Q&A session. I'm sure we have a lot of questions to get through. As a reminder, we will be addressing retail investor questions posted to the Say platform, institutional investor questions emailed to our investors' inbox, and live questions from our analyst community. We'll be checking these platforms intermittently through the duration of the call to address any that come in real time. Before we begin the Q&A session, I wanted to 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, and as such, does include risks and uncertainties. Please refer to our shareholder letter for more information on the specific risk factors that could cause actual results to differ materially. With that, we can get into some of the questions that have been on folks' minds since Luminar Day and some of the developments over the past few weeks. So we'll jump right in with question number one: When will you start mass production of your LiDAR sensors, and what future plans do you have for growth? All right. Hey, hey, guys. Thanks. Hopefully you hear us okay? All good. Awesome, awesome. Well, yeah, thanks, Eileen, for the intro, and excited to get a chance to jump straight in, answer some of the questions. Thanks for taking a look at the letter that was output or, you know, really presentation with all the information. A lot of stuff going on. We thought it was gonna be something more simple, given that we just had Luminar Day, but with the new regulations, everything in the meantime, it's yeah, been quite a whirlwind. But yeah, in terms of the SOP question, that's of course, you know, one that we're really excited about. We did officially hit our start of production milestone, you know, with Volvo, so that's something that the past decade of Luminar has been leading up to. And, you know, we're fortunate enough to get a lot of big congratulations notes from, you know, folks in the industry that have been waiting for this moment for quite some time. And of course, with everyone from, you know, our other customers to other kinds of automakers to see this success is very meaningful all the way even to our own supply base. You know, that, you know, with the vast majority of programs not ultimately making it to production in the broader autonomous vehicle world, this is something that's, I think, a standalone shining beacon, showing what is possible, and people are very much taking notice. All right. Our second question: What are the implications of the new NHTSA ruling, and what impact will this have on Luminar? Can you meet these standards and broader autonomy without LiDAR, like Tesla believes? Yeah, so we're not aware of any system that comes even close to meeting it without LiDAR. And what we've actually shown is that with our long-range LiDAR across all the different testing protocols, including specifically the ones that NHTSA has outlined, that we are able to successfully meet and beat those different protocols. And this is all confirmed as well by the testing that Swiss Re has done independently. We showed that off at Luminar Day, where they're able to show a massive double-digit improvement in terms of the safety implications, as well as in reduction of vehicle accidents and crashes, as well as when they do occur, still significantly a reduction in the speed at which the accident occurs, corresponding to improved mitigation power, so to call it, from that. And what that all means is that, we believe that, you know, a long-range LiDAR is required to be able to meet those kinds of new standards that NHTSA is mandating across the board, and a massive tailwind overall for the adoption. You know, I have to say, I was pretty impressed by how far they went on these regulations. I mean, we know, it's been coming for some time, you know, what a decade in the making. And the U.S. is really stepping it up, and I think will serve as the benchmark worldwide. You know, we saw similar trends, you know, what, decades ago, with everything from seat belts to airbags, to even the concept of AEB in the first place, that camera, radar, were able to solve for. But as we know, the majority of accidents that occur today still occur even despite some of these advancements in AEB technology, and it needs a fundamental step function improvement. And that's not to say that there isn't still room left to be able to do improvements to be made with existing systems. Absolutely, that's the case. But we're talking a totally different world. In particular, there's a massive increase in the speed at which required to be able to do this, as well as a requirement for pedestrian testing and braking during daytime and nighttime. You know, what we've seen is across the automaker landscape, I think, also a lot of surprises that this is now pushing forward so quickly, kind of beyond the expectations. In the letter we outlined that I think this is pretty clear in terms of, you know, driving standardization as much as a decade earlier than what I was otherwise thinking and, you know, 10x-ing our opportunity for what we have ahead. And this is all happening, like I said, literally in automotive years, this is like right around the corner in 2029. So I think this is possibly one of the best things to happen to Luminar, maybe even the best thing to happen to Luminar in our entire history. So, very excited for that. Great. Next question is around the announcement from last Friday. Would it be accurate to say that the restructuring goal is to outsource much or most of the manufacturing process in order to reduce capital need and related risks, as well as to more rapidly ramp up production? Sure, why don't I handle that question? So we, as Austin mentioned, we reached SOP a few weeks ago with Volvo, and that was a really intensive 4+ year period to industrialize our first product, Iris. During the last few years, we've tripled the size of the company, and we put in a lot of blood, sweat, and tears to get there. And we learned a lot about ourselves as an organization, and upon reaching SOP, and actually a little bit in advance, we really took a long, hard look at ourselves and tried to decide, well, what do we do better than anybody else out there? And a lot of that is related to our technology, our R&D, our semiconductor business, et cetera. And then, what are some of the industrialization activities where, quite frankly, some of our existing partners, like TPK, do just as well, if not better than us? And so the primary focus of the actions that we took last week was to put Luminar in a position where we can move more quickly and more efficiently and more cost-effectively to develop and industrialize our future products. I wanna say it wasn't; it wasn't primarily a cost exercise. It was more of a efficiency and speed exercise. Unfortunately, that resulted in having to us to make some, you know, tough decisions on a personal level. You know, but it was, you know, something that we had to do. When you kind of look at the magnitude of those savings, they result in about $80 million of savings. You know, substantially all of them should be realized on a run-rate basis by the end of the year. A little more than half of those are gonna be cash savings, and a little less than half is gonna be stock savings in terms of stock we issued to our employees and some of our vendors. Not included in that eighty are gonna be some of the benefits we get from being able to move faster on the industrialization, as well