Hey, everybody, I'm Jesus Gonzales, the junior analyst, auto analyst covering the LiDAR space, and we're excited to have Tom Fenimore from Luminar here. I don't know if you have any opening remarks, but I'll pass it over to Tom for a second. No, and thanks for having us again. Always, pleasure to be here at J.P. Morgan. So, we didn't have any opening remarks. We just announced earnings a little less than 48 hours ago. But, I know you guys sent over some great questions, so should we just hop right into the Q&A? Yeah, no, ready to get started. I mean, first off, just kind of wanted to touch on Sentinel. I know you guys announced on the call that you sent out some initial test kits. Just wondering, kind of, like, what's the feedback you're hearing, and if you can also remind us what that platform means for you guys and, like, all the capabilities that that offers for the OEMs? Sure. So as a reminder, Sentinel is what we call our suite of software products. It can be anything from the perception software we offer to the 3D mapping software to even a bit more than that. And so this is something we've been working on for several years and talking to our customers about, and this is now, I would say, the ability to ship products to them so that they can try each of these together. You know, it's a way to really take the conversations we've been having to the next level with working demos that our customers can now download and try themselves. So, we're very excited about marrying that with our next generation product as well, Halo, and so I think the two of them together can be very powerful. Early feedback has been very positive, but you know, I would still say it's early. Gotcha. No, thank you. Super helpful. And then you kind of touched on Halo already- Mm-hmm. But, you know, can you remind us of some of the performance benefits that you're gonna see from going from that current generation, that second gen system, and then also the unique economics you're gonna see at scale from Halo? Sure. So the primary benefits of Halo, and if you actually look at our first, we have some samples here, but probably not the best forum to show them. But if you kind of looked at Iris today, it's a product that meets the specs that our customers want for everything from L0 to all the way up to L4. And so, from a technology perspective, it was designed to meet the standards in the, I would say, minimum form factor function. By minimum, I mean minimum standards, maximum size, as weather elements. It was really a product designed by our optics PhDs. As we spent the last several years industrializing it, we've learned a lot. We really didn't design this for, I would say, maximum production efficiency and scale. Iris today has, for example, over 100 fasteners in it, and when you're, you know, manufacturing things in scale, there's probably, you know, fewer screws that you can put in there. So what we've been able to do with Halo, yes, the technology is better, but it's really shrinking the form factor, and it's half the size. It's reducing the integration, so requires less active cooling, less integration costs into the vehicle, and it's gonna cost us less than half to produce that than what it's gonna cost us to do Iris. And once again, I wouldn't say that it is... Yes, it's better technology, but the feedback we're getting from our customers was to make our next generation product smaller, easier to integrate into the vehicle, and cheaper, less than you need to step up your technology game because we're already doing a lot or most, if not all, of what they want us to do. Gotcha. Thank you so much. And then I think one of the things that most excited me about the Halo was that you could integrate that in the roofline behind the windshield, you know. Yep. What's the feedback you've received from OEMs from being able to make that change, where the LiDAR unit has to be on top of the vehicle to where, you know, it can actually be designed into the frame? Yes. So, I would say Halo can go anywhere on the vehicle that the automakers want us to put. Bumper, no problem, but you kind of lose some performance when you put it lower on the vehicle, right? There's a reason, as I like to say, you know, God put our eyes on our forehead and not on our belly button. You get better visibility from a higher vantage point. The bumper is also called a bumper for a reason. You don't want to put expensive sensors into it because it maximizes the, you know, the odds of them getting damaged, like somebody backs up a new parking lot. The challenges of putting it into a windshield, there's a few things. One is you need to have the right thermal and NVH, and by NVH, I mean, like, vibration and noise, et cetera. It needs to be very quiet if you put it in the interior, which Halo is. It needs to basically not require a lot of thermal management, which Halo is, and it also needs to be the right form factor where it can fit behind that windshield. The other challenge is, and this is true for any