Andrew Fung; Director of Investor Relations; Aeva Technologies Inc
Soroush Dardashti; Chief Executive Officer, Director; Aeva Technologies Inc
Saurabh Sinha; Chief Financial Officer; Aeva Technologies Inc
Colin Rusch
Suji Desilva; Managing Director, Senior Research Analyst; Roth Capital Partners LLC
Tyler Anderson
Operator
Good day. My name is Chloe and I will be your conference facilitator. I would like to welcome everyone to the Aeva Technologies third quarter, 2024 earnings conference call.
During the opening remarks, all participants will be in a listen-only mode following the opening remarks. We will conduct a question and answer session as a reminder, today's conference call is being recorded and simultaneously webcast.
I would now like to turn the call over to Andrew Fung, senior Director of Investor Relations and corporate development. Andrew, please go ahead.
Andrew Fung
Thank you and welcome everyone to Aevas third quarter, 2024 earnings conference call. Joining on the call today are Soroush Salehian Aevas, co-founder and CEO and Saurabh Sinha Aevas CFO ahead of this call. We issued our third quarter 2024 press release and presentation which we will refer to today and can be found on our investor relations website at investors.aeva.com.
Please note that on this call, 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 further discussion of the material risks and other important factors that could affect our financial results. Please refer to our filings with the SEC including our most recent form 10-Q and form 10-K. In addition, during today's call, we will discuss non-GAAP financial measures which we believe are useful as supplemental measures of Aeva's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.
The webcast replay of this call will be available on our company website under the investor relations link.
And with that, let me turn the call over to Soroush.
Soroush Dardashti
Thank you, Andrew and good afternoon, everyone. Aeva and Q3 continue to gain momentum across multiple fronts as more customer programs and industries look to adopt Aeva's unique 40 light our technology to enable next generation solutions, from new production awards to key milestones, achieved towards production with existing partners and progress on securing additional wins Aeva achieved major accomplishments this quarter and I'm excited to highlight a few of them.
First, we secured a major industrial production win for security applications with the indoor lab in a multiyear supply agreement with the opportunity to deploy Aeva for Lidar at multiple large locations across the US starting with JFK and SFO airports followed by plans to grow additional deployments on other applications.
This is an exciting expansion for Aeva that offers meaningful revenue potential and builds on our first win in security earlier this year. In automotive, our production partners Torque and Daimler truck achieved an important milestone towards safe and scalable commercialization with a successful validation of fully driverless operations at highway speeds. Of course, Torque's autonomous trucks are equipped with Aeva 40 Lidar as the exclusive long and ultra long-range light supplier. It is incredibly rewarding to be a part of such tangible progress towards bringing down the truck's autonomous truck program to production.
Aeva was also selected for a major European passenger OEMs automated vehicle validation program because of our FMCW advantages like direct velocity measurement which will be used to help validate the OEMs next generation vehicle automation systems.
And lastly, Aeva remains on track with multiple RFQs for passenger vehicle production programs. In particular, we continued to advance further towards the finalization of the RFQ for a global TOP10 passenger OEMs production program.
Let's now discuss in more detail, our recent business developments, we are excited to be awarded a multiyear production supply agreement with indoor lab, with over 15 years of experience the company is a leader in AI powered analytics solutions used to improve safety, security and operational efficiency at major US airports, mass transit, agriculture and smart infrastructure. This production wind represents a major expansion in security applications for Aeva and is also our first industrial production win for Atlas.
Our next generation four D Lidar are designed for mass production. Under the agreement at the sensors will be integrated into the indoor labs Lidar our Overwatch perception platform and enable the enterprise analytics suite for critical infrastructure to perform around the clock AI powered analytics and to monitor and manage indoor and outdoor environments.
The inter lab is transitioning to Aeva 40 Lidar for production deployments in order to leverage our superior capability such as direct velocity measurements and immunity to interference but also importantly because of our product scalability and the maturity of our Atlas product. Our first installations are at some of the largest and busiest airports in the US starting with a new terminal at JFK in New York and multiple terminals at San Francisco International Airport.