as more efficiently. Let me try to quantify that. If I look at what it cost to put the capital in the ground, both to build out the building, the clean room, and the automation equipment for our Mexico plant, that totals to about nearly $60 million. What we expect to be able to launch our second facility in China with TPK for is gonna be about 20% of that amount. Not 20% less, but 20% of that amount, and that's for almost triple the capacity. The other thing, if you look over the last three years and I would say if you look at some of the industrialization cost caused by inefficiencies from industrializing our product for the first time, over the last three years, between cost overruns on some of our NRE budgets, as well as inventory write-downs and duplicative testings. Once again, all this stuff is normal when you industrialize it for the first time. We wanna focus on getting more efficient the next time. Those three things alone, over the last three years, total nearly $100 million, and we think we're gonna be able to substantially reduce that amount, going forward for our Halo product, from the lessons we've learned in doing it more efficiently. And then finally, we have our first Halo win. We'll talk about more of that in a bit, I'm sure. But, our SOP now for Halo is gonna be in 2026, and we wouldn't be able to move that fast without industrializing our first product and putting in place this new structure with L-Tech. So yes, there are cost benefits of it, but more importantly, the reasons that we took the actions we did was to make us more efficient and leaner and meaner, and to move quickly in our industrialization products, process. Well said, and I think describes all of that. And you know, it's been a whole journey for us, you know, over the past decade. And I think if you really zoom out overall, you know, what we've invested, you know, on the order of around $1.8 billion to be able to develop the technology platform, the IP platform, and the industrialization muscle, you know, to be able to enable this, to make this possible. And that's where now you look at, okay, what is the incremental cost, you know, to develop a new product? What is the incremental cost to be able to scale? That has come down radically, you know, from relative to the total investment amount that we had to do in the first place to get to this stage, to get to this leadership position that we've been. So now, what sort of becomes a headwind, now we get to ride in terms of the respective tailwinds of that. And, of course, TPK is one of the first steps of the evolution of the business transformation, and there's gonna be more to come. This is something that certainly we're looking forward to. And when you take a look at, you know, it's the same thing of, like, you have $2 billion, you know, what it takes to have the first kinds of technologies, products, you know, Iris family. You know, now, what? You know, talking on the order of closer to, like, on the order of $100 million now for Halo, because we already have this investment. We have the technology that, now we're just iterating on each generation of chip, on each generation of subcomponent that makes that possible. So, yeah, excited for what's ahead, doing so very efficiently. And, of course, you guys, please look at the shareholder notes, as well as Luminar Day, if you haven't seen it, to see some of the breakthroughs that Halo is enabling and beyond. Thanks, Austin. We're gonna switch gears and take some questions from the analyst community. As a reminder for our analysts, we wanna get as many questions in as possible, so we're gonna allow an initial question and some follow-ups. Our first question is going to come from Kevin Garrigan at Westpark Capital. Hey, Kevin. Yeah, thanks, Eileen. Hey, Austin. Hey, Tom. Thanks for letting me ask a question. Wondering if you can expand on where in the process the two non-series production customers are that you noted in the guide. As in, you know, is this next phase kind of the final stage before announcing a series production win, and are these contracts kind of yours to lose, or are you facing some competition with these two? You know, one of them is an automotive customer, and I would say we're getting to the tail end of the development phase. You know, once again, I don't, I don't like to predict when our customers are gonna make specific decisions that we want them to make, because that timing is largely out of our control, and it's been taking a little bit longer than we would hope for. But I think we're getting to the tail end of that process with them. The other is a non-automotive customer, where we've been working with them for several quarters now. And you know, we're kind of transitioning into the next stage of that and adjusting the size of the contract. So that one, it's exclusive, there's less competition. The first one, we've been working with them for a while. And while we're not too worried about the competition, you know, it's not your business until you win it. Yep. Got it. Okay, perfect. And then just a quick, quick clarification. Your warrants with Volvo that you had noted that are gonna cause contra revenue for Volvo, I didn't see any other specific warrants with customers in the order book in any. No, there. Yeah This is something that dates back to 2020 when we assigned the initial framework agreement with Volvo. It was compensation for them to help us industrialize our product for the first time. You know, it's a little over 4 million warrants, you know, strike price of about $3. And for accounting reasons, once we reach series production, we need to amortize the value of those warrants, which was about $3 million at the time, over the first 22,000 and change LiDARs that we made. And so that's gonna put a little bit of headwinds on the revenue because, you know, for the contra revenue reasons, as well as to the margin that we achieve on those sensors as well. Okay. There's no other customers where we have, you know, warrants like that or a contra revenue issue, and this dates back to something, as I said, we did over four years ago at this point. Okay, awesome. Thanks, guys. That doesn't affect the cash flow of what we get in, of course, or anything with, you know, with the customers and incremental. Okay. Got it. That makes sense. Okay, perfect. Thank you. Our next question is gonna come from Josh Buchalter at TD Cowen. Hey, Josh. Hey, good afternoon. Thanks for taking my question. To start, I wanted to ask about your cost basis and any change that might have, might be coming from the restructuring. So I know at the inaugural Luminar Day, you walked us through the $650 and then $350 milestones of your unit cost economics. Has anything changed regarding that trajectory as you've undertaken, you know, the restructuring efforts, moving more to outsourcing, and in particular, I mean, with Halo on the roadmap? Thank you. Yeah. So, all the actions we took, you know, the most of those are, all of them are unrelated to sensor cost, and sensor economics. We, you know, one of the things we're doing now, our engineering team has almost been solely focused on getting to SOP, because you gotta get there. And now that they're there, they're freeing up, and we're gonna start aggressively attacking the sensor cost. There's still, you know, work that needs to be done there, but the actions we took in that $80 million, that's unrelated, to the