Good morning. My name is Yoni, and I will be your conference operator today. At this time, I would like to welcome everyone to Valens Semiconductor Investor Conference Call to discuss three automotive design wins from leading European OEMs. All participant lines have been placed in a listen-only mode. Opening remarks by Valens Semiconductor management will be followed by a question-and-answer session. I will now turn the call over to Michal Ben Ari, Investor Relations for Valens Semiconductor. Please go ahead. Thank you, and welcome, everyone, to Valens Semiconductor Investor Conference Call to discuss three automotive design wins from leading European OEMs. With me today are Gideon Ben-Zvi, Chief Executive Officer, and Guy Nathanzon, Chief Financial Officer. Earlier today, we issued a press release that is available on the Investor Relations section of our website under investors.valens.com. As a reminder, today's call may include forward-looking statements and projections, which do not guarantee future events or performance. These statements are subject to the safe harbor language in today's press release. Please refer to our annual report on Form 20-F, filed with the SEC on February 28, 2024, for a discussion of the factors that could cause actual results to differ materially from those expressed or implied. We do not undertake any duty to revise or update such statements to reflect new information, subsequent events or changes in strategy. We will be discussing certain Non-GAAP measures on this call, which we believe are relevant in assessing the financial performance of the business, and you can find reconciliation of these metrics within our earnings release. With that, I will now turn the call over to Gideon. Thank you, Michal, and hello, everybody. And before I start, I just want to welcome Michal, who just joined us, and we are very happy with you joining, Michal. So, good morning to those of you in the U.S., and good evening for those of you in the Far East, and the rest are in Israel, so good afternoon. I will speak not long today. I will describe the deal and what we have, and then we have more time today for questions and answers. And I will start with the statement that Valens is all about resilience, and all about resilience, meaning the company is a resilient company, that our products are selling resilience to the customers. And I think resilience is more than a buzzword in the case when you're speaking about Valens, and also those design wins are all a result of the resilience, and I will elaborate in a few minutes. We mentioned two design wins in 2023. It came up that we already have three design wins in 2024. We didn't have anyone in 2023. I'm sure that there will be questions about it. It's fine. And we're looking to ramp up over $1 million in annual revenues. It's a period of five and seven years, and this is the numbers that are the starting number. I'm sure that there is a lot of opportunity to grow here. Also, a little bit, I will elaborate afterwards. We're starting with a small number of cars, which is 500,000 cars. But as you know, when speaking about safety, unlike luxury, no model in the world will stay with safety only for the rich, with the high-end models. Companies from all the different countries and all the different worlds, the safety features like seat belts or airbags will go from the most expensive car to the least expensive car very fast, and this is something we believe and hope to see as part of our growth. The product that we are selling is for ADAS. ADAS is a very interesting need. ADAS is a system that on one hand, there is a computing power that generates results, generates assessments of the cameras on the front and the radar, see on the other side. The radar, sensors, which are either cameras or radars connected to the ECU with a link, and this link is very fragile. This link is subject to a lot of distortions and a lot of noises, and the most known noise, I guess you heard the name from us more than once, is EMC, which is electromagnetic. And electromagnetic influence can create a very actually dangerous situation. And think about the following thing that actually can happen to each of us. We drive our great new car with the most sophisticated ADAS system, and we have the best camera on one hand and the best computing power on the other hand, and we're driving near a cellular antenna or above a bridge or near a truck, and we don't know what is inside, and each of them exposes electromagnetic influence, and the link is broken, and we will not see the red light, we will not see the small foot of the child that's 100 meters from us is about to cross the street. We're speaking about taking a very sophisticated ADAS system and make it inefficient and insecure because of the electromagnetic influence and electromagnetic threat that is not taken care, and this is where we are. Spoken about resilience at the beginning. Valens is a... Valens technology is resilient, and we give the solution, and we give the immunity against this electromagnetic influence and give those ADAS system the safety needed for the driver to be safe for himself and for others. I want to elaborate. These design wins are validating