Hey everyone. Good morning, and thank you for joining our 46th annual growth conference here at Canaccord Genuity. I'm George Henriques, one of our sustainability analysts, and we're very pleased, happy, excited to have Mobileye with us here today. Presenting from the company is Dan Galves, Chief Communications Officer. Dan, thanks for joining us. George, appreciate it. Let's start from the top. Just maybe talking about the day-to-day business. Customer inventory adjustments come and go. Can you just give us an update as to where Mobileye is today from a customer inventory perspective? Yeah. I think our inventories are held generally at our Tier 1 customers, and we're around five weeks. It's typically you're in between four and five weeks. I think it's been an industry-wide phenomenon this year that the automakers are looking to have a little bit more safety stock in the system. We did about 1 million units in Q1, resulted in safety stock increase, but still within normal levels. Where that goes from here, we don't really know. I think that with supply chain tightness that's out there, we think that it stays at this level. There's always the chance that the tier 1s want to manage inventory down at the end of the year and then replenish it in Q1, and we've incorporated some of that potential in our second half guidance, which is one of the reasons why it's a little bit below the first half. I think normal, what the customers wanted, and we'll manage it as it comes. The good news is that you've thought about this problem potentially and incorporated at least a lot of that in your guidance. Yeah, exactly. I think you've heard, I was following earnings last week, and several auto suppliers had negative working capital related to this, where they're holding more inventory. So there is always a chance that they wanted to manage that down by the end of the year. Great. Focusing on your next generation set of products for Mobileye Surround ADAS. You've had some pretty material wins over the last couple of quarters. Just remind us a little bit as to how you expect those to ramp and what they importantly do to your ASPs, your base ASPs. Yeah. All three of the design wins that we have for Mobileye Surround ADAS, which is a one EyeQ6 high supported system that manages five or six cameras and a few radars. We have three design wins that all launch in 2028. You're talking between 2.5x and 3 x the average transaction price that we have today in our base ADAS business, which is around $46. Very good profitability, similar margin profile to the base ADAS business, just at a higher price. It's representing on average about 30%-40% of each of those automakers' volumes. That doesn't happen all in 2028, but as new vehicles launch, and they get the system. I think the trend in the industry is that this type of functionality, which is basically hands-free on highways, incremental safety features to meet upcoming regulations, is considered a have-to-have. There's multiple ways to do it. Stellantis decided to do more of a single front camera plus REM mapping instead of doing the full surround camera. That enabled them to get it up and running in 2027. There's different flavors, but even that program is very roughly equivalent profitability per unit to Mobileye Surround ADAS. Yeah, I think we see a scenario where 30%-40% of our volume converts to this type of product over the next four or five years. Which could drive ASPs into the $80-$90 range. Interesting. And the margin profile is similar? Is similar percentage margin to the core business, which is in the mid to high 60s now. So, in that range. Hmm. When potential customers or existing customers weigh Mobileye Surround ADAS versus your other suite of advanced autonomous products, how are they making that decision? Can you just help us unlock what the next incremental steps unlock from their capabilities? Yeah. The interesting thing is that there are already a lot of highway hands-free systems on the road. Commonly known as L2+. So Mobileye Surround ADAS is really the second generation. The first generation, most of them also have Mobileye front camera systems, but with a lot of other, or multiple other suppliers doing the radar and doing the driver monitoring and doing the parking software and maybe an integration partner and the OEM with some role there. Because of that sort of multi-supplier architecture and a lot of cooks in the kitchen, they're expensive, and maybe the performance isn't what it could be if you had really a focused system. Our offer is actually a cost reduction for the customers- versus these sort of first-generation systems. Like I said, when you have to have a product, you want that cost to be as low as possible. You want the performance to be as high as possible. I think that that's the way I would characterize Mobileye Surround ADAS, and because we have a very good cost structure with the inference chip vertically integrated, we can provide that compelling cost. Mobileye SuperVision is what I would call L2++, like a Tesla Full Self-Driving type of system. There are not many of these on the road. Hardly any. You're talking instead of get on the highway and you can