sensor cost. You know, the targets that we talked about last year at the inaugural Luminar Day, as you mentioned, those were always conditional on us kind of having a first full year run rate of production. And so, you know, you need to get the economies of scale. You need to get, you know, the credibility and the contracts in place with your supply base. You need to work through the manufacturing kinks, and you know, you need to do, you know, some amount of kind of VA/VEs to get there. And so we're in the early innings of getting there. You know, you know, we're not at those targets today. We're gonna be, you know, much closer, and we still have a path, you know, to get very close to that $650 level. Tech and the industrialization, that's all gonna be for Halo. And so, you know, there may be some, you know, resources that we put there on the cost downs for, for Iris and Iris+, but the vast majority of those resources, as well as the benefits we're gonna see on that, is gonna be for the industrialization of Halo. Thank you for all the color there. And then for my follow-up, I know it's been only about a week or a few days since the automatic emergency braking regulations were announced, but I think it had been rumored for some time, and you guys had been talking about it potentially coming for a bit. I mean, do you expect or have you seen potential customers preparing for this? You know, does it change any expectations for when you would be able to, you know, bring things into your order book, and I guess, big picture, to qualify for the new regulations and hit it, when would a potential customer need to sign a deal to, yeah, to hit that 2029 timeframe? Thank you. Yeah. So I think it's a great question on all of that. And, I think, this definitely took a lot of the industry by surprise, in terms of the level that it was at. I think there was a lot of anticipation that it was gonna be heavily watered down, so to say, in terms of the requirements. So, you know, for example, in particular, the majority of the automakers have been part of actually an alliance that's been lobbying to be able to significantly reduce the requirements there, such that it would not be mandated, so to say, to align with something that would have this kind of level of capability on every vehicle because remember, it's not just high-end vehicles, it's literally even the lowest-end possible vehicle like any, like every single vehicle that's sold. And you know, they've said that it will take up to $4,000 in additional hardware and software costs per vehicle, which is, you know, obviously great from a content value standpoint. But the lobbying has been basically to try and reduce certain requirements, such as, for example, the sentiment was that you should be able to hit a pedestrian at up to 25 kilometers per hour, instead of stop for pedestrians fully, has been the big push. Which, as you figure in some negotiations with NHTSA, NHTSA says, "No, it should be zero," they say 25, and they split the difference right in the middle at zero. So, you know, they're taking a hard line on this. And, you know, we kinda laugh about it, but it is very serious, you know, safety implications. And the reality is that vehicles today should not let you run over pedestrians. They should not let you run into things in front of you. And, you know, we're talking about the most simple, basic, you know, safety functionality on a vehicle. And the current kinds of camera and radar technologies cannot enable this across the board in these required scenarios for what's needed to prevent the vast majority of accidents. And we've shown what's possible. Swiss Re, in particular, at Luminar Day, has shown what's possible. And, you know, we've also now starting to even see, hey, what are the insurance implications of this? If you actually, you know, that was, like, one of the points of inspiration as well, you know, for NHTSA, is that, hey, as this happens, you know, the insurance industry is gonna be reformed to be able to, from a total cost of ownership perspective, you know, reduce the cost. So there's a lot of different factors at play, but, would say this, is that I think, from a timing standpoint, to answer that specific part of the question, I, I think there's probably gonna be a scramble over the next, couple of years to really, start getting plans, you know, into place. The beautiful thing with this is that this aligns perfectly with the timing, you know, for Halo. Whereas, you know, this would've been very difficult to try and fulfill and accomplish with, Iris and Iris+, which are more meant for higher-end vehicles. Halo is designed to be able to be mainstream. So this couldn't have come in literally a more perfect time, between, you know, the Swiss Re report and the safety report for what they've put out, the insurance implications of that, and most importantly, a Halo product that's able to take advantage of this. So part of the whole concept is, you know, if they- if there was a concern around cost, hey, for, you know, something not in the $1,000s, but in the $100s, you know, you're able to have a product that can fulfill all of these requirements. And not only that, in terms of meeting and exceeding it, as we've shown, and we have those, for example, specific examples in the requirements in that letter. It's also able to enable via a software, you know, upgrade and additional software, so the same hardware, autonomous capabilities, you know, and start to advance those as well. Which, by the way, we already know is already happening. The majority of automakers at this stage are now planning to have long-range LiDAR, you know, or Luminar in their roadmaps, already by the end of the decade. So this wasn't, like, a crazy thing. It's just the, the crazy part is the sheer scope of what this is, and the fact that this is not, "Hey, you need to do this to get a five-star safety rating on your car," it's, "You need to do this to literally even make a car. Thank you, Austin. Appreciate the call. Or sell a car. Oh, sorry. To sell a car, and yeah, in, I should say, in the U.S. Obviously, U.S. is hopefully it takes a leadership position and kinda proliferates throughout. Okay, we're gonna transition back to a few questions from our investors. Next question: How has the delay in the Volvo launch from last year and the macroeconomic environment affected your capital situation? Will you have to raise an additional $1 billion in 2025, like certain estimates have stated, and what kind of dilution should your shareholders expect? Yeah, I'm not, you know, look, I would say the $1 billion is nowhere near what we think we need, additional capital we need to get to profitability. Now that we're SOP, now that we've taken some of the restructuring actions that we've taken, you know, we're still, you know, finalizing our analysis on what the additional capital needs gonna be, and we're looking at a variety of scenarios, you know, including downside scenarios. And even in our extreme downside scenario, we get nowhere around a $1 billion. You know, the number that we're sending around on is somewhere around a couple hundred million dollars of incremental capital ±. You know, when you kind of look at where our balance sheet is today, we have enough cash to get us to at least the end of 2025. So, you know, we don't have a gun to our head to do anything soon, and we still, we believe, have access to multiple forms