Arbe Announces Third Quarter 2021 Results and Business Update

Rhea-AI Summary

Arbe Robotics Ltd. (Nasdaq: ARBE) reported its Q3 2021 financial results, noting revenues of $0.6 million and a net loss of $13.3 million. The company highlighted strong demand for its next-generation 4D Imaging Radar, with a backlog of $2.0 million. Operating expenses increased to $8.5 million, largely due to headcount growth. Despite losses, Arbe sees continued momentum in technology adoption and expressed confidence in future growth projections. The company received notable awards for its technology and is on track with several key partnerships in the automotive sector.

Positive

• Strong demand for 4D Imaging Radar leading to a backlog of $2.0 million.
• Recognition through multiple awards, including the 2021 Europe New Product Innovation Award.
• Successful business combination with ITAC, generating gross proceeds of $118.3 million.

Negative

• Net loss of $13.3 million for Q3 2021, a significant increase from $3.3 million in Q3 2020.
• Operating expenses rose to $8.5 million, up from $3.4 million in Q3 2020.

TEL AVIV, Israel, Dec. 7, 2021 /PRNewswire/ -- Arbe Robotics Ltd. (Nasdaq: ARBE) ("Arbe"), a global leader in next-generation 4D Imaging Radar Solutions, announced today third quarter 2021 financial results and provided a business update.

Kobi Marenko, Chief Executive Officer, said "We are excited to report a solid quarter of continued operational, technological, and strategic progress. Our successful business combination and presence on the NASDAQ market marks a significant milestone and helps to cement our leadership position ahead of what we see as an imminent, revolutionary change in the global automotive technology market. We look forward to demonstrating the value of our next-generation Imaging Radar and its importance to the future of the automotive industry. We are progressing and paving the road for the adoption of our technology and for the universal acceptance of our products."

Karine Pinto-Flomenboim, Chief Financial Officer, added, "We remain confident in the full range of our projections for growth, our financial performance, the expansion of our operational capabilities, the pace of progress in our research and development efforts, and the adoption of our technology and products by a range of important customers around the world."

Commercial Traction

• A top global OEM selected Arbe for an "Imaging Radar - based perception" project
• Weifu announced it reached a road pilot phase of its Arbe-based Radar Systems and is scheduled to be in full production by the end of 2022
• BAIC Group's Deputy General Manager announced that Arbe's technology will be installed on its mass-produced models
• Hyundai holds a PoC of safety enhancements introduced by Arbe's next generation radars
• On schedule with a pre-production project with the Top 5 OEM, which is progressing towards selection in 2022
• On track with the production plan for Auto-X

Technology Leadership

• Arbe was presented with the 2021 Europe New Product Innovation Award by Frost & Sullivan
• Arbe was named a CES 2022 Innovation Awards Honoree for its Phoenix Perception Radar
• Arbe's 4D Imaging Radar Technology won ADAS & Autonomous Product of the Year 2021 by Informa Tech Automotive
• Arbe delivered radar samples based on our final production chipset with the highest physical resolution in the industry
• Arbe's AI layer is receiving strong feedback following pilot trials from leading automotive companies

 Arbe's Third Quarter 2021 Financial Highlights

• Revenues for Q3 2021 were $0.6 million. The company continues to see strong interest for its products and expects this positive momentum to continue. Revenue for the first nine months of 2021, was $1.7 million
• Backlog as of September 30, 2021 was $2.0 million, consistent with expectations of demand to support prototyping, pilot programs and engineering support, with additional new orders expected in the fourth quarter
• Operating expenses for Q3 2021 were $8.5 million, an increase from $3.4 million in Q3 2020. The increase was primarily related to headcount growth and a return towards normal business conditions in 2021. The company continues strengthening its R&D investment, with R&D expenses totaling $7.4 million for Q3 2021, compared to $2.9 million of R&D expenses in Q3 2020
• Q3 2021 Net loss of ($13.3) million, which included $5.0 million of financial expenses mostly related to the revaluations of convertible loan and warrants, compared with a net loss of ($3.3) million for Q3 of 2020
• Adjusted EBITDA, a non-GAAP measurement which adds back depreciation and amortization, financial expenses and equity-based expenses, was ($8.0) million compared to ($3.3) million in the third quarter of 2020
• As of September 30, 2021, before the Business Combination, Arbe had $4.0 million in cash and cash equivalents, compared to $2.9 million in cash and cash equivalents as of December 31, 2020
• Total gross proceeds resulting from the Business Combination with ITAC, which was completed on October 7th, were approximately $118.3 million, out of which total transaction costs amounted to approximately $19.4 million
• Arbe's post balance sheet events include $9.2 million received from the exercise of warrants issued to the ITAC warrant holder as part of the business combination.

