Good day everyone. Welcome to the Q4 2022 Cepton, Inc. business update and earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the Star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then 1 on a touch-tone phone. To withdraw your question, please press Star then 2. Please note this event is being recorded. I would now like to turn the conference over to Hull Xu, the CFO. Please go ahead, sir. Thank you, and welcome to Cepton's fourth quarter and full year 2022 earnings call and business update. With me today are Jun Pei, Co-founder and Chief Executive Officer, and Mitch Hourtienne, Senior Vice President of Business Development. During the call, we may refer to our unaudited GAAP and non-GAAP measures in our earnings release. The non-GAAP financial measures should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. Reconciliations for non-GAAP measures are included in our earnings release. I would like to remind everyone that comments made in this conference call may include forward-looking statements regarding the company's expected operational and financial performance for future periods. These statements are based on the company's current expectations and are subject to the safe harbor statements related to forward-looking statements contained in our earnings release and the slides that accompany this call. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risks, uncertainties, or other factors, including those discussed in the earnings release or during today's call and those described in our filings with the U.S. SEC. We're not undertaking any commitment to update those statements as a result of future events, except as required by law. As a quick reminder, this call is being recorded, and you can find the earnings release and slides that accompany this call, as well as the webcast replay of this call at investors.Cepton.com. Now, I would like to turn the call over to Jun. Thank you, Hull, and good afternoon, everyone. Thank you for joining Cepton's fourth quarter and full year 2022 earnings call. We will provide a business update, review fourth quarter and full year 2022 financial results, and provide our view for 2023. Starting with our business update. Over the past year, we have shared with you quarterly updates on our progress towards series production. Rather than hearing from me this quarter, I will point towards to our OEM customers' announcement, notably General Motors' announcement of its Ultra Cruise ADAS system on March 7th, last Tuesday. GM offered the most comprehensive look into the role of lidar in their sensor suite in the deployment of their next-generation ADAS system designed to enable hands-free driving in 95% of all driving scenarios. Highlighting our unique lidar integration behind the windshield, our lidar produced an accurate three-dimensional view of the scene, enabling more precise object detection, even in inclement weather conditions. Our lidar sensor is a key enabler to safely deploy GM's next generation ADAS offering. At the end of last year, we began shipping pre-production units to our OEM customers. This year, we look to start of series production. We are excited to move yet another step closer to commercialization of our products. At CES this year, we unveiled our next-generation lidar, the Vista-X120 Plus. Recognized by the CES Innovation Award program, the X120 Plus has a 30-degree wider field of view and 20% reduction in size and 50% reduction in height compared to our X90, which is our flagship lidar selected for the series production. This new sensor builds on our core MMT technology for superior resolution and offers additional vehicle integration options with a slim design. Many OEM customers, both existing and new, are interested in testing and evaluating our new sensor for their next-generation vehicle platforms. We have shipped the first samples to our global top 10 OEM for evaluation, and we expect the Vista-X120 Plus series of products to be a major contender for upcoming automotive production programs. At the end of last year, we successfully taped out our next-generation ASIC chip and expect the first samples to be available starting early this year. This new image processing ASIC is complementary to our existing industry-leading signal processing ASIC. The combination of both will be featured in our new Vista-X120 Plus, working in unison to improve performance and significantly reduce cost. Our proprietary ASIC extends a unique differentiation to our products, offering signal-level compute, moving up to point-level compute, and eventually frame-level compute capabilities. In the year ahead, we look forward to sharing with you our full ASIC chipset roadmap. With our leadership team, it is my pleasure to announce the appointment of Dr. Dongyi Liao as the Chief Technology Officer of Cepton. Dongyi previously served as our Senior Vice President of Applications since 2017 and is responsible for all software effort of the company. We look forward to his contributions to expanding the value of software in the growing deployment of our lidar. Mark McCord, our current CTO, will continue with the company to serve as the chair of Cepton's newly created technical advisory board and will remain in charge of our intellectual property portfolio. Please join me in congratulating both Dongyi and Mark in their new roles. 