Welcome everyone to Luminar's First Quarter of 2023 Business Update Call. My name is Aileen Smith, and I am Luminar's Head of Investor Relations. With me today are Austin Russell, Founder and Chief Executive Officer, and Tom Fennimore, Chief Financial Officer. As a quick reminder, this call is being recorded, and you can find the earnings release and the slides that accompany this call at investors.luminartech.com. In a moment, you'll hear brief remarks from Austin and Tom, followed by Q&A. Similar to prior quarters, and in the spirit of continuously improving our shareholder outreach, we will be addressing some of the top questions submitted online via the Say platform at the end of our prepared remarks today, followed by analyst questions. I would also note that we have extended the submission window for questions via the Say platform through the end of our call, should there be any that are uploaded during that time. Before we begin the prepared remarks and Q&A, let me remind everyone that during the call we may refer to GAAP and non-GAAP financial measures. Today's discussion also contains forward-looking statements based on the environment as we currently see it. As such, does include risks and uncertainties. Please refer to our press release and business update presentation for more information on the specific risk factors that could cause actual results to differ materially. With that, I'd like to introduce Luminar's Founder and CEO, Austin Russell. All right. Well, thanks everyone there too. Thank you, Aileen. Awesome to have you on the team. Yeah, I'm sure maybe a familiar face to many, albeit, you know, coming from NVIDIA. Thank you for that, and looking forward to jumping right in before I hand it off to Tom for some of the financials and then some Q&A afterwards. Going off, I mean, we're a great start to the year. We're certainly firing on all cylinders, you know, to be able to scale and both from a manufacturing standpoint, commercial success standpoint, and working with the global automakers to, you know, advance our overall product roadmap. I'll touch on each of these areas before handing off to Tom. First, from an industrialization standpoint, you know, that really is the fundamental challenge, to be able to scale successfully with these high volume series production wins. Our strong year-to-date progress definitely continues to show how we can continue to execute and are building the capacity necessary to be able to meet these, growing automaker demands on volume. What I can do is can screen share maybe some of the slides and whatnot that I have. Can take a look for a second? You guys see that okay? Looks great. Awesome. Awesome. Okay, I'm gonna go into this. First in Q1, you know, we achieved a successful build-out and bring up of our new highly automated high volume manufacturing facility in Monterrey, Mexico. This is with our partner, Celestica, there. We achieved this major milestone ahead of the Q2 guidance we gave at Luminar Day. The first Luminar Iris sensors out of this new dedicated facility are now already shipping to Volvo as we prepare for the start of series production, first global scale vehicle launch with us. Exciting stuff. If you take a look actually at some of the different photos, sensors on the line, it's a massive clean room build out that we did successfully. All the actual production lines are even in a clean room environment. You can see that, this is a leadership team from one of our automakers that's there alongside some of the folks on production. You know, from a construction standpoint, you can see how this come together very quickly. This is like an example, some of the calibration that you have to do along the way. A lot of different moving parts, but all happening successfully. That's really what leads us up into our recent partnership with TPK. This is a, you know, multi-billion dollar supplier to major company tech and automotive companies around the world, including folks like Apple and Tesla, you know, where they built that first sort of multi-touch display for them, you know, when it comes to the modern smartphone and the original iPhone when it came out. Very familiar with working with its advanced, you know, new technologies and great to have them partner with us to be able to operate an additional even higher volume factory that's driven by, you know, rapidly growing demand for Luminar in Asia. You know, at this time, the factories will have the initial capacity of up to 600,000 Luminar sensors per year, to be able to support the already awarded programs from automakers, like, for example, Mercedes. And then that's to be able to support a volume, like I said, primarily in Asia. That which has been continuing to take off. Factory has the ability to further expand the capacity as the demand ramps beyond those levels. You know, for context, we're expecting Luminar to be equipped on a, you know, seven-figure number of vehicles throughout Asia at the end of this decade from just the current contracts alone. To take, kind of brings it to the next topic there too when it comes to commercial momentum, which we'll go into, and this is sort of a signing ceremony and whatnot that we did with those guys when we're out there. Press conference that we had it's a whole thing. TPK guys are all in. It's very, very exciting. Tom could talk a little bit more about what they're doing from the investment standpoint, but when we were both at the Shanghai Auto Show recently, I think it was clearer than ever that China has, you know, incredibly strong demand, you know, for this kind of product to be able to enable the next generation safety and autonomy. It's about on the order of half of the, you know, 20 million vehicles sold per year in China are from global automakers, so many of which that we are working with as Luminar partners. For context of the now more than 20 production vehicle models, you know, Luminar is designed into, the majority are also slated for the China market. You can see, like, the example of Polestar 3, you know, with Luminar that's that's out on stage on the, you know, Polestar booth there featuring it very prominently and very exciting to see that shown off for the first time live. That's a great example of what they're able to do. You know, you take a look also at what's already happening today with out there with the SAIC R7. Got to actually take a live drive in it for the first time out in China with obviously