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Mar 02, 2023, 07:00 ET
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TEL AVIV, Israel, March 2, 2023 /PRNewswire/ — Arbe Robotics Ltd. (NASDAQ: ARBE) (“Arbe”), a global leader in Perception Radar Solutions, today announced financial results for its fourth quarter and full year, that ended on December 31, 2022.
Key Q4 and 2022 Company Highlights:
Over the past year, Arbe has made significant progress in the development of its next generation Perception Radar technology, which has been validated for its leading performance. This technology will play an integral role in the sensor suite of Level 2+ driving systems, which are projected to be the next mass market.
“Throughout the year, our primary focus was on integrating our technology with automakers to highlight the pivotal role of our radar technology in Level 2+ driver assist solutions. We remained committed to developing leading innovations, to forging stronger collaboration with our Tier 1 partners, and to executing on Arbe’s strategy to enter the commercial stage.” said Kobi Marenko, Chief Executive Officer. “Our Tier 1 partners are making significant investments to secure a timely path to production. Arbe recently achieved certification of its RF chipset for the Japanese market and have already begun a development project with a leading Japanese automotive company as well as field trials with Tier 1s and automakers in the region, opening a new, important market for our company.”
“We are pleased with the progress we made in 2022, as we have reached an exciting milestone, transitioning from the proof-of-concept phase to the production stage, where we can deliver our advanced solution to the market. As we continue to gain significant momentum and see increased demand from industry leaders, we believe that Arbe is well-positioned for growth in the coming years.” Marenko concluded.
Fourth Quarter and Full Year 2022 Financial Highlights
As we progress with our strategy, we are shifting our focus on to chips for production. As a result, we have reduced our focus on selling engineering samples during Q4. This transition will streamline our operations and provide cost savings, as we work to adjust our processes and ramp up production accordingly. We believe that these decisions will enable us to better serve our customers and drive innovation forward.
Revenues for Q4 2022 were $0.15 million, compared to $0.5 million in Q4 2021. Full year 2022 revenues were $3.5 million, an increase from $2.2 million in 2021. New orders for the full year 2022 were $1.6 million. Backlog as of December 31, 2022, is $0.2 million, not including, the previously announced HiRain preliminary order of 340,000 chipsets. Q4 2022 a negative gross margin of 45.8%, compared to a positive gross margin of 37.7% in Q4 2021. Q4 2022 negative gross margin was as a result of our reduced quarterly revenue, as we transition to mass production. Gross margin for the full year of 2022 was 63.5% compared to 36.0% in 2021. Year over year gross margin improvement was primarily related to economy of scale, revenue mix and lower cost per unit as we progress toward production.
Operating expenses in Q4 2022 were $14.0 million, compared to $14.2 million in Q4 2021. Operating expenses for the full year of 2022 were $50.0 million, compared to $34.1 million in 2021. 2022 Operating expenses increase related mainly to non-cash share-based compensation expenses, labor cost increase, and to a lesser extent, expenses associated with Arbe being a publicly traded corporation.
Net loss in the fourth quarter of 2022 was $11.1 million compared to a net loss of $15.8 million in the same period of 2021. Net loss for the full year of 2022 was $40.5 million compared to a net loss of $58.1 million last year. 2022 Net loss included financial income of $7.2 million compared to $24.8 million of financial expenses in 2021. 2022 financial income resulted from warrants revaluation income and interest deposits partially offset by unfavorable exchange rate revaluations.
Adjusted EBITDA in Q4 of 2022, a non-GAAP measurement which excludes expenses for non-cash share-based compensation and for non-recurring items, yielded a loss of ($11.5) million, compared with a loss of ($11.9) million in the fourth quarter of 2021. Adjusted EBITDA for the full year of 2022 amounted to ($38.0) million, a decrease of 25% from ($30.4) million in 2021.
Balance Sheet & Liquidity
As of December 31, 2022, Arbe had $54.2 million in cash and cash equivalents with no debt.