of capital, so we can go get that additional capital when the timing and the situation is right. And, you know, look, we also would rather address the two balance sheet issues that we have sooner rather than later. The first being the additional capital, which I just talked about, and then the second is when you kinda look at our convertible debt, that's trading at a deep discount. and as I mentioned before, we're kinda looking at, are there creative things, that we can, do, given that dynamic? So, you know, now that we've reached SOP, now that we've taken the actions that we've, that we've done, you know, we're actively looking to fix those two balance sheet overhangs that we have, but we wanna do it at the right time, minimize dilution, get the best terms that we can, but also address it sooner rather than later. No, it makes total sense. You know, I'll say this, is that obviously we're very sensitive around all these things, and particularly, you know, when you have a lower share price there, you know, you'd wanna be really cautious for dilution. I'll say that over the 8 years when we were private, I think in aggregate, over all the financings that we raised for $hundreds of millions, we got it, we're diluted the company, you know, on the order of, like, 50% over six different rounds and going through that. That's how, you know, we have large ownership positions in the company more generally, so we take this super seriously, really thoughtful. Our own board, you know, is also taking it very seriously in terms of that aspect of it. So, but, you know, we're in a strong position here. We know exactly what needs to be done, and most importantly, we wanna show and continue to prove out the aspects of the business that show how significant, you know, this industry is, and how much value we're able to really produce to get that realization. And we've been in a stronger position than ever with the fundamentals of our business, from technology, product, commercialization, and scaling now with being the first company at a global scale to be able to go to SOP with us. So, yeah, that's what we have ahead. Great. Next question: Will you provide more detailed financial guidance for 2024, now that you've kicked off production for Volvo Cars? That's something we're gonna do in the second half of the year. We're getting more visibility into the Volvo ramp-up. We're getting more visibility into, you know, when we're gonna start to realize some of the cost-saving actions that we took, both on the restructuring we did on Friday, as well as starting to aggressively attack the sensor cost. And so once we get into the second half of the year, we're gonna provide more visibility on what our quarterly financial performance is going to be. You know, the two things that we talked about during our last call, that we reiterate, is we're gonna get to, you know, a quarterly revenue run rate in the mid-thirties by the end of the year, and that we'll end the year with, with $150 million plus of liquidity. Those are two things that we still remain confident in. I would say the path to getting from where we are today to those points by the end of the year, you know, it's still gonna be you know, have some bumps on the road, you know, during that journey. And just for the context that the $35 mil per quarter, if you're amortizing that, we're talking, what? You know, $140 million run rate per year, so, you know, on an annualized basis. So I mean, pretty, pretty significant growth, you know, compared to, you know, I mean, you guys all know last year's numbers and everything. It's. The key is that that all kicks in in the second half of the year. So when we talk about SOP for the revenue for, you know, this quarter, and, you know, it'll be next quarter, it's, there's been no serious production revenues quarter small for, for next quarter. But that's really where, you know, in the second half when you start to see that kicking in and that exponential growth really taking off. That's where, you know, what we highlighted, is that, you know, we have $3.8 billion, you know, in our order book that's now kicking off that conversion into revenue, and that's what's gonna be the main driver behind all this, exponential growth. Whereas historically, it's been, you know, development systems that we've been working with automakers on. Of course, Volvo was the first, but that's sort of kicking off a plethora of additional subsequent vehicle model launches. We've shown how we have, you know, 25 of them that expands across combustion engine vehicles, electric vehicles, hybrid vehicles, all those kinds, which is, you know, also unique to Luminar in terms of the diversity of what kinds of vehicles we're on. So excited to make that happen, and then, yeah, as Tom was saying there, that economies of scale and value is gonna be huge. The other thing is that, the most significant thing really with Volvo getting out there is also around the data collection. You know, right now there's been a very, very, I mean, we're talking very, very small fleets of vehicles, you know, on the order of hundreds, you know, usually that are going out collecting data. When you talk about something with Volvo, when it's tens of thousands of vehicles, you know, just even starting this year alone, scaling to hundreds of thousands of vehicles and then, you know, ultimately millions, like, this is, at a scale of data that no one in the industry has ever seen at a global level. That allows the AI systems to really train on that data, to be able to understand the world. I mean, we're talking about, you know, creating a more accurate understanding of the world than has ever been seen before by this precise 3D data. You know, more than what you have, the largest autonomous fleet out there today is, well, you know, it's like Waymo, or like a what, less than what, a couple thousand vehicles, something to that effect. So, you know, you take a look at that and the scope and scale of what we're talking about, and the fact that, you know, every Volvo driver is driving... You know, we don't pay them to drive, they drive themselves. So it's gonna be pretty transformational as all of this happens. Okay, let's switch gears and go back to our sell-side analyst community. Our next question is gonna come from Itay Michaeli at Citibank. Hey, Itay. Hi, great. Hi, everybody. Thanks for taking the question. Just, I was hoping you could just remind us. I I know your number one focus now is the Volvo ramp. How should we think about subsequent ramps of the 25 + programs that you have? Maybe, you know, if you could talk about roughly how many launches you're expecting in 2025, that'd be helpful. You know, the next big one that we have, which will be somewhere around the end of this year, is gonna be the Polestar 3. You know, there are maybe one or two smaller programs next year between our current customers. And then I think the next big wave is really gonna come around late 2025, early 2026, with Mercedes. And, you know, there's multiple platforms that will probably then launch starting in 2026, over the next two to three years. And so, you know, this is the big one. Polestar 3 is the next one, a couple other smaller ones, and then the wave of Mercedes, you know, starting. The only other thing I'd point out is that, you know, there are also variants in particular that launch at different times and locations. And so, for example, you