Luminar integrated on the production vehicle. An exciting experience to already see some benefits that are happening from a safety and autonomous capability perspective there too, when you get the really long-range detection capabilities and enhancing the ADAS systems that's on there. You know, see the Thomas case there. When it comes to what's next and what was also announced is, Volvo had introduced the new Volvo EX90 Excellence. This is a new model. It's a derivative of the EX90, of course. This is a four-seater that's really, like I said, just all around very impressive and, you know, initially slated for the China market. Goes to show how automakers are continuing to double down on us. Of course, we announced some of the other expanded wins with other automakers, but this was sort of a new one for just the past couple weeks. You take a look at what they had on stage, and it's pretty impressive, so all around with the EX90 Excellence. The recent interesting bits of news is that, you know, the Volvo CEO, Jim Rowan, had just said on the recent earnings call that the pre-orders for the Luminar-equipped EX90 had surpassed even the company's boldest and most ambitious internal projections in terms of what the sales were. They sold out for that, you know, initial run that they'll do and then obviously going to be scaling that up exponentially. As part of the future of their brand. You can see even just on the press conference there too, they actually featured even Luminar as one of the key fundamental points for why you would buy a Volvo like this and how it differentiates in that kind of market where it's highly competitive. Of course, as I said, continuing to expand with Polestar that we covered. This was earlier in Q1 we announced that we'll be now moving across their different models in their lineup. This expanded partnership provides that foundation to be able to further collaborate on the LiDAR integration, including on the Polestar 5 that'll be out after this. Of course, after two years of close collaboration between our companies, Mercedes-Benz, you know, announced plans in Q1 this prior quarter to introduce our new Iris Plus sensor and associated software across a broad range of their next generation production vehicle lines by mid-decade. It's great to be up there with, you know, with their leadership and really be able to help work with them to set the future roadmap for what's possible when it comes to Autobahn-speed level capabilities, as well as, of course, improving the safety of vehicles for all. They're on, you know, across the board, South by Southwest, as well as their own investor event, which was great to be there with, you know, Jensen Huang, the NVIDIA CEO on stage alongside Marcus and those guys, you know, awesome all around. Their example featuring a Luminar point cloud and perception in one of their cars. Of course, you know, we're continuing to focus on product execution development with, you know, not just industrializing the current products but, you know, next generation products. One of them is this Iris Plus product. We announced this over at Luminar Day, and proud to be able to say that, you know, these samples have already been successfully delivered to the lead series production OEM for it. You can see an example of this is, you know, just to show a case of like the at least to our knowledge, like the largest range LiDAR or 3D sensing ranging facility of its kind, you know, over 300 m long and, you know, have a host of different crazy tests that it has to be able to go through to make it successful, to reach Mercedes's standards, by being able to truly cover all the different edge cases and use cases. Great huge milestone. Obviously, we started working on it, you know, a little while ago, but I'm proud to say that it was actually less than 1 year from the project kickoff all the way to the B sample customer delivery. So again, another important milestone along the way and showing that, you know, we're firing on all cylinders with a strong ability to execute through the entire, you know, engineering manufacturing process and, you know, core software, firmware, you know, all the things that have to make this make this successful. So yep. Obviously we're, as part of this, you know, we're well on track to be able to achieve our goal of entering the Iris+ C phase this year. The question, what else are we doing? Part of what we announced at Luminar Day is we talked about Seagate and the LiDAR team, how they're joining on Luminar to accelerate our tech roadmap. Happy to announce today that, you know, we're also welcoming the Argo AI LiDAR team as well as what was formerly Velodyne are now Ouster, you know, team out in India. As part of accelerating our existing roadmap, again, in those cases, less about the technology more about how do we continue to successfully resource with great minds on how to continue to accelerate our products, you know. In the case of, you know, the Argo AI, which is formerly known as the Princeton Lightwave team, they're partnering with and joining on to Luminar Semiconductor to be able to advance our high performance laser and photodetector roadmaps rapidly. For the India case, you know, that's really, you know, starting or establishing an engineering office out there as sort of a kick start of this. This will be, that'll be great to be able to do. Continue to expand at global scale. Last and not least, you know, want to highlight just some new ecosystem partners that we had in Q1 as well as, of course, you know, what we formed in Q1 for the Luminar Semiconductor, between OptoGration, Black Forest and Freedom Photonics, again, with the receiver, the basics for the processing electronics and the laser chips, respectively. We combine those together to be able to have an internal, you know, semiconductor powerhouse in the U.S. here to be able to make this very successful. Like I said, it's really building specialized chips for LiDAR, for our LiDAR, and of course, can leverage those technologies to be able to scale, you know, across, you know, other industries which we've already had successful contracts for expanding even beyond. When it comes down to it, this is a key engine for technology development that's very, very unique to Luminar, and I think critical to being able to create such a high-performance product and being able to do so at cost effectively, you know, in the real world there too, with the scale of product. We're