Arbe Announces Q4 and Full Year 2023 Financial Results
- Arbe completed chipset pre-production phase and is moving towards production ramp up in 2024.
- Tier-1s will start mass production of radar systems based on Arbe's chipset in China.
- Arbe's chipset selected for five perception projects with leading OEMs.
- Received a second order from a Western truck company and HiRain Technologies for 4D Imaging Radars.
- Sensrad received significant customer orders for radar systems based on Arbe's chipset.
- Evaluation by key players with projected radar revenue of $7.5 billion by the end of the decade.
- Released production version of Radar Processor and production intent chipset for mass manufacturing.
- Initiating a dual listing on TASE and negotiating bond issuance for working capital.
- Financial highlights show a decrease in revenues, negative gross margins, and increased operating expenses.
- Net loss in Q4 2023 was $9.3 million, and $43.5 million for the full year 2023.
- Adjusted EBITDA improved to ($32.5) million for 2023.
- Arbe had $28.6 million in cash and cash equivalents with no debt as of December 31, 2023.
- Revenue projections for 2024 expect growth in 2025, with Adjusted EBITDA projected to be in the range of ($30) million to ($36) million.
- Conference call and webcast details for March 7, 2024, with speakers including the CEO and CFO.
- Decrease in revenues for Q4 and full year 2023 compared to the previous year.
- Negative gross margins in Q4 and full year 2023.
- Increased operating expenses for the full year of 2023.
- Extended decision timelines affecting progress and revenue growth.
- Adjusted EBITDA still showing a loss for 2023.
- Decrease in gross margin primarily related to economy of scale.
- Revenue projections for 2024 expect no growth compared to 2023.
Insights
Arbe Robotics Ltd.'s announcement of its financial results for the fourth quarter and full year ended December 31, 2023, holds significant weight for investors and stakeholders. The reported Q4 revenues of $0.35 million, although showing an increase from $0.15 million in Q4 2022, are overshadowed by the year-on-year decrease in annual revenue from $3.5 million in 2022 to $1.5 million in 2023. This contraction could raise concerns about the company's market penetration and revenue-generating capabilities, especially given the negative gross margin reported for the full year.
The announcement of the dual listing on the Tel Aviv Stock Exchange and the potential issuance of bonds are strategic financial moves aimed at increasing liquidity and securing working capital. These actions suggest that Arbe is looking to bolster its financial position ahead of its anticipated production ramp-up in 2025. Investors should monitor the company's ability to manage its operating expenses, which have decreased from the previous year and its cash reserves of $28.6 million, as these factors will be crucial for sustaining operations and funding growth.
Arbe Robotics Ltd. is positioning itself as a key player in the Perception Radar Solutions market, with significant developments such as the completion of its chipset pre-production phase and the initiation of mass production by Tier-1s in China. The selection of Arbe's chipset for five perception projects with leading OEMs and the receipt of a second order from a Western truck company are indicative of the company's growing influence in the automotive radar market.
Moreover, the company's strategic focus on expanding its Total Addressable Market by targeting non-automotive sectors could be a critical driver for future growth. The interest from key players accounting for over 40% of the passenger vehicle market and projected cumulative radar revenue of $7.5 billion by the end of the decade highlights the potential scale of Arbe's market penetration. Stakeholders should evaluate the long-term implications of these developments, including the potential for Arbe to secure a substantial portion of the radar systems market share.
Arbe's advancements in radar technology, particularly the release of the production version of its Radar Processor, underscore the company's commitment to innovation in the automotive sector. The processor is touted as the strongest dedicated automotive radar processing solution, which could set new industry standards and drive the hands-free revolution in driving.
The anticipated mass production of 4D Imaging Radars by HiRain Technologies and significant customer orders from Sensrad are indicative of the industry's confidence in Arbe's technology. However, the extended decision timelines from OEMs, shifting from late 2023 to 2024, may affect the short-term expectations of stakeholders. Despite this, Arbe's chipset evaluation by key market players and the positive outlook for RFQ results in 2024 suggest a promising trajectory for the company's integration into the automotive radar market.
Key Q4 and 2023 Company Highlights:
- Arbe completed its chipset pre-production phase and is in the final stages towards production ramp up in 2024. Following that, Arbe Tier-1s announced they will begin mass production of radar systems, based on the Arbe chipset, starting with the Tier-1s in
China . - Radars based on Arbe's chipset were selected for five perception projects with leading OEMs.
- Arbe received a second order from a leading Western truck company, marking an important step towards a full commercial order.
- HiRain Technologies, a leading Chinese ADAS Tier-1 supplier, announced that it will begin the mass production of state-of-the-art 4D Imaging Radars, powered by Arbe's chipset, by the end of 2024.
- Sensrad, one of Arbe's Tier-1s, announced significant customer orders from companies across the globe for its radar systems based on Arbe's chipset.
- Arbe's chipset is being evaluated by key players that collectively account for more than a
40% share in the passenger vehicle market. These companies' cumulative radar revenue is projected to reach$7.5 billion - Although decision timelines were extended beyond the originally forecasted end of 2023, Arbe's progress continues to stay on course, and the company expects a positive result for the RFQs in 2024.