2023 will be a landmark year for Cepton as we look to transition into series production. Staying true to our principles that our sensors must achieve a balance of performance, cost, and reliability is ever more important. As our sensors enter mainstream vehicles, we're hyper-focused on delivering auto-grade quality at scale volume costs. Our tier one partner, Koito, brings decades of volume manufacturing expertise to complement our technology. In the year-end, our collaboration efforts will not only focus on series production execution, but winning additional automotive OEM programs, which Mitch will share more details with you next. Thank you, Jun. Starting with our automotive programs, as Jun indicated, pre-production shipments started at the end of the previous year and have expanded to multiple vehicles and multiple vehicle manufacturing sites. We are in advanced discussions to expand our existing business award to additional vehicle models. GM kicked off the announcement of the Celestiq late last year and followed up with a comprehensive announcement of the sensor suite in the Ultra Cruise system a week ago. We expect more announcements across additional models in the year ahead. Over the past year in the automotive industry, we've seen accelerated investments and focus on L2+ ADAS offerings as a result of Level 4 programs being pushed out. Of course, I'm always speaking about our target customers, leading global top 10 automotive OEMs. We expect additional OEMs to take a similar approach to GM on L2+ or L3 system deployments with announcements in the near future. We remain in a very good position for additional production awards with our target OEMs. We're in advanced discussions with several global top 10 OEMs at this stage. As we have seen across the lidar industry over the past year, the competitive landscape is a smaller list of lidar companies that have existing automotive production awards. We have gained trust across the industry, having gone through an extensive development process and launch efforts with General Motors. This entire process spans over three years in both hardware and software development, establishing Cepton as one of a few auto-grade lidar suppliers for automotive OEMs. In 2023, we will direct efforts in winning series production awards toward our newly launched Vista-X120 Plus product. Our public launch in January has received a lot of interest among the OEMs hoping to deploy lidar in the next gen vehicle platforms. Turning to smart infrastructure, we recently announced a multi-million dollar contract from a leading U.S. highway tolling systems operator. We believe our contract is the largest commercial deployment of lidar to date for this application, with the potential to scale across more highways in the U.S. and outside the U.S. for future deployments. Our strategy to partner and work with systems integrators in targeted applications helps us extend our reach across smaller end customers in a more fragmented market. We will continue to focus on executing our strategy in our target applications, including airports in the year ahead. Finally, we have a new autonomous ground vehicle project with a top 10 automotive OEM to announce. Cepton is supporting the safe deployment of Level 4 autonomous ground vehicles with our Nova near range lidar. Details of this customer and application will be forthcoming soon, so stay tuned. I'll turn it back to Hull now. Thank you, Mitch. Starting with our fourth quarter results, total revenue for the quarter was $1.6 million, a 23% increase compared to the prior year period. Fourth quarter product revenue was $1 million, consistent with the prior year period. In the fourth quarter, we had development revenue of $0.6 million based on timing of achieving milestones on those projects. Our gross profit margin improved in the fourth quarter to 35%, primarily driven by revenue mix shift between product and development revenues. Fourth quarter GAAP net loss was $15.3 million or $0.10 per share, basic and diluted. Fourth quarter non-GAAP net loss was $13.4 million or $0.09 per share, basic and diluted. Fourth quarter non-GAAP adjusted EBITDA was negative $12.3 million. We achieved full-year revenue of $7.4 million, meeting our revenue guidance, and represents a 65% increase compared to the prior year. While our development revenue was consistent year-over-year, our product revenue was $5.6 million, a 92% increase compared to the prior year, reflecting our ongoing commercialization efforts of our products. Full-year gross profit margin was slightly positive at 2.6% and is consistent with the prior year. Our full-year GAAP operating expenses were $61.6 million, meeting our operating expense guidance. Excluding transactional costs, one-time and non-cash items, our operating expense for the year was $50.6 million, well under our OpEx guide. Full year GAAP net income was $9.6 million or $0.06 per share, basic and diluted. Full year non-GAAP net loss was $53.2 million or $0.36 per share, basic and diluted. Non-GAAP adjusted EBITDA for the year was