LiDAR, when you actually put photons through a windshield, there is actually absorption and other loss of photons, and it can be anywhere from, I would say, a 10%-20% amount if it's straight on, and then the more that it goes to angle, it can actually get to a much higher number. And so you do lose some performance by putting it in the windshield. Now, luckily, we're, you know, we send out 15 times more photons than a 905 LiDAR, so, we're still able to push through there, but there are, I would say, some performance sacrifices by putting it through the windshield. We're working with several manufacturers about whether there's coating, notching, whatever you can do that, but the good news is, from an NVH, thermal, size, fit, and form, it can go back there. Gotcha. Thank you so much. And then, kind of maybe to switch gears, so on Monday, when you announced your earnings, you also announced that you're redeeming or pushing out some of the- Mm-hmm ... 2026 convertibles. Can you kind of, like, walk us through that transaction? You know, what drove the decision to do that, and then, you know, the capital sourcing decisions going forward from here? Sure. So, LiDAR adoption, I would say, has taken a little bit longer than we all were expecting a few years ago. There's a variety of reasons for that. A lot of the factors are outside of our control, some of them are within them. As part of that, though, I would say the longer-term adoption of LiDAR, we've never felt stronger about. You can even look at some of the recent NHTSA regulations that are gonna encourage adoptions. And so, end of the decade, we think LiDARs and our LiDAR in particular, are gonna be on a lot of vehicles on the road globally. But the path to getting there, it's gonna take a little bit longer, and, you know, there have been a little bit more bumps in the road than we were all accepting. And so that had two implications for us from a balance sheet perspective. One, we had debt maturing in 2026, we needed to extend it out. We extended nearly 70% of that debt from 2026 to the next decade, January of 2030, to be precise. In addition, we were able to capture some of the discount that our debt was trading at. So we were able to reduce the total face amount of our convertible debt by $150 million. So that helped give us more of a runway to capture this longer term growth. The second thing we did is, those investors that we transacted with, they're also big believers in the longer term Luminar story. And so in addition to giving us more time with the maturity extension, they gave us more capital. So they gave us $100 million of incremental capital in the terms of a first lien senior secured note to help fund the additional capital that we need to get there. And so, while things are slowing down in the industry, largely outside of factors of our control, what we're trying to do is focus on the things we can control. Those are, give us the balance sheet flexibility for the revised timeline, which we achieved most, not all, of what we needed to do earlier this week. Two, we need to get our cost structure right, our fixed cost structure, where, you know, we took the first step of doing that in April, after we reached Volvo SOP. More to come there. You know, we're aggressively attacking our costs. Three, we need to get our sensor unit economics right on Iris, and we're working real time on that, and making good progress there. And then finally, we wanna get Halo to the market as soon as possible, because that's, you know, as we mentioned before, smaller, easier to integrate into vehicle, cheaper, and that, I think, in and of itself, will help encourage adoption as well. Gotcha. Thank you. And then, so I think you kind of touched on that LiDAR adoption is getting pushed out a little bit- Mm-hmm ... relative to expectations in 2022 or 2023. You know, what are you guys seeing in terms of the platforms that you guys are being quoted on? Because, you know- Yeah ... there's a perception that LiDAR is synonymous with EVs, and you guys have kind of pushed back on that. Yeah. Is there any kind of balance between those, or, you know, what are you seeing there? So first of all, from a purely technological perspective, LiDAR is powertrain-agnostic. Our technology works on an electric vehicle, a hybrid electric vehicle, or an internal combustion engine. So we are indifferent to what type of vehicle an automaker produces. We need them to make a decision on what their product strategy is going to be. From my personal opinion, what we've seen in the industry, over the last, I would say few years, have been two trends. One is, I would say a few years ago, when some of the initial decisions on which LiDAR to put vehicles on, there tended to be a higher correlation to the EVs, particularly the higher-end EVs. My personal opinion on why that was happening is the automakers wanted to throw more of their tech R&D dollars at the high-end electric vehicles to penetrate that market and take share order away from Tesla. And