Outlook
Management provided an outlook for the full year, the period ending December 31, 2023. Based on current estimates: Our goal for 2023 is to achieve 4 design-ins with automakers. Revenues are expected to be in the range of $5 to $7 million, implying approximately 71% growth over 2022 at the midpoint of the range. Revenue represents our expectation to full production in Q4 2023, as well as our decision to focus exclusively on production intent chips. Adjusted EBITDA is projected to be in the range of ($32 million) and ($35 million), primarily attributable to revenue growth, the decrease in initial production cost and cost efficiency efforts.
Conference Call & Webcast Details
Arbe will host a live webcast entitled “POC to Production: Driving Innovation Forward” on Thursday, March 2, at 8:30 a.m. Eastern Time to discuss the company’s fourth quarter and fiscal year 2022 financial results, recent developments and vision. Speakers will include Kobi Marenko, Co-Founder and Chief Executive Officer, Karine Pinto-Flomenboim, Chief Financial Officer, Dr. Noam Arkind CTO, and Ram Machness, Chief Business Officer.
Virtual Event Details
Please register in advance via this site to receive the webcast link. Log-in instructions will be available after registering for the event.
Arbe encourages participants to use the webcast link, as there will be several videos and live presentations during the webcast. Questions can be sent in advance to: [email protected] or [email protected] or during the registration process.
An archived replay will be made available from Arbe’s Investor Relations website at https://ir.arberobotics.com.
About Arbe
Arbe (Nasdaq: ARBE), the global leader in Perception Radar Chipset Solutions, is spearheading a revolution in sensing, enabling truly safe driver-assist systems today while paving the way to full autonomous-driving. A critical sensor for L2+ and higher autonomy, Arbe solutions are 100 times more detailed than the most advanced radars on the market, providing full sensing coverage around the vehicle. Arbe has been selected by leading Tier 1s and car manufacturers to deliver advanced sensing and paradigm-changing perception to a wide range of vehicles and applications across the U.S., Europe, and Asia. Arbe is a leader in the fast-growing automotive radar market that has a projected total addressable market of $11 billion in 2025. For more information, visit https://arberobotics.com/.
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) unanticipated delays or difficulties in connection with the evaluation of Arbe’s products in evaluation and test programs; (ii) Arbe’s ability to have products manufactured for it by its third party supplier that meet Arbe’s and its customers quality standards and delivery requirements; (iii) Arbe’s ability to leverage its existing relationships and secure orders resulting from the test programs; (iv) Arbe’s ability to meet its projected revenue level and its ability to operate profitably; (v) Arbe’s ability to meet its timetable both to achieve full production and to meet the delivery requirements of its customers; (vi) the development of safe autonomous vehicles that include Arbe’s radar systems; (vii) Arbe’s expectation that it will obtain orders from Tier 1 suppliers and automakers that would build the radars based on its Chipset solution; (viii) the effect of inflation and supply chain issues on Arbe’s cost and its development schedule, including Arbe’s ability to obtain semiconductor products when needed and at a reasonable price; (ix) Arbe’s ability to price its products in a manner to enable it to operate profitably; (x) Arbe’s expectation that radars are crucial to the automotive industry and in the not to distant future will be deployed in nearly all new vehicles as a long range, cost-effective sensor with the fewest environmental limitations; (xi) Arbe’s belief that the Arbe Radar Chipset and Lynx Surround Imaging Radar herald a breakthrough in radar technology that provide Tier 1 suppliers and automakers with the ability 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; (xii) Arbe’s ability to develop or have access to the latest developments relating to radar and autonomous driving vehicles; (xiii) the