In addition, vendor lab is planning to expand deployment opportunities of 40 lidar to other applications at scale for other airports as well as mass transit, agriculture and smart infrastructure applications across the United States.
As we deliver on the initial deployments, we expect to scale our supply to significant volumes to support the deployments and other industrial security applications resulting in estimated revenue opportunity in the multiple tens of millions of dollars over the next 2 to 3 years. We have already begun shipments to a vendor lab last month and plan to scale volumes in 2025.
Moving now to the latest on the Daimler truck production program, Torque Dima truck subsidiary that is developing the OEMs autonomous driving technology achieved a significant step towards the safe and scalable commercialization of autonomous trucks. A comprehensive validation milestone, torque trucks equipped with Aeva 40 lidar with 360 degrees field of view coverage successfully completed fully driverless runs at highway speeds of 65 MPH. This is a major accomplishment that clearly illustrates the tremendous progress and dedication down the truck and torque and partners are making to commercialize autonomous trucks on the US highways by 2027.
As the exclusive long range and ultra long-range lighter supplier for Daimler trucks, autonomous truck production program. Multiple Aeva 40 lidar are being integrated into each truck for operation with torque's virtual driver technology to enable highway speed autonomy starting with the Freightliner Cascadia platform.
We remain on track with our start up production in 2026 to support the Merx's planned market entry by 2027 . In passenger vehicle Aeva was selected for a major European passenger OEMs automated vehicle validation program in collaboration with the leading simulation and validation technology provider, Aeva 40 lidar will gather ground truth data which will serve as the benchmark for validating its next generation vehicle automation systems, including sensing, perception, decision making and control systems.
The OEM's decision to use Aeva 40 lidar for this project is another example of the growing interest to leverage FMCW technology due to its ability to natively provide the additional dimension of instant velocity data. Along with other advantages that are missing in conventional wider sensors, we look forward to supporting the validation work and providing the OEM real world experience with the differentiated capabilities of Aeva 40 Lider.
Now, moving on to additional opportunities that we are engaged on. We are highly encouraged by the growing interest in our unique FMCW technology and Q3 made strong progress on multiple automotive RFQS and engagements with leading OEMs in particular, with a global TOP10 passenger OEM that we have discussed over the course of this year we have advanced through multiple phases of their RFQ now having worked jointly on spec alignment on thousands of technical requirements and passing extensive manufacturing quality audits to be their potential Tier one supplier.
Aeva has been down selected to the final stage of the RFQ and we remain in close collaboration with OEM across the technical and commercial teams as they work through the finalization of the RFQ for the production program. To support our ongoing engagements and growing number of production wins such as with the indoor lab I am pleased to share that we have made the strategic decision and superb execution to pull forward the first shipments of Atlas by almost six months to this quarter.
This was a massive team effort across the organization that meaningfully changes our ability to support recent production wins pull forward scaling of our ad deliveries and capitalize on additional interest for our unique technology. Analyst is our production intent product that was designed from the ground up to be automotive grade and scalable to mass volume. Based on our engagements customers are increasingly looking for solutions that can be deployed at significantly greater scale than today's solutions.
By accelerating the availability of Atlas, we believe this further positions Aeva to be in a market leading position to not only deliver on our recent production wins but continue to convert additional opportunities to production wins.
With that, let me turn the call over to Saurabh Sinha to discuss the financials.
Saurabh Sinha
Thanks Soroush and good afternoon, everyone. Now let's review our Q3 financial results, revenue in Q3 was 2.3 million representing scaling of our sensor shipments to automotive and industrial customers as well as our Daimler truck program. In line with our expectations our non-GAAP operating loss was 31.4 million for the quarter, gross cash use was 26.4 million in the third quarter, which is defined as operating cash use of 25.9 million and capital expenditure of 0.5 million.
