- We have strengthened our position in all our RFQ engagements, even though the OEMs shifted their decision timelines from late 2023 to 2024.
- The 2024 annual revenues are expected to be in line with those of 2023, followed by revenue growth in 2025. These revenue projections are based on the intention to be in full production in the second half of 2024, as well as our decision to exclusively focus on getting our chipset into production.
- We are committed to maintaining a strong and well-managed balance sheet, focusing on cost-effectiveness and the ability to fund our revenue growth. Adjusted EBITDA for 2024 is projected to be in the range of
( to$30) million ( .$36) million
Conference Call & Webcast Details
Arbe will host a conference call and webcast today at 8:30 am ET. Speakers will include Kobi Marenko, Chief Executive Officer, Co-Founder and Director, and Karine Pinto-Flomenboim, Chief Financial Officer. The Company encourages participants to pre-register for the conference call here. Callers will receive a unique dial-in upon registration, which enables immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.
The live call may be accessed via:
International: (412) 317-1880
Israel Toll Free: (80) 921-2373
A telephonic replay of the conference call will be available until June 5, 2024, following the end of the conference call. To listen to the replay, please dial:
International: (412) 317-0088
Access ID: 4712793
A live webcast of the call can be accessed here or from Arbe's Investor Relations website at https://ir.arberobotics.com/news/ir-calendar. An archived webcast of the conference call will also be made available on the website following the call.
About Arbe
Arbe (Nasdaq: ARBE), a global leader in Perception Radar Solutions, is spearheading a radar revolution, enabling truly safe driver-assist systems today while paving the way to full autonomous-driving. Arbe's radar technology is 100 times more detailed than any other radar on the market and is a critical sensor for L2+ and higher autonomy. The company is empowering automakers, Tier-1 suppliers, autonomous ground vehicles, commercial and industrial vehicles, and a wide array of safety applications with advanced sensing and paradigm changing perception. Arbe, a leader in the fast-growing automotive radar market, is based in
Cautionary Note Regarding Forward-Looking Statements
This press release and any statements made at the conference call and webcast referred to in this press release, contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. The words "expect," "believe," "estimate," "intend," "plan," "anticipate," "may," "should," "strategy," "future," "will," "project," "potential" and similar expressions indicate forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to effect on the Israeli economy generally and on Arbe's business resulting from the terrorism and the hostilities in
Information contained on, or that can be accessed through, Arbe's website or any other website or any social media is expressly not incorporated by reference into and is not a part of this press release.
CONSOLIDATED BALANCE SHEETS | ||
( | ||
March 31, 2024 | December 31, 2023 | |
Current Assets: | (Unaudited) | (Unaudited) |
Cash and cash equivalents | 5,131 | 28,587 |
Restricted cash | 260 | 163 |
Short term Bank deposits | 30,304 | 15,402 |
Trade receivable | 856 | 1,258 |
Prepaid expenses and other receivables | 2,198 | 2,026 |
Total current assets | 38,749 | 47,436 |
Non-Current Assets | ||
Operating lease right-of-use assets | 2,034 | 1,740 |
Property and equipment, net | 1,263 | 1,309 |
Total non-current assets | 3,297 | 3,049 |
Total assets | 42,046 | 50,485 |
Current liabilities: | ||
Trade payables | 1,681 | 1,149 |
Operating lease liabilities | 543 | 436 |
Employees and payroll accruals | 3,061 | 2,916 |
Accrued expenses and other payables | 1,015 | 1,710 |
Total current liabilities | 6,300 | 6,211 |
Total current liabilities | ||
Long term liabilities | ||
Operating lease liabilities | 1,622 | 1,306 |