Outlook

• Arbe reaffirms its forward-looking guidance for 2025 including revenue of $312 million, representing identified projects with deep engagement
• Based on year-to-date backlog and expected new orders, the Company reiterates its expectation for 2021 booking

Investor Event

Arbe will host an investor event (https://arberobotics.com/investorevent/) today at 10am Eastern Time, which will include commentary on its third quarter 2021 financial performance and Q&A. The presentation will be available on the Company's website following the event.

About Arbe

Arbe (Nasdaq: ARBE), a global leader in next-generation 4D Imaging 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, autonomous ground vehicles, 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 an estimated projected total addressable market of $11 billion in 2025. Arbe is based in Tel Aviv, Israel, and has an office in the United States.

Use of Non-GAAP Financial Measures

This press release contains financial information calculated other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The non-GAAP measures presented by the Company are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company's financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. Arbe's presentation of these measures may not be comparable to similarly-titled measures used by other companies. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures and should be considered in addition to, and not as a substitute for, comparable GAAP measures. The non-GAAP measures used in this press release are Non-GAAP Net Loss and Adjusted EBITDA. The Company provides these non-GAAP financial measures because it believes that they present a measure of the Company's core business that management uses internally to evaluate the Company's ongoing performance. Reconciliations of these non-GAAP measures to the Company's Net Loss can be found immediately following the Consolidated Statements of Cash Flows included in this press release. In evaluating Arbe, undue reliance should not be placed on the non-GAAP financial information.

Forward-Looking Statements 

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include information regarding Arbe's current beliefs, plans and expectations, including, without limitation, Arbe's belief that it will continue to be able to execute strongly on its business plan. Words such as "believe," "anticipate," "estimate," "expect," "project," "intend," "plan," "forecast," "goal," "could," "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," "potential" and variations of any such words or similar expressions are indicate forward-looking statements. 

Forward-looking statements are made on the basis of management's current views and assumptions and are not guarantees of future performance. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results, and actual events that occur, to differ materially from results contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to: (i) unanticipated delays or difficulties in connection with the evaluation of Arbe's products in evaluation and test programs; (ii) the success of road pilot programs for Arbe's products, (iii) Arbe's ability to develop significant revenue as a result of the test programs involving its radar system; (iv) Arbe's ability to leverage its existing relationships and secure test programs and orders resulting from the test programs; (v) Arbe's ability to meet its projected revenue level and its ability to operate profitably; (vi) Arbe's expectation that it will be engaging with Tier 1 suppliers and OEMs which would be building the radars based on its Chipset solution, eliminating expenses associated with system completion, requirement for undertaking significant capital expenditures associated with developing mass production manufacturing and the expenses of operating any such manufacturing capability; (vii) Arbe's expectation that radars are crucial to the automotive industry and will be deployed in nearly all new vehicles as a long range, cost-effective sensor with the fewest environmental limitations; (viii) Arbe's belief that the Arbe Radar Chipset heralds a breakthrough in radar technology that will enable Tier 1 manufacturers and OEMs 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; (ix) Arbe's ability to develop or have access to the latest developments relating to radar and autonomous driving vehicles; (x) Arbe's ability to have products manufactured for it by third parties that meet Arbe's and its customers quality standards and delivery requirements; (xi) Arbe's ability to attract and retain highly skilled personnel and senior management, including research and development, sales and marketing personnel; (xii) Arbe's ability to obtain funding when required through debt and equity financings; (xiii) the effect of inflation and supply chain problems on Arbe's business, including Arbe's ability to obtain semiconductor products when needed and at a reasonable price; (xiv) Arbe's ability to develop and market products based on its radar technology for uses outside of the automotive industry; (xv) 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; (xvi) the failure of the markets for Arbe's current or new technologies and products to materialize to the extent or at the rate that Arbe expects; (xvii) unexpected delays or difficulties related to the development of Arbe's technologies and products; (xviii) the effect of laws and changes in laws that have an effect on the market for or the requirement for autonomous vehicles; (xix) the effect of COVID-19 and any new variants or any pandemics or multinational epidemics and actions taken by governments and industry to address the effects of the pandemic and the corresponding macroeconomic uncertainty; (xvii) risks related to the potential impact of new accounting standards on Arbe's financial position, results of operations or cash flows; (xx) changes or inaccuracies in market projections; (xxi) changes in Arbe's business strategy; and (xxii) the risk and uncertainties described in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Cautionary Note Regarding Forward-Looking Statements'' and the additional risks described in Arbe's prospectus dated November 2, 2021 which was filed by Arbe with the Securities and Exchange Commission on November 4, 2021, as well as the other documents filed by Arbe with the SEC. Arbe undertakes no duty to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law.