not stopping there. You know, and this is what we're talking about, just like what are our exclusive ecosystem partners that you know, where we have, you know, even contractual exclusivity around it. We've added actually four of those even just alone in Q1. You know, TPK was one of them from what we talked about. They're signed up. They're, you know, 100% all in on Luminar. Same thing with Swiss Re. You know, we've got the exclusivity all in on Luminar, which this is the insurance partnership that we had that, you know, the Swiss Re CEO, came up with the over video on Luminar Day, for the Swiss Re solutions to be able to speak to how we're gonna be able to, you know, use the data from Luminar to lower insurance costs from by providing that to the insurance providers for Luminar-equipped vehicles. As well as, you know, ultimately, we already have the ability to provide reduced cost of insurance ourselves in partnership with automakers that will help with the total cost of ownership significantly and take advantage of those things that, you know, I think a lot of people weren't even thinking about today. Scale is again, a great close partner that we're using for our Luminar AI Engine, they're exclusive to Luminar and know their LiDAR. Then, you know, Seagate, of course, you know, as part of that strategic deal that we did. Yeah, it just goes to show what's possible and just great progress all around as we scale the business, build them out, continue to execute on all of our promises. With that, I'd love to be able to hand it off to Tom for some remarks when it comes to the financials and milestones. Great. All right. Well, thank thank you very much, Austin. I'm gonna start off by reviewing our progress towards our 3 key 2023 milestones. The first is to successfully scale. Our target is to bring online our high volume automated manufacturing facility and meet Volvo's SOP requirements by the end of this year. As we announced a few weeks ago, the highly automated dedicated facility in Mexico is up and running ahead of schedule. The team is now focused on completing the remaining validation tests to ramp up this facility to the necessary production levels by the end of this year. Our second milestone is to keep advancing our technology and product roadmap. Specifically, our targets for this year include entering the Iris+ C-sample phase, building a next-gen LiDAR prototype, and completing software support to Volvo and Mercedes-Benz SOPs. We remain on track to achieve this milestone. Specifically, we delivered Iris+ B1 samples to our lead customer this quarter and achieved several software milestones necessary to support series production. Our third milestone is to grow our forward-looking order book. We have already been awarded new vehicle programs from existing customers this year, such as the Volvo EX90 Excellence that Austin mentioned. In addition, commercial momentum with potential new series production customers is accelerating. We remain on track to grow our forward-looking order book by at least $1 billion this year. Let's now turn to financial highlights for Q1. Revenue for the quarter was $14.5 million, up 112% year-over-year and ahead of our guidance, primarily due to higher program revenue and sensor sales. For the quarter, we reported a gross loss of $14.6 million on a GAAP basis and $11.8 million on a non-GAAP basis. This was a significant sequential improvement, cutting our gross loss almost in half from Q4 levels. A few more details on our Q1 COGS and gross margin. During the quarter, we incurred approximately $11 million of launch-related COGS expenses, which we expect to significantly decline as the year progresses and we achieve a successful launch. These expenses consist of items like inventory write-offs, primarily from obsolescence due to product advancements, expenses of launching our new dedicated Mexico facility, and adjustments to NRE contract cost estimates. As these launch-related expenses wind down and our new facility winds up, our non-GAAP gross margin should turn positive on a quarterly basis by the end of this year. We ended the quarter with $422 million in cash and equivalents. As I mentioned at Luminar Day, this liquidity position leaves us with sufficient capital plus a cushion to reach profitability. Our Q1 free cash flow was -$76 million, which improved slightly from the last quarter. In addition to the launch-related COGS expenses I just discussed, there were significant other cash expenses during Q1 that we expect to improve during the second half of the year. Of the -$76 million of free cash flow, approximately $22 million was launch-related expenses such as contractor payments, tooling expenses, CapEx and other items. Another $8 million was on other items like mark-to-market losses on our investments and security deposits on new leases. As our business and new facility ramps up and the launch costs ramps down, we expect to demonstrate solid progress towards our profitability goals we discussed at Luminar Day. Specifically, we expect to improve our end-of-the-year free cash flow run rate by approximately 50% compared to Q1 levels. During the first quarter, we executed several small strategic transactions, including the Seagate acquisition and the two acquihires highlighted by Austin earlier, and financed this activity by drawing down on $23 million from our existing strategic M&A equity program we put in place earlier this year. In the coming days, consistent with the plan we put in place last year, we will file a supplement to our existing registration shelf to provide Luminar stock to certain strategic provet vendors who prefer it instead of cash, and expect this to total about 1% of our current shares outstanding. To reinforce our recent partnership, we have entered into a definitive agreement with TPK whereby they will invest up to $20 million into Luminar. All these actions are consistent with our year-end guidance of 395 million-400 million shares outstanding. I want to affirm all of our full year 2023 financial guidance we discussed at Luminar Day. Specifically, we expect to grow revenue at least 100% this year, achieve positive quarterly non-GAAP gross margin by year-end, and end the year with at least $300 million in cash and liquidity and a share count in the 395 million-400 million range. For the second quarter of this year, we expect revenue to be in the range of $15 million-$17 million, and our EPS loss to be relatively similar