Yahoo Finance Cepton Inc (CPTN) Q1 2024 Earnings Call Transcript Highlights: Strategic Advances Amid ...
Total Revenue: $1.9 million, up 31% year-over-year.
Product Revenue: $1.1 million.
Development Revenue: $0.8 million.
GAAP Net Loss: $6.8 million, or $0.43 loss per share.
Non-GAAP Net Loss: $8.3 million, or $0.52 loss per share.
Non-GAAP Adjusted EBITDA: Negative $8.9 million.
Cash and Cash Equivalents: $49.2 million as of March 31, 2024.
Full-Year Revenue Guidance: Expected to be between $15 million and $25 million.
Operating Expenses Guidance: Expected to be below $50 million.
Positive Cash Flow: Expected for Q2 2024.
Release Date: May 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Cepton Inc (NASDAQ:CPTN) has successfully advanced its Ultra lidar product from concept to the B sample stage quicker than anticipated, with performance exceeding expectations.
The company has secured a series production project with a global OEM in collaboration with Koito, highlighting its competitive technology and industry trust.
Cepton Inc (NASDAQ:CPTN) expects to achieve positive cash flow for Q2 2024, marking a significant milestone for the company and the lidar industry.
The company has demonstrated its Ultra lidar capabilities across three continents, receiving overwhelmingly positive feedback, which affirms its potential in transforming automotive safety standards.
Cepton Inc (NASDAQ:CPTN) has expanded its market reach, actively participating in RFQ submissions with some of the world's largest automotive manufacturers, positioning it well for future growth.
Negative Points
Cepton Inc (NASDAQ:CPTN) reported a GAAP net loss of $6.8 million and a non-GAAP net loss of $8.3 million for Q1 2024, indicating ongoing financial challenges.
The company's total revenue for Q1 2024 was $1.9 million, which, despite a 31% increase from the previous year, remains relatively low.
Cepton Inc (NASDAQ:CPTN) is heavily reliant on progressing from development to production stages with OEMs, which involves significant time and investment.
The company's financial health is dependent on the successful execution and expansion of its series production awards and securing new contracts.
There are inherent risks involved with the reliance on a few significant contracts and partnerships, such as the $10 million engineering services contract with Koito, which could impact financial stability if any issues arise.
Q & A Highlights
Q: Hi. Thanks for taking my questions on maybe firstly, just on the CAD4 million gain, I just wanted to pick on the GM cost recovery. I just wanted to clarify, is that a was that a cash payment? A: Dong Chang, Cepton Inc - Interim Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer: And the $4 million is a cash payment. It has been received in the first quarter.
Q: Can you help us frame for the new production win and congratulations on that win? When should we expect or when could we start to expect ARM, you know, production revenue from that? Is that a 2026 event? A: Mitch Hourtienne, Cepton Inc - Chief Commercial Officer: We noted that we'll begin collecting development revenues this quarter. And then sample product revenues are also starting this quarter for the high volume production revenue in most of these programs are typically source 2.5 to 3 years ahead of the start of production. And that's the case for this project as well.
Q: The new auto award mentioned in the PR and then on the call, is this the same one mentioned end of March? A: Mitch Hourtienne, Cepton Inc - Chief Commercial Officer: Yeah, yeah, it is.
Q: This $10 million fee, it sounds like most of it's going to be recognized in 2Q and then the rest of it throughout fiscal 2024 or is it all going to be recognized in Q2? A: Mitch Hourtienne, Cepton Inc - Chief Commercial Officer: Yes, actually all of it is recognized within Q2. And then from my answer the previous question, there will be subsequent development revenues on top of the $10 million in the second half of the year.
Q: With the guidance given of 15 to 25 million for the year, we already know about 12 million of that on to make up the rest of that 3 to 13 million in revenues. Are you able to give you can give some more color on whether it has to be made up of primarily and R&D or product sales? A: Mitch Hourtienne, Cepton Inc - Chief Commercial Officer: It will be a mix of both. As we indicated in the call, we're working on two or three other OEM. projects. Both of those will have significant NRE contracts as well as our early sample sales and the details are not finalized yet by the customer or by shutdown. And so that's why we have a bit of a range on the forecast as we finalize the timing and the category of those payments.
Q: I know you guys have previously had one GM, but this automotive win in OEM seems a little more secure, if you will, but I'd love to just get your thoughts on on how important it is to get that first design win or just to secure a design win is it kind of put you in a better position to win these other RFPs that you're fighting for? A: Mitch Hourtienne, Cepton Inc - Chief Commercial Officer: There's a lot of lessons learned from the GM program that go into our product evolution who show that and you see that showing up in our new Ultra products. So all of the design and manufacturing lessons learned are built into our Ultra product and you see it in our new software ecosystem product called studio biz that we announced last week. Again, this is pretty unique in the industry and that it takes into account all the manufacturing variances of building a lidar. And then I think maybe one of the last but not least important lessons learned is the supply chain we have we're carrying over some of the suppliers that that worked really well on the GM project in finding new suppliers as our product has evolved. So yes, it puts us in a very competitive position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