- In Q4, Arbe released the production version of its Radar Processor, designed to be the strongest dedicated automotive radar processing solution on the market.
- Arbe announced the availability of its production intent chipset for use in mass manufacturing of Perception Radars. The chipset meets the final Arbe specifications and is used for Tier 1 radar system production and for OEM development programs.
- Arbe is initiating a dual listing on the Tel Aviv Stock Exchange (TASE), to enhance trading volume. Simultaneously, the company is negotiating the issuance of bonds on TASE, to secure working capital to support the predicted production ramp up in 2025.
"We are proud of our accomplishments in 2023, as our production intent chipset has been successfully delivered, and is currently undergoing rigorous automotive qualification processes towards mass production. Our industry-leading radar solutions are not only redefining road safety but also driving the hands-free revolution," said Kobi Marenko, Chief Executive Officer. "Despite market delays resulting in extended decision times, OEMs have expressed enthusiasm for our solutions. The anticipation surrounding our offerings is high, and we expect to announce substantial customer wins in 2024."
"In 2023, Arbe's Tier-1s achieved substantial progress in system development, positioning the Tier-1s to enter the production and commercial phases in 2024. Additionally, our strategic focus on expanding our Total Addressable Market (TAM) by targeting non-automotive sectors is proving successful. We foresee accelerated technology adoption by several non-automotive players." concluded Marenko.
Fourth Quarter and Full Year 2023 Financial Highlights
Revenues for Q4 2023 were
Operating expenses in Q4 2023 were
Net loss in the fourth quarter of 2023 was
Adjusted EBITDA in Q4 of 2023, a non-GAAP measurement which excludes expenses for non-cash share-based compensation and for non-recurring items, yielded a loss of
Balance Sheet & Liquidity
As of December 31, 2023, 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 positioning in all our RFQ engagements, even though the OEMs have 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, March 7, 2024, at 8:30 am ET. Speakers will include Kobi Marenko, Chief Executive Officer, Co-Founder and Director, and Karine Pinto-Flomenboim, Chief Financial Officer. We encourage 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 March 21, 2024, following the end of the conference call. To listen to the replay, please dial:
International: (412) 317-0088
Access ID: 7640562
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 the earnings call contain "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 this press release are based on Arbe's preliminary financial statements, which are subject to audit by the Company's independent accounting firm and are subject to any adjustments resulting from the completion of such audit. These risks and uncertainties include, but are not limited to: (i) our ability to generate firm orders from the Tier-1s who are incorporating our chipset in the radar products they are marketing to automobile manufacturers; (ii) the success of our Tier-1s to market and sell product that are based on our chipset; (iii) our ability to raise funds on terms that are acceptable and do not have a negative impact on our stock price; (iv) the impact of
Information contained on, or that can be accessed through, our 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 | ||||
( | ||||
December 31, 2023 | December 31, 2022 | |||
Current Assets: | (Unaudited) | (Unaudited) | ||
Cash and cash equivalents | 28,587 | 54,171 | ||
Restricted cash | 163 | 144 | ||
Short term Bank deposits | 15,402 | 400 | ||
Trade receivable | 1,258 | 2,202 | ||
Prepaid expenses and other receivables | 2,026 | 1,839 | ||
Total current assets | 47,436 | 58,756 | ||
Non-Current Assets | ||||
Operating lease right-of-use assets | 1,740 | 465 | ||
Property and equipment, net | 1,309 | 1,609 | ||
Total non-current assets | 3,049 | 2,074 | ||
Total assets | 50,485 | 60,830 | ||
Current liabilities: | ||||
Trade payables | 1,149 | 1,244 | ||
Operating lease liabilities | 436 | 364 | ||
Employees and payroll accruals | 2,916 | 2,861 | ||
Deferred revenues | - | 351 | ||
Accrued expenses and other payables | 1,710 | 5,609 | ||
Total current liabilities | 6,211 | 10,429 | ||
Long term liabilities | ||||
Operating lease liabilities | 1,306 | 17 | ||
Warrant liabilities | 875 | 1,631 | ||
Total long-term liabilities | 2,181 | 1,648 | ||
SHAREHOLDERS' EQUITY: | ||||
Ordinary Shares | *) | *) | ||
Additional paid-in capital | 245,733 | 208,893 | ||
Accumulated deficit | (203,640) | (160,140) | ||
Total shareholders' equity | 42,093 | 48,753 | ||
Total liabilities and shareholders' equity | 50,485 | 60,830 | ||
*) Represents less than | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
( | |||||||||
3 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
Revenues | 347 | 149 | 1,470 | 3,517 | |||||
Cost of revenues | 536 | 217 | 1,508 | 1,283 | |||||