to the Q1 loss of $0.24 on a non-GAAP basis. To conclude, I would like to thank the broader Luminar team once again for another great quarter and the incredible operational progress that the team has made. I will hand it over to Aileen for Q&A. Great. Thank you, Tom. We're going to start our Q&A with a few of the questions that we received on the Say platform. We'll move over to the analyst questions. Our first question we received is, when will Luminar be profitable, and what are the plans to get profitable? Sure. To reiterate what we discussed at Luminar Day, we're on track for this, by the end of this year, we expect to be profitable on a gross margin basis on a quarterly basis. We expect by the end of next year for our core business to be profitable on a quarterly basis, and then in 2025, the whole company. Now, let's talk about gross profit and kind of how we get there this year. As I just mentioned, our gross loss this quarter was $11.8 million. Of that $11.8, about $11 million of that, was launch-related costs. As we launch, those costs should be significantly reduced. If I was able to bring them to zero this year, you know, clear on it wasn't, 'cause we're still in the process of launching, we would be, you know, more or less at that benchmark already. As that new facility launches, it will have a better cost structure than where we're producing units today, and we'll get the better revenue. That's the trajectory to reach our milestone this year. Great. Our second question combines two similar ones that were uploaded on the platform. First, have you considered LiDAR applications outside of vehicle implementation? Two relatedly, what is Luminar doing to expand its technology platform into markets outside of vehicles? Yeah. Yeah. The answer is, while our primary focus today is to launch in the passenger vehicle and the commercial trucking landscape because, you know, those are areas where you can get significant scale benefits, we are focused on some of the adjacent markets. We talked in the past about what we're doing with Airbus on the aerospace and defense side. You know, we have strategic partnerships with players like Robotic Research to help us in other areas of the adjacent markets. That is an area that we are focused on. The primary focus for Luminar for the time being is to focus on these initial launches in the passenger vehicle and the commercial trucking landscape. Yeah. I will say, you know, across even when it comes to from the semiconductor level to the LiDAR level to all the different levels, you know, we already have, what, like, you know, double-digit number of programs there too, to work with in adjacent market applications, leveraging the core technologies that we develop. We don't develop new products, of course, for those other things. It's the automotive market is how you get to the trillion-dollar business, so to say. Okay. Our final question before we move on to the analyst community. How is production going, and when will we be seeing Luminar LiDAR technology on local car lots? Well, if you're in China, you can see them today with the R7 there. I think we gave a production, you know, an update on the production with the new plant coming online. You know, we're already shipping initial batches to Volvo. As we said, you know, we're planning for the launch at the end of this year. Well, thank you everyone to all the investors who submitted Say questions. We'll continue to use that as a platform to increase shareholder engagement with us. Let's transition to our analyst questions. In the interest of time in getting through as many analysts as possible, we would ask the analysts to limit their questions to just 1 initially and then to hop back in the queue or raise their hand again via the Zoom function for follow-ups. With that, we're gonna start our analyst questions with Joshua Buchalter at TD Cowen. Hey, guys. Thanks for taking my questions and congrats on all the manufacturing progress. I wanted to ask about the billion-dollar order book growth target. You've made a number of announcements already this year with expansions of Mercedes, Polestar, Volvo, and others, and I know the public timing of the announcements don't always line up with when they're actually inked on the back end, so I was hoping you could maybe help us understand how much of the $1 billion that you're hoping to add to the order book has already been won versus you still need, there's still wood to chop there. Thank you. Yeah, Josh. Well, you know, we're in May, so there's still some wood to chop there. That number has grown, you know, as we do the tally at the end of the year, so I'm not gonna go into any details in terms of how much that $1 billion. What I would say is the big announcements we made earlier this year for Polestar and Mercedes, those contracts were actually inked towards the end of last year, so they were included in the tally that we did as of December 31st. You know, some items like the EX90 Excellence, you know, which are kind of new this year. You know, we still have some wood to chop on the billion-dollar. Very confident we'll get, you know, at least to that number. You know, we kind of do the tally at the end of the year, so I'm not gonna, you know, share any info in terms of what, how, what percentage of the way we're already there. Understood. I'll hop back in the queue. Thanks, guys. Great. Thanks, Josh. Our next question is going to come from Kevin Garrigan at WestPark Capital. Hey, Kevin. Yeah. Hey, guys. Good afternoon. Thanks for letting me ask a question, and congrats on the results. I know, you know, Luminar LiDAR is an option for SAIC and Polestar. I was wondering if you guys can kind of give us, you know, a high level view of how the take rates are kind of shaping out for those models. Yeah. You know, Kevin, we haven't really seen yet any real data on the Polestar 3 take rate, so really nothing to share there on the psych. You know, I would say what we've seen is kind of consistent with what we're modeling there. You know, it's something that is kind of in that, you know, mid to high single digit% take rate. The Volvo, we're standard on that is something that I would say is, you've seen some of the commentary coming around Volvo in terms of what the pre-orders look like for that. There, we don't have to worry about take rates 'cause we'll be on 100% of the EX90s that they produce. Okay. Got it. Thanks, guys. Thanks. You're welcome. You'll