TEL
AVIV, Israel, Nov. 8, 2023
/PRNewswire/ -- Arbe Robotics Ltd. (NASDAQ: ARBE) ("Arbe"), a
global leader in perception radar solutions, today announced
financial results for its third quarter, ended September 30, 2023.
Key Q3 and Recent Company Highlights:
- Magna, HiRain, Weifu and Sensrad, Arbe's Tier 1s, keep
progressing towards radar system production based on the Arbe
chipset.
- The Tier 1 radar "B Samples" (production intent systems)
utilizing Arbe's chipset were delivered to car manufacturers
(OEMs), an OEM pre-selection condition, allowing the OEM perception
teams to collect data for their L2+ and L3 applications.
- Tests conducted on the Tier 1s׳ radar systems show that the
performance achieved by the Arbe chipset aligns with target
benchmarks, demonstrating the superiority of our technology.
- Arbe, in collaboration with the Tier 1s, is in the final stages
of the selection process with leading European, American, and Asian
OEMs.
- These OEMs collectively account for a 31% share of the global
passenger vehicle market. Their selection of Imaging Radar
technology signifies a growing trend, pointing towards the
widespread integration of Imaging Radars in most passenger vehicles
by the end of the decade.
- Arbe is awaiting final confirmation on securing two prominent
truck projects.
- Current cash balance provides Arbe with sufficient funds until
the second half of 2025. Arbe has preliminary chipset orders from
Chinese Tier 1s for 2024 and 2025 which, once finalized, will allow
the company to reach the breakeven point with current cash
reserves.
- Prof. Yonina Eldar, an Israeli professor of electrical
engineering and leading radar theory expert at the Weizmann
Institute of Science, known for her pioneering work
on sub-Nyquist sampling, has joined Arbe's board of
directors.
Current Situation in Israel
- Arbe's manufacturing and production are performed in
Germany, by GlobalFoundries,
a multinational semiconductor manufacturing and
design company. As a result, the company doesn't expect any change
in product availability.
- While 20% of Arbe's team was called for military duty,
this primarily affects long-term projects, and has no impact on our
short-term commercial and client support capabilities.
- The company continues to monitor its ongoing activities and
will adapt as needed to ensure business continuity while
prioritizing our employees' safety and well-being.
"We're very pleased with the progress by our team and Tier-1s
during the third quarter, including the significant milestones
we've surpassed with leading OEMs," stated Kobi Marenko, Chief Executive Officer. "Arbe is
now in the concluding stages of various OEM selection processes.
The market is signaling the rising significance of Imaging Radars
as a backbone of the automotive sensor suite, and Arbe's
cutting-edge technology is uniquely positioned to meet this demand.
I'd like to extend my gratitude to our team, whether they are
currently serving in Israel's armed forces or fully dedicated to
ensuring Arbe continues to execute our business priorities as
planned."
Third Quarter 2023 Financial Highlights
Revenues for
Q3 2023 were $0.5 million, a decrease
from $1.3 million in Q3 2022. Backlog
as of Sept. 30 is $1.1 million.
Gross margin for Q3 2023 was 24.0%, compared to 72.5% in Q3
2022, mainly as a result of our reduced quarterly revenue, with a
fixed cost portion in our cost of goods sold.
Operating expenses in Q3 2023 were $11.7
million, compared to $11.8
million in Q3 2022. Operating expenses decreased by
$0.1 million primarily due to
lower subcontractor expenses, favorable exchange rate impact,
and a reduction in our D&O insurance cost, offset by share-
based compensation expenses increase. Research and Development
decreased, from $8.6 million in Q3
2022 to $8.4 million in Q3 2023.