negative $50.3 million. As of December 31, 2022, we had available liquidity of approximately $134 million. Total available liquidity consists of approximately $36 million in cash and short-term investments and a commitment to purchase up to $98 million in equity from Lincoln Park Capital. In January, we closed a $100 million preferred stock investment from Koito after obtaining shareholder approval for the transaction. As a reminder, the preferred stock will be convertible beginning one year after the issuance date at an initial conversion price of $2.585, and will carry a dividend rate of 4.25% paid in kind or 3.25% if paid in cash. At close, we used the proceeds from the transaction to repay our outstanding term loan from Koito, increasing our cash and cash equivalent to approximately $89 million. Including the commitment to purchase up to $98 million in equity from Lincoln Park Capital, our available liquidity increases to approximately $187 million, which we believe provides sufficient cash and available liquidity to support the launch and ramp of our current series production award. Turning to 2023 guidance, we're expecting full year revenue between $15 million-$20 million, weighted in the back half of the year as we launch series production and unit volume begins to ramp. We expect gross margin to be positive for the year. On the cost side, we expect full year operating expenses to be in line with that of 2022 or between $55 million-$65 million. We have many notable achievements in our first year as a public company. With the closing of the Koito preferred stock transaction, we believe we have sufficient financial resources to fund our next stage of growth as we look to launch series production this year. We look forward to connecting with investors at our annual stockholders meeting to be held in May with details of the event to follow. Now I'd like to open up the call for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then Two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Tom Narayan with RBC. Please go ahead. Yeah. Thanks. Tom Narayan, RBC. Thanks for taking the questions. First, congratulations on the GM press announcement. The first question has to do with the 2023 guidance. You have $7.2 million in revenue in 2022, increasing what it looks like to $15 million-$20 million in 2023. Could you help us maybe understand what is driving the incremental revenue of the guidance here? Maybe just a further breakout. Is this assuming new auto OEM wins beyond GM or is it mostly GM or is there maybe organic growth in smart infrastructure as well? Yep. Happy to do that, Tom. Thanks for the question. Let me provide a little bit more color on our guidance. The short of it is that it's primarily driven by the GM program. Just to provide some numbers behind it. For 2022, in terms of unit shipments, we shipped about 1,500 units, and that's 45% to automotive and 55% to smart infrastructure. Right now we have 6 months of visibility into the program. You know, when you have a series production programs, you do have a little bit more visibility. In our hands right now, we have purchase orders of over 10,000 units. That's, you know, going forward to 6 months. In relation to last year's unit shipments, this is a significant increase in terms of units. That's just automotive. Actually, that's just the GM program in automotive. Turning to smart infrastructure, we announced that we had won this multi-million dollar contract from electronic tolling provider in the U.S. The bulk of that will occur this year, that also gives us a lot of confidence in our guidance. Did I answer your question, Tom? Yeah, yeah. It sounds like there's not you're not assuming new OEM revenues beyond GM for the auto piece for 2023? in the guidance. We will have some, but meaningful as it compares to the GM program, right? You know, when we win additional large programs with automotive OEMs, the real ramp isn't going to be, you know, immediate. It's gonna take a couple of years to work through. The real ramp this year is going to be just GM, and then next year will be even higher. In the meantime, we are We are in late stages of discussion with other large, you know, global top 10 OEMs. There will be some revenue toward those, maybe in the forms of NREs. Volume-wise, it will not be able to match the GM program. Got it. My, my second one, if I could. You know, there seems to be a handful of winners today in the lidar space. It seems like it's kind of solidifying before us today, like who's kind of winning out, and you guys are in there with GM. Just curious how you see the industry in, let's say, 5 years from now. Do you see consolidation happening maybe with a couple of dominant players, or do you see just many players with kind of equal market share across OEMs? Just how do you see this kind of playing out in your eyes? Yeah. Thanks, Tom. Jun Pei here. I'll start the question, maybe followed up with some additional comments from Mitch Hourtienne. The consolidation is already happening, as you can see it in this industry ... you know, the plain fact is, the winners right now with a well-defined automotive program will continue to be the winners, because we go through