Innoviz Technologies Ltd (INVZ) 2022 Q3 法說會逐字稿

Good morning. This is Rob Moffat, Vice President of Corporate Development and IR in Innoviz. And I want to welcome you to our third-quarter 2022 earnings conference call. Joining us today are Omer Keilaf, Chief Executive Officer; and Eldar Cegla, Chief Financial Officer. Following their opening remarks, we will open the call for your questions.

I'd like to remind everyone that this call is being recorded and will be available on the investor relations section of our website at ir.innoviz.tech.

Before we begin, I would like to remind you that our discussion today will include forward-looking statements that are subject to risks and uncertainties relating to future events and the future financial performance of Innoviz. Actual results could differ materially from those anticipated in the forward-looking statements. Forward-looking statements made today speak only to our expectations as of today, and we undertake no obligation to publicly update or revise them. For discussion of some important risk factors that could cause actual results to differ materially from any forward-looking statements, please see the risk factor section of our Form 20-F filed with the SEC on March 30, 2022.

I will now turn the call over to Omer. Please go ahead.

Thank you, Rob, and welcome to the team. Good morning, everyone, and thank you for joining us. I'm excited to provide another update on the meaningful progress we've been making at Innoviz. This has been another fast-moving quarter with new design wins, new technology partnerships, significant upgrades to our manufacturing throughput, and a big-step forward in our move into the non-automotive market.

Well, let's start things off with a look at our most recent new customer win. After our Volkswagen announcement last quarter, we said that we had two to three additional OEMs that could make a decision in the next six months. Proven true to our word, we announced in September that we secured yet another production award with the new Asia-based customer. Not only is this our fourth production win, and our second win as a Tier 1, it also signals an exciting acceleration on momentum, delivering back-to-back production wins just one quarter out.

We will dig a little deeper into our pipeline later in the call, but let's first take a look at this most recent deal. The new contract is with an Asian OEM who I cannot name yet but is on a fast path to becoming an emerging global EV leader. There are some very important parts of the deal that I want to touch on. First and foremost, this is an extremely tech-forward OEM. They took a close look at our technology, and the platform partners that we can integrate with. And they decisively chose our solution over any other competition.

And in that process, they also concluded that we are well positioned as a Tier 1 LiDAR supplier. Additionally, there are currently targeting a fast ramp-up of lighter installation on two models. With a quick turnaround to SOP, with production revenues expected already to begin in '24. And this deal will articulate our long-term strategy extremely well.

Very large deals like the Volkswagen deal we announced last quarter are going to bring the volumes that will rapidly drive our unit cost equivalent slower, and lower volume deals will bring our higher contribution margins. And with each new deal we win, we are growing our pre-production NRE revenues, and securing increased funding of production machinery and tooling. Over time, each deal will move us closer and closer to our long-term margin targets.

From a global standpoint, this is our first automotive win in Asia, expanding Innoviz geographic reach and production footprint. This is an important step in our platform, expansion efforts, and highlights the incredible progress we've been making on this front. Combined with recent progress on the non-automotive side, Asia is evolving into an increasingly important geography for Innoviz, and we hope to have additional news to share in the coming quarters as this market is rapidly developing for us.

Last but not least, there is one more very important part this deal, and it has to do with the technology partner that we are working with for this customer. As many of you know, there are three leading autonomous driving platforms in the auto industry that operate -- the hub that operate the hardware and the software stack that integrate the sensing and perception inputs from the various ADAS components such as LiDAR, and radars, and cameras. With this deal announcement, we are excited to share that now we have production awards, not demos or partnerships, but actual production awards with two out of three main platforms in the industry.

Integrating with these platforms can be an important barrier to entry. And we believe that once you are on the platform and you have the working relationship with the partner, you can gain deep domain experience together and it could accelerate future business points for both parties. I want to encourage investors to not underestimate this aspect of the deal. Several of the RFQs that we are currently competing on have already decided to use this platform. We believe that having this working relationship can increase our odds of winning additional business in the near term. Needless to say, we are very excited about this to build.