General and Administrative expenses decreased from $2.2 million in Q3 2022 to $2.0 million in Q3 2023. Sales and Marketing
expenses increased from $1.1 million
in Q3 2022 to $1.3 million in Q3
2023, Sales and Marketing increase relates to the share-based
compensation increase of $0.3
million. As a result, our operating loss in Q3 2023 was
$11.6 million compared to
$10.9 million loss in Q3 2022. Our
operating expenses were affected by an increase in share-based
compensation, which was $2.3 in the
third quarter of 2022 and $3.9 in the
third quarter of 2023.
Net loss in the third quarter of 2023 increased to $11.7 million, compared to a net loss of
$9.9 million in the third quarter of
2022. Net loss in Q3 2023 included $0.1
million of financial expenses, mainly related to exchange
rate revaluations expenses partially offset by interest from
deposits and warrant revaluations. Net loss in Q3 2022 reflected
financial income of $1.0 million,
mainly related to exchange rate revaluation income.
Adjusted EBITDA, a non-GAAP measurement which excludes financial
expense/income and expenses of non-cash share-based compensation
and of non-recurring expenses, in Q3 2023, yielded a loss of
$7.5 million, compared to a loss of
$8.4 million in the third quarter of
2022.
Balance Sheet & Liquidity
As of September 30, 2023, Arbe had $23.5 million in cash and cash equivalents
and $25.6 million in short term bank
deposits with no debt.
Outlook
For the full year outlook for the period
ending December 31, 2023. based
on current estimates:
- Arbe is in the final selection stages with leading OEMs in
Europe, the US, and Asia Pacific. These OEMs account for 31% share
of the global passenger vehicle market.
- Revenues are expected to be in the lower range of $5 to $7
million.
- Adjusted EBITDA is projected to be in the range of
($32 million) and ($35 million).
Conference Call & Webcast Details
Arbe will host a
conference call and webcast today at 8:30 am
ET. Speakers will include Kobi
Marenko, Chief Executive Officer, Co-Founder and Director,
and Karine Pinto-Flomenboim, Chief Financial Officer. The company
encourages participants to pre-register for the conference
call here. Callers will receive a unique dial-in upon
registration, which enables immediate access to the call.
Participants may pre-register at any time, including up to and
after the call start time.
The live call may be accessed via:
U.S. Toll Free: (833)
316-0562
International: (412)
317-5736
Israel Toll
Free: (80) 921-2373
A telephonic replay of the conference call will be available
until Nov. 22, 2023, following the
end of the conference call. To listen to the replay, please
dial:
U.S. Toll Free: (877)
344-7529
International: (412) 317-0088
Access
ID: 2439734
A live webcast of the call can be accessed here or
from Arbe's Investor Relations website
at https://ir.arberobotics.com/news/ir-calendar. An
archived webcast of the conference call will also be made available
on the website following the call.
About Arbe
Arbe
(Nasdaq: ARBE), a global leader in Perception Radar
Solutions, is spearheading a radar revolution, enabling
truly safe driver-assist systems today while paving the way to full
autonomous-driving. Arbe's radar technology is 100 times more
detailed than any other radar on the market and
is a mandatory sensor for L2+ and higher autonomy. The
company is empowering automakers, tier-1 suppliers, autonomous
ground vehicles, commercial and industrial vehicles,
and a wide array of safety applications with advanced
sensing and paradigm-changing perception. Arbe
is a leader in the fast-growing automotive radar market
that has an estimated projected total addressable market
of $11 billion in 2025. Arbe is based in Tel Aviv,
Israel, and has an office in China, Germany, and the United States.