the situation. In order for a company in Israel to win design wins of big companies, it's not enough to be a little bit better. We are smaller, we are from Israel, and we are not incumbent in the industry. We can't win in points. We need to win in knockouts in order to get the trust of the OEMs, and they need to see that the value that we give is value that is significantly more important and better than others. I guess that one day when all names are exposed and spoken, this will be outspoken. In some tests, we even showed, and some of you were guests in our shows and could see that we demonstrate resilience of up to 20 times better in how well we compete with electromagnetic influence. Part of this design win also is elaborating relationship with the Tier 1s. In order to have such a deal, there are more, there are partners, there are the sensor manufacturers, there is the ECU or the ADAS manufacturer, that all together have a system. And today we have two important partners, significant partners in the market, that will tell everyone this works with Valens. Valens is a company which you can trust, and we believe that it will help us in further OEM to grow the market. Yes, indeed, the first three design wins took time, more than we wanted and more than some of you wanted. But we believe that you know, every start is longer and harder, and it is a start, and we genuinely believe that this is only the beginning, and we will do everything in order to continue and elaborate this opportunity. So this was relatively short to what you're used to in our other earnings call. I hope you're not disappointed by this, and I'm actually now open for questions and answers. So Yoni, please, take it from here. Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Please ask your question in a loud and clear voice. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Suji Desilva of Roth Capital. Please go ahead. Congratulations on the win here, everybody. Maybe the calendar year 2022 win contrasting it to the current one, just kinda give me a sense of, you know, 2023 was kind of a building phase, and then the pipeline from here. I just wanna also confirm the second win is a new OEM versus the first win, Mercedes. Well, of course, we cannot elaborate. Unfortunately, I have to disappoint you and stay vague. We are subject to a lot of constraints in this, but I would say one thing in order to just not leave you with nothing answered. And I would say that all the signs are that there is a scale from these design wins, and but unfortunately I cannot answer the particular question you asked. But I'm happy if you want to maybe ask it in a different way, that I can be more open as I... You know, we know some time, and I don't want to disappoint you, Suji. So, That's fine, Gideon. I understand the constraints you're under. Maybe the last part of my question was the pipeline from here forward, obviously, you know, you're recovering with the second win here. Just, you know, what does the pipeline look like? And maybe you can talk about the geographic opportunity here. Is it gonna be Europe-centric near term, or are there US APAC opportunities in the near-term pipeline as well? Okay, well, that's a tricky one, but I can try. In fact, I want to say that we are very, very thankful to Japan, because Japan helped to educate the market about EMC. You know that when we started about the EMC, we heard sentences, especially for Europe, actually, which were the first to take us, like: Guys, you have a great solution looking for a problem. And we tried to say that, "Guys, it's a real problem," and it was quite hard to convince. But the Japanese, and especially JASPAR, made this education. Today, we really seriously do not need to mention it anymore, anywhere. The need and the importance of electromagnetic is clear, and I tell you why. It's not obvious, but when you need... People need more resolution, and they need more resolution to see more particular, almost, almost accident case. And in order to have the almost accident case, you sometimes need to move from two gigabits to four gigabits, to a better, better camera with small depth. And the instinct is: Okay, two gig to four gigabit, it's probably double the, EMC exposure. No, it's not. It's not linear. It's very exponential. The move from two gigabit to four gigabit or to four from eight, is sometimes ten times more exposure and more risky to the link to be broken. So, Japan, from educating the market, was very helpful. It will disclose the, the who the customer is, and we cannot do it. But I can say that a very big part of the industry are in transition. In the coming three or four years, they will have a new ADAS system that can cope with more cases of accidents. And, so the pipeline, and, you know, the whole world is speaking about 12, 13, 14, how many OEM, really big OEMs there are? I can say, we are not unknown to any of them, and to some of them, we have different level of discussions. And, as I think it's, I already said, almost a little bit more than I should, and I, I'll stop it here, Suji. No, appreciate that, Gideon. Maybe one for Guy, or just on the financials. I appreciate the unit numbers here, the 500,000 per