Shreyas Patil: I guess as we look out over the next few years, a few years, you’ve talked about supervision ramping up to maybe the low $200,000 unit range for next year. I think you’re still targeting $1.2 million by 2026. So that would imply a pretty big ramp in 2025 and — so maybe can you talk a little bit about the visibility, how much visibility you feel like you have there in supporting that kind of ramp?
Dan Galves: Well, our visibility is getting better and better as time goes by naturally. — the more design wins or close design wins gives us a much better visibility. I would say that amongst all the opportunities that we have, 50% of them are going to launch in 2025 or 2025 and earlier. — and 50% in 2026. And we’re talking about kind of an inflection point in revenue because Supervision revenue per car is in order of magnitude higher than our ASP of IQ. Now pinpointing exactly the date of that inflection point is difficult by the 2025, 2026 time frame, we are confident with the numbers that we gave.
Shreyas Patil: Okay. Great. And then just to maybe clarify, so you mentioned on supervision light in this award that you secured, you’re playing a Tier 2 role versus a Tier 1. So can you maybe talk a little bit about what a Tier 2 role entails for you? Is it more just software versus providing the domain controller as well? Is that how to think about it?
Dan Galves: The Tier 2 role may this is our classic role in almost all other non-supervision programs where we provide the chip, in this case, it’s the IQ6 high. and all the software around it, that powers the IQ in terms of the driving functions. And our revenue is for the chip and the software and a few hundreds of dollars.
Shreyas Patil: Okay. Maybe just a last quick one for me. just shifting to profitability. It looks like Q4 is tracking towards 36% for operating income at the midpoint. It was just quite strong. I think you’ve previously talked about 20% OpEx growth for next year, but it sounds like this year, it may be coming in a little bit lower. So should we still be assuming that kind of growth, or should we assume something higher?
Dan Galves: Well, there were some things that were not in our control, like the depreciation of the Israeli shekel. Which is responsible for most of our operating expenses. We were still late in moving on to our new campuses. So there’s also sales on operating expenses. But our plan of investments, we’re not changing that. No, we have big investments to make going forward, and those have not changed.
A – Moran Shemesh Rojansky: I would just add to that on 2023, there’s also an issue worth mentioning of the nonrecurring engineering reimbursements that reduced R&D. So for more advanced development programs like super visional or hofer the NRE reimbursements are much more significant than what we used to see in ADAS. Of course, to tile, we mobilize investments and therefore, more challenging to predict. So these reimbursements for 2022 are expected to be higher than our conservative assumption at the beginning of the year. That’s also part of our savings for 2023. And for 2024, based on our current forecast for 2023, we would expect to see 20% or 25% growth in 2024. So, important factor is, of course, the design is what we are winning supervision and so far, but assuming we win everything, we expect it to be even closer to 25% in 2024.
A – Dan Galves: There was a point that on the supervision line, our revenue includes also check the software and ran as well.
Operator: Our next question comes from Mark Delaney with Goldman Sachs.
Mark Delaney: Yes. And let me add my support of these for everything that the Mobileye family is dealing with. The question on the tech road map for you, Amnon. Do you think the latest GPUs and AI training technology will help Mobileye to accelerate its product development timeline on the topic of the tech road map, I’m curious what feedback you’ve had on your paper about how end-to-end neural nets may not be the best approach for timing?
A – Dan Galves: Well, our view about end-to-end, we put it in that paper, and I don’t think this is the forum to kind of repeat what I wrote. So it’s out there in a block and we spent some thought on writing it. So, I’ll not add more to that. In terms of our compute infrastructure, our compute infrastructure is not GPUs, it is the IQ. It provides us much more flexibility than GPU. It’s much more cost efficient. It’s much more power efficient. And this is what is driving kind of the big value proposition to our customers that we can be very efficient in cost performance and DD scaling because we have a tapered system on chip to our name.
Mark Delaney: Got it. In terms of the potential for supervision gross margins to expand, you spoke about a new domain controller and that being a meaningful driver over the course, any more details you can share about how impactful that may be to gross margins?
A – Dan Galves: Our asset of gross margin for supervision is aiming at 50%. We’re not there yet, but this is where we’re going.
A – Moran Shemesh Rojansky: Yes, so supervision. I mean everybody mentioned, the gross margin now will tender the 2 figures that I mentioned. One is the cost reduction for the ECU, the next generation of the ECU, that’s supposed to have a significant impact in the beginning of 2024 as of Q2. And also, again, the software bundle, that will have more effect in the back half of 2024, but we will have a meaningful growth in gross margin for supervision in 2024 versus 2023.
Mark Delaney: Thank you.
Operator: Our next question comes from Aaron Rakers with Wells Fargo.
Aaron Rakers: Yes. And my thoughts to the Mobileye family as well, given your current situation. So, I guess, I want to ask about the longer term how we should think about the modification cloud theta, obviously with the MVP functionality across a hundred thousand vehicles. Just maybe, walk me through how we think about that monetization. What comes to be kicking on the latter part of ’24? Any metrics you can share how we should think about that?
A – Dan Galves: Yeah. Sorry Aaron, could you repeat the question?
Aaron Rakers: Yes. Dan, I appreciate that. So I’m asking about the monetization, the effect of the deeper vehicles, for example, taking the full license of the rent functionality, the cloud enhanced ADAS, just how we think about that flowing into the model as we look through ’24.