ability of its Tier 1 customers to successfully market radar systems using Arbe’s radar to automobile manufacturers; (xiv) Arbe’s ability to attract and retain highly skilled personnel and senior management, including research and development, sales and marketing personnel; (xv) Arbe’s ability to develop and market products based on its radar technology for uses outside of the automotive industry; (xvi) 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; (xvii) 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; (xviii) unexpected delays or difficulties related to the development of Arbe’s technologies and products; (xix) the effect of laws and changes in laws that have an effect on the market for or the requirement for autonomous vehicles; (xx) Arbe’s belief that an increased demand for autonomous vehicles and the transition to mass production of Level 2 and higher autonomous vehicles, requiring advanced systems for automatically integrating vehicles in traffic and preventing traffic accidents, are expected to increase the demand for products in our field of activity; (xxi) Arbe’s belief that any requirement on the part of insurance companies that radar systems be installed as a condition for issuing insurance policies is expected to increase the demand for Arbe’s products; (xxii) 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 including the effects of the decision of the government of the People’s Republic of China to change from the zero-COVID policy; (xxiii) changes or inaccuracies in market projections; (xxiv) changes in Arbe’s business strategy; and (xxv) 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 risk described in Arbe’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission, or SEC, on March 31, 2022 and in Arbe’s prospectus dated June 22, 2022, which was filed by Arbe with the SEC on June 23, 2022, and its prospectus dated July 11, 2022, which was field by Arbe with the SEC on July 19, 2022, as well as other documents filed by Arbe 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 Arbe 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, our website or any other website is expressly not incorporated by reference into and is not a part of this press release.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
December 31, 2022
December 31, 2021
Current Assets:
(Unaudited)
(Audited)
Cash and cash equivalents
54,171
100,811
Restricted cash
144
125
Short Term Bank Deposits
400
–
Trade Receivable
2,202
187
Prepaid expenses and other receivables
1,839
3,058
Total current assets
58,756
104,181
Non-Current Assets
Operating lease right-of-use assets
465
–
Property and equipment, net
1,609
1,165
Total non-current assets
2,074
1,165
Total assets
60,830
105,346
Current liabilities:
Short term loan
–
4,916
Trade payables
1,244
2,005
Operating lease liabilities
364
–
Employees and payroll accruals
2,861
3,095
Deferred revenues
351
726
Accrued expenses and other payables
5,609
4,725
Total current liabilities
10,429
15,467
Long term liabilities
Operating lease liabilities
17
–
Warrant Liabilities
1,631
10,056
Total long-term liabilities
1,648
10,056
SHAREHOLDERS’ EQUITY:
Ordinary Shares
*)
*)
Additional paid-in capital
208,893
199,469
Accumulated Deficit
(160,140)
(119,646)
Total shareholders’ equity
48,753
79,823
Total liabilities and shareholders’ equity
60,830
105,346
*) 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
12 Months Ended
12 Months Ended
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Revenues
149
520
3,517
2,249
Cost of revenues
217
324
1,283
1,440
Gross Profit
(68)
196
2,234
809
Operating Expenses:
Research and development, net
10,827
11,580
36,731
28,564
Sales and marketing
1,194
677
4,621
1,814
General and administrative
2,026
1,916
8,613
3,709
Total operating expenses
14,047
14,173
49,965
34,087
Operating loss
(14,115)
(13,977)
(47,731)
(33,278)
Financial (income) expenses, net
(3,004)
1,870
(7,237)
24,814
Net loss
(11,111)
(15,847)
(40,494)
(58,092)
Basic net loss per share attributable
to Ordinary Shareholders
(0.17)
(0.27)
(0.64)
(2.64)
Weighted-average number of shares
used in computing basic net loss per
share attributable to Ordinary
Shareholders
63,940,247
58,632,414
63,489,983
22,027,292
Diluted net loss per share attributable to