also see a very like a factor of a multiple difference in take rate if you're on a, you know, $35,000 car versus a, you know, $70,000 car, you know, et cetera there too, of course. I think that's where, you know, we have. We've tried to model it very conservatively though, too, you know, when it comes to these take rates. Of course, you know, the Volvo volume is very, very exciting since that kicks off right off the bat with the standardization. Yeah, absolutely. That makes ton of sense. Okay, thanks, guys. Our next question is going to come from Itay Michaeli at Citi. Great. Thanks. Hi, everybody. Hey. Hey, Tom. You mentioned before, you're seeing some momentum with new customers accelerating. I was hoping you could maybe give us a little bit more on what you're seeing there at a high level, what regions perhaps you're seeing incremental demand for, whether you do expect to Austin's point just now, additional programs to perhaps source on a standard fitment basis. Just curious if you can give us a bit more about the funnel. Sure. We're seeing it across all the three major regions, if you looked at it as EMEA, you know, call it Europe, you know, North America, as well as Asia. Within Asia that, you know, could be the three major countries there, which would be China, Japan, and Korea. You know, Itay, I don't wanna go into much more detail on that. We tend to announce wins when our customers are ready to announce those wins. We don't try to gun shop or foreshadow or do anything like that. You know, the good news is like, as we get out there with the R7, as we kind of get closer to the Volvo launch, as we kind of, other OEMs expand our business, with Volvo, Mercedes, Polestar and others, that clearly garners more interest. The closer we also get to industrialization, that also helps as well. As much as we go into a lot of detail on that path we are to industrializing and making these things in scale, you really take the you know, all the risk off the table till you actually do that. Once we actually get to that point, you know, I think that that's gonna be another inflection point in terms of, you know, increasing the dialogue and interest and, you know, converting that into real new orders. You know, look, we're also in discussion with our existing customers about expanding business with them. We, you know, Volvo publicly announced the EX90 Excellence, which, you know, will be, you know, primarily for their China market. The discussions with existing customers has done really well there, and when they're ready to announce that, we'll share it with you guys. That's very helpful. Thank you. I think the key is continuing to see the same customers, you know, double down on us there, too, and as we successfully execute, you know, improve ourselves along the way. That's really where, you know, if you take a look at basically all the major global OEMs, you know, that we're working with, they're just continuing to hammer down on that same message and, you know, why they're speaking out even during, you know, Luminar Day and other things like that. It's a great trend. There's even a lot more to go even within these automakers there, too. Only a small portion, you know, the overall order book in terms of the total volume for what everybody can do. Will be very good to get all that, get all that out there as we prove ourselves continuously. That's very helpful. Thank you. Thanks, Itay. Our next question will come from Natalia Winkler on from Jefferies at Jefferies. Hey, Natalia. Thanks for taking my question. Hi. I wanted to ask about the TPK partnership. Tom, if you could probably elaborate, are there any kind of CapEx requirement that you guys would have to, you know, bring there? Or would it be sort of a typical foundry kind of arrangement? Yeah. There is gonna be some capital we're gonna have to put in to get that new line up and running. What I would say is it's gonna be significantly lower than what we spent to get Mexico up and running. I think there's a few reasons for that. One, you know, we learned a lot from doing it the first time, we're gonna apply those lessons to the second time, there's just gonna be a significant amount of efficiency gains. Two is, in Mexico, we had to, you know, basically build a brand new dedicated plant. We kinda ran out of room at the Celestica's existing facility, getting that up and running, building the clean room, all that, it ain't cheap, as you kinda see from, you know, what we've been spending. TPK has an existing facility. It has capacity in there, so we're gonna be utilizing that, including some of the existing benefits like a clean room. You know, as I said, to actually build out the equipment for the new line, you know, there's gonna be some significant improvements doing it the second time relative to the first. The capital we'll need to spend this year is not gonna be a big amount. Most of it's gonna be next year. You know, as we kind of finalize the plans with them, we'll probably share some of the detail of what that's gonna look like as part of our 2024 guidance that we'll share towards the end of this year. Thank you. It's basically where their, you know, investment as their, which, you know, they approved, I think, what, just yesterday. Like I said, that basically covers it, the majority of it almost alone, you know, from what they're over what they're doing. They're a great partner with that. Our next question is going to come from Mark Delaney at Goldman Sachs. Hey, Mark. Hey, thank you very much for taking the question. you know, Tom, you focused on the reduction in COGS. Just hoping to better understand some of the moving pieces from the fourth quarter to the first quarter, maybe give us a little bit more color on all the different puts and takes in COGS, but also if you could perhaps comment on R&D, Was there anything moving between R&D and COGS? Then, you know, just how to think about those over the balance of the year as well. Thanks. Yeah. You know, I would say that as you may recall from some of our past quarterly calls, for the program development revenue that we perform for our customers as we get ready for series production, we do, I would say, move some engineering expenses, which would typically be in the R&D line up to the COGS lines because it's actually a cost of providing that service to our customers. You know, I wouldn't say that number, it typically mirrors what our program development revenue is. There are, I