know, this is, this is the launch, for the EX90 out of, North America there. So, you know, we're shipping from, you know, Mexico, you know, into, into North America. Luminar has a unique, globally diversified, you know, footprint here, which is, which is special. And, you know, so we're talking about the launch there. You know, then you talk about launches in China. You know, we've – there's already been, you know, they announced the EX90 Excellence, as well as the EX90 China variant. You know, there's more opportunity and upside, you know, beyond these things as well. Of course, you know, we know, we all know about the Polestar 3, but there's also different model variants as well of some of these things that can help further drive the growth of this. But this is. So that's why you're gonna see it's kind of like a flywheel effect, right? In terms of the compounding. So there's an exponential curve in terms of the ramp and the economies of scale for each one, and then when they sort of compound on top of each other, then you end up in this, like, very good pile-up of all these things. But it's not so much, and this is where we've been smart about it. It's the same thing of, like, I think if we tried to launch with, like, five different OEMs all at the same time, we would be, drowned, you know, in that. So, you know, it's, it's, it's good. It's like good, methodical, you know, spacing between, the different, OEMs and launches and everything. But it, but it is definitely action-packed, that's, that's for sure. And the beautiful part is it, it is the same hardware setup that we have that's, that's able to launch. Obviously, there's certain kind of specific integration modes and certain kinds of, incremental, customizations, but the large part, it's, you know, 95% the same thing. Terrific. And then as my follow-up, Austin, you mentioned data collection. I kind of want to go back to that a little bit here. You know, how much data are you getting from the real-world fleet of some of your customers? And will you be getting data from the Volvo fleet as you ramp? And as you're getting this data back and iterating the you know, the software and AI, how much improvement are you seeing in safety and automated driving functionality, such that you know, when maybe the RFQs come in for you know, NHTSA-related awards for later in the decade, you know, how much better do you think your system could be by the time you get to that point? Yeah. So, couple things on that. Obviously, the big step function from a product standpoint is with Halo. So that's, you know, that, that's what we're very excited about. But I would just say from a data perspective, more generally, there's two aspects. So one is from a customer standpoint, of where they need the data first and foremost, in terms of being able to build out the features, you know, optimize them, and do all the safety checks on it, and then ultimately, you know, release the features. And that's where you're gonna see, you know, the LiDAR get more and more utilized, you know, over time, for these additional, you know, starting with safety features and ultimately autonomous driving features and other kinds of things that it, that it can be able to enable, you know, creating maps of the world, doing all those things. And, you know, so I'd say from a customer standpoint, they need this to build their and train their AI systems there. And then when it comes to, our systems accordingly, is that, you know, data is, critical to, say, feed the beast, of this. You know, we have our Luminar AI engine. You know, we have some of our own initial vehicles that have sort of gotten that started, and we're very excited to be able to have the opportunity to start getting in customer data. So, you know, for some of our customers, we actually specifically have data clauses, you know, that allows us to be able to get access to data from customers. So, that when that happens, that would be very accretive to the overall software efforts and scaling. And we're gonna have more to talk about on the software front over the coming couple of months. Perfect. Very helpful. Thank you. Our next question is going to come from John Babcock from Bank of America. Hey, John. Hey. Hey, how are you guys doing? Thanks, for giving me the opportunity to ask a couple of questions here. I guess just starting out, you did mention, you know, in passing, that Tesla is using your products and buying sensors. I was just wondering if you could talk a bit more about, you know, the extent to which they're doing that. Like, so are they just buying part of the sensors? Are they installing the full LiDAR? And also, are they a growing business with you? And then if you could also just generally talk about how their relationship compares with, that of other OEMs, that'd be, that'd be useful. Yeah. So, you know, what I would say is, I'm not gonna... I don't think we're in the best position to talk about, you know, what they're doing with our LiDAR. You know, this isn't the first, you know, time that they've ordered, LiDARs from us, but I would say it's, it's been more lumpy than recurring. You know, the, you know, the reason we're talking about this is because if they're greater than 10% in a quarter, we, you know, we disclose who those customers are. But, you know, look, they, you know, they're buying the LiDARs for us, and, you know, what exactly they're doing them, we can only speculate. We, uh, Yeah T hey made us sign an NDA. I'm not surprised at all, but appreciate the call. And then just next on the cost savings program, you know, I think you mentioned a bit more than half is gonna be cash cost savings. Could you just confirm that? And then also, you know, what are the total costs that it's ultimately gonna take to get to that $80 million in annual run rate savings? Confirm the statement that you said, we kind of mentioned that in the letter. We, you know, we disclosed what the cash costs are gonna be there. It's, you know, on the order of magnitude of $6 -$8 million. Okay. That, We'll call it less than $10 million. Gotcha. Okay, great. And then might you be able to detail the, the contractor reduction piece associated with that, and then provide any additional color on the other category that's driving that? Yeah, you know, I would say, you know, the vast majority of that $80 million is coming from a headcount, both our employees and then, you know, also contractors ramping down. As you ramp up and we industrialize our first product, reach SOP. There's a lot of, I would say, non-recurring work that needs to get done, whether that's setting up the plant, working with our suppliers to ramp up, you know, doing testing of the products that is required to meet our, you know, our automotive customer standards. And what we try to do, if the work is not recurring, to fulfill those needs with, you know, contractors, if it's gonna be over a finite period of time. And then as that work is done, and as the, you know, SOP and industrialization process for that product draws to a close, you can start ramping down those contractors. And then as we re- you know, rely more on TPK and L-Tech for our Halo, which is our next generation product, you don't need those resources to recur. And so that is what I would say, you know, driving you know, the, the, the vast majority of of the restructuring actions that we took last week. I'd say in particular, when it comes to the contracting