Now, let's spend a little time on why we are winning in the automotive market. As picked up from some of my conversations with investors that there is a belief that the success in the LiDAR industry is going to come down to one thing, like range or resolution. But that is obviously not enough.

In our experience with customers, you cannot simply win by checking one or two boxes. You have to check all of them. You have to be strong on each of these categories: price, performance, automotive grade, manufacturing, and company maturity. And the feedback that we've gotten from customer is that we aren't winning these deals by one or two points. We are winning across the board on multiple fronts.

But don't just take it from us. We wanted to share a quick video from the event we hosted in September, celebrating the opening of our new headquarters with a large group of investors and customers from all over the world.

(video starts)

It's not only a big building that who knows what we'll do with it, it's actually going to allow us to meet our targets.

Of all the places that I've been to, I was so impressed by the vigor in the creativity and the technology.

Never before the automotive industry had been under such a strong change movement. We're looking at the sensors, picking out the best sensors that you can find in the markets. In the future, we will work closely together with you. So you deserve and all the merits of the efforts that you have accomplished so far. And this is just fruit of all your effort, and I think this deserves a big applause from everyone. So thank you.

Many companies had one or two smart engineering idea, how to solve a specific problem, but Innoviz looks like the most promising one in making the best out of those conflicting things. And that's why we decided a few years back for Innoviz.

And today, I think there's probably a dozen, maybe a little bit more than that, of companies that are worth talking about. Eight of them, I believe, are now public independently, including Innovis, as you know. So you also have to talk to the customers. You have to talk to the Tier 1s, to the OEMs. And so that's what we did, and that's how we evaluate. This is overwhelmingly positive feedback for Innoviz's products. This is sort of how we think about the industry and why we think Innoviz is a leader.

To me, it's very clear that two years from today, three years from today, we continue to make progress and develop the right technology to allow the use of safe mobility everywhere.

(video ends)

Nothing is better than hearing from our customers and others themselves. One of the other points that I want to make about our strategy is that we are deeply focused on Level 2-plus plus Level 3, sweet spot of the automotive industry. There has been an increase in headlines recently highlighting the progress Level 5 autonomous driving is moving slower than hoped. And it's increasingly more -- looking more like 2035 or even later. We wanted to take the opportunity to remind investors that it had been long our view that full Level 5 autonomy was going to take many years. And this is why from day one, we built the company strategy around focusing on the Level 2-plus, Level 3, to Level 4 categories in the autonomy spectrum.

The recent developments of OEMs either deemphasizing or even fully transiting the Level 5 FO is happening at the same time that they are realizing that many customers have grown frustrated with Level 1 and Level 2 active safety solutions like forward collision warning and lane keeping assist. For some drivers, turning the features off entirely.

Looking at both of these trends together, OEMs are quickly realizing that Level 2-plus and Level 3 autonomy systems are likely going to be the biggest differentiating factor in the automotive industry over the next decade, and you can see this in our pipeline in our next slide.

One of the major milestones that we track for our business is our OEM share. Since we believe that once you're on the shelf and validate with an OEM and integrated into their software stack, it becomes easier for them to pull you into more and more product lines. Once you're embedded, you should be able to grow with the OEM as LiDAR-based L2 plus and L3 systems are rapidly democratized and moved up the S curve over the next decade.

On that basis, our OEM share as it stands today is roughly 15% of the global automotive market. And if you look at our pipeline to the right, we have 11 OEMs that are in either RFI or RFQ process. Collectively, these 11 OEMs will produce approximately 40 million vehicles per year, representing an additional 42% of the global market. When combined with 15% share currently in Innoviz order book, it means that the company either has business or is actively competing for new business with OEMs that hold roughly 57% of the global automotive market.