year ramp. Just give us a sense maybe the shape of the ramp, you know, starting in 2026, you know, whether it takes a few years to get up to that or whether it's a relatively quick element. Is the ASP really taking that $10 million divided by 500,000? Is that the simplest way to think about an ASP framework? Okay, we answer both. Guy and me, there are two answers here. The first one is about how the scale looks in automotive, and the scale looks in automotive in two ways. First, inside the same model. Sometimes the model say we start only with four cameras, and there is scale inside the same model, going from four to eight, and we even hear examples of 11 cameras. Adding to this also a surround view in some cases, which makes it a lot of cameras and sensors. Actually, there is also scale within the same model, and of course, there is a scale in the model. So of course, a company would not start only with the high-end. As I said, it's not level six, that you can be with 4% of your cars. When you speak about safety, the safety of people from the most expensive model to the least expensive model in the same company, it's very few years. If you remember when the ABS started, how long it took from the most expensive car to the least expensive car? We're speaking about seat belts or airbags. All of them is flying very fast, and this is our hope that this is going to be the same. At the same time, it's not the same system. In the same automotive, there will be a car, vehicles with, say, 12 cameras, and cars with eight or six cameras. Like in airbags, there are companies with, say, a car with, say, 10 airbags that protect every single possible angle, and those with four. But you will not find a car without airbags. And this is very similar to what we expect the growth in the industry. And the second part, Guy will answer. So typically, I think that from our past experience we've seen in the past ramp up of anywhere between, let's say, two to three years until full ramped up. This is what we've seen in the past in the same models. But again, as already explained, this is hopefully be the first and other to come after that, on top of it. Okay. Congratulations, everybody. Again, thanks. Thank you. Thank you. The next question is from Quinn Bolton of Needham & Company. Please go ahead. Hi, Gideon and Guy. Thanks for hosting this call. Congratulations on the win. I guess I wanted to start, Gideon. You sort of talked a couple of times about ADAS not just being at the high end and sort of percolating down to the mainstream vehicles. It's not clear to me whether these design wins today are only at the high end, and the opportunity to move more into mainstream vehicles is still ahead of the company, or do these three wins already incorporate mainstream models at these OEMs? And then I've got a follow-up. Okay. I will answer in the beginning as a general... First, thank you for the question, and it's the first time we speak, so nice to meet you, and welcome to the, well, welcome to our conference call. And the second is, I will answer the question here. Not all the cars, starting with the high end, is the high-end car, is the experimental car. Actually, sometimes the mid-size will be the experimental car. With them, they start to go into the market. Sometimes it's the very high end or the... It will never be the low end, but it's not necessarily the most expensive, as we had in the past with Mercedes. This is started with the S Series. So this is a general statement about the answer. In our particular case, I cannot elaborate a lot without disclosing too much. I can say that it was somehow tuned to expensive cars, but not necessarily the most expensive cars of the company. There are more expensive cars that will wait to the next phase, but it definitely didn't start with the entry level of any of the company. It never happens. Understood. And then, it wasn't clear to me, the design win. Are you going into the camera or radar module, or are you going into the ECU or the ADAS, you know, sort of central processor? Where does your chip go, you know, in these designs? ... There are two chips. The transmitter is located near the sensor and transmits the, what the sensor scans and send it to through the link to the receiver, which is always near the ECU, very close to the ECU. So one is near the ECU, the receiver, which is usually a quad receiver, can receive four cameras, four sources at the same time. The transmitter will be near the sensor, which is either a radar or a camera. Got it. So it's a chipset solution with transmitters at the sensors and then a receiver or multiple port receiver at the ECU to capture the signals from the multiple sensors communicating back to the ECU? Yeah, and to be particular, let's be technical. Sorry for if it's too technical. The transmitter is very small, very power efficient, and can be in a, even on the bumper, in the more sensitive area of the car, and the receiver is where the calculation and the mathematics, most of them are done and is bigger and takes, of course, more power, and is located near the ECU. I got it. And then in the press release, you mentioned 500,000 units a year or 500,000 vehicles a year to generate $10 