all those sophisticated process of bringing an automotive component into marketplace. Yes, indeed, it's not a winner-takes-all position, but for sure it will be concentrated into a small group of people that basically can be counted by one hand. Yeah, Tom, this is Mitch. I'll just add, you know- once you see the vehicles on the road, which, you know, Hull just talked about, we have orders for over 10,000 units this year, so that puts them on the road late this year, early next year. That's really the final proof point, right, for these companies that have made claims of design wins and projections. You know, that's what we're working towards. Once you're integrated into the vehicle, especially like we are behind the windshield, it's very hard for any competitor to get to that location or replace that socket. These design wins with OEMs are really on the order of 5-10 years minimum. Right. Sorry, last one I have is in an environment where, let's say, lidar becomes required- Right ... for vehicles for safety, kind of like how we have with airbags, rearview mirrors, that sort of thing, do you view that as a, as a positive or a negative in that could that create an incentive for tons of competitors to come into the space or perhaps it become more commoditized where pricing comes down? How do you see that world developing or is it just great for you guys because it's a, you know, not winner take all, but the better guys win out and you guys could be, you know, beneficiaries of that? Well, having, if it's already a commonplace to have lidar in cars, if that's what you're referring to, and to the extent it could be even regulated into a car safety device, I think that's always a good thing for us. You know, we're one of the front runners in the lidar business. You know, when you use the word commoditized, actually in automotive business, it's like Mitch said, it's really, really hard to get into a socket there. You know, it has to go through a very long process, to get yourself established. Having a foothold into the space, you know, as long as the space is expanding, we're gonna enjoy that benefit. I think I'd just add it'll follow a similar path as radar and camera. You know, it took them 15 - 20 years to establish, you know, a so-called commoditized where OEMs had a handful of qualified suppliers to choose from. I think, you know, we're very far from that situation, you know, I would say at least 10 to 15 years. These winners that launch are going to be the winners for the next decade. Yeah. I'll add that on the ASP front, I think, Tom, that was part of your question also. You know, we do expect ASP to come down as this becomes proliferated, right? As a technology company in the valley, and that's what we're good at, which is in doing our engineering work to bring the cost down. I'll point to the fact that we have already taped out our second ASIC, which will dramatically reduce some of the component cost in our current version and our next generation products. Great. Thanks a lot. I'll turn it over. If you have a question, please press star then one to be joined into the queue. The next question comes from Samik Chatterjee with J.P. Morgan. Please go ahead. Hey, guys. Thank you for taking my question. I guess if I can start, I think you mentioned, Hul, you mentioned the visibility that you have in relation to production, the series production with about 6 months of visibility and 10,000 unit as the order pipeline there. Just wondering if that sort of we should read that as sort of the 10K unit volume or in terms of series production over a 6-month period. Does that give you a little more of a visibility about what the take rate on sort of the options that the OEM is planning for in relation to ADAS related to their vehicles? Does that give you any more sort of details in terms of what the OEM is thinking about in relation to attach of that ADAS solution on the platforms you're on? I have a quick follow-up as well. Thank you. This is Hull. This is Mitch Hourtienne. I think I can offer some color on that. The units that Hull is talking about, we have orders for that. That just covers the first couple of platforms at GM. There will be a mix of take rates, you know, whether it's the high-end luxury vehicle, could be up to 100% versus the mid-grade models which don't start until next year, where the take rate could be a little bit lower, but they're higher volume platforms. Yeah, I think we're getting more insight obviously as we get the firm orders. I don't think there's anything surprising so far or different from our original assumptions from the, you know, the nine vehicle platforms at GM. I mean, just to clarify, you're implying that 10,000 is a pretty high take rate on the platforms, the platforms you're launching on initially in 2023? Yeah, on the first few vehicles, yes. Yeah. Okay. Got it. Just secondly, I think most of your peers who have reported this earnings season have been setting milestones in terms of number of OEMs, number of wins they expect to sort of get through in 2023. Wondering sort of, I know you've talked about sort of expansion of the opportunity with GM being sort of for something you're targeting for 2023, any