This pipeline includes many of the world's largest OEMs and it's full of them, if you are familiar with. In fact, six of the OEMs have annual production levels of 4 million units or more. And the average production within the pipeline is about 4.2 million per year. But even more important here is that we believe that nearly all of the pipeline decisions will be made by the end of '24 with most of these decisions likely to close at '23.

When I meet with investor, I'm often asked why should I care now. Let's talk again when production starts. But the question that's missing is that there is a sizable land grab taking place right now, and the bulk of the early market share is going to be awarded in the next 6 to 12 months. Ultimately, we think this is going to be a winner-takes-most market, with us in the lead. And this market share would be very sticky for the next decade or more.

Now let's transition from the long term. So the past quarter. We had some very exciting developments in the third quarter that I want to spend some time on. First, I'm excited to share that during the quarter, we began shipping these samples, units originating from the Holly, Michigan production line. And as a reminder, that this sample is the version that ultimately is going to go to full production and needs to be produced by the final production tools and processes. It's design is already automotive grade. And this is the last stage of the process, it's used by the OEM for the final manufacturing validation before moving to serial production.

You can see in the photos how excited we are to be this close to the start of the production of our customers.

One of the other exciting developments this quarter relate to the upgrades we've made for the production processes which were required as part of reaching the D-sample milestone. The production process upgrades were made in parallel with our planned downtime from our headquarters move, which included the movement of the calibration and testing lines within our building. I don't want to understate the scope of this effort. I personally spent many, many late nights with our engineers implementing and reengineering the process so we could maximize the [lines] and minimize the downtime so far of our lines.

This was a crucial step in our plans for the next stage of our strategy as it removed a key bottleneck in our production. This development achieves two important things. Number one, it helps prepare for mass production with BMW and the shorter programs launching this year. And number two, it will unlock more units for sale in the automotive market beginning this quarter and ramping into 2023. In the past, the majority of our production unit will be prioritized for larger volume automotive customers. But now with this upgrade, we will be increasingly able to pursue both markets in returnlessly and in more equal measure.

While we haven't been as vocal about our progress in the non-automotive market as we have been in automotive, it has the potential to become an important part of our business. And we have made some early success, including the deals and partnerships from the third quarter listed on this slide. One important takeaway here for investors is that every time a customer chooses to work with our LiDAR solution, it's a validation of both our hardware and software. Of course, not every deal is at the size of Volkswagen and BMW, but each announcement we make here is a situation where a customer takes a close look at our technology, compares it to the competitive environment and choose to go with Innoviz.

This validation and early momentum in automotive markets, coupled with our increased ability to ship units, is an important development. When you combine all of the various stems from the non-automotive market, it can approximate it down on the automotive side. And the product design cycles are shorter so the revenue can come on faster, and they tend to be at higher gross margins. It's a perfect complement to the automotive market for volumes can be in the millions of units, allowing you to reach market-leading unit cost economics once those volumes come on. If I take a step back, there's a -- these are both [$30 billion] TAMs that we are showing great progress in.

And to accelerate our success in the automotive market, we are planning to increasingly work with distributors -- distribution partners. In fact, next week we are launching our first-ever, three-day-long Global Distributors' Summit here at headquarters in Israel. We'll be hosting nine industrial & technology distributors from across Asia, Europe, and North America to educate them on our technology, arm them with our marketing tools, and introduce them to our opening and logistic platforms. Engaging distributors is an important evolution in our go-to-market strategy. It's a lower-cost way to amplify the efforts of ourselves, expanding our reach in non-automotive quickly, and without meaningful increases to our headcount and fixed costs.

As we've said before, 2023 will be an important year for our growth in the non-automotive market. And we are making progress in building the partnerships and the overall foundation for success in the coming years.

With that, I'll turn it over to Eldar to go over the financials.

Thank you, Omer, and good morning, everyone. Starting with cash, we continue to maintain a high liquidity level with approximately $218 million in cash, short-term deposits in restricted cash and marketable security on balance sheet as of quarter end. As we have said in the past, our cost structure has already largely matured. So our operating cash outlays remain mostly stable during the quarter and were in line with our 2022 budget.

