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| So, tremendous progress driven by the team and our partners at Continental over the summer here since we've last spoken about it |
| We're complete with that, and we feel that we're a strong contender in meeting the various requirements that are out there in the automotive industry |
| Third, our unique capital-light licensing-based business model positions us for meaningful operating leverage as we ramp up sales and scale our business going forward |
| To sum it up, I believe our relationship with Continental is stronger than ever |
| We believe with the important steps we have taken, AEye continues to be well-positioned to navigate this transition and to play a significant role in improving automotive safety over the long term for several reasons |
| We are bullish about the future and believe implementing the next phase of our Automotive First Plan will position AEye to optimize this significant opportunity we see with our OEM partners |
| As Matt discussed earlier, AEye has incredible and innovative technology solutions for its automotive customers |
| Finally, our capital-light model has enabled us to further right-size our expense structure to extend our runway to 2025 without raising additional capital |
| OEMs specifically note that our relationship with Continental is a key advantage, while also being impressed by our software-defined capabilities and reliability potential, thanks to our superior semiconductor IP |
| We beat out several of our LiDAR peers in being recognized as an automotive innovator that is accelerating advanced safety features and software revenue opportunities for OEMs |
| Second, our partnership with Continental is stronger than ever, and thanks to their partnership with the supply chain, we have and continue to make strides with significant cost down of our LiDAR product |
| I'm happy to report that last month, our 4Sight platform received Reuters' prestigious Automotive Drive Honors Award for Excellence, with the judges calling 4Sight high-performing, flexible, scalable, and a critical enabling technology for the next generation of vehicles |
| That's good news |
| Based on our ongoing work and conversations with Continental, OEMs, and other partners, we remain confident that AEye has the right technology and the right model to successfully compete and win our fair share of business in the LiDAR space |
| Customer feedback has been incredibly positive, underscoring that AEye's technology is highly competitive |
| First, our RFQ pipeline continues to be healthy |
| The expense reductions we made in the third quarter were the main reason we were able to meet our GAAP EPS loss guidance and beat our non-GAAP EPS loss guidance we provided last quarter by $0.01 |
| And there are a number of technical advantages to have something behind the windshield |
| Since we rolled out a revised strategy in May, we have been relentlessly focused on ensuring we enter the automotive market with a differentiated and superior product that integrates seamlessly into OEM solutions and carries a price point that establishes AEye as a major ADAS player |
| On the product front, we continue to be recognized for our innovative next-generation products |
| With RFQs typically ranging in size from $250 million to more than a billion dollars, an award decision is a game-changing opportunity for AEye |
| Our technology, which has been endorsed by major players, including Continental and NVIDIA, stands out for its ability to deliver safety with long-range detection at highway speeds |
| It keeps the risk manageable and also allows us to leverage economy and scale through volumes |
| On today's call, I will provide an update on the trends we are seeing in the LiDAR marketplace, our progress with respect to quoting activities, and share some news on our 4Sight Intelligence Sensing Platform, which is receiving strong industry recognition |
| We have implemented steps to further drive down costs by reducing headcount and cash burn, helping to extend our runway out to 2025 |
| One is tie out from the customer through Continental to our sub-suppliers that we have high confidence, low risk ability to manufacture at scale with a reliable set of products |
| This compact, low-power design provides high-performance LiDAR in a small form factor, giving OEMs the ultimate flexibility in bringing safety solutions to market |
| In the near term, it allows us to leverage our partners' manufacturing, supply chain, OEM relationships, and sales teams to cost-effectively bring our technology to market |
| Over the past several weeks, we have been actively engaged in an OEM customer roadshow, demonstrating the industry-leading performance enhancements of our 4Sight architecture |
| As I said earlier, we believe the LiDAR industry is at an inflection point as we transition from a battle for the best technology to a battle for the best path to commercialization |
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| Although, we're getting a clear signal from OEMs that LiDAR adoption will happen, and it is moving forward, just at a slower pace than expected |
| Third quarter GAAP operating expenses were $12.9 million, down 13% from the prior quarter, due primarily to our continued cost reduction initiatives |
| Non-GAAP operating expenses were $8.5 million, down sequentially from $10.7 million last quarter |
| We are seeing that OEMs are now being more cautious about the pace of their capital spent and adding advanced technologies like LiDAR to the mix right now |
| We also reduced our net cash burn by $2.7 million from the prior quarter |
| Now turning to revenues, we anticipate fourth quarter revenues will be less than $100,000, primarily due to our focus on automotive |
| We expect fourth quarter GAAP EPS loss to be $0.10, reflecting inventory write-downs, asset impairment charges and one-time termination benefits related to the restructuring, and non-GAAP EPS loss to decrease to $0.04 due to the reduction of our workforce |
| The increase in GAAP net loss was mainly due to inventory write-downs outside of our ordinary operations associated with the transition to certain higher-grade automotive components as part of commercialization, which were partially offset by operating expense reductions |
| We reported a third quarter GAAP net loss of $17 million, or $0.09 per share, versus a GAAP net loss of $16 million, or $0.09 per share, last quarter |
| We continue to manage our cash carefully, and net cash used for operating activities decreased to $11.2 million in the third quarter from $13.1 million in the second quarter |
| To that point, we are discontinuing our existing industrial product line and will be dialing back support for this end market until we have sufficient scale in automotive, which is our largest and highest priority market |
| On a non-GAAP basis, our net loss was $9.5 million, or $0.05 per share, in the third quarter, compared to a non-GAAP net loss of $11.7 million, or $0.07 per share in the prior quarter |
| As a result, we expect to record a one-time non-cash charge in the range of $4.5 million to $6.5 million, principally related to the write-down of inventory and asset impairment charges |
| Look, it's kind of a mixed bag, and this is actually one of the reasons why we announced the 4Sight Flex here today, because we are seeing the need |
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