million, which I think implies about a $20 ASP for the chipset. It sounds like that's for the entire chipset that would include both the receivers or the transmitters and the receiver. Yeah. The numbers are. It's not exactly kind of dividing one by the other. We're making far more than $20 per car. And but again, we're not giving exact numbers of how many dollars we make per car, and of course, the receivers and the transmitter are different price tag. But taking and dividing one by the other, that's the result, but you know, sometimes if taking the just to make this calculation, it might get the wrong answer, which is the case here, and the number is higher than $20 in a car, insignificantly. That's helpful, Gideon. Thank you very much. Thank you. Thank you. The next question is from Rick Schafer of Oppenheimer. Please go ahead. Hi, this is Wei Mok on the line for Rick, and congrats on your announcement. My first question is on the in-vehicle connectivity market. This is a pretty big market, it's very competitive and has some large incumbents. So I was wondering if you could talk a little bit about the qualification process. How were you able to get these design wins? And is there any feedback you can share on the reason they decided to go with your solution rather than the others? Thank you, Wei, for the question, and hello. The answer is as follows: As I said in the beginning, a company like us does not win in points. We need to win in a significant advantage, and as a smaller company and not incumbent in the industry, we have to have a blunt win. We cannot have a modest win. And the win today is because more and more companies understand three things. First, electromagnetic is a big issue. Second, the ways to solve this issue are either very short cables, which is a don't know, either very expensive cable, which is another no-no, and less flexibility of how to design the cars because all the others. What Valens enable is to have the long cable you want, up to fifteen meters. It enables to have cheaper cable in any category, whether it's a shielded, you can have a cheaper shielded, which is a cheap shielded, we can have unshielded. In any case, we are saving on the cost of both the cable and the connectors, and the weight, by the way. The more expensive shielded are also more heavy, and shielded is more heavy than unshielded. So where we had to demonstrate a very blunt demonstration, we could not win in points in this case, and no one will be... And furthermore, I believe that it was a small, it should be something that's on the level of enabler, not enabler. This is the level of requirement that we need to go through. Great, thank you. As for my follow-up, I was wondering if you could comment a little bit about the state of the overall automotive industry. So it's been slow in the first half of this year, so was curious what's changed in the last three months. Are you seeing more decisions being made, more design wins, and any more activities in this area? Thanks. Actually, to say, I think it's a question I should ask you. You're the analyst who knows the macroeconomy, and I am the. There are some changes in macroeconomy. There I believe a little bit more hunger for innovation. We definitely saw that when the market had decline in automotive sales, in vehicle numbers, that a lot of this they decided to sacrifice the innovation, and this was part of the reason it took more time to for the design win. We sense some more hunger in the market for innovation. But I feel that I don't have the knowledge to speak macro economy about the automotive industry as general industry, and only my impression that there is more knocking on the door than before. Sure, appreciate that. Just for my last question, just wanted to get a sense of the production ramp. It looks like production starts in 2026, and you guys gave some estimates on commercialization ramp. So, was curious, how long does it take to get from start of production to commercialization ramp? The product, our product is ready. Our product can work now. Each automotive company has a lot of different projects that any of them, not necessarily the ADAS, can create a decision to postpone in a quarter or two quarters or whatever, the production of the car. It can be the tires, it can be nothing to do with us. A new model is something which is comprised from a lot of different small projects. We are certain that we are not the bottleneck here for their decision. We are ready and what we supply with the is working. The ramp up depends, as I said, on all those things I mentioned before. Some of them can make it slower or faster. And you see that even now, some cars that we see in the news, they stop the shipment, and then they say, we slow it down because of this or this reason. It is very hard to know our expectation, given the reputation of the OEM, that it will be as they plan, with less surprises, but even the world best OEMs had surprises in the past. So it's we are taking a conservative measurements here and not assuming everything works by the book. We are the opposite. We assume that we need to understand that this is the industry. Got it. Thank you. Thank you very much. If there are, excuse