Arbe Announces Q2 2024 Financial Results
TEL AVIV, Israel, Aug. 6, 2024 /PRNewswire/ -- Arbe Robotics Ltd. (Nasdaq: ARBE) (TASE: ARBE) ("Arbe"), a global leader in Perception Radar Solutions, today announced financial results for its second quarter, ended June 30, 2024.
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Key Q2 and Recent Company Highlights:
-- Arbe's chipset was selected by one of the top ten OEMs worldwide for the
development of its next-generation imaging radar aimed at serial
production. The selection of Arbe's technology presents a significant
commercial opportunity given its applicability across a wide range of
vehicle classes.
-- Arbe collaborates with a prominent European truck manufacturer to
revolutionize truck safety with Arbe's imaging radar. The manufacturer
is set to integrate Arbe's radar into its next-generation sensor suite
as part of the transition to an advanced implementation stage.
-- Arbe is actively engaged in achieving four design-ins with leading
global automakers. Despite longer decision cycles, Arbe expects those
decisions in the coming months.
-- During the second quarter, Arbe participated in the final stages of OEM
RFQ processes along with its Tier 1s: Magna, HiRain, Weifu, and Sensrad.
-- The demand for high-channel count solutions is widespread across the
board, and Arbe's solution is recognized by leading OEMs as the radar
with the largest channel array at the best price per channel.
-- Arbe began trading on the Tel Aviv Stock Exchange (TASE) and issued
convertible debentures totaling approximately $30 million to Israeli
investors. This strategic move aims to bolster its cash reserves in
anticipation of upcoming OEM selections. The proceeds from the debenture
offering are held in escrow and will be released upon meeting certain
conditions by March 31, 2025.
"We are excited to announce that we have reached a significant milestone with two key customers. The selection of our imaging radar by both a leading OEM and a prominent European truck manufacturer validates our technology and highlights its market appeal. We are in the final stages of RFPs and RFQs with our Tier 1s, and we believe that we are on track to secure additional major OEM selections this year," said Kobi Marenko, Chief Executive Officer. "Arbe is well-positioned to capitalize on the growing demand for advanced radar systems, and we anticipate an increase in sales and market share in the near future."
Second Quarter 2024 Financial Highlights
Revenues for Q2 2024 were $0.4 million, an increase from $0.3 million in Q2 2023. Backlog as of June 30, 2024, was $0.8 million.
Negative gross margin for Q2 2024 was 9.5%, compared to negative gross margin of 1% in Q2 2023, mainly related to headcount increase.
Operating expenses in Q2 2024 were $11.6 million, compared to $12.6 million in Q2 2023. The decrease in operating expenses was primarily driven by a decrease in R&D materials and to a lesser extent due to a labor cost decrease, partially offset by doubtful debts provision and debt issuance costs. Research and Development decreased, from $9.1 million in Q2 2023 to $7.9 million in Q2 2024, the decrease was mainly related to finalization and maturing stages of production and labor cost savings. Sales and Marketing expenses decreased from $1.5 million in Q2 2023 to $1.4 million in Q2 2024, related to lower travel and conference expenses. General and Administrative expenses increased from $2.0 million in Q2 2023 to $2.3 million in Q2 2024, later include a one-time provision and offering fees.
As a result, our operating loss in Q2 2024 was $11.6 million compared to a $12.6 million loss in Q2 2023.
Net loss in the second quarter of 2024 decreased to $11.8 million, compared to a net loss of $12.6 million in the second quarter of 2023. Net loss in Q2 2024 included $0.1 million of financial expenses, consisting of foreign exchange revaluations offset by interest from deposits.
Adjusted EBITDA, a non-GAAP measurement which excludes expenses for non-cash share-based compensation and for non-recurring items, for Q2 2024, yielded a loss of $7.5 million, compared to a loss of $8.4 million in the second quarter of 2023.