take your hands off the wheel, take your foot off the pedals, now you're talking about get in your car in the driveway, plug in the address, the car drives you there. I think that there's much more uncertainty around consumer willingness to pay. What's the value? What should the architecture be? What price level of vehicles it goes on? That's leading to more of a, it's not a have to have, it's like we need to try or we need to have something going on there. I think that that's leading to just a lot of different. It's not a clear competitive landscape. A lot of it is automaker self-development on an Nvidia or Qualcomm chip. Some of it is like, Let's go back to the five or six different suppliers, each contributing something. Cost really doesn't matter because it's only going to go on a few cars. I think we're almost in the Mobileye SuperVision segment. We're almost where the highway hands-free segment, the L2+ segment was five years ago. Interesting. Maybe just to remind us what the regulatory environment looks like that's compelling OEMs to make sure they have a Mobileye Surround ADAS product both in U.S. and Europe. Yes. One of the things that's benefited Mobileye over the years is the safety envelope, like what level of safety the car needs to provide. What situations does the car need to deal with is constantly expanding. Europe is always the leader. Everyone else is usually a couple of years behind, and the 2029 European safety regs or what has been published to the automakers as of about a year ago is a bigger than normal jump, and it's including a lot of side view issues like where you have to identify a pedestrian to the side of the car that might be in the crosswalk. That makes it very difficult to do when you only have a front camera. You need side cameras. Like I said before, there's a variety of mixtures of how you could meet these requirements. But we think Mobileye Surround ADAS is one of the mainstream ones. And you mentioned REM, too, which is a really important part of your product and what you are trying to build. Just maybe for the audience's sake, what is REM and why is it so important to your future product portfolio? REM is a. We crowdsource data from existing cars that have one of our chips and a front-facing camera. It does not have to be any sort of special type of system, regular base ADAS system. But we pull data out of these cars to the cloud, data that is fully anonymized but includes a lot of telemetry data about the curvature of the road, where exactly the lane markings are, where does the typical car stop next to a stop sign, what is the common speed versus the legal speed. All of these semantic details about human driving, and this can lead to a lot smoother performance, better comfort levels. Picture you are coming up to a sharp curve. The car understands that curve is coming before the camera can see it. It is also an amazing AI prior. Right? Because we can build simulators based on this real road structure. We have about 8 million cars sending data consistently. It is measured in the billions of miles. Internationally, too. Internationally, yeah. U.S., Europe. Wherever there are Ford, Hyundai, VW, BMW cars. Stellantis is starting soon as well. Mahindra is starting soon as well. We are getting data from that. Hmm. What is interesting about it is that there are so many, and we will talk about this later, emerging autonomous system providers, and they are a lot relying on simulation, but this is stuff that simulation cannot really capture, I think. I think that is right because it is like the problem with simulation is always how realistic is it to the real world. If you can create simulators where you understand yield rules and, again, back to things like that seem trivial but it is like if the line for the stop sign is too far back and you cannot see around the corner because there is a bunch of trees there, then everybody is going to stop 5 feet in front of the stop sign. So why do you have an autonomous car that stops on the line and then has to creep forward? Trivial things like that, you can create a much better experience if you have that understanding. A bit of focus on Volkswagen, who is the leading customer for some of your advanced autonomous solutions, including Mobileye SuperVision and Mobileye Chauffeur. Just remind us of the timelines and when you expect Mobileye SuperVision to roll out over the next couple of years. Yeah. Mobileye SuperVision launches in the first Porsche vehicle in Q1 of 2027. The significant volume ramp will start to happen in the second half of the year, but we'll have cars on the road in the first half of the year. You'll have multiple models roll out, and like we said at the announcement of the program a couple of years ago, the intention is to ramp to around 300,000, 350,000 vehicles a year, probably in year three. Mobileye Chauffeur launches in the first half of 2028. Mobileye Chauffeur is a Level 3 system, so full driver disengagement on the highway, up to highway speeds, day and night, different weather conditions. It should be really a full service, like, Hey, I can watch a movie while I'm on the highway, while I'm on my commute. Mobileye