Moving to income statement, revenues in the quarter came in at $0.9 million compared to Q3 2021 revenues of $2.1 million. Sales in the quarters were impacted by the upgrades we made to our calibration and test lines during the move of our company headquarters as Omer previously discussed. While the timing for the upgrade took slightly longer than expected, the investment was well worth it, giving the meaningful improvements in throughput.

With these changes behind us, we expect our revenue's cadence to normalize going forward with an uplift to InnovizOne unit deliveries in the coming quarters. In fact, our current unit deliveries in Q4 2022 have already surpassed Q3 2022 deliveries.

On the cost side, operating expenses for the first quarter of 2022 were $31.3 million, an increase from $30 million in the third quarter of 2021. This included $4.9 million of share-based compensation compared to $8.2 million in Q3 2021. The year-over-year increase in operating expenses was primarily due to an increase in headcount during the quarter, partially offset by the lower level of share-based compensation.

Research and development expenses for Q3 2022 were $24.2 million, an increase from $20.6 million in Q3 2021. The quarter included $3.2 million attributable to share-based compensation compared to $3.7 million in Q3 2021.

In conclusion, while the setback in our unit deliveries this quarter was slightly larger than expected, the volumes should be recovered in the following quarter. And the long-term benefits that we expect to unlock are meaningful and a step in the right direction for the company as we move to full-series production of the BMW and shuttle programs next year. This progress further strengthening our position in the marketplace and improves our ability to gain additional market share going forward in both the automotive and non-automotive segments.

And with that, I will turn the call back to Omer.

Thank you, Eldar. Before I turn it over to the Q&A, I wanted to wrap up our prepared remarks with a quick review of where we stand to date versus our original 2022 goals.

On the right-hand side of this slide, you can see the goals we have set ourselves at the beginning of the year and where we stand now. In terms of pre-production programs, it came into the year of targeting 10, and today we are at 14. We targeted one design win, and we are already delivered two with two months left in the year. And in terms of the order book, we originally targeted at 30% increase. And thanks in particular to the VW deal and our most recent win, we've blown through that goal with 165% gain, moving to $6.9 billion and again, the year is not over yet.

In terms of our pipeline, we had previously disclosed 12 programs in RFI or RFQ process, with 2 to 3 expected to make a decision in the next six months. With the announcement of our new Asian OEM deal, the 12 goes to 11, and now we have 1 to 3 customers who could make a decision in the upcoming six months. When I talk about the momentum that we have at Innoviz, you can see it from this slide. We've already delivered all the things we promised to deliver for 2022, and we believe there is a lot more to come in '23 and '24.

Okay. With that said, I will turn over the call to the operator to take us into the Q&A.

Thank you. (Operator Instructions) Mark Delaney, Goldman Sachs Group, Inc.

Yes, thank you very much for taking the questions. The first one is, I'm wondering if you can give any preliminary input on how well Innoviz is doing with the one to three OEM decisions that could be made in the next six months, and can you elaborate a bit on how impactful being qualified with two of the key platforms has been with those decisions?

Okay. So I would say that with those opportunities, we are already at the short list, meaning that the last stage of the RFQ. And in January, I would say that we are in a very strong position. We've heard several times that our award with VW is very meaningful. And one of them is using one of the platforms, the other one is using the other. And the third -- actually, I'm not sure which platform they're using. But I would definitely say that from the first two I mentioned, the fact that we are already integrated into those platforms is a key advantage.

All right. That's helpful. My second question was hoping you can give more of an update on how the D-sample process is going and any more clarity you can provide on when you think the company will be in series production? You said next year for a couple of programs, but is there more granularity you can share, is it more first half or second half weighted? Thanks.

So maybe I'll explain a little bit about what we've done in the last quarter.