Balance Sheet and Liquidity
As of June 30, 2024, Arbe had $8.8 million in cash and cash equivalents and $17.7 million in short term bank deposits. In June 2024, the Company issued convertible debentures in the principal amount of NIS 110,000,000 (approximately $30 million). The proceeds from the sale of the debentures, which were approximately NIS 112,400,000 (approximately $30.5 million), are held in escrow and will be released to the Company upon meeting certain conditions by March 31, 2025 (these funds are classified as other assets on our balance sheet). The Company has incurred losses from operations since its inception and has negative cash flow from operating activities. Considering management's plans and the forecasted revenue, we will have sufficient funds to finance our operation needs in the foreseeable future.
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 position 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 our expectation that we will 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
($30) million to ($36) 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:
U.S. Toll Free: 1-844-481-3015
International: 1-412-317-1880
Israel Toll Free: 1-809-212373
A telephonic replay of the conference call will be available until August 20, 2024, following the end of the conference call. To listen to the replay, please dial:
U.S. Toll Free: 1-877-344-7529
International: 1-412-317-0088
Access ID: 6889354
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.
Arbe (Nasdaq: ARBE) (TASE: 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 Tel Aviv, Israel, and has offices in China, Germany, and the United States.
Cautionary Note Regarding Forward-Looking Statements
This press release and the earnings call contains or will 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. 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. These risks and uncertainties include, the effect on the Israeli economy generally and on the Company's business resulting from the terrorism and the hostilities in Israel and with its neighboring countries including the effects of the continuing war with Hamas and any further intensification of hostilities with others, including Iran and Hezbollah, and the effect of the call-up of a significant portion of its working population, including the Company's employees; the effect of any potential boycott both of Israeli products and business and of stocks in Israeli companies; the effect of any downgrading of the Israeli economy and the effect of changes in the exchange rate between the US dollar and the Israeli shekel; the Company's ability to meet the conditions to the release from escrow of the proceeds from its recent sale of convertible debentures; the Company's ability to generate additional OEM selections and substantial orders and the risk and uncertainties described in "Cautionary Note Regarding Forward-Looking Statements," "Item 3. Key Information - D. Risk Factors" and "Item 5. Operating and Financial Review and Prospects" and in the Company's Annual Report on Form 20-F for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the "SEC") on March 28, 2024, as well as other documents filed by the Company 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 the Company 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, the Company's 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.
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CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
June 30, 2024 December 31, 2023
Current Assets: (Unaudited) (Unaudited)
Cash and cash equivalents 8,840 28,587
Restricted cash 280 163
Short term bank deposits 17,683 15,402
Trade receivable 694 1,258
Other assets 30,545
Prepaid expenses and other receivables 1,954 2,026
Total current assets 59,996 47,436
Non-Current Assets
Operating lease right-of-use assets 1,895 1,740
Property and equipment, net 1,434 1,309
Total non-current assets 3,329 3,049
Total assets 63,325 50,485
Current liabilities:
Trade payables 832 1,149
Operating lease liabilities 519 436
Employees and payroll accruals 3,265 2,916
Convertible debentures 29,982
Accrued expenses and other payables 1,097 1,710
Total current liabilities 35,695 6,211
Long term liabilities
Operating lease liabilities 1,512 1,306
Warrant liabilities 607 875
Total long-term liabilities 2,119 2,181
SHAREHOLDERS' EQUITY:
Ordinary Shares
*)
*)
Additional paid-in capital 253,702 245,733
Accumulated Deficit (228,191) (203,640)
Total shareholders' equity 25,511 42,093
Total liabilities and shareholders' equity 63,325 50,485
*) Represents less than $1.
