Arbe Announces Q2 2023 Financial Results
- Arbe secured an $11.6 million preliminary order for radar chipsets from Weifu High-Technology Group.
- The company raised $23 million with Special Situations Funds.
- Arbe's chipset is in the final stages of selection with 11 premium OEMs.
- The company aims to add four customer wins by the end of the year.
- Revenues for Q2 2023 decreased to $0.3 million from $1.2 million in Q2 2022.
- The gross margin for Q2 2023 was negative 1% compared to 72.7% positive gross margin in Q2 2022.
- The net loss in Q2 2023 increased to $12.6 million compared to a net loss of $11.6 million in Q2 2022.
Key Q2 and Recent Company Highlights:
- Weifu High-Technology Group placed an
preliminary order for radar chipsets which will enable Arbe to meet Weifu's estimated requirements for 2024, for customers across$11.6 million China . Additionally, Weifu placed a order for professional services including engineering services, setup of a testing lab, and advanced support from Arbe.$1 million - Arbe's chipset is in final stages of selection with 11 premium leading OEMs across
Europe andChina for level 2++ / level 3 programs. - Arbe Tier 1s maintained the momentum, submitting Arbe's chipset in requests for proposal (RFPs) and requests for quotation (RFQs) to leading car manufacturers aiming to adopt next generation radar technology for enhancing safety and autonomy in their next-generation platforms.
- Arbe successfully raised
with Special Situations Funds, a family of funds focused primarily on growth oriented small public companies with a concentration on the technology and life sciences industries. Existing investors, including two affiliates of Arbe's directors also joined this round.$23 million - Product development is progressing on schedule towards production.
"During the second quarter, we made significant advancements towards our production goals for 2023 and we remain on track to add four customer wins by the end of the year," said Kobi Marenko, Chief Executive Officer.
"We are pleased that Special Situations Funds, together with current investors, chose to invest
Second Quarter 2023 Financial Highlights
Revenues for Q2 2023 were
Gross margin for Q2 2023 was negative
Operating expenses in Q2 2023 were
Sales and Marketing expenses increased from
Net loss in the second quarter of 2023 increased to
Adjusted EBITDA, a non-GAAP measurement which excludes financial expense/income and expenses for non-cash share-based compensation and for non-recurring expenses, for Q2 2023, yielded a loss of
Balance Sheet & Liquidity
As of June 30, 2023, Arbe had
Outlook
Management reiterated the full year outlook for the period ending December 31, 2023. Based on current estimates:
- Our goal for 2023 is to achieve 4 design-ins with automakers.
- Revenues are expected to be in the range of
to$5 .$7 million - Revenues will be heavily weighted towards the end of the year as Arbe expects to start shipping production chips.
- Adjusted EBITDA is projected to be in the range of (
) and ($32 million ).$35 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) 317-5736
Israel Toll Free: (80) 921-2373
A telephonic replay of the conference call will be available until Aug. 23, 2023, following the end of the conference call. To listen to the replay, please dial:
International: (412) 317-0088
Access ID: 4917417
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 Chipset Solutions, is spearheading a radar revolution, enabling truly safe driver-assist systems today while paving the way to full autonomous-driving. Arbe's imaging radar is 100 times more detailed than any other radar on the market and is a mandatory sensor for L2+ and higher autonomy. The company is empowering automakers, tier-1 suppliers, delivery robots, commercial and industrial vehicles, and a wide array of safety applications with advanced sensing and paradigm-changing perception. Arbe is a leader in the fast-growing automotive radar market that has a projected total addressable market of
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. The financial results described in the press release and the financial information include as an exhibit to the press release are based on Arbe's preliminary financial statements, which are subject to review by the Company's independent accounting firm and are subject to any adjustments resulting from the completion of such review. The non-GAAP financial information provides information that is different from the Company's financial statements, which are prepared in accordance with GAAP. These risks and uncertainties include, but are not limited to (i) the extent of binding purchase orders from the preliminary orders made by Weifu; (ii) our ability to obtain design-ins during 2023; (iii) unanticipated delays or difficulties in connection with the evaluation of Arbe's products in evaluation and test programs; (iv) Arbe's ability to have products