Warrant liabilities | 763 | 875 |
Total long-term liabilities | 2,385 | 2,181 |
SHAREHOLDERS' EQUITY: | ||
Ordinary Shares | *) | *) |
Additional paid-in capital | 249,807 | 245,733 |
Accumulated Deficit | (216,446) | (203,640) |
Total shareholders' equity | 33,361 | 42,093 |
Total liabilities and shareholders' equity | 42,046 | 50,485 |
*) Represents less than | ||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
( | ||
3 Months Ended | 3 Months Ended | |
March 31, 2024 | March 31, 2023 | |
(Unaudited) | (Unaudited) | |
Revenues | 137 | 355 |
Cost of revenues | 403 | 316 |
Gross loss (profit) | (266) | 39 |
Operating Expenses: | ||
Research and development, net | 9,397 | 8,124 |
Sales and marketing | 1,453 | 924 |
General and administrative | 1,644 | 1,630 |
Total operating expenses | 12,494 | 10,678 |
Operating loss | (12,760) | (10,639) |
financing expenses (loss), net | 45 | (732) |
Net loss | (12,805) | (9,907) |
Basic net loss per ordinary share | -0.16 | -0.15 |
Weighted-average number of | 78,176,210 | 64,671,688 |
Diluted net loss per ordinary share | -0.21 | -0.17 |
Weighted-average number of | 62,573,715 | 58,969,265 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
( | ||
3 Months Ended | 3 Months Ended | |
March 31, 2024 | March 31, 2023 | |
Cash flows from operating activities: | (Unaudited) | (Unaudited) |
Net Loss | (12,805) | (9,907) |
Adjustments to reconcile loss to net cash used in operating activities: | ||
Depreciation | 142 | 137 |
Stock-based compensation | 3,726 | 2,008 |
Warrants to service providers | 348 | 97 |
Revaluation of warrants and accretion | (112) | 131 |
Change in operating assets and liabilities: | ||
Decrease in trade receivable | 402 | 114 |
Decrease (increase) in prepaid expenses and other receivables | (172) | 174 |
Operating lease ROU assets and liabilities, net | 129 | 8 |
Increase in trade payables | 517 | 853 |
Increase (decrease) in employees and payroll accruals | 145 | (593) |
Decrease in accrued expenses and other payables | (695) | (3,207) |
Net cash used in operating activities | (8,376) | (10,185) |
Cash flows from investing activities: | ||
Change in bank deposits | (14,902) | 400 |
Purchase of property and equipment | (81) | (53) |
Net cash provided by (used in) investing activities | (14,983) | 347 |
Cash flows from financing activities: | ||
Proceeds from exercise of options | - | 561 |
Net cash provided by financing activities | - | 561 |
Effect of exchange rate fluctuations on cash and cash equivalent | 256 | 509 |
Decrease in cash, cash equivalents and restricted cash | (23,615) | (9,786) |
Cash, cash equivalents and restricted cash at the beginning of period | 28,750 | 54,315 |
Cash, cash equivalents and restricted cash at the end of period | 5,391 | 45,038 |
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS | ||
( | ||
3 Months Ended | 3 Months Ended | |
March 31, 2024 | March 31, 2023 | |
GAAP net loss attributable to ordinary shareholders | (12,805) | (9,907) |
Add: | ||
Stock-based compensation | 3,726 | 2,008 |
Warrants to service providers | 348 | 97 |
Revaluation of warrants and accretion | (112) | 131 |
Non-GAAP net loss | (8,842) | (7,671) |
Basic Non-GAAP net loss per ordinary share | -0.11 | -0.12 |
Weighted-average number of shares used in computing basic | 78,176,210 | 64,671,688 |
Diluted Non-GAAP net loss per ordinary share | -0.14 | -0.13 |
Weighted-average number of shares used in computing diluted | 62,573,715 | 58,969,265 |
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA | ||
( | ||
3 Months Ended | 3 Months Ended | |
March 31, 2024 | March 31, 2023 | |
GAAP net loss attributable to ordinary shareholders | (12,805) | (9,907) |
Add: | ||
Financial expenses (income), net | 45 | (732) |
Depreciation | 142 | 137 |
Stock-based compensation | 3,726 | 2,008 |
Warrants to service providers | 348 | 97 |
Adjusted EBITDA | (8,544) | (8,397) |
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SOURCE Arbe
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