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues 409 289 546 644
Cost of revenues 448 292 851 608
Gross profit (loss) (39) (3) (305) 36
Operating Expenses:
Research and development, net 7,914 9,091 17,311 17,215
Sales and marketing 1,365 1,478 2,818 2,402
General and administrative 2,296 2,014 3,940 3,644
Total operating expenses 11,575 12,583 24,069 23,261
Operating loss (11,614) (12,586) (24,374) (23,225)
Financial expenses (income), net 132 25 177 (707)
Net loss (11,746) (12,611) (24,551) -22,518
Basic net loss per ordinary share (0.15) (0.19) (0.31) (0.34)
Weighted-average number of 80,578,820 67,762,711 79,377,515 66,225,739
shares used in computing basic
net loss per ordinary share
Diluted net loss per ordinary share (0.19) (0.23) (0.39) (0.39)
Weighted-average number of 64,204,137 56,450,209 63,390,411 58,419,059
shares used in computing
diluted net loss per ordinary share
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Cash flows from operating activities: (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net Loss (11,746) (12,611) (24,551) (22,518)
Adjustments to reconcile loss to net cash used in operating activities:
Depreciation 147 139 289 276
Stock-based compensation 3,587 3,713 7,313 5,721
Warrants to service providers 286 157 634 254
Revaluation of warrants and accretion (157) (369) (268) (238)
Convertible debentures accretion 176 176
Change in operating assets and liabilities:
Decrease in trade receivable 162 48 564 162
Decrease in prepaid expenses and other receivables 245 330 72 504
Increase in other assets (128) (128)
Operating lease ROU assets and liabilities, net 6 (8) 135
Decrease in trade payables (1,039) (1,116) (506) (284)
Increase (decrease) in employees and payroll accruals 204 43 349 (550)
Decrease in accrued expenses and other payables (72) (499) (766) (3,706)
Net cash used in operating activities (8,328) (10,173) (16,687) (20,379)
Cash flows from investing activities:
Change in bank deposits 12,621 (25,602) (2,281) (25,202)
Purchase of property and equipment (126) (87) (225) (119)
Net cash provided by (used in) investing activities 12,494 (25,689) (2,506) (25,321)
Cash flows from financing activities:
Proceeds from issuance of ordinary shares, net of issuance costs 22,496 22,496
Issuance costs related to convertible debentures (459) (459)
Proceeds from exercise of options 22 46 22 606
Net cash provided by (used in) (437) 22,542 (437) 23,102
financing activities
Effect of exchange rate fluctuations on cash and cash equivalent 80 (574) 214 (66)
Increase (decrease) in cash, cash equivalents and restricted cash 3,650 (12,746) (19,844) (22,532)
Cash, cash equivalents and restricted cash at the beginning of period 5,391 45,037 28,750 54,315
Cash, cash equivalents and restricted cash at the end of period 9,120 31,717 9,120 31,717
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 6 Months Ended 6 Months Ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
GAAP net loss attributable to ordinary shareholders (11,746) (12,611) (24,551) (22,518)
Add:
Stock-based compensation 3,587 3,713 7,313 5,721
Warrants to service providers 286 157 634 254
Revaluation of warrants and accretion (157) (369) (268) (238)
Convertible debentures accretion 176 176
Non-recurring expenses related to convertible debentures and ATM 805 214 805 214
Non-GAAP net loss (7,048) (8,896) (15,890) (16,567)
Basic Non-GAAP net loss per ordinary share (0.09) (0.13) (0.20) (0.25)
Weighted-average number of shares used in computing basic 80,578,820 67,762,711 79,377,515 66,225,739
Non-GAAP net loss per ordinary share
Diluted Non-GAAP net loss per ordinary share (0.09) (0.16) (0.14) (0.29)
Weighted-average number of shares used in computing diluted 64,204,137 56,450,209 63,390,411 58,419,059
Non-GAAP net loss per ordinary share
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
(U.S. dollars in thousands)
3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
GAAP net loss attributable to ordinary shareholders (11,746) (12,611) (24,551) (22,518)
Add:
Financial expenses (income), net 132 25 177 (707)
Depreciation 147 139 289 276
Stock-based compensation 3,587 3,713 7,313 5,721
Warrants to service providers 286 157 634 254
Non-recurring expenses related to ATM 68 214 68 214
Adjusted EBITDA (7,526) (8,363) (16,070) (16,760)
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SOURCE Arbe