partners, you know, we had, what, over 100 contracting partners, you know, in aggregate to help us, you know, in one way or another, the majority of which were signed to help us reach SOP. Now that that's happened, you know, we're able to roll off the majority of those 100 contracting partners to be, which, you know, helps reduce costs, but is something that we have planned anyway as part of this. And frankly, overall, the majority of the Luminar cost structure there is to be able to help advance, you know, the future of what we're doing, where it's a relatively dynamic structure that we're able to have. So, of course, now post-SOP, that's where I think that dynamic changes and the needs change, and, you know, models can evolve accordingly as well. Okay, thank you. And then if you don't mind, just one quick question. There was a seating supplier that recently commented about the EX90 being delayed due to software issues. Can you just talk about whether or not that's an incremental delay relative to what you've discussed or if that's, something that had been announced previously? I think that's, I think that's old news, John, from, you know, a year or so ago. Yeah. That's, that's correct. Gotcha. And on top of that, I think there was some misinformation also that there was some delay that was caused by Luminar as well, which was also not the case there either. So we're very excited for the EX90 ahead, and that's gonna be a huge driver of growth here for us over the course of the second half of the year. That's gonna take us to new heights. All right. Thanks, Tom. Appreciate all the detail. Our next question is gonna come from Mark Delaney from Goldman Sachs. Hey, Mark. Good afternoon, guys. Thank you very much for taking the question. One on gross margins. Your gross margin came in better than expected in the first quarter, although in the letter, you spoke about some production kinks and lower ASPs as potential headwinds over the next few quarters. I'm hoping you can help investors to better understand the magnitude of those headwinds, and perhaps more importantly, what might be needed to reach a positive gross profit. Yeah, so, you know, Mark, you know, I'd seen the improvement we saw during Q1, that was largely driven by the industrialization costs, you know, coming out of, you know. It's, it's starting to come out of the system in good chunks. We're hoping that happening in Q4, you know, it happened instead in Q1. You know, as I said, the, the ability to kind of predict when you kind of do what needs to be done to launch your first product, you know, there's, there's some variability there. And so that kind of drove the profit there. What's happening now is there is a, you know, once we start selling Volvo series production sensors instead of prototypes, there's a step function and immediate decline in the ASP. You know, we can't wave a magic wand and have our sensor costs decline at the same rate. You know, it's gonna take us a few quarters to start, you know, witnessing the benefits of the actions, you know, we have taken and are gonna accelerate taking now to get those costs lower. You know, we also need economies of scale. You know, Europe, where things aren't gonna go smoothly, and, you know, as you start increasingly ramping up, you know, we're expecting some unexpected surprises. And so, you know, I would expect, you know, the gross loss to get a little worse before it starts to get better. You know, I don't wanna predict exactly, you know, what that curve is gonna look like and when exactly we're gonna get there, you know, but reiterating what I said earlier on the call, it's gonna take us, you know, you know, a full year of serious production to, you know, get close to some of the targets that we talked about a year ago for Iris. I'd say overall, when it comes to the cost structure here, you know, you have the industrialization costs, you know, sort of launch costs, you know, that you have there, that's bucketed separately from the actual product costs, you know, in terms of what it costs to be able to deliver each thing. The thing that we've done well on is that we've now been really starting to aggressively roll off those industrialization costs. So, you know, that's what's driven that improvement. And, you know, actually, we would've been positive this quarter, barring a couple of, like, un- things that are unrelated to the actual product itself. But, when it comes to, you know, that next wave, now the focus is gonna be, as that scales up, to get, realize those economies of scale. The key thing here, you know, is that from a supply chain perspective and supply chain basis, is being able to now that we have that clear visibility into a volume perspective. There's a very big difference between when you're ordering components in the, you know, thousands versus hundreds of thousands, and that's the key distinction from a supply base that we see- we believe we'll be able to see those benefits of when you're not talking prototype pricing, when you're talking scaled series production pricing. So that's kind of that next that next wave that drives that. If you look at the overall direct costs, for example, even for this, this quarter, it was only around, like, $16 million, you know, off of the, the $21 million in revenue and aggregate. So, you know, there's some things there that, you know, have shown that we've seen those realizations. But now that we're doing that. We're not stopping, we're not resting on our laurels by any means, and now we're focused on this next wave that will drive that. And we're gonna give some more insight as well into specific parts of our business in terms of the profitability aspects, like, you know, our semiconductor business, as a preview over the coming months. That's all very helpful, thanks. My other question was on the TPK agreement. You spoke around an expanded relationship there. I think in the blog post you put out last week, Austin, you called it an exclusive relationship. So I was hoping to better understand what exactly that might entail, how the partnership and work with TPK may differ compared to your current arrangement with, I believe, Celestica. And then also when you think you may go into production with TPK. Thanks. Yeah, so Celestica, you know, the relationship we have with them, that's more of a pure contract manufacturer, which is as we make products in series production, Celestica is making them. They, they made some of our late-stage prototypes just to make sure that their, you know, manufacturing system worked the way it should have, but they're basically a series production manufacturing partner with us. What we're doing... And TPK, the deal we announced with them last year, was the equivalent of what Celestica is for us at our Mexico plant, in the China plant. This new relationship with TPK expands that to more of an industrialization, you know, particularly related to Halo, our next-generation product. So, you know, all the prototype manufacturing is gonna be done by them. You know, I would say a lot of the, you know, design validation and production validation testing, you know, most of that, which we did ourselves, is, you know, they're, we're expecting them to kind of do, you know, most of that going forward. You know, we're gonna be sitting there verifying and doing some of the results. You know, a lot of the supply chain management, you know, a lot of kind of