so that make it our... I would say, our order book in the near term, more correlated to the electric vehicle space than the, overall industry. The other thing that's happened now that there's been a slowdown in EVs, the automakers are revisiting how much additional dollars and where they're gonna be devoting their platform, whether they're gonna continue to be all on, on EVs, or do they wanna start hedging with more internal combustion engines or, or hybrid vehicles. I think they've kind of put a lot of their new product planning decisions on pause as they figure out what strategy they wanna do. And that in turn, I think has driven some of the slowdown we've seen here in the LiDAR adoption. We just need them—we can go on any vehicle that they decide to build, we just need them to make a decision on which vehicles they're gonna build before they move forward with LiDAR RFQs. Gotcha. Thank you. I think, my colleague, Rajat, has a couple of questions he wanted to ask. Sure. Yeah, I mean, you mentioned, you know, some of the OEM decisions, you know, continue to be, you know, to be pushed to the right. You know, what actions are you taking in the near term, you know, to execute, you know- Sure ... through that delay, and, you know, what else can you do to, you know, like, maybe improve the product or, like, just manage- Yep ... you know, the cost structure accordingly? Yeah, great question. For us, we're focusing on the factors we can do in the near term. It's right-sizing our balance sheet for that revised timeline. You saw the actions we took earlier this week as a first step to do that. Get our fixed cost base, and really making sure we're getting that to the right point, and being as efficient as we can on that. We took a first step of that back in April. We're constantly evaluating if that's the right one, getting Halo to the market as quickly as possible. We've been able to move up that timeline by learning lessons from our industrializing our first product and bringing in and working more with our partners like TPK. And then finally, we're aggressively attacking our sensor economics on Iris to make sure that we can get the gross profitability and overall profitability as fast as possible. So those are factors we can control. We're also staying in front of our customers, both existing customers and new customers, keeping them updated on our progress, on our products, and our technology, so that when they're ready to make their, those decisions to use a LiDAR, it will be a when, not an if, we're in the best position to continue to grow our business. That last part, we can't control when they're gonna make that decision. What we can control is to make sure that we're in there on almost a daily basis, keeping them updated on us, spending time with them, and optimizing our chances of winning once they ultimately make those. ... Just on the same vein, you know, you announced some restructuring actions as well to right-size. You know, just maybe a little bit more on the timeline- Yep. of the savings, you know, and how should we be modeling the expected run rate? Yeah, so we back in April, we started actions to take about $80 million of cost out of our business. A little more than half of that would be in cash, a little under half of that would be in stock, on things like stock-based compensation. That included reducing our workforce by about 20%. Most of that, most, if not all of that workforce actions have already been taken out. Some of it is because we were launching a product the first time, we brought on a lot of consultants and contractors. We're gonna ramp most of that down by the end of the year. We're subleasing some extra space that we have. And so all those actions kind of total up to $80 million. It started to show up in a little bit in Q2, but because we took those, those actions midway through the quarter, you're gonna start really seeing that roll on in Q3 and Q4. And I think by the time we get to the end of the year, you know, I would say most, if not all of those savings, should be recognized on a run rate basis. Got it. Thank you. Super helpful. And then kind of to switch gears a little bit. At your investor day, you guys announced the potential for Luminar to, you know, expand into the insurance business. Mm-hmm. You know, can you remind us, like, how that business progressed? And, you know, what some of the potential benefits? Yeah customers may see from using you guys? Sure. And, like, as I always like when I meet with our automakers to talk about this, if you don't think our technology is gonna significantly improve the safety of the vehicle, you wouldn't put it on, our technology on it. So we're gonna significantly improve the safety of the vehicle. We know what we won't know exactly what that is until you get out into the real world and see real-life data. Having said all that, what we've done in the meantime is we've done our own internal tests, our customers have done our internal tests. We've actually been partnering with