would say, periodically, some one-time adjustments we need to make to that number. For example, because there are engineers providing that work, we have to actually calculate the, you know, call it compensation rate for each of our engineers, and that number can go up and down depending upon, you know, the mix of people. You know, are they doing the work more out of Orlando or other jurisdictions, and are they, you know, as our kinda stock-based comp number goes up and down, that runs through that number. That number was a little bit higher this quarter as we kinda true it up relative to Q4, and that was kind of embedded in that $11 million. I think what you're starting to see, Mark, in terms of some of that improvement is as we're getting closer to launch, those launch costs are starting to ramp down. You know, at the same time, as we're, you know, kind of ramping up the production, you kinda get the, you know, the benefit of the increased revenue and how that kinda translates into the better line, into the bottom line. Our next question is going to come from Samik Chatterjee at J P Morgan. Hi. Thanks for taking my question. Samik. Hi. Just a question more on sort of what you're seeing on the technology platforms. One of the autonomous camera-based radar suppliers today announced a partnership with Porsche, which is, and that runs counter to the Volkswagen internal platform carrier that Volkswagen had been working on and is driving some questions from investors about how many competing or side-by-side technology platforms are large OEMs probably trying to run. When you look at your pipeline or your funnel, sort of in terms of discussions, what are you seeing from OEMs? Are you seeing them really develop sort of technology platforms by, like, targeting certain geographies, or is it more by brand, or are you really bidding more for, like, platforms that run global? Thank you. No, absolutely. It's a great question. I'm sure Thomas has some thoughts there too, but I think the reality is that, you know, it's effectively almost impossible to have, you know, complementary parallel paths, you know, that are at the table. It's already so challenging to be able to do one that in order to try and introduce like a multipath strategy there to you basically, you know, pretty much giving up on, or at least taking a completely independent approach at the end of the day, like something has to not be working. That's really why, I mean, for the vast majority of OEMs out there, you really see you have to go sort of all in on a given strategy, and you basically end up with almost de facto exclusivity when it comes to a given platform, like past a certain development stage. You know, in the case of this, I think, you know, we will still continue to see different levels of things like, you know, the Mobileye's world are, you know, obviously, and, you know, they're a partner of ours, of course, too, which is great. You know, there's like a base level of, you know, technical capabilities that you have for assisted driving, and then You know, when you start to enable next-gen safety and driver out-of-the-loop capabilities with LiDAR, and that's obviously the part that we think the world is, and the automakers are saying everything is continuously shifting towards. I think that's where it's ultimately moving from. The reality is that I think more and more so, you know, people realize developing software is very hard. You know, you have to have the best and brightest talent, you know, on this and across the globe and especially also in Silicon Valley, you know, where the team is and where the center of AI is and everything that we have. It's important. Nevertheless, I think, you know, for sake of clarity, for all the OEMs that we work with, it's the single all-in path that, you know, putting billions of dollars into to make sure it's successful. That's generally a very good thing. I wouldn't be surprised if for some of the, you know I wouldn't be surprised if that were to happen again in some other instance there too, where if people were trying to make something work. Yes. I mean, the only thing I would add is our strategy is to be flexible. In the Volvo case, we're working with their in-house software team, Zenseact, you know, we're gonna, you know, work with them hand in hand to reach successful launch. You know, you know, we also partner with NVIDIA, Mobileye, Qualcomm, you know, kind of like a leading technology systems integrator. In the Mercedes-Benz case, they want us to work with hand in hand with NVIDIA, no problem, we're gonna do it. You know, we're also developing, you know, some of our own software, you know, that, you know, in case an OEM wanted to work directly with us. We wanna be flexible. You know, this is, as Austin said, this is tough. At the end of the day, we need the software to work. If the software doesn't work, our LiDAR is just an expensive, you know, piece of equipment sitting on the car. We need to work hand in hand with the software players to make that work. We think that this is gonna continue to evolve and it's gonna evolve OEM by OEM, region by region, and we're gonna be flexible and make sure that we can work with anybody that the OEM wants it to work with. 'Cause at the end of the day, we need the software work to work to fully deploy our LiDAR and its capabilities. For that exact reason, that's why we've already developed that base capability, you know, when it comes to the software around the LiDAR and, you know, providing it to OEMs. The real question is now is that how much can you scale that content value on the vehicle? Kinda what we were talking about, sort of seeding the idea of a Luminar Day is you have this core sort of engine around the Luminar LiDAR. You have, you know, sort of base software and some advanced software features that we enable with that and then, and the AI capabilities. You have, you know, the, you know, full stack systems for, you know, proactive safety, highway assist, you know, mapping or even insurance, you know, that we have that are all additional vectors for growth of how we can, you know, exponentially scale that revenue per vehicle, you know. That, that's where I think hopefully even what we presented at Luminar Day should prove to be very conservative over the long term. Thank you. Our next question will come from Emmanuel Rosner at Deutsche Bank. Hey, Emmanuel. Hey, hey team, it's Connor Walters on for Emmanuel. Thanks for taking