Aeva's liquidity totaled 259.8 million at the end of Q3 comprised of 134.8 million in cash equivalents and marketable securities and 125 million of available undrawn equity facility. We believe this places Aeva in a strong position to support our current production partners for their SOP launches as well as securing additional production program wins, that our team is engaged on. As Soroush shared Aeva continues to see growing interest for a unique four D Lider. We are focused on meeting this increasing demand and securing additional production wins.
Now, I would like to turn it back to Soroush for closing remarks.
Soroush Dardashti
Thank you, Saurabh.
Over the course of 2024 Aeva has seen a sharp uptick in our commercial momentum starting with the Daimler truck production award announced at the beginning of this year to more recently, our major expansion into security applications with multiple wins we're converting more of our engagements to production wins as well as converting the one programs to growing product shipments and revenues.
I would like to thank the Aeva team for delivering these wonderful achievements. Looking ahead, we see opportunity to further build on our growing momentum and are focused on executing on the multiple passenger RFQs and engagements such as the global TOP10 passenger OEM that we spoke about as well as responding to the growing interest for our perception solutions in industrial automation, security and other applications.
With an expanding list of industries looking to leverage FMCW advantages for automation and perception solutions Aeva is in a strong position to drive the adoption of 40lider in automotive industrial security and beyond.
With that, we will now open the line up for questions.
Operator
At this time. If you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star two and once more for your questions. That is star and one we do ask that you limit yourself to one question. So there's time for everyone to ask their question and we'll move first to Colin Rusch with Oppenheimer. Your line is open.
Colin Rusch
Thanks so much. Guys, you know, now that you've got a couple of wins on the security side you know, and with the ground truth, and can you talk a little bit about what's going on with the potential customers in those areas? You know, how many, or just give a sense of, of growth in the number of customers and the scope of that opportunity over the next 12 to 24 months for shipments.
Soroush Dardashti
Yeah. Hi, Colin, happy to answer that this is Soroush, obviously, as you've seen over the past number of quarters, we have continued to really build up and capitalize the momentum that we've seen in the market, you know, started off the Air Force with the main production win with Daimler Truck we have since executed on all the milestones that we set out for us as a company and in the market with the customers as well as actually pulling forward the product with Atlas now by nearly six months, which was I think a big deal with it with the company and across organization to get this scale really in response to the growing demand so to answer a question, you know, with obviously now this additional production, when industrial security with indoor lab, we're really excited about this it's a major opportunity for us with the industrial production when in the lab is a leader in the space, you know, around the light our based AI analytics across applications and airports, smart infrastructure and other large venues.
This is a multi-year production supply deal we have, we're starting first with deployments across airports in the US starting, with JFK as well as in San Francisco Airport, which we're excited about and over time, we going to expand these additional locations over time. So, we see now, you know, this plus the National Security Organization win that we had earlier a significant opportunity so within as well as the other industrial security applications to get to the bottom of your question, we estimate that the revenue potential here to be approximately up to about $50 million in the next few years.
So this is something that that's obviously, you know, we see as the first opportunity and over time as vendor lab and other applications continue to grow their platforms and the deployment with new sites we see the revenue initiative that could grow over time. So, in a nutshell, we're really excited about that the progress we made, it's not just an automotive, which we're really, you know, working well and, and progressing well, but also industrial and other applications.
Colin Rusch
Excellent. And then, you know, as you work towards our production with Torque, can you talk about the remaining key manufacturing hurdles that you guys are looking at and we'll be able to talk about with the public markets over the next couple of years.
Soroush Dardashti
Yeah, sure, I would. So, you know, so far, we've been really well on track and really well aligned with Daimler truck and Torque, our partners for production here we have hit, you know, all the milestones, everything we've been on, you know, plan on with Daimler truck and Torque towards our milestones and importantly Torque and Daimler also have been continuing hitting their milestones, right? So with what we've seen and talked about and, Torque made a release about in the past few days, this validation of their driverless operations at highway speeds without a driver in the cab is a critical milestone, not just for Torque and Daimler truck, but also for the industry.