milestones in terms of new customer additions, et cetera, that you're targeting for 2023 that we should be sort of tracking you against, just any color on that front? Yeah. Once again, this is Mitch. I'll answer that and then you can add any comments. We always have the goal of adding additional OEMs. More than that, this year, I'd say as Hull mentioned, we're in the late stages at one or two OEMs right now in the top 10. We do really expect them to make decisions within the next six months or so. Of course, you know, no lidar company can dictate the timing from an OEM. And if you look at our target customers, there have been a lot of changes. You know, GM's revealed more details on Ultra Cruise, so that's a public validation. Ford may shut down Argo three or four months ago, but they also said they're doubling down on ADAS. You know, we expect next gen BlueCruise next. Honda announced a joint venture with Sony, so that's a step in adopting new ADAS tech. Toyota just changed CEOs. There's a lot of movement at the OEMs that sometimes delays some of their sourcing decisions here. But we're very much in the discussion, and I would even expand that to Korea and Europe. We're in the discussion in all the major sourcings. Okay. Thank you. Thanks for taking my questions. The next question comes from Richard Shannon with Craig-Hallum. Please go ahead. Well, thanks guys for taking my question. I think I'm gonna follow up on the very first question asked here, regarding the 2023 revenue profile here. Hull, I think you mentioned this being a back-end loaded year. Maybe you can give more clarity to that, like how much bigger will the second half be in the first half or some way just to kind of get a sense of what you're expecting here. Yeah. The ramp does take a little bit of a nonlinear fashion, right? I'd say the back end is probably twice as much as the first half. Okay. All right. In terms of your lead OEM here, can you clarify or characterize how many models that you're shipping into now? at least are covered in that 10,000 units in your order book. Yeah. The pre-production shipments right now are going into multiple vehicle models. It's more than two. The hard orders that we have, yeah, I think they also cover the same number of models, so two or three models. They're all staged in timing, right? Like, they don't launch the same month. Right. Yeah. I figured they'd be staged throughout the year. Okay, that's helpful in understanding this dynamic here. Let's see here. I think on the last earnings call, you had talked about a couple of RFIs that you were hoping to go to RFQ. I didn't hear you talk about language to that effect here. I think, Mitch, you just used some different language to maybe describe those situations. You also mentioned a relationship in the advanced engagement stage that appeared to be without competition. I guess in the first two RFIs, have those officially moved to RFQs or not? Any statements you can make on that advanced engagement that didn't have any competition, that'd be great, please. Sure, sure. Yeah, there has been some progress on both of those. On the first point on RFIs, yes, we've advanced to the RFQ phase with another major OEM recently. We're very much in the RFQ phase with them. The second point, this has evolved into the point that I made about advanced discussions about additional vehicle models and extended duration, that's where we're at with our lead OEM, General Motors. Okay. I know you'd mentioned someone mentioned on the last earnings call about that. There hasn't been, there's been discussions, but you haven't extended beyond. I think you've mentioned the past model year 27, and so it's still in model year 27 then? Yeah. yeah, that's right. Okay. That is helpful. Maybe one or two other ones here. I guess just a question on the OpEx guide here, kind of keep it in a similar range as last year. I guess in the context of thinking about where you're able to compete well, I know you've done pretty well with Asia, in Asia, at least with your, with your tier ones there. You also mentioned, Mitch, I think, some engagements in your competitive in Korea and Europe as well. Had announced, I think a few months ago, opening up your office in Munich. With your OpEx, you're staying flat. How do you, how do you kinda manage, you know, being competitive across the world, especially with at least one of your lidar peers here in the public market spending at rates well above what you are? How do you, how are you able to do that with kinda keeping your OpEx flat this year? Yeah. I think one of the operative word is focus. We are, you know, very much focused on the top 10 global OEMs, you know, while maybe others could, you know, say they've got wins with other OEMs, but, you know, we're really just, you know, top 10. I think, you know, North America is our key geography. Japan, because of a relationship with Koito, you know, we're very much plugged in there. Europe, we've had an office for a little while now, we've actually gotten quite a bit more activity in Europe in recent months. I think that's owing to the success we've had with GM. Maybe, Mitch can talk about some of the European OEM tractions. Yeah. I think, Richard, we