Drive, which is the AV, which is the robotaxi system, we expect to have vehicles deployed without safety drivers by the end of this year in Florida. And maybe just to focus a little bit on Volkswagen, there's a lot written about the company and what they're going through with the competitive pressures that they're seeing. How do you feel about your place in Volkswagen? The confidence level that you have that these products will get launched in 2027 and 2028 and beyond, and maybe broadly around what they are testing in terms of autonomy, autonomous solutions broadly. Mm-hmm. Volkswagen Group is adopting our entire product portfolio. They are definitely an important customer. I think that the position we have with them was the result of a lot of internal investment that wasn't making progress, and I think that they started earlier than others. We continue to believe that we will have more Volkswagens down the road, especially after we can show these cars on the road. I think that they are excited about it. Essentially, every new vehicle that Volkswagen will launch for the next five years will have some advanced Mobileye technology within it. There is always a lot of noise out of that company, and they are very cadenced in how they talk about products. They don't announce things before the car is about to go on the road. But I think the relationship is great. We have been executing very well. There is a huge amount of collaboration. Sometimes we probably make it sound like it is all us, and we are developing these products. You just drop it into the car and go. But that is not the case at all. Actually, for SuperVision, there are 30,000 requirements that Volkswagen and Mobileye engineers work on together to get to a fully validated product that will launch early next year. Maybe you can remind us what happens to the. Your traditional chipsets sell for $47. Surround ADAS is multiples of that. What are the price points, and how could that impact your P&L over the next couple of years? Yeah. Think Mobileye Surround ADAS, think around $125. Mobileye SuperVision is around $1,300. Mobileye SuperVision will have a lower gross margin because we are delivering a full compute unit, not just the chips, but very high selling price. Mobileye Chauffeur is between $2,500 and $3,000. Mobileye Drive is a different business model because Right they are robotaxi, so you are talking $40,000, something like that. Excluding the robotaxi business, which will be lower volume, but it is hard to tell what the volumes will be. Excluding that, we would expect our average selling price with Volkswagen to double. I think that we said that at our Analyst Day a year and a half ago, and it is still the case, by around 2030. That is on 7 million units. Right. Something like that. Very meaningful revenue growth. Does it take a lot of volume to really impact the P&L in a positive way as these products launch over the next couple of years? Exactly. Right. Exactly. Yeah, I think the OpEx is. We'll have OpEx growth, but we've been investing in these products heavily without much revenue for a few years now, so the operating leverage should be very strong. In terms of the consternation that some of the OEMs are showing about adopting next generation autonomous solutions, I think the test case has always been, well, how many people want Tesla FSD? I think you'd agree, we saw, at least what they've talked to us about, a significant jump in adoption of Tesla FSD. Have you seen any change in conversations with some of the OEMs after that was announced? I think we are seeing some level of change there. It's really very crazy because I've said this before, the worst headline that I've ever seen, out of many negative headlines over the last few years, was there was some data scraping company that came out and said, Tesla just did a 30-day free trial for every one of their customers, and only 3% of people bought it. Because that really took a lot of the wind out of the sails of the automakers feeling like this was the product. Now it's what? 55% of new vehicles. Even on social media, which I ingest too much. Me too. It's like you've got all of these stories about people that really couldn't drive or that really it's changed their life. I think the value proposition. Because it's always been like, okay, you have to keep your eyes on the road. What's the big deal? Right. Right? I think automakers are starting to notice, it's starting to become clear that there's a huge amount of value there. I think between us launching this product within Porsche vehicles and then Audi vehicles later in the year, being able to fully demonstrate the production version of the system, it may lead to more traction. But I wouldn't say that there's been any sort of huge change yet. Right. Maybe to focus on your robotaxi business. which has very high ASPs. You are launching in conjunction with Volkswagen in a couple of markets. You have decided to go on your own path as well. in terms of launching a robot. Maybe just for the audience, describe the dual path there and which cities you expect to launch in over the next 12 - 24 months. Yes. I think we made the decision maybe three or four years ago