Moving from C-sample in this sample means that the product -- in C-sample, the product needs to finalize all of the design validation for automotive grade. At D-sample is related to the production validation. So you need to start D-sample when all the production processes all of them. So we had to -- before starting the D-sample, we have to go through all of the needed changes from the operations we had in our production processes in order to meet that milestone. So we started shipping already, the D-sample, and now we're doing D-sample production validation. And basically, it means that next year, hopefully by the beginning of the year, we will already be able to meet the start of production of our customers.

Thank you.

Jared Maymon, Berenberg Bank.

Hey, good morning, guys. First of all, great to see my colleague, Michael, on the video, referencing our Channel Checks. And there's no doubt the feedback from those customers and prospective customers show you guys are in a great position.

And first question for me, you guys talked about it on the press and then on the call as well, but on the new platform partner. So given your existing partnership with Qualcomm, as you guys pointed out, that kind of leaves in video or [mobile], either one of those, obviously great to kind of hit yourselves too. So I guess the question is, can you expand a bit on what the mechanics of that relationship are? And then given the key competitor has called out past partnerships with those platform partners, can you explain how you're competitive positioning and the procurement process changes for you?

So the way they work with these platforms, or maybe, specifically with this one. The way that they work with the different customers, is that -- eventually is the customer decision on which sensor they like to source. But eventually there is a lot of value in one scale already losing your sense of collecting data, practicing the algorithms, it removes a lot of overhead on doing that again. And eventually, although it's the customer decision on which sensor they want to use, there is a certain, I would say overhead they might need to pay if they want the platform to support the differences.

So in general, I would say the fact that we were awarded to a program with this new platform is giving us a huge benefit -- or maybe the customer, the future customer, a huge benefit because it leverages our existing effort going on. And wouldn't need to -- I mean overall program cost would be lower. I hope it's clear.

Yeah. No, definitely. Thanks, Omer. And then the second question, it's great to hear the update on the forward-looking order book. Just on the order book in general, we've been trying to get a better sense of how the kind of top LiDAR players are approaching those calculations alongside the customer. So can you help us better to understand how estimates on things like take rates on LiDAR? And then if any unconfirmed wins are considered in there, like what some of your peers are doing?

No, we're only referring to design wins we have, and those are based on volumes that were provided as part of the RFQ. We give some weighted measure to the different scenarios that are given to us and based on the number of vehicles that are expected to be included across the several years of the program. We are assuming a moderate take rate, which is starting from 1% to 14%. It's actually different between the different programs, the cost per passenger vehicle, there is more clarity on the number of vehicles per customer, specifically on the short-term program. This is based on just the volumes that we got from the customer itself because there are no volumes out there already.

Got it. That's it for me. Thanks, Omer.

Sure.

Andres Sheppard, Cantor Fitzgerald, L.P.

Hey, Omer and Eldar. Thanks for taking my question and congrats on another quarter. A few quick questions from me. In regards to the revenue number, [sell] dollar, so that was a little bit lower than Q3 in '21. Looks like the primary reason was-- says here, downtime from the company's headquarters move. I'm just wondering, can you expand a little bit on that? And I know you're not guiding Q4, but should we expect a stronger Q4 to finish the year? Thanks.

So it was very important for us. This move was -- the setback is primarily due to the upgrade that we did in relation to the D-sample stage that we transition to, which means currently the throughput is much better than we had before. And as I said, already now with the deliveries that we made to this point in Q4 is larger, exceeds the deliveries that we did last quarter. So definitely, I expect the momentum to pick up on that. Maybe one important change from last quarter is the fact that we won another program, which has some NREs to it, some considerable NREs, which really impact us already next year. So this is something very important and we want to -- very nice program that will contribute to our revenues next year as well.

I wanted to maybe add to this, if I may. As a company pursues automotive, our commitment to our customers such as BMW to follow their quality requirements. Moving to the D-sample required us to modify our production processes to meet with their requirements. So it's not only that product that needs to build automotive grades, also all of the production tools and processes need to meet certain requirements.

