Sumit Sharma: So, Q4 2023, we do expect a significant step up in revenue from Q3 levels to hit our range of $6.5 million to $8 million for the full-year 2023. And as I mentioned earlier, we expect this revenue to come from direct sales and this is the high contribution revenue primarily from software. So, we are expecting similar levels of gross profits as well, next quarter on these revenue as well. And I think maybe this is the right time to also talk about what 2024 could potentially look like. Obviously, we will be providing detailed guidance and details at our annual Q4 call next year. But 2024, as I had mentioned earlier, would be a combination of NRE from OEMs and also direct sales of MOSAIK and MOVIA to some of the non-automotive customers.
And direct sales are shorter sales cycle revenue. And I think like I mentioned, we want to make sure the focus to increase the direct sales revenue channel is only done at high gross margins to help drive cash flow and reduce needs for additional capital as the company grows and focuses on achieving economies of scale on the strategic sales aspect of it. So, I almost think of this as a dance in tandem between direct and strategic sales, where direct sales are uplifting the strategic sales revenue channel for the company.
Anubhav Verma: The next question is, do the current RFQs cover OEM’s complete automobile offerings or are they limited to specific models? And along the same lines, are the OEM RFQs projected to cover multiple year models and do the RFQs tie the OEM to the selected LiDAR company for multiple years?
Sumit Sharma: I think I’ll answer the last one first. Any contract you sign, I think you come through an agreement, they’re going to invest a lot of engineering on their time to get the product they need, get it qualified, will invest a lot of time. So, I think the way you think about, are they committed to us, are they committed to the contract? As long as you perform for the contract, you deliver that, you’re going to be a great partner. And I believe where others may have failed in the past of delivering on time, that’s not an issue with us because we have a high level of maturity. Certainly, that’s a really big advantage that we have. As long as, is it going to go across, I think the question is, let me rephrase that, I think what I understand is, like, is it going to go across the entire fleet, right?
I think the way to think about it is that you have multiple model years that they pick, they will have something that will introduce you, they have a marketing strategy that goes with it, but the volumes that you’re talking about, right, that would be across multiple model lines, right? When you start getting to millions of units, it’s going to be across multiple model lines. So, yes, I can say with absolute confidence that this will be across multiple model lines and depends on how they deliver the product, how they market it, what the uptake would be, because you’re going to create this whole environment for them to be able to get access to that technology at a certain price point, they would have qualified it, it’s like a qualified part, and it has to go into production for them.
And you got to deliver on time, if they have a production timeline for 2027 they want you to be ready on a significant amount of time. You can’t be the one that ever causes a delay. And if anybody did, that would be pretty bad. That would delay any kind of launches for an OEM, and that’s very, very bad. But for us, I feel like that we’re probably well positioned with our Tier 1 strategy, and of course the supply agreements we tend to sign with a contract manufacturer, that the OEMs have already looked at and qualified and feel very comfortable with. So, I feel confident that, once we are tied together, contract is still, it’s a pretty significant commitment that we would make on their behalf, and of course they would have to make by picking us as a technology partner.
Operator: And we do have a question from Andres Sheppard. Andres Sheppard, your line is live. Mr. Andres Sheppard from Cantor Fitzgerald, your line is live.
Sumit Sharma: I think Andres is having some trouble. Let’s continue and let’s see if he can get through somehow.
Anubhav Verma: Right, I think the next question is from the outside, MicroVision’s hiring and it can look promising and indicate a company ramping up, but without execution went in the third quarter, will this look fiscally irresponsible? Actually, let me take that question. Look, I think we think of this company, not just a quarter-to-quarter, but a long-term business, right? And to build a business, you need to have the right building blocks. And for that, not just engineering, we need to build our operations and our supply chain, which is absolutely very critical to these OEMs, as I mentioned, as part of their due diligence too. So, recently we brought on senior executives for building our operations and supply chain and product engineering capabilities as well, because these are very critical in any of these discussions with OEMs, because they help us lay out a complete roadmap from where we are today, and how do we scale the product in terms of the units, which are millions of units, as from the described.
And to achieve that kind of pricing, which is sustainable, we need to have a very solid plan in place to be able to deliver those prices that we are offering to our potential customers, which will essentially help us get a competitive edge over the competition. So, yes, so I think that’s sort of why the hiring, the recent hiring initiative that MicroVision have been focused on for the company. And like I mentioned, for scaling, it is going to be all about scaling similar products. So, that’s when you achieve the economies of scale. So, at that point, we would not need to add more hardware engineers, but that would more be project managers, which will be dedicated resources, managing the particular OEM relationship that will be tasked with delivering that production schedule to make sure any recalls or any associated production nuance that the customer and we have to deal with are taken care of.
So, that would be the growth in the headcount related to that. And then on top of that, obviously, the software engineering team as we integrate more software into our products down the road. All right. So, the next question is, at the Investor Day, you stated that all the in-flight RFQs required MicroVision’s dynamic view LiDAR and capability, and no other vendor has that capability. If there’s still an accurate statement, you said no one can catch us, and that will have multiple deals this year and refer to the potential take of 80% to 90% of the market share and wish the shorts good luck. Is there still an accurate statement?
Sumit Sharma: Yes, it’s sort of the accurate statement. Everybody’s using some sort of spinning prism or a static, electrostatic mirror that you cannot change the field of view of the MEMS mirror dynamically or like galval. So, ultimately firing off multiple pulses with a slow moving mirror, you can only collect. So, if you think about this dynamic view at the resolution, the way to do it is the dynamic view LiDAR. So, that statement is still valid from everything I’ve seen so far.
Anubhav Verma: All right, we still have yet to hear any LiDAR supply agreement from OEM. Our timeline still as management had imagined and some investors have lost faith in the LiDAR market has been quiet. And if no decisions are made before the end of 2023, that won’t help the cause. Although obviously we know that there’s not much LiDAR suppliers can do as it is up to the OEMs. So, any specific demand environment or delays that we’re seeing?
