Operator: Good afternoon and welcome to indie Semiconductor ‘s First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.

Ashish Gupta: Thank you, Operator. Good afternoon and welcome to indie Semiconductor ‘s first quarter 2023 earnings call. Joining me today are Don McClymont, indie’s Co-Founder and CEO; and Raja Bal, indie’s Chief Accounting Officer. Tom Schiller, indie’s CFO and EVP of Strategy is out of the office with the passing of his mother just days ago. Donald will provide opening remarks and discuss business highlights followed by Raja’s review of indie’s Q1 results and second quarter outlook. Please note that we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the strategic backlog formulation methodology, please refer to our Safe Harbor statement on our Q3 2022 earnings press release. For material risks and other important factors that could affect our financial results, please review our risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as well as other public reports filed with the SEC. Finally, the results and guidance discussed today are based on certain non-GAAP financial measures. For a complete reconciliation to GAAP, please see our Q1 earnings press release, which was issued in advance of this call and can be found on our website at www.indisemi.com.

I’ll now turn the call over to Donald.

Donald McClymont: Thank you, Ashish, and welcome everybody. I’m pleased to report that indie delivered yet another above plan record performance in the first quarter, reflecting robust demand for our highly innovative Autotech solutions and our unwavering commitment to achieving operational excellence. Once again, we substantially outpaced our industry peers, driven by indie’s diverse and differentiated product set underpinned by over 400 global patents and applications. We’re off to a strong start in 2023. Specifically, during the quarter, we grew revenue 84% year-over-year and 22% sequentially to $40.5 million and achieved a gross margin of just over 52%. Our deep R&D investments and targeted acquisitions are beginning to yield results, allowing indie to sharply outpace our peer group and insulate us from isolated geographic customer and market weakness.

As we’ll review, we’re gaining design win momentum across ADAS, user experience and electrification applications, setting the stage for sustained, outsized growth for years to come as these wins translate into program ramps and ultimately revenue and free cash flow generation. First, within the ADAS product area, we’re enabling automotive OEMs and Tier 1 suppliers to meet the growing demand for advanced safety systems in next generation vehicles. Importantly, we continue to follow a technology agnostic approach supporting multiple sensor modalities such as Radar, LiDAR, Computer Vision and Ultrasonic Solutions from which we will ultimately fuse the data created to provide a comprehensive and accurate perception of the vehicle’s surroundings.

We believe that our sensor fusion product roadmap augmented and accelerated by our acquisition strategy, has truly differentiated indie from the pack, including competitors who tend to cling to one modality, often with an extremely narrow customer base. Quite simply, we believe that no single sensing modality will dominate the application landscape, particularly given the diversity of ADAS use cases ranging from backup safety systems to lane assist to fully autonomous driving and everything in between. And to be clear, indie’s business plan isn’t dependent on full autonomy. Our solutions support the evolution of today’s safety systems from level two to what I like to call level two plus, plus, plus. In other words, we haven’t even begun to address the opportunity presented by levels four and five, the definition of the complete driverless vehicle.

But we certainly will when those markets begin to mature. In the meantime, I’m delighted to announce that during the quarter we captured our first design win at General Motors in partnership with Sharp of Japan. While we can’t elaborate upon this particular program, suffice it to say it’s a material development for indie and will initially encompass many of GM’s forthcoming models, including its EV portfolio. We look forward to providing additional information upon the global rollout next year. During the quarter, we also strengthened our position as a technology leader in automotive radar with this acquisition of Silicon Radar, a company specializing in advanced, highly integrated high frequency systems on chip. Silicon Radar had developed the industry’s first volume production-ready, highly integrated 120GHz radar front-end transceiver, including on-chip integrated antennas.