Swiss Re, one of the largest global reinsurers, over the last few years. What they did earlier this year is they completed a series of their own independent testing with vehicles deployed with our technology on it, and they released the study of this of the results. Relative to the safest car of the 15 that we tested, and, you know, we kind of tested what we thought were the safest cars, the vehicle equipped with our technology reduced the accident rate by approximately 30%. And even when you're unable to avoid the accident, we were able to reduce severity of the accidents you are unable to avoid by 30%, i.e., you're getting in an accident at 10 miles an hour instead of 30 miles an hour, it's doing less damage to the car. That quantifies itself in very significant insurance savings. Right now, if you buy a Volvo EX, an SUV, you're spending about $2,500 a year on insurance. We think we can, you know, capture a lot of those savings. So one of the things we're doing, you know, is we want to partner with our automotive customers to capture those savings by offering discounted insurance to the consumer to encourage adoption of our technology, but also doing it in a way where you can, you know, hopefully make some incremental profit to subsidize the cost of our technology to our consumers. We hired, a couple of years ago, the person who built out Tesla's insurance business. We've been building it out at Luminar. We've been doing it in a very cost-effective, asset-light way, and we are gonna be in a position in select states to start writing insurance policies at discounted rates to people who buy the Volvo EX90. You know, we're targeting by the end of this year. Gotcha. And then, like, just to kind of follow up on that, can you kind of quantify the long-term revenue opportunity you see from here, or you know, how that would materialize in our models over the coming years? Yeah, look, I don't wanna kind of give formal guidance on that because I wanna kind of see, like, what the ultimate consumer take rate's gonna be. I want to kind of see some real-life data. I'm personally convinced there is, you know, real opportunity here. Legacy insurance companies are gonna wanna see several years of data before they adjust their pricing. But at the same time, look, our, you know, the cost of our LiDAR, it's not cheap, but it's creating a lot of value in the ecosystem, and we want to build tools to work with our automotive clients to capture that value, to subsidize the cost of our technology, and thus encourage faster adoption. Got it. Thank you. Super helpful. And then maybe, you know, given you guys did the capital raise on Monday- Mm-hmm ... and, you know, there's potential limited capital availability over the coming years, how are you guys prioritizing, you know, capital spending and R&D dollars going forward? Look, this is something that we're thinking through real time. We are going to be much more disciplined about where we're putting our capital and spending our money. You know, we realize that, you know, we have finite capital and finite resources. We also recognize that our cost of capital has increased substantially here over the last couple of years. So, we've already started to reduce the number of projects we're working on, and, you know, we're gonna continue to do that. You know, the good news is now that we've successfully industrialized Iris, there's still, I would say, some, you know, additional work there, but I think there's a lot of costs there that are gonna roll off, as we continue the successful ramp-up there. Got it. Thank you. And then, kind of, like, following up along those lines, you know, I don't know if you guys have put out a formal timeline for when you guys expect to reach EBITDA or free cash flow profitability, but can you kind of remind us around sort of like the timing for the company? Yeah. We haven't formally updated that guidance yet just because there's, you know, I would say, a lot of moving parts in the industry outside of our control. What I would say is, with the actions we took earlier this week with our balance sheet, we have enough capital to, you know, get us to the end of 2026. We've also said we probably need about $100 million more capital to get us to profitability. So you can probably, you know, get a sense from those two data points on the rough timing of what them, when that would be. Got it. Thank you. Super helpful. I'm gonna see if the investors have any questions at this time. If not, I think, we also have a couple we can follow up with. Okay, good... Awesome. So I don't think there's any questions. Rajat, do you have one? So, you know, could you give us, like, just an update on, like, some of the start of production timelines, you know, for some of your OEMs, you know, Volvo to Polestar? Yep to Mercedes. You know, just remind us of what's included in your order book. Yeah. So, in the near term, we ramped up, or we hit SOP with the Volvo EX90, earlier this year. We're in the process of ramping that