Microvision (MVIS) 7 Aug 24 2024 Q2 Earnings call transcript

In MicroVision's second quarter earnings call, CEO Sumit Sharma and CFO Anubhav Verma shed light on the company's financial performance and strategic initiatives, providing valuable insights into its financial health and growth prospects. While the call was marked by a cautious optimism, it also underscored the challenges faced by the company and its industry at large.

Financial Performance and Strategic Initiatives

MicroVision reported a revenue of $1.9 million for the second quarter, slightly ahead of expectations. This revenue was primarily driven by sales to a leading agricultural equipment company for industrial applications. The company's financial performance was also impacted by its strategic focus on non-automotive customers, as revenue from automotive customers ramps up. Gross margins were reported at approximately 39% on an adjusted basis, demonstrating MicroVision's differentiation from competitors with upside-down negative or near-zero gross margins.

The company also shared its efforts to streamline operations and reduce expenses, focusing on Mavin and Movia, driven by perception software offerings. This strategic move is aimed at conserving resources for these products and terminating all expenses related to Mosaic and sensor fusion. Despite the challenges, MicroVision maintains a disciplined approach to cash burn and has extended its runway, positioning itself for the future.

Market Outlook and Competitive Landscape

The call highlighted the competitive landscape in the Lidar market, with key competitors facing significant challenges in terms of high costs, lack of partnerships, and unproven products. MicroVision's positioning as a strategic player in the market, with a focus on high-volume passenger vehicle OEMs, sets it apart from its competitors. The company's commitment to customizing its products for OEMs and its aggressive exploration of new opportunities, such as integration behind windshields and 180-degree field of view Movia sensors, positions it well for future growth.

Future Opportunities and Challenges

The call also touched upon the potential for industrial sales, which could bridge the gap until automotive OEM revenues come alive later in the decade. MicroVision's focus on key accounts and strategic partnerships in the heavy industrial market, leveraging its Movia L sensor and perception software, could yield meaningful revenues starting from 2025. However, the company acknowledged the challenges in the near term, with OEMs expecting downstream Lidar suppliers to bear the cost in the initial years and having diversified revenue streams from non-automotive industries to sustain their operations.

Conclusion

MicroVision's second quarter earnings call painted a picture of a company in a strategic transition, navigating both challenges and opportunities in the Lidar market. The company's focus on customization, operational efficiency, and strategic partnerships, coupled with its commitment to delivering high-quality products, positions it well for the future. However, the company's success will depend on its ability to capitalize on its strengths, manage cash burn, and navigate the complexities of the Lidar market. With a disciplined approach and a clear strategic vision, MicroVision is poised to emerge as a key player in the Lidar market, leveraging its technology to drive growth and value for its stakeholders.