And we had those obligations to cover in order to move to the D-sample. In a way we had to sacrifice the short-term in order to do those necessary changes so we can move to the D-sample. So the downtime was, I would say, unavoidable. But in general, it is to support our customers that we are expecting to launch next year.

And maybe to add to the recent design wins. So as Eldar said, this recent design win, there are two very important elements here related to the revenues. One is as Eldar said, is the significant NREs, but also the production tools, so the customer is funding the cost of the production. Another element, which is super critical, is the fact that this program, out of the different RFQs that we were competing, was the one that launched the earliest. And with quite substantial volume already in 2024.

So for us, it was very strategic to win this program because it allows us to see growth of our revenues in a minute -- I would say, in the good way, already in 2024.

Wonderful. Thank you both. That's very, very thorough. I appreciate. Quick follow up, earlier this week, we saw some consolidation in the LiDAR sector with the merger between Alfter and Velodyne, which I'm sure you're aware of. I'm just wondering maybe, Omer, in regards to strategy, is this something that you and Innoviz might be considering? Obviously, you guys have great partnerships with BMW, Cariad, Asian OEM. So in some ways you are ahead of the competition. I'm just wondering, are you exploring or contemplating any M&A activities? Thank you.

No, it's a good question. So I can share with you that in the last, probably year, we came across the different ideas coming from banks, et cetera, to consider that kind of that path. Have to say that in my point of view, the only thing that matters for us is whether this acquisition will help us to gain momentum in the automotive space. And whether the technology that we might need in order to have a better offering into the market, will help us to do that. From that point of view, we didn't see it. We don't see a good reason to look at that point, to look at that approach.

Got it. Fair enough. And maybe one last one, if I could. Eldar, maybe for you. Can you just remind us on your capital needs, how are you thinking about capital raising needs as we approach 2023 and beyond?

Yes, yes. So basically, we are looking at next year in terms of what are the expected revenue or inflow sources. And as we said before, we expect both the launch of the BMW program, which will both generate the final NRE that we are expecting there in revenues. We expect the shuttle programs to launch. We have additional revenues coming from the new client in Asia. So we have some expected inflows. So in addition to that, we have a strong cash position. So I think we are in a good position. And, of course, there might be certain opportunities depending on what we do in the market. But currently this is our plan.

Maybe I'll add to that as well. We are pursuing additional programs right now, and every program that we are competing with, there is a substantial NRE requirement that will also support our efforts. Which is quite meaningful. So in that manner, it's supports our needs.

The company organizational structure is very, I would say, efficient. The way the company is able to support different programs is based on the fact that the technology is highly flexible, and it actually meets all the requirements we've seen. That such we doesn't require a large of it, of meaningful need to grow the company to support additional customers. Basically with every company that we need to support, the headcount is not -- does not required to increase meaningfully.

Wonderful. Thank you very, very much again. Thanks for taking our questions. Congrats on another good quarter and I'll pass it on. Thanks, guys.

Thank you.

Samik Chatterjee, J.P. Morgan.

Hi. Thanks for taking my question and hope you can hear me. I guess a couple from my side, and I'll ask them together at one. Firstly, in terms of your pipeline, can you talk about the sort of geographic diversity or sort of how the pipeline looks like in terms of the split between the geos or the OEMs there? And are there any geographies that you feel you're sort of underrepresented today and even in terms of your pipeline and need to focus more and invest more towards over the sort of next 12 months or so?

And the second one of the question I had was around this new win that you have and the customer is trying to rush to light sort of series production in 2024, with the Asian OEM that you referenced. I mean, as a company, as a LiDAR company that's providing safety, how are you trying to mitigate some of the rest of the OEM, trying to rush this to cease production? What is allowing the customer to rush this or compress the timeline? Is it the software stack is much more developed or they're more confident about the software stack? Like how do you as a company then mitigate some of the challenges in trying to balance sort of safety versus compressing the timeline to production? Thank you.