Cautionary Note Regarding Forward-Looking
Statements
This press release and any statements made at the
conference call and webcast referred to in this press release,
contains "forward-looking statements" within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934,
both as amended by the Private Securities Litigation Reform Act of
1995. The words "expect," "believe," "estimate," "intend," "plan,"
"anticipate," "may," "should," "strategy," "future," "will,"
"project," "potential" and similar expressions indicate
forward-looking statements. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. These risks and
uncertainties include, but are not limited to (i) effect on the
Israeli economy generally and on Arbe's business resulting from the
terrorism and the hostilities in Israel and with its neighboring countries
including the effect of the call-up of a significant portion of its
working population; (ii) the effect of any downgrading of the
Israeli economy and the effect of changes in the exchange ratio
between the US dollar and the Israeli shekel; (iii) the extent
that Arbe receives binding orders and commitments on the
projects that are in the final stage of selection; (iv) the extent
of binding purchase orders from the preliminary orders made by
Weifu and HiRain; (v) our ability to obtain design-ins during 2023;
(vi) unanticipated delays or difficulties in connection with the
evaluation of Arbe's products in evaluation and test programs;
(vii) Arbe's ability to have products manufactured for it by its
third party supplier that meet Arbe's and its customers' quality
standards and delivery requirements; (viii) Arbe's ability to meet
its projected revenue level and its ability to operate profitably;
(ix) Arbe's ability to meet its timetable both to achieve full
production and to meet the delivery requirements of its customers;
(x) the development of safe autonomous vehicles that include Arbe's
radar systems; (xi) the extent that regulations restrict or ban the
use of driverless cars; (xii) the ability of its Tier 1 customers
to successfully market radar systems using Arbe's radar to
automobile manufacturers; (xiii) Arbe's ability to develop and
market products based on its radar technology for uses outside of
the automotive industry; (xiv) accidents or bad press resulting
from accidents involving autonomous driving vehicles, even those
using radar products from other companies or based on other
technology and the effect of any accidents with vehicles using
Arbe's radar system; (xv) the effect of laws and changes in laws
that have an effect on the market for or the requirement for
autonomous vehicles; (xvi) Arbe's belief that an increased demand
for autonomous vehicles and the transition to mass production of
Level 2 and higher autonomous vehicles, requiring advanced systems
for automatically integrating vehicles in traffic and preventing
traffic accidents, are expected to increase the demand for products
in Arbe's field of activity; (xvii) changes or inaccuracies in
market projections; and the risk and uncertainties described in
"Cautionary Note Regarding Forward-Looking Statements," "Item 5.
Operating and Financial Review and Prospects" and Item 3. Key
Information –Risk Factors" in Amendment No. 2 to Arbe's Annual
Report on Form 20-F/A for the year ended December 31, 2022, which was filed with the
Securities and Exchange Commission on May
16, 2023, as well as other documents filed by Arbe with
the SEC. Accordingly, you are cautioned not to place undue reliance
on these forward-looking statements. Forward-looking statements
relate only to the date they were made, and Arbe does not undertake
any obligation to update forward-looking statements to reflect
events or circumstances after the date they were made except as
required by law or applicable regulation.
CONSOLIDATED BALANCE
SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
Current Assets:
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash and cash