And this is further, you know, confidence building towards the timeline of our SOP which obviously is in 2026 but also Torque and Daimler trucks market entry in 2027 which by the way, they have retied and even as of the past few days. So, for what, what's going on from here from now on, first of all, this year, at this point, we have now, you know, we continue to scale our censor shipments to do the Daimler truck and torque we've actually completed all the censor shipment deliveries that we need to do for our Aeva's two platform with Daimler and Torque this year on time or ahead of time a little bit and we're now of course, focused on deliveries with Atlas in into next year.
So that's where the, the key focus is and the key milestone is going to be the validation for the rest of the Torque fleets as they scale into next year, as well as some of our automotive qualifications and making sure that we bring up the scaling production line for our Atlas up to the levels that needed to, for mass SOP throughout next year. So that's kind of the focus that we see in the next number of quarters ahead of us. But overall, we're really progressing well, we're on track and we actually because we've been able to pull forward now this Aeva's deliveries, we are also using that to capitalize on our momentum and other programs and automotive including all their passenger vehicles.
Thanks, you so much Chris.
Operator
And once more for your questions that is star and one, we'll pause just another moment to allow questions to queue.
And we do have another question. We'll move next to Suji DeSilva with ROTH Capital. Your line is open.
Suji Desilva
Congrats on the progress here. Question on the Tier one OEM win that you have here. Can you give us an update on the progress there and the remaining milestones for that global Tier one program, it sounds like it's coming close to a decision point or a ramp any color there would be helpful.
Soroush Dardashti
Yes. So you're happy to answer that. So, obviously, you know, we have been talking about our traction, the passenger car vehicle space in the past couple of quarters. Following our production with Daimler truck, we have seen an uptick in interest for he and for FMCW technology. It with the passenger vehicle, automotive market and I think with our ability to actually pull forward our Atlas deployments and really hitting all the milestones for our ISO audit and certification we have continued over the course of this year across our engagements with multiple top passenger vehicle EMS specifically for the TOP10. OEM that you're, I think you're referring to over the course of this year we have worked extensively with this, OEM and we continue to do so, and we're on track on that. in a little bit more context.
We've been obviously working from evaluation of the technology earlier in the year throughout you know, really going through all the extensive testing together with this TOP10 OEM, we have, you know, completed and passed all the critical manufacturing quality audits that helps us to build maturity as a Tier one supplier and got the approvals for that, you know, leading to our ability to manufacture for them we have joined the, also worked together through the technical teams aligning on all the requirements, thousands of technical requirements have been aligned in the past number of months and very close engagement there that we have done and then more recently, you know, we've been down selected the final stages here and are now discussing commercial terms.
So that's what I can share obviously, we are gaining continued confidence in the OEM as they move towards finalization of the RQ for this vehicle program, as you mentioned and you know that obviously there's many factors that go into the decision and you know, but we're feeling overall good about the progress that we have had with this OEM and this is lastly the second time that we've done this now, first with Daimler truck and now with this OEM in the in the past car space.
Suji Desilva
Okay, great. And would you be able to share, there are other competitors in the down select or whether it's just you kind of moving into new milestones.
Soroush Dardashti
Yeah. So look what I can say obviously is we're at the final stages of the RQ and have been multiple down selects, right. In that and we think we're in a, in a good position with this passenger.
Suji Desilva
That's fair and then switching over to the Innovation Labs partnership, I'm wondering how does the financial opportunity for that play out as, as you start to develop, I guess customers together or a pipeline together?
Soroush Dardashti
Yeah, absolutely. So, you know we spoke a little bit about this earlier but in general, you know, obviously the, the inter labs partnership is a multi year production deal that we have with committed volumes and you know, we're starting together it really to deploy our technology with 40 lidar as well as their analytic solution across number of airports, large venues and transit, mass transit applications we're starting with JSK airports and San Francisco reports and the overall progress of indoor labs is really to go after a number of different application installments. With the opportunity here that we're talking about with indoor as well as some of our other industrial security applications we estimate that the revenue potential for this to be approximately in the $50 million range over the next few years.