manufactured for it by its third party supplier that meet Arbe's and its customers' quality standards and delivery requirements; (v) Arbe's ability to leverage its existing relationships and secure orders resulting from the test programs; (vi) Arbe's ability to meet its projected revenue level and its ability to operate profitably; (vii) Arbe's ability to meet its timetable both to achieve full production and to meet the delivery requirements of its customers; (viii) the development of safe autonomous vehicles that include Arbe's radar systems; (ixi) Arbe's expectation that it will obtain orders from Tier 1 suppliers and automakers that would build the radars based on its Chipset solution; (x) Arbe's belief that the Arbe Radar Chipset and Lynx Surround Imaging Radar herald a breakthrough in radar technology that provide Tier 1 suppliers and automakers with the ability to replace the current radars with an advanced solution that meets the safety requirements of Euro-NCAP and NHTSA for autonomous vehicles at all levels of autonomous driving; (xi) the ability of its Tier 1 customers to successfully market radar systems using Arbe's radar to automobile manufacturers; (xii) Arbe's ability to develop and market products based on its radar technology for uses outside of the automotive industry; (xiii) accidents or bad press resulting from accidents involving autonomous driving vehicles, even those using radar products from other companies or based on other technology and the effect of any accidents with vehicles using Arbe's radar system; (xiv) the effect of laws and changes in laws that have an effect on the market for or the requirement for autonomous vehicles; (xv) Arbe's belief that an increased demand for autonomous vehicles and the transition to mass production of Level 2 and higher autonomous vehicles, requiring advanced systems for automatically integrating vehicles in traffic and preventing traffic accidents, are expected to increase the demand for products in Arbe's field of activity; (xvi) changes or inaccuracies in market projections; and (xvii) the risk and uncertainties described in "Cautionary Note Regarding Forward-Looking Statements," "Item 5. Operating and Financial Review and Prospects" and Item 3. Key Information –Risk Factors" in Amendment No. 1 to Arbe's Annual Report on Form 20-F/A for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission on May 9, 2023, as well as other documents filed by Arbe with the SEC. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements relate only to the date they were made, and Arbe does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.
Information contained on, or that can be accessed through, Arbe's website or any other website is expressly not incorporated by reference into and is not a part of this Form 6-K.
CONSOLIDATED BALANCE SHEETS | ||||
( | ||||
June 30, 2023 | December 31, 2022 | |||
Current Assets: | (Unaudited) | (Unaudited) | ||
Cash and cash equivalents | 31,586 | 54,171 | ||
Restricted cash | 131 | 144 | ||
Short term Bank deposits | 25,602 | 400 | ||
Trade receivable | 2,040 | 2,202 | ||
Prepaid expenses and other receivables | 1,335 | 1,839 | ||
Total current assets | 60,694 | 58,756 | ||
Non-Current Assets | ||||
Operating lease right-of-use assets | 362 | 465 | ||
Property and equipment, net | 1,484 | 1,609 | ||
Total non-current assets | 1,846 | 2,074 | ||
Total assets | 62,540 | 60,830 | ||
Current liabilities: | ||||
Trade payables | 992 | 1,244 | ||
Operating lease liabilities | 234 | 364 | ||
Employees and payroll accruals | 2,311 | 2,861 | ||
Deferred revenues | 351 | 351 | ||
Accrued expenses and other payables | 1,903 | 5,609 | ||
Total current liabilities | 5,791 | 10,429 | ||
Long term liabilities | ||||
Operating lease liabilities | 44 | 17 | ||
Warrant liabilities | 1,393 | 1,631 | ||
Total long-term liabilities | 1,437 | 1,648 | ||
SHAREHOLDERS' EQUITY: | ||||
Ordinary Shares | *) | *) | ||
Additional paid-in capital | 237,970 | 208,893 | ||
Accumulated deficit | (182,658) | (160,140) | ||
Total shareholders' equity | 55,312 | 48,753 | ||
Total liabilities and shareholders' equity | 62,540 | 60,830 | ||
*) Represents less than |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
( | |||||||||
3 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | ||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
Revenues | 289 | 1,236 | 644 | 2,112 | |||||
Cost of revenues | 292 | 337 | 608 | 721 | |||||
Gross Profit | (3) | 899 | 36 | 1,391 | |||||
Operating Expenses: | |||||||||
Research and development, net | 9,091 | 9,534 | 17,215 | 17,337 | |||||
Sales and marketing | 1,478 | 1,177 | 2,402 | 2,360 | |||||
General and administrative | 2,014 | 2,273 | 3,644 | 4,418 | |||||
Total operating expenses | 12,583 | 12,984 | 23,261 | 24,115 | |||||
Operating loss | (12,586) | (12,085) | (23,225) | (22,724) | |||||
Financial expenses (income), net | 25 | (492) | (707) | (3,274) | |||||