working out the manufacturing kinks. You know, a lot of that, the inventory management, is gonna be done by them as opposed to us. That's gonna allow us to move faster, more efficiently. You know, I shared with you, you know, some of the inefficiency costs that we experience industrializing Iris. I don't know how much savings we're gonna have for our next-generation product relative to Iris, but I'm expecting it to be substantial, and none of that is in, you know, the $80 million number that we kind of talked about with, you know, the direct actions that we took last week. Absolutely. And we'll also say, if take a look at the Luminar Day, speech that TPK gave, you know, their CEO was on stage, and I think, you know, they described it, you know, as the relationship of kind of everything, all the work that they did, you know, back with, with Apple and the iPhone for its introduction, you know, in 2007. They really see, this moment with, that we've had with Volvo and part of the broader industry as a little bit of that iPhone moment to kick off the broader autonomy world. In particular, you asked the question on exclusivity, and that was kind of leading up to that, they have agreed and signed a deal to only work with Luminar in the world of, you know, LiDAR and AV more broadly, having the extreme amount of conviction that, you know, we'll be a winner or the winner. Thank you. Okay. We'll take another question from our shareholder community. Now that Luminar has introduced Halo to the market, what has been the response from your existing and prospective customers? Do you expect Halo to drive new customers like Nissan and other large OEMs to make decisions sooner, as it will be available in 2026? Yeah, I think it's been a great reception. Of course, as you figured, you know, there's been some level of work behind the scenes, you know, with automakers on this, you know, leading up to this. We've been working on the Halo design for, oh, man, like six years in terms of some of the technologies that have been going into this. I mean, this all goes back to this, you know, nearly $2 billion technology foundation and IP foundation that we've been able to develop to make this possible. That's how we get to ride all of those tailwinds and do so very, very efficiently this time. Of course, this is really taking into account the things that automakers are most excited about, and that's what allowed us to move so quickly to a point where we can announce today, you know, our first OEM win with Halo. So, you know, very excited about that, and that's a start. You know, there'll certainly be a lot more to come. I would say for major automakers, I mean, the key thing is that, as you said before, it. People were really looking for, you know, two things. One was the validation that Luminar could successfully make it to series production in a world where the vast majority of programs do not successfully achieve that. The vast majority of companies aren't successfully able to make it. You know, Luminar has proven that it is very much possible and executing to that. The second part was, is the product to be able to enable mainstream adoption, and that's something that it's, it's clear there needs to be a step up, you know, from Iris to be able to do that at, at the kind of scale that we're talking about. And, you know, with, it's about a third of the size, you know, double the, overall efficiency, you know, a fraction of the way, half- less than half the cost. You know, all the other benefits associated with, with Halo, and I think that is something that starts to get people, really, really excited. So, the other thing is that we, of course, understood some of these new regulatory requirements at a time where I think I don't want to say folks were maybe asleep at the wheel on that, but there's definitely, like, it came as a surprise to some. And this is designed to be able to make sure that automakers can meet those new regulatory requirements as well. Of course, we exceed beyond those requirements. But that said, that is something that is meaningful and powerful to be able to do, and this is the kind of product that really can be standardized on mainstream vehicles. So it makes total sense, and the reception across the board couldn't be more positive. All right, we've got a little less than 10 minutes, so we're gonna get through as many analyst questions as we can. Our next question comes from Kevin Cassidy from Rosenblatt. Hey, Kevin. Hey. Hey. Hey, thanks for taking my question. Yeah, you know, my question is, is Halo seems like a real game changer and, you know, as the industry has evolved, can you tell me about more, what's happening in the bidding, you know, for, for your competitors? We'll say, what's the competitive landscape, how has that changed? And also, what are the priorities that your customers are looking for now? Has that changed since when you first got into this, bidding, process? Yeah, I mean, I'd say that overall, one thing that I think is significant in the case of Luminar specifically, is that, for most of the kinds of deals that we strike, you know, it's rarely so, like, a specific kind of bidding process, so to say. That the goal of what we like to do is that when we start working with someone, you know, really go all in. You know, you only have so much capacity, and you have to have so much focus with different automakers. What we'll do is we'll try and strike a more, call it, a company-wide, you know, deal for something that covers all the different kinds of scopes, products, and technology, other things that they're enabling, rather than maybe say, for like, one specific point in time or one specific vehicle model for, you know, some arbitrarily low volume or, or not. I think the, the way that you make this work is you have to have the big economies of scale. And, of course, everyone can talk about opportunity all you want, but I think we've tried to set a really, a credible benchmark for the way that you define order book, you know, in terms of what's actually included and, you know, associated take rates and everything, not just saying, "Hey, magically, you're gonna win everything from even a given automaker." So, long story short, of course, there are, you know, plenty of RFQs and everything that, that we're all a part of and, you know, in the finalists, so to say, for the processes that are, that are there. But, you know, every automaker probably always has some kind of RFQ outstanding for something. The question is, like, what's real, what's not real? The reality is, is that I think, historically, what we've seen, every automaker, like, or the... Sorry, not everyone. The majority of, you know, call it the top 20 automakers have, as I mentioned, long-range LiDAR into their roadmap at some point, you know, throughout the decade. Obviously, those are different introduction points. I think the question and the dynamic that we're excited to see is how the autonomy roadmap evolves and also gets radically accelerated with these new regulations. And that was something that, you know, it's a 300-page report. Automakers are digesting it now. They're really. It's probably over the next year, are gonna be putting their updated roadmaps together, and I think that's where, when we're talking about the kind of volume opportunity, it's whatever's there now is, it's gonna be a tiny, tiny fraction of what's gonna be running in parallel. So that's