up, with Volvo. They're building these SUVs, at their South Carolina plant. They're gonna start building them at their China plant sometime around the end of this year. And so that will, you know, be the primary platform that we're building for, call it, over the next 6 months. Shortly after that, they're gonna be transitioning to-- we're gonna be ramping up for the Polestar 3, probably sometime early next year. After that, there may be some smaller, derivative-type platforms from Volvo through the balance of 2025. Probably sometime towards, you know, in the 2026 timeframe, you'll start to see our production volume for Mercedes ramp up. You know, all in all, over the next few years, we're working on 20 vehicle lines across our variety of customers that we expect to launch. Our order book is close to $4 billion, $3.8 billion, to be precise, at the end of this year. You know, we have a lot to do from the business we've already won over the next three years. In this current, like, RFQ environment, you know, you know, you talked about your order book. You know, give us some expectations around, you know, you know, the, the growth there and the wins that you're gonna have. You know, how does the transition from Iris to, to Halo, you know, play into this? We're in the early stages of working with our existing. I'd say two things: One, I would say most, if not all, of the new business we're quoting today, whether it's with existing customers on new platforms or with new customers on new platforms, it's, it's Halo. Typically, in the automotive industry, when you're doing something the first time, you need, call it, you know, 2-3 years of development timeframe, and so Halo is based upon new business you win. It kind of aligns with our rollout schedule for Halo and our development timeline for Halo. With existing customers that are already using Iris or Iris+, we're kind of working through them real time. Now, it isn't just, you know, as easy as, you know, shipping them Iris one day and then shipping to them Halo the next day. You have to find the right point in their product transition, whether it's at the end of the platform, a mid-cycle refresh, for where you can do that. You know, our automakers have also spent a lot of blood, sweat, tear, and treasure on developing their software algorithms around Iris. And so, one of the, important aspects of them is, as we transition to Halo and as we develop Halo for them, they want to make sure that there's what we call point cloud equivalency, right? So you might want to make sure that from a software algorithm perspective, we can make it as simple as plug and play as we can, right? You wanna—they don't wanna have to... They want to minimize the amount of effort they need to go back to revert or retrain their software algorithms, particularly when, you know, it took a lot of effort to kind of get them to where they are today on that front. Got it. You touched upon a little bit at the beginning around the regulations and how that's the benefit. You know, could you just elaborate a bit more on, you know, some of the recent regulatory dynamics, you know, such as NHTSA's mandate for advanced AEB, and then what would that means for Luminar? Yep ... and the industry? So, NHTSA came out a few months ago and introduced new mandates around the end of the decade, I think it's 2029, that is gonna significantly increase the standards. We're mentioned in the report that NHTSA published, I believe, 27 times as justification for introducing these new standards and have the technology exist to meet them. What I am confident in saying, based upon where we are today, is you can meet those new standards with our technology. We're confident that that our technology is good enough today and will get better over time to meet those standards. We are unaware of other ways to get there without a lidar, particularly our lidar. Now, those standards are, as I mentioned before, expected to go in place at the end of the decade, and we think that that's gonna create, you know, a pull for our products with the automakers out there. Are they gonna try to figure out ways to do it with camera or camera and radar systems? Absolutely. But we think ultimately they're gonna conclude that they're gonna need our LiDAR in order to make that happen. Got it. Maybe, like, just, you know, a few more thoughts around the competitive landscape. Mm-hmm. You know, you've seen some M&A in the space over the past year. You know, what's your opinion on that? Do you think it continues? You know, where is Luminar focused, you know, you know, in terms of this landscape and your position there? Yeah, I think when you look at the LiDAR space, there's still a lot of players, and I think there's gonna be rationalization and fewer LiDAR players, one way or the other. What we're focused on here is executing. We're, we're keeping our heads down. We're getting our cost structure in line. We're getting our balance sheet right. We're launching these 20 vehicle lines that we have