Net loss | (12,611) | (11,593) | (22,518) | (19,450) | |||||
Basic net loss per ordinary share | (0.19) | (0.18) | (0.34) | (0.31) | |||||
Weighted-average number of shares used in computing basic net loss per ordinary share | 67,762,711 | 63,286,563 | 66,225,739 | 63,390,139 | |||||
Diluted net loss per ordinary share | (0.23) | (0.18) | (0.39) | (0.31) | |||||
Weighted-average number of shares used in computing diluted net loss per ordinary share | 56,450,209 | 63,286,563 | 58,419,059 | 63,390,139 | |||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
( | |||||||||
3 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | ||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||
Cash flows from operating activities: | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||
Net Loss | (12,611) | (11,593) | (22,518) | (19,450) | |||||
Adjustments to reconcile loss to net cash used in operating activities: | |||||||||
Depreciation | 139 | 111 | 276 | 217 | |||||
Stock-based compensation | 3,713 | 2,348 | 5,721 | 4,207 | |||||
Warrants to service providers | 157 | 96 | 254 | 96 | |||||
Revaluation of warrants and accretion | (369) | (2,014) | (238) | (5,149) | |||||
Change in operating assets and liabilities: | |||||||||
Decrease (increase) in trade receivable | 48 | (367) | 162 | (832) | |||||
Decrease (increase) in prepaid expenses and other receivables | 330 | 1,003 | 504 | 663 | |||||
Operating lease ROU assets and liabilities, net | (8) | (59) | - | (75) | |||||
Increase (decrease) in trade payables | (1,116) | 62 | (284) | (605) | |||||
Increase (decrease) in employees and payroll accruals | 43 | (155) | (550) | 217 | |||||
Increase (decrease) in deferred revenue | - | (340) | - | (335) | |||||
Increase (decrease) in accrued expenses and other payables | (499) | 339 | (3,706) | (2,526) | |||||
Net cash used in operating activities | (10,173) | (10,569) | (20,379) | (23,572) | |||||
Cash flows from investing activities: | |||||||||
Change in bank deposits | (25,602) | - | (25,202) | (400) | |||||
Purchase of property and equipment | (87) | (283) | (119) | (526) | |||||
Net cash provided by investing activities | (25,689) | (283) | (25,321) | (926) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from issuance of ordinary shares, net of issuance costs | 22,496 | - | 22,496 | - | |||||
Repayment of short-term loan | - | (5,217) | - | (5,217) | |||||
Proceeds from exercise of options | 46 | 118 | 606 | 215 | |||||
Net cash provided (used in) by financing activities | 22,542 | (5,099) | 23,102 | (5,002) | |||||
Effect of exchange rate fluctuations on cash and cash equivalent | (574) | (1,587) | (66) | (1,522) | |||||
Decrease in cash, cash equivalents and restricted cash | (12,746) | (14,364) | (22,532) | (27,978) | |||||
Cash, cash equivalents and restricted cash at the beginning of period | 45,037 | 87,387 | 54,315 | 100,936 | |||||
Cash, cash equivalents and restricted cash at the end of period | 31,717 | 71,436 | 31,717 | 71,436 |
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS | |||||||||
( | |||||||||
3 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | ||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||
GAAP net loss attributable to ordinary shareholders | (12,611) | (11,593) | (22,518) | (19,450) | |||||
Add: | |||||||||
Stock-based compensation | 3,713 | 2,348 | 5,721 | 4,207 | |||||
Warrants to service providers | 157 | 96 | 254 | 96 | |||||
Revaluation of warrants and accretion | (369) | (2,014) | (238) | (5,149) | |||||
Non-recurring expenses | 214 | - | 214 | 130 | |||||
Non-GAAP net loss | (8,896) | (11,163) | (16,567) | (20,166) | |||||
Basic Non-GAAP net loss per ordinary share | (0.13) | (0.18) | (0.25) | (0.32) | |||||
Weighted-average number of shares used in computing basic Non-GAAP net loss per ordinary share | 67,762,711 | 63,286,563 | 66,225,739 | 63,390,139 | |||||
Diluted Non-GAAP net loss per ordinary share | (0.16) | (0.18) | (0.29) | (0.32) | |||||
Weighted-average number of shares used in computing diluted Non-GAAP net loss per ordinary share | 56,450,209 | 63,286,563 | 58,419,059 | 63,390,139 | |||||
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA | |||||||||
( | |||||||||
3 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | ||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||
GAAP net loss attributable to ordinary shareholders | (12,611) | (11,593) | (22,518) | (19,450) | |||||
Add: | |||||||||
Financial expenses (income), net | 25 | (492) | (707) | (3,274) | |||||
Depreciation | 139 | 111 | 276 | 217 | |||||
Stock-based compensation | 3,713 | 2,348 | 5,721 | 4,207 | |||||
Warrants to service providers | 157 | 96 | 254 | 96 | |||||
Non-recurring expenses | 214 | - | 214 | 130 | |||||
Adjusted EBITDA | (8,363) | (9,530) | (16,760) | (18,074) | |||||
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SOURCE Arbe
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