equivalents
|
|
23,527
|
|
54,171
|
Restricted
cash
|
|
115
|
|
144
|
Short term Bank
deposits
|
|
25,615
|
|
400
|
Trade
receivable
|
|
1,766
|
|
2,202
|
Prepaid expenses and
other receivables
|
|
1,277
|
|
1,839
|
Total current
assets
|
|
52,300
|
|
58,756
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
Operating lease
right-of-use assets
|
|
268
|
|
465
|
Property and equipment,
net
|
|
1,386
|
|
1,609
|
Total non-current
assets
|
|
1,654
|
|
2,074
|
|
|
|
|
|
Total
assets
|
|
53,954
|
|
60,830
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Trade
payables
|
|
594
|
|
1,244
|
Operating lease
liabilities
|
|
145
|
|
364
|
Employees and payroll
accruals
|
|
2,521
|
|
2,861
|
Deferred
revenues
|
|
101
|
|
351
|
Accrued expenses and
other payables
|
|
1,820
|
|
5,609
|
Total current
liabilities
|
|
5,181
|
|
10,429
|
|
|
|
|
|
Long term liabilities
|
|
|
|
|
Operating lease
liabilities
|
|
35
|
|
17
|
Warrant
liabilities
|
|
1,141
|
|
1,631
|
Total long-term
liabilities
|
|
1,176
|
|
1,648
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
Ordinary
Shares
|
|
*)
|
|
*)
|
Additional paid-in
capital
|
|
241,952
|
|
208,893
|
Accumulated
deficit
|
|
-194,355
|
|
-160,140
|
Total shareholders'
equity
|
|
47,597
|
|
48,753
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
53,954
|
|
60,830
|
|
|
|
|
|
*) Represents less than
$1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(U.S. dollars in
thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months
Ended
|
|
3 Months
Ended
|
|
9 Months
Ended
|
|
9 Months
Ended
|
|
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Revenues
|
|
479
|
|
1,256
|
|
1,123
|
|
3,368
|
|
|
Cost of
revenues
|
|
364
|
|
345
|
|
972
|
|
1,066
|
|
|
Gross
Profit
|
|
115
|
|
911
|
|
151
|
|
2,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
8,421
|
|
8,566
|
|
25,636
|
|
25,904
|
|
|
Sales and
marketing
|
|
1,264
|
|
1,068
|
|
3,666
|
|
3,427
|
|
|
General and
administrative
|
|
1,993
|
|
2,169
|
|
5,637
|
|
6,587
|
|
|
Total operating
expenses
|
|
11,678
|
|
11,803
|
|
34,939
|
|
35,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(11,563)
|
|
(10,892)
|
|
(34,788)
|
|
(33,616)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses
(income), net
|
|
134
|
|
(959)
|
|
(573)
|
|
(4,233)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(11,697)
|
|
(9,933)
|
|
(34,215)
|
|
(29,383)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per
ordinary share
|
|
(0.15)
|
|
(0.16)
|
|
(0.49)
|
|
(0.46)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares used
in computing basic net loss per ordinary share
|
|
77,474,326
|
|
63,623,063
|
|
69,975,104
|
|
63,341,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per
ordinary share
|
|
(0.18)
|
|
(0.16)
|
|
(0.56)
|
|
(0.46)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares used
in computing diluted net loss per ordinary share
|
|
67,286,305
|
|
63,623,063
|
|
61,452,569
|
|
63,341,817
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
3 Months
Ended
|
|
3 Months
Ended
|
|
9 Months
Ended
|
|
9 Months
Ended
|
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
|
Cash flows from operating
activities:
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Net
Loss
|
|
(11,697)
|
|
(9,933)
|
|
(34,215)
|
|
(29,383)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile loss to net cash
used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
139
|
|
132
|
|
415
|
|
349
|
|
Stock-based
compensation
|
|
3,707
|
|
2,240
|
|
9,428
|
|
6,377
|
|
Warrants to service
providers
|
|
178
|
|
106
|
|
432
|
|
272
|
|
Revaluation of warrants
and accretion
|
|
(252)
|
|
387
|
|
(490)
|
|
(4,761)
|
|
|
|
|
|
|
|
|
|
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in
trade receivable
|
|
24
|
|
(1,075)
|
|
186
|
|
(1,907)
|
|
Decrease (increase) in
prepaid expenses and other receivables
|
|
58
|
|
903
|
|
562
|
|
1,566
|
|
Operating lease ROU
assets and liabilities, net
|
|
(5)
|
|