First of all, thank you, Samik, for the questions. Starting with the first question, geographically, we are spread now. I mean, we started with German, in Germany because we saw it as the base of the automotive market. I would say that even some of our -- even our Asian new customer, [INDF] team, there is a big team there also in Germany, which is also helpful for us.

But other than that, we are currently in discussion. Within those 11 OEMs, I would say that probably, let's say everywhere. Japan, US, and other areas of Europe. I don't think that we have a blind spot. But blind spot by definition is probably something I don't know either. But I think that we -- I don't think there is a car maker that is pursuing the LiDAR now that we're not in engaged. So I hope that answer your questions.

I think that the -- maybe just I'll add, I think that there is good progress in Japan now. Moving faster. And also in the US, maybe a little bit following that.

Other than that, the second question about safety. So look, the second program -- I mean, the new program that I've mentioned, the partner that is responsible for the overall driving decision and testing is a very credible player. And I believe that potentially they would manage to do -- I mean, eventually they are responsible for all of driving testing and safety. We are responsible for the LiDAR and the perception software. But eventually, I believe this is a very credible our team behind it, so I'm not concerned.

Thank you. Thanks a lot.

McClain Culver, Rosenblatt Securities Inc.

This is McClain on for Kevin Cassidy. Thank you for letting me ask a question. I had a few questions around the Innoviz 360 RFQs. Have you already started accumulating RFQs and is the process different than the automotive market? And I had a few follow-ups. Thanks.

Sure. So the short answer is no. The Innoviz 360 was designed based on discussion with the specific customer. But generally speaking, I would say that the Innoviz 360 would be delivered samples to different customers. The 360 -- maybe there's one RFQ. But I would say that generally speaking, the automotive market is not yet at a stage or Level 4 is making meaningful progress in terms of making decisions on the product. But we do see that trend going there.

So I believe that with in terms of -- I mean, basically, we started to develop the 360 and at that stage would come, and I believe that next year, that's the time that we'll start to see more meaningfully. Right now, the discussions are more on I would say the technical aspects to see that we design the system that meets all of their needs. But no, I would say RFQs in the automotive market.

There are discussions with non-automotive customers. I would say that one of the changes we've made to the product is related to discussions about the industrial design. Many customers that we've showed the product, it made their comment about having a more seamless integration just by having a product that is more similar in terms of shape. And therefore, we did change the product, the way it looks and connects. And we hope to show this the product by the end of this year. I think it will be a very disruptive technology because it introduces a very significant improvements to the price performance that it is offered today by others.

Okay. Thank you. That's helpful. And for those RFQs, about how many competitors do you have? Is it kind of the same, about two or three as before?

So I would say that a different geography sometimes introduce different competitors. In general, we mostly compete with the Tier 1s. Some there are, the Tier ones that you're probably familiar with that have their own LiDAR. And I would say that in general, we don't really see a lot of the LiDAR -- other LiDARs compete directly.

Okay. Thank you again, and that's all for me.

You're welcome. Thank you.

Thank you very much. That shall conclude our Q&A session for today. And I would like to pass the call back over to Omer. Thank you.

Okay. Thank you, everyone, for joining us today. I'd just like to take a minute to give you a quick advertisement for CES. We're excited to meet with both customers and investors in January at the conference. Without saying too much before the event, we plan to highlight not just our technology, but some of our actual products that we are integrated on. And we will showcase some of the capabilities of our new Innoviz 360 LiDAR, which is going to be an exciting new addition to our product suite and an important part of our continued growth, both the automotive and non-automotive market.

For investors that are looking to connect at the event, please feel free to reach out to our IR department directly through the e-mail address on this slide or in the press release. We will help you find the time to visit the booth and meet the team.

Okay. With that said, I'm excited with where Innoviz stands today and the progress we've made over this quarter. Thank you for joining us and with that, we can end the call. Thank you very much.