Silicon Radar had previously been a design partner to our own Munich, Germany based radar group. As vehicle safety standard initiatives such as the European New Car Assessment Program continued to expand globally, there is an increasing need for driver and occupant monitoring systems, making in-cabin sensing solutions as an essential component for ensuring overall safety. In fact, S&P Global Mobility predicts that the market for driver and occupant monitoring semiconductors will grow to over $0.5 billion by 2029 at a 34% compound annual growth rate. With Silicon Radar’s world class design team, we plan to lead the way. On the LiDAR front, during the quarter, we continued to make progress with our Surya SOC program demonstrating our solution at multiple European automotive Tier 1s.

indie’s Surya LiDAR SOC is a game changing product, enabling customers to implement a highly-integrated and high performance software defined data acquisition and signal processing system. It is the world’s first merchant market coherent LiDAR solution that integrates multi-channel, high speed analog to digital converters, hardware and software based signal, digital signal processing, together with the system control interfaces needed for an efficient and cost effective FMCW LiDAR system. Specifically, we are targeting a $200 BOM 80% less than current architectures. As a result, we believe indie can uniquely drive this key three-dimensional imaging technology, which is now beginning to gain traction as a mainstream sensor. And finally, computer vision systems are a crucial component of both ADAS and autonomous driving, serving as the primary sensing function with next generation vehicles requiring up to 20 cameras for sensing functionality.

Computer vision systems are diverse, enabling a wide range of applications, including backup cameras, surround view systems, object and lane detection, night vision and driver and occupant monitoring. These functions collectively enable use cases such as lane change assist, highway pilot, traffic jam pilot, occupant safety and automated parking, amongst others. During the quarter, we continued to expand our design win pipeline, securing initial vision sockets at Panasonic in support of Honda. Next, turning to user experience, by background OEMs have been increasingly prioritizing a best-in-class in-cabin experience as a point of differentiation, prioritizing, communication, entertainment and information sharing. With modern cars becoming more like temporary homes or workplaces, providing the ultimate user experience throughout the entire cabin is becoming the new standard.

OEMs have increasingly highlighted the importance of interior lighting as it can drive an emotional connection with the driver and is a strong generator of brand recognition. indie is redefining the future of in-cabin lighting with multi-color technologies for an enhanced user experience. The interior and exterior lighting of today’s vehicles is rapidly evolving. With advanced dynamic lighting, it is possible to improve visibility and make it easier for drivers to see and be seen, which can help reduce the risk of accidents. Innovative lighting can also improve the comfort of the driver and occupants, creating an atmosphere suited to the context of the journey, style preference of the vehicle owner and indeed the general mood. indie’s solutions, such as the recently announced LED matrix controller are designed to address this growing demand for innovative and power efficient LED lighting.

Based on our power efficiency leadership, during the quarter, we captured additional advanced lighting wins at several leading EV OEMs both North American and China based, including BYD, NIO and Li Auto. Similarly, mobile device integration and wireless charging are also top priorities for global automakers. This technology allows drivers to seamlessly link their mobile device into the vehicle’s infotainment system, safely making calls, sending and receiving messages, and enjoying their favorite music without diverting their attention from the road. To-date, Apple and Android have provided compelling consumer experiences and have gained significant market share. In that process, indie has played no small part in enabling this functionality.

That said, our chipset is agnostic to whatever software layer is implemented be it Apple CarPlay, Android Auto or even in-house solutions. While some OEMs have recently announced plans to transition to internally developed architectures, indie is in no way impacted by this development, particularly as we continue to sell data transport and power to connect the phone to the infotainment system within any configuration. At the same time, our strong relationships with Tier 1s global car makers and rapidly emerging EV OEMs have allowed us to expand our offerings into adjacent areas of user experience, such as wireless charging, USB-PD controller and other in-cabin solutions. And speaking of electric vehicles, we’re seeing a market acceleration as EV sales continue to gain momentum.

According to Kelley Blue Book, EV sales were up 45% versus the prior year in the US and the EV share of the total market increased to over 7%. Additionally, as EV technology continues to improve, charging infrastructure expands and battery costs decrease, the potential for growth in the EV market is phenomenal. We expect global EV OEMs will seek more efficient and integrated semiconductor solutions and believe indie is in a strong position to benefit from the growth, particularly given our strong relationships with an increasing number of leading EV OEMs around the globe. I’ll now turn the call over to Raja for a discussion of our Q1 results and Q2 outlook. For those who haven’t had the opportunity to meet Raja, he has been a valuable member of the indie team for over three years and currently serves as our Chief Accounting Officer.