 

 

 

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
		September 30, 2021				December 31, 2020
Current Assets:		(Unaudited)				(Audited)
Cash and cash equivalents			3,929				2,857
Restricted cash			120				97
Short term bank deposits			-				100
Trade Receivable			365				137
Prepaid expenses and other receivables			904				830
Total current assets			5,318				4,021
Non-Current Asset
Deferred transaction costs *			1,685				-
Property and equipment, net			826				384
Total non-current assets			2,511				384
Total assets			7,829				4,405
Current liabilities:
Current maturities of long-term loan			-				1,879
Short term loan			4,780				-
Trade payables			2,854				1,209
Employees and payroll accruals			2,503				1,538
Deferred revenues			1,012				281
Accrued expenses and other payables			2,264				364
Total current liabilities			13,413				5,271
Long term liabilities
Long-term loan			-				676
Convertible loan			30,844				1,641
Warrants to purchase Series B-1 preferred shares			1,751				375
Warrants to purchase Series B-2 preferred shares			1,906				1,159
Total long-term liabilities			34,501				3,851
REDEEMABLE CONVERTIBLE PREFERRED SHARES			61,560				55,440
SHAREHOLDERS' DEFICIENCY:
Ordinary Shares			*)				*)
Additional paid-in capital			2,154				1,397
Accumulated Deficit			(103,799)				(61,554)
Total shareholders' deficiency			(101,645)				(60,157)
Total liabilities, redeemable convertible preferred shares and shareholders' deficiency			7,829				4,405
*     Represents transaction costs incurred by Arbe in consummating the transaction. $1.7 million were recorded        against accrued expenses.