(4)
|
|
(4)
|
|
(79)
|
|
Decrease (increase) in
trade payables
|
|
(368)
|
|
20
|
|
(652)
|
|
(585)
|
|
Increase (decrease) in
employees and payroll accruals
|
|
210
|
|
(1,226)
|
|
(340)
|
|
(1,009)
|
|
Increase (decrease) in
deferred revenue
|
|
-
|
|
(40)
|
|
-
|
|
(375)
|
|
Decrease (increase) in
accrued expenses and other payables
|
|
(83)
|
|
411
|
|
(3,789)
|
|
(2,116)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(8,089)
|
|
(8,079)
|
|
(28,467)
|
|
(31,651)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
|
|
Change in bank
deposits
|
|
(13)
|
|
-
|
|
(25,215)
|
|
(400)
|
|
Purchase of property
and equipment
|
|
(71)
|
|
(51)
|
|
(190)
|
|
(576)
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
Net cash provided by
investing activities
|
|
(84)
|
|
(51)
|
|
(25,405)
|
|
(976)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of ordinary shares, net of issuance costs
|
|
-
|
|
-
|
|
22,496
|
|
-
|
|
Repayment of short-term
loan
|
|
-
|
|
-
|
|
-
|
|
(5,218)
|
|
Proceeds from exercise
of options
|
|
97
|
|
49
|
|
703
|
|
264
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used
in) by financing activities
|
|
97
|
|
49
|
|
23,199
|
|
(4,954)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash and cash equivalent
|
|
(655)
|
|
-
|
|
(721)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
decrease (Increase) in
cash, cash equivalents and restricted cash
|
|
(7,420)
|
|
(8,081)
|
|
(29,952)
|
|
(37,581)
|
|
Cash, cash equivalents
and restricted cash at the beginning of period
|
|
31,718
|
|
71,436
|
|
54,315
|
|
100,936
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at the end of period
|
|
23,642
|
|
63,355
|
|
23,642
|
|
63,355
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP NET LOSS TO NON-GAAP NET LOSS
|
(U.S. dollars in
thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months
Ended
|
|
3 Months
Ended
|
|
9 Months
Ended
|
|
9 Months
Ended
|
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
|
GAAP net loss
attributable to ordinary shareholders
|
|
(11,697)
|
|
(9,933)
|
|
(34,215)
|
|
(29,383)
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
3,707
|
|
2,240
|
|
9,428
|
|
6,377
|
|
Warrants to service
providers
|
|
178
|
|
106
|
|
432
|
|
272
|
|
Revaluation of warrants
and accretion
|
|
(252)
|
|
387
|
|
(490)
|
|
(4,761)
|
|
Non-recurring
expenses
|
|
-
|
|
-
|
|
214
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
loss
|
|
(8,064)
|
|
(7,200)
|
|
(24,631)
|
|
(27,365)
|
|
|
|
|
|
|
|
|
|
|
|
Basic Non-GAAP net loss
per ordinary share
|
|
(0.10)
|
|
(0.11)
|
|
(0.35)
|
|
(0.43)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares used in
computing basic Non-GAAP net loss per ordinary share
|
|
77,474,326
|
|
63,623,063
|
|
69,975,104
|
|
63,341,817
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Non-GAAP net
loss per ordinary share
|
|
(0.12)
|
|
(0.11)
|
|
(0.40)
|
|
(0.43)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares used in
computing diluted Non-GAAP net loss per ordinary
share
|
|
67,286,305
|
|
63,623,063
|
|
61,452,569
|
|
63,341,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP NET LOSS TO ADJUSTED EBITDA
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months
Ended
|
|
3 Months
Ended
|
|
9 Months
Ended
|
|
9 Months
Ended
|
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
|
GAAP net loss
attributable to ordinary shareholders
|
|
(11,697)
|
|
(9,933)
|
|
(34,215)
|
|
(29,383)
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Financial expenses
(income), net
|
|
134
|
|
(959)
|
|
(573)
|
|
(4,233)
|
|
Depreciation
|
|
139
|
|
132
|
|
415
|
|
349
|
|
Stock-based
compensation
|
|
3,707
|
|
2,240
|
|
9,428
|
|
6,377
|
|
Warrants to service
providers
|
|
178
|
|
106
|
|
432
|
|
272
|
|
Non-recurring
expenses
|
|
-
|
|
-
|
|
214
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
(7,539)
|
|
(8,414)
|
|
(24,299)
|
|
(26,488)
|
|
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SOURCE Arbe