can do a lot more with a lot less than the competition because of our relationship with Koito and General Motors. Koito is doing a lot more on the front end business development, especially in Japan and the Asia region. We can rely on them. Now with General Motors divulging a lot more details about this system, especially where lidar is, other OEMs are viewing these public announcements and understand more about Cepton solutions. You're right, we are doing more with less, but that's because we have two big companies we're working on this with. Okay. You know, I think that's all the questions from me. I'll jump off the line, guys. Thank you very much. The next question come from George Syllantavos of Growth Capital. Please go ahead. Hello, guys. Just a couple of questions for me. I just wanted to ask, when do you expect to see the first batch of GM's cars using Cepton's lidar at actual dealerships? That's a good question, Tasso. This is Mitch. Yeah, I mean, GM revealed publicly the first Celestiq last July on stage. You know that's not at a dealership. The target is before the end of the year, that these vehicles will be at dealerships. Of course, we're, you know, we're relying on General Motors' own hitting their own internal milestones. I believe that's already what they've revealed. This is a model year 2024 vehicle. Yeah. I'll just refer back to the numbers, you know, and the PO that we have in hand, you know, over 10,000 units that we have in hand that we need to ship this year. Actually, the final number will be, you know, well over 10,000. If you put, you know, one, two together, they wouldn't be ordering that many units if only a handful of Celestiqs are on the road. Okay. Thanks. That gives a lot of color. The other thing I wanted to ask is regarding the latest share price pressure. Can you comment at all if this was related at all to the SVB situation or the Signature Bank situation? Can you comment at all? We, we can't really comment on our own share price. With regards to SVB, we could share some information. SVB has been the company's operating bank ever since, you know, since we were a private company. Several years back, the company did have a small loan with SVB, which was paid back a long time ago. That was in the filing when we went through the process. I'm not sure if that's related or not. As of now, it shouldn't be of a concern. SVB is probably the safest place to put our funds. We already have other bank accounts open with national banks that can take over in terms of operating, you know, operational needs. We're doing that already. Okay. Thanks a lot. Yep. Thanks. The next question comes from Matthew Galinko with Maxim Group. Please go ahead. Hey, good afternoon. Thanks for taking my questions. Maybe if we could start with the, I guess the guidance. You talked about having about 6-month visibility with your primary customer. How do you think about fourth quarter and sort of, you know, 2023 beyond the 6-month window? You know, how are you know, constructing or thinking about, you know, how that factors into the guidance provided? Sure. What we have visibility into is until September, right? In terms of the POs that we have received. I would expect the second half to be, you know, to have more volume than the first half. We expect right now, you know, the last quarter will be higher volume than the previous quarters. Yeah, that's right. One of the OEM checkpoints is demonstrating capacity. The capacity we're putting in place is obviously much larger than the actual unit shipments we're making this year. Got it. Okay. I think you mentioned the potential to expand within your current tolling system win. What's the timeline for, you know, potential expansion? I think you mentioned that most of the revenue in that deal, or at least the initial phase of in 2023. You know, when and how would we see expansion within that win? Yeah, that tolling win covers, I believe three or four highway sections across a couple different states. It's roughly an 18-month-long project if you look at from first install to final install. We already have the customer, right? The next acquisition should be quicker. Those should be on the order to 3-6 months to win additional projects there. To add that this initial order probably covers what? 10% of the highways that this operator has. Right. There's quite a bit of potential, you know, once this launches and there's follow-on projects to do. Got it. Is your sense that there's a period of sort of performance that they're gonna wanna, gonna wanna sort of see how it works at that scale before moving through more of the, you know, of that portfolio? Or, you know, I guess, what's stopping them from moving, you know, more quickly through, you know, the next 10% or more? The performance is already proven. All the commercials are proven so that the value is, you know, obviously recognized by the three different states. But it's really a state-by-state decision. The end customer, the Department of Transportation within each state. As you know, you know, some states are more aggressive adopting new tech, some lag. Some have expedited processes, some have slower processes. The main gating item is just