what we're excited about. If people can take that same kind of model that Volvo has, you know, around showing that safety should be for everyone, not just as a standard product, not just as an optional feature, like a seatbelt, then you really win the game. And that's where we also showed that... I think I mentioned this in the letter, even just a small fraction of market penetration, like, you know, we had modeled 3%-4%, you know, that's like a home run for this kind of business because that means, you know, into the single-digit billion dollars, you know, in revenue, growing rapidly, other stuff. If we can do that, and now that's 10x, you know, I mean, that's where I think it kind of changes the game, as you pointed out, and we have the perfect product to do it. Okay. I won't have a follow-up. I'll save time for other people. Thank you. Thanks. Who do we have next, Aileen? Sorry, folks, I was on mute. Our next question is gonna come from Jesus Gonzalez from JP Morgan. Hey, Jesus. Hey, guys. Thanks for taking my call. Just wanted to ask about the $50 million run rate cost savings you guys called out. You know, how should we think about that split between OpEx and CapEx? And then what's kind of like the ramp-up timeline for those savings to come online? Are you talking about the $80 million? Yeah, sorry. Oh, yeah, yeah. So the $80 million, I would say very little of that is CapEx. Most of that, of that $80 million, a little over half of it is cash, a little less than half of it is saving in stocks we issued to our employees and vendors, as I mentioned earlier. And I would say, you know, substantially all of that $80 million is stuff that's gonna flow through the P&L, either as COGS or OpEx. Gotcha. And then, so on the timeline, should we expect that to, like, start coming online in the back half of the year, and then really ramp up in 2025, or, We should get on a run rate basis, you know, I would say very close, if not the full 80 by the end of the year. You'll start seeing it show up in Q2, and then really start to ramp up in Q3 and Q4. Gotcha. Okay, and, for my follow-up, just kind of wanted to switch gears and talk about the order book. I know you guys just called out the first product win for Halo, but so should we think about some of those wins that you already have in the order book converting to the Halo system? Or, you know, what's kind of like the cadence of, like, the product mix that we should see over the coming years? Yeah, the vast majority of our order book today, as it stands, is Iris and Iris Plus. We have had our first major win with Halo, and what I would say is, you know, we're in discussions real time with our customers to transition into Halo sooner rather than later. Now, look, you gotta work through their production cycle, mid-cycle refreshes, you know, making sure that you reduce as much as possible any additional software, algorithm, training, or validation that they need to do. And so it isn't something that you can do overnight, but I think it's in the interest of both parties, both to them, because it's gonna be, you know, a cheaper product, and to us, where we expect it to be a better margin product, to do it sooner rather than later. And so I would expect at some point in the future, the order book to start converting, and hopefully at a very brisk pace, to Halo. Gotcha. Thanks. Okay, Tom and Austin, you wanna take another question? Yeah, let's do one more, Aileen. Okay. Our final question is gonna come from Richard Shannon, from Craig-Hallum. Hey, Richard. Hey. Hi, guys. Sorry, I got on the call late here, and I'm not really sure I have a question this time. I'm sorry I didn't hit any buttons, so apologies for that. I'll have to. I'll follow up later when I've got a more, full, consumption of your entire call. So sorry about that. Richard, that's the easiest question you ever asked. Well, we'll talk to you soon, buddy. Thanks. Aileen, let's do one more, if we have it. All right, I think in that case, we'll take our final question from the same platform, which is: What is the outlook for the next five years? A lot of growth. Yes. World domination. No, but in all seriousness, I think next five years, we got a lot ahead of us here. You know, I mean, literally five years from now is 2029, when the new regulations go into effect, so that's gonna be quite the show. There's a lot that we have ahead to be able to do. Of course, you know, like I said, we're realizing a massive amount of growth that's gonna happen, starting really in the second half of this year, when the order book starts converting. We're gonna realize those economies of scale. We're gonna really start driving this like no tomorrow. And, you know, I mentioned in the letter and at the beginning that in terms of the strength of our business and fundamentals of what we're doing, could never be stronger. And, you know, the reality is that if we're able to achieve even a fraction of what we think we can over the next five years, that's a huge win and a home run. And the key is just being able to make sure that we can continue to differentiate ourselves. You know, obviously, in the. There's an skepticism for this world and type of company, in a world of, you know, EV startups and other kinds of autonomous, fully autonomous vehicle companies, and other things that haven't been able to deliver, you know, product, or in the way that they wanted, or LiDAR that wasn't able to make the technology work, et cetera. We're in a world of, you know, so companies that are challenged, and that's where I think being able to show how we can, you know, continue to succeed, how, you know, from where we've come from, from when we were first at, you know, IPO and developing a theoretical technology concept into industrialized product, to being the first to launch in serious production and scale, going from one to a dozen, you know, major commercial customers and wins, to now, you know, having a clear path towards broader standardization. Future couldn't be brighter for us. Key is, we know what we have to do. And that's not to say that there aren't headwinds. We know the macro, you know, headwinds that at a broader scale, that have come into place. That's clear to everyone, and, you know, it's not not lost on us by any means. And we're tackling it head on. And I think that's where you guys saw, you know, some of the restructuring actions, you know, that took place on Friday. It seems like it was a surprise to some. Probably shouldn't be a huge surprise, given we've kind of signaled that. And the reality is that as we're talking here today, over the course of the next five years, there's going to be other drivers of efficiency that we're taking, and it's not even gonna take that long. I mean, we're talking literally over the next 12 months. This is the first phase of what we're doing. There's a lot more opportunity that we have ahead and, we're gonna be fully capitalizing on that. So I'm very excited for what we have ahead for that timeframe. And thank you, everyone, for being on the journey with us as we make that happen. All right. Okay. Thanks, everyone. Thanks, everyone. That marks, that marks the end of our, our question session. I'd like to thank everyone for sticking around and participating in the call. For the analysts that asked the questions, and investors and other folks that joined us, we look forward to talking with you guys next quarter. Thanks, everyone.