me. If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for more questions. The next question is from Nir Rotenberg. Please go ahead. Hi, Gideon. It took the company a very long time till it got this design award. How long you think it will take you to get the next one? Nir, this is a question which I'm very happy been asked, and thank you for asking it. And, you know, usually I would say it's a general answer, that the first is the longer and the most complex, and so forth. And, we believe that the second one, we don't... will not have a lot of the obstacles and a lot of the challenges that we have in the first, and also we'll have the reputation that we will gain due to being the first. I guess that's the, and also the, the, we are already speaking to many others of course, it's not that we are in a situation that now we are starting to look for the next one. So I believe that a ramp up will be regular ramp up. The first takes more time, the second takes less, the third takes less. Like in any industry actually, especially an industry which is so engineering focused. So we are hopefully not going to wait the amount of time we had to wait here. And I do hope that the amount of time we and what we went through reward us, and that we will not regret took so long time because of the quality of the OEMs. The next question is, how $10 million revenue per year will became hundreds of millions per year? I'll explain. First, in each vehicle you have many sensors, and some of them don't start with all the sensors from us. So in the same car, it grows from four to eight or from eight to twelve, so there is scale inside the same car. Second, there are scale in the models. As I said, no company will have the ADAS only for the rich. The companies will have the high-end product for the high-end car, the most expensive car, and then it goes down to all the cars. If, as I mentioned before, you look at the history of ABS, of seat belts, or of airbags, this is safety; it's not luxury. And safety goes from the most expensive model to the least expensive model very fast. Speaking about the market size, and we're actually the way we look is the market is the sum of the market. The world of 90 million vehicles, which be between 8 - 12 links per car, that's what we see in front of us. How long it take? And this is where we're. Of course, we don't expect to be 100% of the market. Furthermore, with MIPI A-PHY, there will be people competing with us on this technology, which will bless them for doing that. But we're looking at the market of more than a billion links a year, not tomorrow, but in a few years. Each link has a certain amount of dollars that it costs, and this is the market we are going, and the scale is in the car, more links and more models in the same OEM, and that's the two scales. No one is starting with all the models at once. No one in the world. It takes the time. If you look at any OEM you know, like, if they have four, five or six lines, it will take between four and seven years until they replace all the lines. Sometimes they have what's called in the industry, facelift, that they are doing in between the change of the line. They are changing part of the inside technology, which is, for us, will be a very good news because it will be kind of a fast forward. But these are the elements which are in our favor for how to scale. I hope I answered you, Nir. Yes. Thank you very much. Yeah. Thank you, and I see we have another question. The next question is from Doriya Chesky of IBI Capital. Please go ahead. Hey, guys. Two questions for me. The first, is it in the early 2026 or late 2026? And the second is, how many sensors are going to be on those vehicles? How many cameras or radars? Okay, I'll start with... Thank you very much for the question, and welcome. On the second question, I can't answer, of course, because it's part of the reverse engineering information that discloses the information, which I'm not permitted to say. On the first question, it is hard to say. At the moment, they're speaking about the first half, but you know, automotive industry is automotive industry. It less predictable. We are inside the company, we call it industry with geological timetable. And we are prepared for it. But it is quite hard to say, and it can-- I can say something now that can change. So I'm sorry that you asked two questions and I answered you zero answers. I hope you don't hold it against me. It's okay. No problem. There are no further questions at this time. I will now transfer the call to Gideon to make a concluding statement. Gideon, please go ahead. First, I want to thank you all for at such a short notice come and be interested in Valens. It's an exciting time for us, which is a result of very hard work, and the hard work is just going to continue even more, and we're prepared and happy to do it. We are concentrating the work rather than the celebration, and I believe it's a part of the word resilience, and again, thank you for all, and hope to meet you all again in further good news in the future. All the best. Thank you. This concludes the Valens Semiconductor conference call. Thank you for your participation. You may go ahead and disconnect.