my question. Congrats on the results. I just wanted to ask what the expected timeline is to ramp the Mexico facility to hit the 250,000 run rate is, and how we should be thinking about the timeline in Asia with TPK. Look, I would say the, you know, the initial launch we're planning for is later this year. That's going to be call it at a run rate that's going to be in the low six figures. Then, you know, we'll kind of ramp up to the, you know, 250K rate that we've talked about before, probably throughout 2024 and 2025. Look, we have the ability to expand that plan as necessary. TPK, you know, I would say, you know, we're starting now and working with TPK. We're currently doing the Iris+ B samples in-house. The C sample, as we kind of enter that phase towards the end of this year, that's when you kind of start to transition that over to TPK. you know, that plant is, we're targeting to have it ready for series production probably sometime in 2025 to support the initial launch with Iris+. Okay. Got it. That's very clear. Thanks so much. Thanks a lot. Our next question will come from Joshua Buchalter with a follow-up from Cowen. Hey, guys. Thanks for letting me back in the queue. We've seen examples of customers expanding their engagements, adding your LiDAR on certain models and then not on other models. As these engagements with OEMs deepen, I was wondering if you could help us sort of understand what are some of the factors that go into their decision-making of whether they're installing LiDAR. Has it been primarily a mix and pricing decision? I mean, I'm just trying to understand that side of it as we sort of calculate your expansion opportunities after engaged customers. Thank you. I think when it comes down to it, the reality is that it has to align overall with the product technology roadmap. I think different automakers work at different speeds, and I think it's clear that everybody ultimately wants or needs, you know, this kind of technology. It's really, the business case is already there for almost any kind of vehicle. It's just a question of there's a lot of different things that have to come together from a technical development standpoint, and people have to be willing to invest, you know, big time to be able to make this successful. As you said, you know, it's to go in and be able to create the next-gen ADAS, you know, autonomous system, it's, you know, billions of dollars, you know, by the time you're done with these different automakers. It's, it's big bets. You know, we all know it's ultimately the way that it's going. I think hopefully we ultimately enable lower costs as we get more and more content value on the, on the vehicles for those automakers in terms of their development path. That's where I think the right ecosystem partners continue to be able to come into play to accelerate the development adoption. You know, we're seeing other vectors like the software development or even insurance angles, other things to be able to accelerate adoption, working with regulators to be able to accelerate adoption there, you know. All of those, you know, different tailwinds are very, very helpful and positive. I would say, obviously when it comes to these kinds of capabilities, that's where, you know, the economics have, you know, some factor when it comes into play. Generally, you know, we've been able to maintain some, you know, I guess, some really strong ASPs, you know, when it comes to the customer base and products that I think, you know, as always, I mean, don't get me wrong, every OEM would love to squeeze every cent out of you that they can. I think people appreciate, you know, the meaningfulness of, you know, how important it is to have that life-saving technology and the additional capabilities of the life-saving technology onto the car. All those things are factors. The other one is just frankly how tech forward people wanna be. Are you an initial adopter or are you a fast follower on this? I think our strategy was to work with the most tech forward ones that we could see successful deployments with. A lot of the automakers out there, you know, they have some idea, like even for example, they wanna put a LiDAR on a car. Like, what does that actually mean? Like, what does it do? Like, the LiDAR itself is just a box. you know, if you don't actually utilize the whole data, the mileage that it actually produces. you know, it's about that end-to-end system. you know, our take was, is that, you know, the Volvo implementation, Mercedes implementation, you know, et cetera, among others, were gonna be the most financially successful ones. It's not surprising 'cause it's like the same for most other kinds of new, you know, safety or ADAS technologies for those guys that they started off with introducing before it went throughout the rest of the lineup. I think it's really no longer a matter of if, but a matter of when throughout this decade where I would be, I would be surprised if by the end of the decade we weren't ultimately on, you know, the substantial majority of, you know, all the different kinds of OEMs or not just. We're already starting to see some of that mainstream vehicle model traction when it comes to some of the new ones that we're working with. You know, it's, it'll be, it'll be exciting to get that to happen. When the insurance story ultimately comes into play there too, I think that's sort of the nail in the coffin. I mean, maybe you could say the regulatory requirement of having, you know, this level of capability would also be a nail in the coffin. The other one is that of where it's basically just absolutely no excuse of why you cannot have if the total cost of ownership is like, you know, negative, or it's, you know, then, it's pretty clear what the opportunity is. Yeah. Anyway, that's sort of the take as we work with these automakers and educate them. This is moving really fast with them already. You know, these are not like hyper speed moving groups, as they should be. You know, it's a very, very serious process and requires a very rigorous development. This will be good. Excited to execute on what's ahead. Thanks, Austin. Our next follow-up will come from Natalia Winkler at Jefferies. Thank you for taking my follow-up. I wanted to confirm something about the software. Thank you guys for providing the color on kind of the sophistication of that system. If we're talking about 2023 goals, could you please elaborate when you talk about the