Gross Profit (Loss) | (189) | (68) | (38) | 2,234 | |||||
Operating Expenses: | |||||||||
Research and development, net | 8,446 | 10,827 | 34,082 | 36,731 | |||||
Sales and marketing | 1,528 | 1,194 | 5,194 | 4,621 | |||||
General and administrative | 1,934 | 2,026 | 7,571 | 8,613 | |||||
Total operating expenses | 11,908 | 14,047 | 46,847 | 49,965 | |||||
Operating loss | (12,097) | (14,115) | (46,885) | (47,731) | |||||
Financial income, net | (2,812) | (3,004) | (3,385) | (7,237) | |||||
Net loss | (9,285) | (11,111) | (43,500) | (40,494) | |||||
Basic net loss per ordinary share | (0.12) | (0.17) | (0.60) | (0.64) | |||||
Weighted-average number of shares | 77,837,624 | 63,940,247 | 72,021,520 | 63,489,983 | |||||
Diluted net loss per ordinary share | (0.15) | (0.25) | (0.71) | (0.80) | |||||
Weighted-average number of shares | 63,226,491 | 58,860,661 | 62,390,302 | 60,960,641 | |||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
( | |||||||||
3 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||
Cash flows from operating activities: | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||
Net Loss | (9,285) | (11,111) | (43,500) | (40,494) | |||||
Adjustments to reconcile loss to net cash used in operating activities: | |||||||||
Depreciation | 142 | 132 | 557 | 481 | |||||
Stock-based compensation | 3,584 | 2,416 | 13,012 | 8,793 | |||||
Warrants to service providers | 197 | 82 | 629 | 354 | |||||
Revaluation of warrants and accretion | (266) | (3,361) | (756) | (8,122) | |||||
Change in operating assets and liabilities: | |||||||||
Decrease (increase) in trade receivable | 508 | (107) | 694 | (2,015) | |||||
Decrease (increase) in prepaid expenses and other receivables | (749) | (348) | (187) | 1,219 | |||||
Operating lease ROU assets and liabilities, net | 90 | (4) | 86 | (84) | |||||
Increase (decrease) in trade payables | 549 | (477) | (103) | (769) | |||||
Increase (decrease) in employees and payroll accruals | 396 | 775 | 55 | (234) | |||||
Decrease in deferred revenue | (101) | - | (101) | (375) | |||||
Increase (decrease) in accrued expenses and other payables | (110) | 3,001 | (3,899) | 884 | |||||
Net cash used in operating activities | (5,045) | (9,002) | (33,513) | (40,362) | |||||
Cash flows from investing activities: | |||||||||
Change in bank deposits | 10,213 | - | (15,002) | (400) | |||||
Purchase of property and equipment | (59) | (50) | (249) | (918) | |||||
Net cash provided by (used in) investing activities | 10,154 | (50) | (15,251) | (1,318) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from issuance of ordinary shares, net of issuance costs | - | - | 22,496 | - | |||||
Repayment of short-term loan | - | - | - | (5,218) | |||||
Proceeds from exercise of options | - | 12 | 703 | 277 | |||||
Net cash provided by (used in) financing activities | - | 12 | 23,199 | (4,941) | |||||
Effect of exchange rate fluctuations on cash and cash equivalent | 768 | (616) | 47 | (1,189) | |||||
Increase (decrease) in cash, cash equivalents and restricted cash | 4,341 | (8,424) | (25,612) | (45,432) | |||||
Cash, cash equivalents and restricted cash at the beginning of period | 23,641 | 63,355 | 54,315 | 100,936 | |||||
Cash, cash equivalents and restricted cash at the end of period | 28,750 | 54,315 | 28,750 | 54,315 | |||||
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS | |||||||||
( | |||||||||
3 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||
GAAP net loss attributable to ordinary shareholders | (9,285) | (11,111) | (43,500) | (40,494) | |||||
Add: | |||||||||
Stock-based compensation | 3,584 | 2,416 | 13,012 | 8,793 | |||||
Warrants to service providers | 197 | 82 | 629 | 354 | |||||
Revaluation of warrants and accretion | (266) | (3,361) | (756) | (8,122) | |||||
Non-recurring expenses | - | - | 214 | 130 | |||||
Non-GAAP net loss | (5,770) | (11,974) | (30,401) | (39,339) | |||||
Basic Non-GAAP net loss per ordinary share | (0.07) | (0.19) | (0.42) | (0.62) | |||||
Weighted-average number of shares used in computing basic Non- | 77,837,624 | 63,940,247 | 72,021,520 | 63,489,983 | |||||
Diluted Non-GAAP net loss per ordinary share | (0.10) | (0.26) | (0.50) | (0.78) | |||||
Weighted-average number of shares used in computing diluted Non- | 63,226,491 | 58,860,661 | 62,390,302 | 60,960,641 | |||||
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA | |||||||||
( | |||||||||
3 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||
GAAP net loss attributable to ordinary shareholders | (9,285) | (11,111) | (43,500) | (40,494) | |||||
Add: | |||||||||
Financial (income), net | (2,812) | (3,004) | (3,385) | (7,237) | |||||
Depreciation | 142 | 132 | 557 | 481 | |||||
Stock-based compensation | 3,584 | 2,416 | 13,012 | 8,793 | |||||
Warrants to service providers | 197 | 82 | 629 | 354 | |||||
Non-recurring expenses | - | - | 214 | 130 | |||||
Adjusted EBITDA | (8,174) | (11,485) | (32,473) | (37,973) | |||||
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SOURCE Arbe
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