Raja, over to you.

Raja Bal: Thanks, Donald. indie delivered a strong first quarter once again exceeding our top line guidance and expectations. In fact, this represents our eighth consecutive quarter of beating or at least meeting our revenue and gross margin targets post-indie’s IPO. Specifically, revenue for the period was up 84% year-over-year and up 22% sequentially to $40.5 million, including a stub portion of revenue from our acquisition of GEO Semiconductor in March. On a non-GAAP basis, gross profit was 21.1 million, translating into 52.2% gross margin up 484 basis points year-over-year and slightly ahead of our 52% guidance. Total operating expenses for the quarter were $37.9 million, including $29.3 million in R&D and $8.6 million in SG&A reflecting our continued investment in accelerated product development and expansion of our sales and marketing reach.

In turn, our Q1 operating loss was $16.8 million. Below the line, net interest income was $0.5 million. As a result, our net loss was $16.3 million and we posted a $0.10 loss per share on a base of 155.1 million shares in line with guidance. Turning to the balance sheet. We had significant one-time cash disbursements during the quarter, including $90 million related to the acquisition of GEO Semiconductor, $8.4 million related to the acquisition of Silicon Radar and a $10 million repayment of the analog devices promissory note related to the acquisition of Symeo. We also invested $16.7 million in working capital, primarily to secure inventory in support of our back half growth plans. $3.2 million in capital expenditures for expanded internal testing capabilities and $3.9 million in other financing activities.

Also, during the quarter, we raised $34.2 million from the ATM and issued 3.3 million shares. These sources and uses of cash combined with our non-GAAP operating loss of $16.8 million, resulted in $207.4 million of cash on hand exiting the quarter. Looking forward based on our order visibility and the depth of indie’s new product pipeline, we plan to demonstrably outperform the Autotech market over the forecast horizon. For the second quarter, we plan to scale to a $205 million to $210 million annualized revenue run rate, assuming the midpoint of this range at $51.9 million, we expect non-GAAP gross margin again in the 52% range, particularly as we work through lower margin pre-synergized GEO inventory. We are also planning $33 million in R&D and $9 million in SG&A, which includes the full quarterly impacts of both our recent acquisitions versus just one month in Q1.

As a result, we plan to narrow our operating loss to approximately $15 million. Below the line, we anticipate $200,000 of net interest expense and no taxes. Assuming 164.3 million shares outstanding, we expect a $0.09 loss per share. Finally, and to reiterate, we believe the combination of indie’s accelerating growth trajectory, gross margin expansion, post-acquisition synergies and planned operating expense leverage will enable us to reach profitability in the back half of this year. With that, I’ll turn the call back to Donald for his closing comments.

Donald McClymont: Thanks, Raja. In summary, Q1 was another solid quarter operationally, but we also remain in the early innings of what’s possible at indie given the strength of our customer engagements, supplier partnerships, product portfolio, roadmaps and our world class design team. In the short-term, our performance and outlook represent yet more proof points that we’re effectively executing to our plan. In fact, we are now on pace to more than double our top line again this year, our third year in a row of doing so. Since we’re in the middle of the NBA Playoff season, that’s indie’s version of a triple double, representing another step towards realizing our vision of capitalizing on the 42 billion automotive semiconductor market opportunity and in the process creating an Autotech powerhouse. That concludes our prepared remarks. Operator, let’s open the call for questions.

Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from Suji DeSilva with Roth Capital. Please proceed with your question.

Operator: Thank you. Our next question comes from Anthony Stoss with Craig-Hallum. Please proceed with your question.

Operator: Thank you. Our next question comes from Ross Seymore with Deutsche Bank. Please proceed with your question.

Operator: Thank you. Our next question comes from Cody Acree with Benchmark. Please proceed with your question.

Operator: Thank you. Our next question comes from Craig Ellis with B. Riley Securities. Please proceed with your question.

Operator: Thank you. There are no further questions at this time. I would like to turn the floor back over to management for closing comments.

Donald McClymont: Thanks, everybody, for attending and listening to our call. Hope to see you guys at the investor conferences in the coming weeks and see you next quarter.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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