Ordinary Shareholders
(0.25)
(0.27)
(0.80)
(2.64)
Weighted-average number of shares
used in computing diluted net loss
per share attributable to Ordinary
Shareholders
58,860,661
58,632,414
60,960,641
22,027,292
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
3 Months Ended
3 Months Ended
12 Months Ended
12 Months Ended
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Cash flows from operating activities:
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Net Loss
(11,111)
(15,847)
(40,494)
(58,092)
Adjustments to reconcile loss to net cash used in operating activities:
Depreciation
132
96
481
342
Stock-based compensation
2,416
1,723
8,793
2,211
Warrants to service providers
82
59
354
115
Revaluation of warrants and accretion
(3,361)
1,861
(8,122)
6,599
Revaluation of convertible loan
–
–
–
17,866
Change in operating assets and liabilities:
Decrease (increase) in trade receivable
(107)
112
(2,015)
(50)
Decrease (increase) in prepaid expenses and other receivables
(348)
(2,153)
1,219
(2,228)
Operating lease ROU assets and liabilities, net
(4)
–
(84)
–
Increase (decrease) in trade payables
(477)
(1,187)
(769)
458
Increase (decrease) in employees and payroll accruals
775
591
(234)
1,557
Increase (decrease) in deferred revenue
–
(220)
(375)
445
Increase in accrued expenses and other payables
3,001
4,030
884
4,361
Net cash used in operating activities
(9,002)
(10,935)
(40,362)
(26,416)
Cash flows from investing activities:
Change in bank deposits
–
–
(400)
100
Purchase of property and equipment
(50)
(97)
(918)
(784)
Net cash used in investing activities
(50)
(97)
(1,318)
(684)
Cash flows from financing activities:
Repayment of long-term loan
–
–
–
(2,639)
Proceeds from short term loan
–
(18)
–
4,715
Payment of deferred transaction costs
–
117
–
–
Proceeds from recapitalization and pipe offering, net of
issuance cost
–
98,587
–
98,587
Repayment of short-term loan
–
–
(5,218)
–
Proceeds from exercise of warrants
–
9,222
–
12,859
Proceeds from exercise of options
12
11
277
223
Proceeds from convertible loan
–
–
–
11,337
Net cash provided by (used in) financing activities
12
107,919
(4,941)
125,082
Increase (decrease) in cash, cash equivalents and
restricted cash
(9,040)
96,887
(46,621)
97,982
Cash, cash equivalents and restricted cash at the
beginning of period
63,355
4,049
100,936
2,954
Cash, cash equivalents and restricted cash
at the end of period
54,315
100,936
54,315
100,936
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
12 Months Ended
12 Months Ended
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
GAAP net loss attributable to ordinary shareholders
(11,111)
(15,847)
(40,494)
(58,092)
Add:
Stock-based compensation
2,416
1,723
8,793
2,211
Warrants to service providers
82
59
354
115
Revaluation of warrants and accretion
(3,361)
1,861
(8,122)
6,599
Revaluation of convertible loan
–
–
–
17,866
Non-recurring initial public offering expenses
–
234
130
234
Non-GAAP net loss
(11,974)
(11,970)
(39,339)
(31,067)
Basic Non-GAAP net loss per share attributable to
Ordinary Shareholders
(0.19)
(0.20)
(0.62)
(1.41)
Weighted-average number of shares used in computing
basic Non-GAAP net loss per share attributable to
Ordinary Shareholders
63,940,247
58,632,414
63,489,983
22,027,292
Diluted Non-GAAP net loss per share attributable to
Ordinary Shareholders
(0.26)
(0.20)
(0.78)
(1.41)
Weighted-average number of shares used in computing
diluted Non-GAAP net loss per share attributable to
Ordinary Shareholders
58,860,661
58,632,414
60,960,641
22,027,292
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
(U.S. dollars in thousands)
3 Months Ended
3 Months Ended
12 Months Ended
12 Months Ended
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
GAAP net loss attributable to ordinary shareholders
(11,111)
(15,847)
(40,494)
(58,092)
Add:
Financial expenses (income), net
(3,004)
1,870
(7,237)
24,814
Depreciation
132
96
481
342
Stock-based compensation
2,416
1,723
8,793
2,211
Warrants to service providers
82
59
354
115
Non-recurring initial public offering expenses
–
234
130
234
Adjusted EBITDA
(11,485)
(11,865)
(37,973)
(30,376)
Logo: https://mma.prnewswire.com/media/803813/Arbe_Robotics_Logo.jpg
SOURCE Arbe
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