awarded over the next few years. We're getting Halo to the market as fast as possible, and, you know, we're gonna continue to stay in front of our customers and win new business when they're ready to make those decisions. If we do that, there's a ton of upside for us, whether we do it by ourselves. You know, that's what we're focusing on now. I think strategically, you know, the stuff we did in the past has been, you know, more smaller, bolt-on type of stuff. I would say in this market, I would never say, you know, you know, never say never, but the bar is extremely high, given, you know, everything that we have going on in front of us over the next, you know, few quarters here. ... Got it. Thank you. And I think, one more question before we turn over to, turn over to the investors, too. But, you know, we've seen the share prices across the LiDAR industry in general- Yeah just get depressed all to 2022-2023 levels, you know. What do you think it's gonna take for investors to start buying back into the Luminar story and, you know, have those prices get higher? Yeah. It's a great question. I think we got to do three things. One is we got to continue to successfully ramp up with Volvo and launch on these platforms that we have over the next few years and execute without hitting a significant bump on the road. Number two is we got to provide a clear path to profitability, right? I said on the call yesterday that we're gonna get the gross margin positive sometime next year. I expect to give more precise timing on when exactly that's going to be. We need to see, I would say, more visibility on when we're gonna hit that steady state Volvo production. You know, we're kind of in real-time discussions with our key supplier and other partners, you know, to try to get the, you know, the economics where they need to be that. But I think we need to show, you know, a clear path to profitability. And then three, I think it's you got to see this current industry-wide pause button hit, get unpaused, and us to win our fair share, if not more, of, you know, the new business that's currently in the pipeline. I think you need to see those three things: continued execution, better clarity on the road to profitability, you know, unlocking of this new, you know, new business out there and what the adoption more clarity on the adoption rate. I think you're gonna see a ton of upside, you know, in the overall LiDAR space and particularly in our stock. Gotcha. Actually, if I can sneak one more in. You know, I think one of the things that we've seen push out LiDAR demand to the right is the delay in L4 or those higher levels of autonomy. What are you guys seeing in terms of the timeline for OEMs to deploy those higher levels of autonomy? And, you know, is that something you guys see near term, or is it still getting pushed out further? Look, I, I would say, a very, a very, very small percentage of our order book is on L4 stuff and above. We've made the painful decision to walk away from L4 projects over the last year or so because these things take longer than expected. We see people struggling with, you know, the current, L2 and L3 systems that they're trying to get out there, let alone L4. And so, you know, the thing about that is we have to be very disciplined about the projects we take on. You know, we think L4 and the robotaxis, there's a big longer-term potential there, but right now we're focused on the passenger vehicle space, which is more of like an, you know, L0 to L3 type, functionality, and that's what we're focusing on. We're confident that that's gonna play out here, you know, over the next few years. But you know, there's a lot of opportunity there. And then, as we capture that opportunity, not only will we go to the L4 and the L5, but also other markets besides automotive. But right now, for us, it's head down, focused on execution and getting done what we need to get done. Got it. Thank you. I don't think we have any questions from the audience. So, Rajat, do you have a follow-up there? No. No, I think, you know, that, that, that was great. You know, any, any final messages? No, it- Yeah. Yeah. The only thing that I would want to add is part of the earnings we did earlier this week, we really went what I would say back to the basics in terms of you know our investor strategy. And you know really going back describing our technology, its differentiating factors, the the road ahead in terms of how we think the LiDAR industry and the autonomy industry developing. So I think Austin did a good job of kind of refreshing some of our historical slides, discussing that, as well as how we talk about it. And I think you'll be seeing us you know doing more around that here in the coming months. Got it. Thank you. This was super helpful. Obviously, you know, we're very excited to see the prospects for you guys and the LiDAR industry in general over the coming years. Mm-hmm. Thank you for participating. All right. We really appreciate it. Thank you, guys. Appreciate it.