additional states adopting the technology and, you know, the process of sourcing this. Yeah. I think the final piece is probably the capital that's available to these operators. You know, as the Infrastructure bill funding gets rolled out, that'll probably help a bit as well. All right. Thank you. Thanks, Matt. The next question is a follow-up from Richard Shannon with Craig-Hallum. Please go ahead. Great. Thank you. Maybe one or two questions here. Hull, I think you mentioned, is your guidance for gross margin something to be positive here? I wonder if you could help us kinda think through this as we go throughout the year. Obviously, we know there's a mix of auto and infrastructure and some product and some, you know, NRE type of stuff here. As we gain some volumes here, how do we think about kind of the exit rate of your product gross margins? I don't know if you wanna quantify or qualify in some way, but I'd love to get a sense of kind of that exit velocity on that, on that, number. Thanks, Richard. Good question. Tough one to answer. As you mentioned, there is a mix of, you know, product revenue versus development revenue, right? Development revenue, typically, you know, right now it's running at around, you know, 50% or more. It and in the future also depends on is it more software development or something else. Product revenue, it really depends on the cost, you know, BOM cost and also the ASP. ASP for automotive, we're launching below $1,000. As the as it scales, we're targeting ASP, you know, to be somewhere near $500 or below. That'll take a couple of years when before we reach that volume. Smart infrastructure ASP is quite a bit higher than automotive. For example, last year, our smart infrastructure ASP somewhere around $4,000-$4,500. We do expect that to come down a little bit, but gradually, very gradually. You know, we do expect smart infrastructure ASP this year to be, you know, still quite a bit higher than that of automotive. All of these play into the gross margin picture. I think what we guided to is what we can or what we feel confident saying right now. Okay. You know what? I think that'd be my only question. Thank you much. Okay. Thanks. The next question is from Gus Richard with Northland. Please go ahead. Yes. Thanks for taking my question. Just to follow on Richard's question, can you give us a rough idea of what the mix is gonna be this year between NRE auto and infrastructure? Yeah. In our guidance, there's not a lot of NRE right now. Additional NRE will be upside. Essentially, the majority of the guide is product revenue. In terms of auto versus smart infra, I'd say it's maybe 3 to 1 kind of relationship. 3 for auto, 1 for smart infra in terms of revenue. Got it. You know, your OpEx is expected to be flat, and sort of I'm assuming R&D will be flat. I'm just wondering is that, you know, because you had a tape out last year and you don't have a major tape out this year, or, you know, how do you kinda hold the R&D flat? Well, this has been always, Jun here, Gus. This has been always a very efficient operating pace in terms of R&D budget. We actually have continuous tapeouts, for our, new ASIC chips or new product, as you also call it, tapeout. It's again, it's extremely efficient operation here. We actually do not expect any slowdown in our research and development. There's, as you heard from the CES, there's a new product that just came out, with, you know, a lot of improvement, a lot of changes. Some of them even goes beyond our MMT technology. All of these came out of the existing budget. We're just gonna charge forward as is. There is no reason to waste more money if we can just make the best use of what we have now. Yeah. I'll just. This is Mitch. I'll just add, you know, we're building upon something that we're already launching, right? Our incremental investments on new products like we launched at CES are only a fraction, OpEx-wise of the original product, because we're, you know, we can reuse ASIC and software from our GM development. Got it. Okay. Very, very helpful. Last one for me. I think you mentioned, you know, you're working on a Level 4 ground vehicle. You know, any color as to what kind of ground vehicle that is? Is it a, you know? Any color there? Yeah, a little bit. Yeah. I mean, it operates in remote sites outside. It, it'll be, you know, more details will be revealed. It's at a trade show this week being demonstrated, so that's why we couldn't comment more details until it gets revealed this week. Yeah, it's a subsidiary of a top 10 auto company, a Level 4 autonomous ground vehicle that basically takes supplies and materials to remote construction sites. Got it. All right. That's helpful. That's it for me. Thank you. As we have no further questions, this concludes the question and answer session. I would like to turn the conference back over to Jun Pei for any closing remarks. Okay. Just to wrap it up, it's another quarter of good progress on our OEM program execution and certainly a very good past year for Cepton. As we move forward with higher speed and higher intensity, please pay attention to us as we strive to bring additional levels of safety to the automotive industry. Thank you.