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
		3 Months Ended				3 Months Ended				9 Months Ended				9 Months Ended
		September 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Revenues			628				-				1,729				138
Cost of revenues			438				90				1,116				227
Gross Profit (Loss)			190				(90)				613				(89)
Operating Expenses:
Research and development, net			7,432				2,890				16,984				9,515
Sales and marketing			390				192				1,137				752
General and administrative			674				285				1,793				792
Total operating expenses			8,496				3,367				19,914				11,059
Operating loss			(8,306)				(3,457)				(19,301)				(11,148)
Financial expenses (income), net			4,980				(126)				22,944				(27)
Net loss			(13,286)				(3,331)				(42,245)				(11,121)
Basic and diluted net loss per share attributable to       Ordinary Shareholders			(1.35)				(0.36)				(4.40)				(1.21)
Weighted-average number of shares used in       computing basic and diluted net loss per share       attributable to Ordinary Shareholders*			9,870,463				9,238,425				9,596,666				9,182,514
*     The number of ordinary shares retroactively reflects the 46.25783-for-one stock split of the ordinary shares which         was effective on October 7, 2021.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
		9 Months Ended				9 Months Ended
		September 30, 2021				September 30, 2020
Cash flows from operating activities:		(Unaudited)				(Unaudited)
Net Loss			(42,245)				(11,121
Adjustments to reconcile loss to net cash used in operating activities:
Depreciation			246				255
Stock-based compensation			488				290
Warrants to service providers			56				43
Revaluation of warrants and accretion			4,738				268
Revaluation of convertible loan			17,866				-
Change in operating assets and liabilities:
Decrease (increase) in trade receivable			(162)				28
Decrease (increase) in prepaid expenses and other receivables			(74)				(33)
Increase (decrease) in trade payables			1,645				(1,400)
Increase in employees and payroll accruals			965				(525)
Increase in deferred revenue			665				124
Increase in accrued expenses and other payables			331				200
Net cash used in operating activities			(15,481)				(11,871)
Cash flows from investing activities:
Change in bank deposits			100				7,860
Purchase of property and equipment			(687)				(156)
Net cash provided by (used in) investing activities			(587)				7,704
Cash flows from financing activities:
Repayment of long-term loan			(2,639)				(1,161)
Proceeds from short term loan			4,733
Payment of deferred transaction costs			(117)
Proceeds from issuance of redeemable convertible preferred shares and warrants for the purchase of Series B-2 redeemable convertible preferred shares, net			-				1,190
Proceeds from exercise of warrants			3,637
Proceeds from exercise of options			212				30
Proceeds from convertible loan			11,337
Net cash provided by financing activities			17,163				59
Increase (decrease) in cash, cash equivalents and restricted cash			1,095				(4,108)
Cash, cash equivalents and restricted cash at the beginning of the year			2,954				7,003
Cash, cash equivalents and restricted cash at the end of the period			4,049				2,895

 

 

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
(U.S. dollars in thousands, except share and per share data)
		3 Months Ended				3 Months Ended				9 Months Ended				9 Months Ended
		September 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
GAAP net loss attributable to ordinary       shareholders			(13,286)				(3,331)				(42,245)				(11,121)
Add:
Stock-based compensation			176				83				488				290
Warrants to service providers			19				15				56				43
Revaluation of warrants and accretion			612				114				4,738				268
Revaluation of convertible loan			4,160				-				17,866				-
Non-GAAP net loss			(8,319)				(3,119)				(19,097)				(10,520)
Basic and diluted Non-GAAP net loss per share       attributable to Ordinary Shareholders			(0.84)				(0.34)				(1.99)				(1.15)
Weighted-average number of shares used in       computing basic and diluted Non-GAAP net       loss per share attributable to Ordinary       Shareholders*			9,870,463				9,238,425				9,596,666				9,182,514
*     The number of ordinary shares retroactively reflects the 46.25783-for-one stock split of the ordinary shares which was effective on October 7, 2021.

 

 

RECONCILIATION OF GAAP NET LOSS TO AJUSTED EBITDA
(U.S. dollars in thousands)
		3 Months Ended				3 Months Ended				9 Months Ended				9 Months Ended
		September 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
GAAP net loss attributable to ordinary shareholders			(13,286)				(3,331)				(42,245)				(11,121)
Add:
Financial expenses (income), net			4,980				(126)				22,944				(27
Depreciation & Amortization			97				41				246				255
Stock-based compensation			176				83				488				290
Warrants to service providers			19				15				56				43
Adjusted EBITDA			(8,014)				(3,318)				(18,511)				(10,560)

 

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SOURCE Arbe

FAQ

What were Arbe Robotics' Q3 2021 revenues and losses?

Arbe Robotics reported revenues of $0.6 million and a net loss of $13.3 million for Q3 2021.

How much cash did Arbe have as of September 30, 2021?

As of September 30, 2021, Arbe had $4.0 million in cash and cash equivalents.

What is the backlog amount reported by Arbe in Q3 2021?

Arbe reported a backlog of $2.0 million as of September 30, 2021.

What awards did Arbe Robotics receive recently?

Arbe was awarded the 2021 Europe New Product Innovation Award and was recognized as a CES 2022 Innovation Awards Honoree.

What major financial event happened for Arbe in October 2021?

In October 2021, Arbe completed a business combination with ITAC, resulting in gross proceeds of approximately $118.3 million.