milestones for Volvo and Mercedes software, where in the stack would it actually be? Are you talking about the Sentinel? Are you talking about kind of the more at the device level software? Could you also possibly elaborate on what are those milestones? Does it mean that it's gonna be technologically feasible, or is there some sort of, kind of, you know, step up towards that that you guys are trying to achieve? Thank you. The initial focus is really all centered around the, you know, LiDAR software. For data, you know, processing, how you can be able to successfully, you know, control systems, calibrate systems, integrate systems, and everything around it there too that's successful. We have, you know, we have a team, or something I think it's over, you know, 100 at this stage, you know, and primarily out in Silicon Valley. You know, we've been, like I said, great talent is led by, you know, CJ, who is formerly director of Autopilot at Tesla and, you know, a fruit company as well, so to say. That's been, that's been great. Working in this space to make that happen is really, really critical to see through the smooth and successful integration. Obviously, as we sort of shown at Luminar Day in terms of what's possible when it comes to an AI standpoint, perception standpoint, you know, in the full vehicle functions, I think that's something that, you know, we're continuing to be able to move towards as we sort of get that foothold in with the LiDAR and then just continue to build that content value on top of it. It's very straightforward when we're building software that's based on our own system. We sort of inherently have that advantage, so to say, you know, when it comes to the capabilities. I think, you know, what we also do, you know, from a software standpoint is that we collaborate with the automakers themselves to be able to help ensure that they have successful efforts, you know, because ultimately the programs have to be successful to be able to make it. Well, you wanna sell a lot of cars with LiDAR, you know, the programs have to be successful, software has to be successful. We work with them on like 12 different products and software features and product capabilities and other things that extend even beyond some of the core stuff. Yeah, more to come, and we look forward to building more. Ultimately I think what we're gonna see is people transitioning, you know, more towards kind of the one-off model where we sort of combine some like, you know, base level portion of the software with the LiDAR, you know, and have that together. I think ultimately, it'll move towards that subscription model where, you know, we can continue to provide updates, you know, to the software over time as we release it, where it's not just like, okay, only the new models get updates. Like this is part of the roadmap that, you know, even the existing automakers we're working with are thinking about and ultimately planning for. I think that will be where we have continued additional opportunities to capitalize on. Thank you. Our next follow-up will come from Mark Delaney at Goldman Sachs. Thank you for taking the follow-up questions. Just a couple of follow-ups. Tom, you spoke about the startup costs and how those will decline as you get to line production. Could you talk on 2Q? I mean, you gave some EPS guidance for the second quarter. I missed it. You know, what you're assuming for what those startup costs may look like in the second quarter? The other question was just around some of the additions you've made to your engineering team. You know, you did Seagate, you just did Argo. Maybe you could just talk a little bit more around what, you know, what capabilities that adds or accelerates relative to what Luminar already had? Specific to Argo AI, was there a financial cost to that in terms of, like, an acquisition price that maybe you're paying, or is this just more, you know, adding more engineers? Thanks. I'll start with the with the second set of questions around that, right? When you look at the Argo team in Princeton, as Austin mentioned, they're really gonna be supplementing the LSI team, you know… LSI is Luminar Semiconductor. Yeah, Luminar Semiconductor. We talked about that at Luminar Day and, you know, particularly helping out the Freedom Photonics team there in terms of some of the laser development we wanna do and helping to grow the Freedom Photonics business. When you look at the team over in India that we kinda took on from Velodyne, it was in our plans this year to kind of build out an engineering team over in India. You know, right now we're using a fair amount of consulting and contractor services over in India, so they'll help us wean us off of, you know, those type of costs. you know, those are more acquihire opportunities and, you know, I would say the, you know, at least the M&A considering costs are de minimis, but there's gonna be, you know, some costs there in terms of, you know, adding those facilities, you know, housing those people, security deposits, et cetera. you know, going back to your first question, if you kind of look at the guidance that I've given, Mark, and kind of read between the lines a little bit, we guided that EPS is kinda, Q2's gonna be, you know, roughly similar to what we have in Q1. So a lot of those launch cost improvements we're expecting to see in the second half of the year, right? We're still in the process of launching this, completing our production testing, you know, getting the, you know, finishing off the investments there. You know, I would say you'd start to see the improvement in those launch costs to happen, more in the second half of this year as opposed to in Q2. All right. That marks the end of our analyst queue and the questions. I would like to thank everybody for participating in the call, for the analysts that asked questions and for the investors and other folks who have joined us. We look forward to talking with you next quarter. Thanks a lot, everyone. I'll say, you know, excited and awesome to have everyone on for the journey for this. You know, we got as much conviction as ever in making all of this happen here too. I'm a 100% all in. You know, I think it's never, I'm planning on for what it's worth, I'm planning on selling a single share and, you know, as soon as our legal lets me actually get some of it, I hope to be able to do it. You know, crazy market times. Appreciate it, guys, and yeah, let's be in touch. Thank you.