that we should focus our robotaxi efforts on the technology itself and be a self-driving system provider, which means you are providing the compute, the chipset, the compute, the software. Maybe you are procuring the sensors and providing those as well. So you are creating this complete system and Volkswagen was the perfect customer because they want to install that type of system on a regular assembly line, which creates a lot of efficiency, which creates a lot of scaling potential. And they have an ambition to deploy their own service through a division called MOIA, which has been a car sharing outfit in Europe that has a good amount of users. So this was perfect because it created a lot of scalability. It allowed us to focus on the technology itself, and that is going really well. Volkswagen expects to be deployed in five or six cities by the end of 2027, two in the U.S., L.A. and Orlando, and then four cities in Europe. It is pretty far along. They are doing user group testing in Hamburg. Oslo just got their permitting done. There has been on-road testing in all of these cities, not all of them for multiple years, but some on-road testing for multiple years. The vehicle is now coming off the regular production line, so we are able to validate the actual production vehicle. The technology is looking great. We are meeting all the KPIs we need to meet to get to these milestones, which are essentially invite-only user group testing, and then open it up to anybody. Test the end-to-end service. It is not just about the driving, it is about does the app work? Do people know where the cars are? Is the routing system correct? I think we feel very good about this relationship and the way we are scaling. As we got more comfortable with the KPIs and the technology, got to the point where we feel extremely confident about being able to remove safety drivers. As Waymo led the charge and provided a lot of data points on consumer demand. Consumers seem to be very open to getting in a car with no driver. Regulators have been generally supportive. Pricing has been good, Waymo is generating over $100,000 per car per year, on only 24 rides a day, we think the utilization could go much higher than that. A lot more clarity around the business drove us to decide to do an end-to-end vertically integrated service. I think that in the first city, which we have chosen but we have not announced, in southeastern U.S., we will generate the demand on our own. I don't think that is the end game. I think you could have cities where our division, Moovit, has a good presence, and maybe it is small enough that you can generate a brand name pretty quickly. I think you could see fully owned Mobileye services in multiple cities. Standing up a service like that, proving that it works, proving that we have a handle on defining the product itself allows us to go to market through other demand generators, I think in a more powerful way than we can today. I think it creates a lot of optionality for us. I think the funding is not hugely material. First couple hundred cars, maybe around $100,000 a piece. We can easily manage that within our cash flow. I think beyond that, as you start to scale, there are opportunities for securitized financing and off-balance sheet arrangements that we have been exploring. I think the OpEx is manageable for something like that. We feel good about that decision. But there's a little ways to go. We would expect to be in the first city around the middle of next year. We have about a minute left, and I have to ask about your humanoids. They're really interesting and cool from the videos that I've seen. So what is Mentee? What's the end market for it, and how are you training it and which data? Yeah. I think Mentee, they were built as a fully vertically integrated, designing everything from the compute and the software to the motors and the hands. So full vertical integration allows you to really have control of the product. AI first, so no teleoperations. The goal is to be able to train this robot with a few demonstrations. So it's important to be able to deliver a robot to a customer and then let them do the training. The Mobileye synergies with Mentee are huge because we have a couple of decades of experience in multimodal perception and intent-aware planning, and we have access to massive amounts of data. We have huge simulators. Mentee has a really state-of-the-art sim-to-real transfer techniques that's part of their core technology that can move back into Mobileye. So we're already seeing a lot of synergies with that business. Great. Looks like we're up on time. I warned you this was going to happen. I was doing riddles with my daughters this weekend, and I've decided to ask a riddle of the audience. Dan, you're welcome to participate if you can get it right. Whoever wins gets that wonderful CG Hydro Flask right there on that table. Here we go. I got to make this one good. I think this is okay. A man shaves several times a day, yet still has a beard. Who is he? He's a barber. That's who he is. Thanks, everyone. Thank you, Dan. Thanks, George. Great to see you. Appreciate it. Yeah. And see you. If you want it, there you go.