And this is the starting point, what we see with, with these opportunities and as there is growing interest for the platforms and new sites and applications, we see the potential revenue opportunity grow over time. So this is we don't think by any means any kind of ceiling here just to kind of the 1st deployment. So hopefully that answers your question.
Suji Desilva
No, understood. Thanks.
Operator
We'll take our next question from Richard Shannon with Craig Hallum. Your line is open.
Tyler Anderson
Hi, everyone. This is Tyler Anderson on for Richard Shannon. Thank you for taking my questions. I was wondering if there was any qualitative differences between all of the places that you're looking to get into for indoor and outdoor and also what would the pull forward for the shipment about? Is that something that was a technical or manufacturing matter? What could you describe that a bit for us?
Soroush Dardashti
Sure. Yeah. So, obviously with, you know, with our growing interest and for our technology, with 40 lidar and FMCW, we're expanding our applications and really capitalizing on the growing interest in the market. So I think your question around industrial applications, obviously, besides what we talk about automotive with, in the past two OEMs that we have advanced on besides this European OEM validation program that we want.
We have secured production one with indoor and the on the indoor labs on the industrial side but this actually is for indoor and outdoor application so it's not just indoor application. But the key there for them actually has been that they've been looking at different technologies in the space, they have valid, different types of technologies and decided that 40 lidars where they're going to go with as they go in terms of production, scaling, that's the transition they're making.
Part of the reason is, and we have, you know, I've seen this over and over is around the left the advantages of velocity dimension, the advantages of interference immunity, right, not having issues with the interference looming as well as I think, importantly, our ability to show not just superior capability but also maturity of our products. And these were kind of some of the key drivers, especially when you talk about monitoring analytics of different behavior, people in different settings inside the airports as well as outside.
And your other question about this and pulling, this has been obviously a strategic, strategic decision that we made earlier in the year. The moment we announced at this following you know, the same time with our win with Daimler truck, we saw a sharp uptick and the interest in the market for our products and our team has been working together for the past number of months across engineering as well as manufacture operations to really pull forward this Atlas deliveries by about six months or so.
So that's something that we, you know, has taken a significant amount of effort from the team but in general, of course, you know, with non automotive applications, we see the ability to pull this forward because often they don't necessarily need some of those automotive qualifications or certification to be completed yet so which obviously ongoing and on time for our Daimler truck SOP. So all this, I think has resulted us in our ability not just to deliver on the existing program with production programs that we have, but also win additional programs and what we're going to do here, what we're planning on forward is continue on capitalizing on this momentum, not just executing on our existing programs, but also converting those additional opportunities to production wins and then those wins to growing shipments and revenue. So that's kind of how we've been operating.
Tyler Anderson
And then are there commonalities between the indoor and outdoor opportunities that you're looking at? Is there a population or geographical situation that you're looking for when you're entering into a space?
Soroush Dardashti
Your time is specific to the industrial sensing, right, Tyler.
Tyler Anderson
Industrial or mass transit and smart infrastructure.
Soroush Dardashti
Yeah. So first of all, in, and what we're seeing the growing interest there in the industrial security, there is, you know, in across different regions, our first deployment starting in the US, obviously with our, you know, this first National Security Organization program that we have and now with the lab, and these are actually both indoor facing. So some of these, for example, in the terminals with SFO and JFK are looking at inside the terminal, looking for monitoring of people, you know, wrong behavior or bad behavior, tracking analytics, queue times, things like that. So there's a number of different applications. It's monitoring also on the outside, for example, looking at airplanes and on time, docking and undocking.
But also there is other applications outdoor for just security monitoring around the fences and perimeters which are, you know, some of the different customers. So though from a commonality you're talking about is all the same Atlas product that we have been working on that is for automotive that we're providing here for these industrial applications. Be it indoor, be it outdoor, be it for perimeter or mass transit applications that's some of the I guess beauty of kind of the platform that we have built that is highly software configured, configurable and flexible and in those applications.
Tyler Anderson
Thank you. I appreciate your time.
Operator
There are no further questions at this time, this does conclude today's program. We thank you for your participation. You may disconnect at any time and have a wonderful afternoon.
