TEL
AVIV, Israel, Aug. 9, 2023
/PRNewswire/ -- Arbe Robotics Ltd. (NASDAQ: ARBE) ("Arbe"), a
global leader in perception radar solutions, today announced
financial results for its second quarter ended June 30, 2023.
Key Q2 and Recent Company Highlights:
- Weifu High-Technology Group placed an $11.6 million preliminary order for radar
chipsets which will enable Arbe to meet Weifu's estimated
requirements for 2024, for customers across China. Additionally, Weifu placed a
$1 million order for professional
services including engineering services, setup of a testing lab,
and advanced support from Arbe.
- Arbe's chipset is in final stages of selection with 11 premium
leading OEMs across Europe and
China for level 2++ / level 3
programs.
- Arbe Tier 1s maintained the
momentum, submitting Arbe's chipset in requests for proposal (RFPs)
and requests for quotation (RFQs) to leading car manufacturers
aiming to adopt next generation radar technology for enhancing
safety and autonomy in their next-generation platforms.
- Arbe successfully raised $23
million with Special Situations Funds, a family of funds
focused primarily on growth oriented small public companies with a
concentration on the technology and life sciences industries.
Existing investors, including two affiliates of Arbe's directors
also joined this round.
- Product development is progressing on schedule towards
production.
"During the second quarter, we made significant advancements
towards our production goals for 2023 and we remain on track to add
four customer wins by the end of the year," said Kobi Marenko, Chief Executive Officer.
"We are pleased that Special Situations Funds, together with
current investors, chose to invest $23
million in our company's future. We intend to use the
proceeds from the financing to further enhance our penetration in
the Chinese automotive market, expedite our R&D efforts,
increase our chipset line capacity, capitalize on recently proposed
safety regulations and strengthen our balance sheet," concluded
Marenko.
Second Quarter 2023 Financial Highlights
Revenues for Q2 2023 were $0.3
million, a decrease from $1.2
million in Q2 2022. Revenue was in line with expectations
given Arbe's decision to shift focus to chips for
production. Backlog as of August
9th is $1.5 million.
Gross margin for Q2 2023 was negative 1%, compared to 72.7%
positive gross margin in Q2 2022, as a result of our reduced
quarterly revenue, as we transition to mass production.
Operating expenses in Q2 2023 were $12.6
million, compared to $13.0
million in Q2 2022. The decrease was primarily in Research
and Development, from $9.5 million in
Q2 2022 to $9.1 million in Q2 2023
and a decrease in General and Administrative expenses, from
$2.3 million in Q2 2022 to
$2.0 million in Q2 2023. The decrease
was primarily related to a reduction in subcontractor expenses,
favorable exchange rate, as well as reduction in D&O insurance
cost, partially offset by an increase in our share-based
compensation costs related to a recent employee grant and to a
lesser extent an increase in fund raising costs.
Sales and Marketing expenses increased from $1.2 million in Q2 2022 to $1.5 million in Q2 2023. Excluding share-based
compensation, sales and marketing level unchanged. As a result, our
operating loss in Q2 2023 was $12.6
million compared to $12.1
million in Q2 2022.
Net loss in the second quarter of 2023 increased to $12.6 million, compared to a net loss of
$11.6 million in the second quarter
of 2022. Net loss in Q2 2023 included $0.03
million of financial expenses, mainly related to exchange
rates revaluations offset by income of interest from deposits and
to warrant revaluations. Net loss in Q2 2022 reflected financial
income of $0.5 million, mainly
related to warrant revaluations.
Adjusted EBITDA, a non-GAAP measurement which excludes financial
expense/income and expenses for non-cash share-based compensation
and for non-recurring expenses, for Q2 2023, yielded a loss of
$8.4 million, compared to a loss of
$9.5 million in the second quarter of
2022.
Balance Sheet & Liquidity
As of June 30, 2023, Arbe had
$31.6 million in cash and cash
equivalents and $25.6 million in
short term bank deposits with no debt.
Outlook
Management reiterated the full year outlook for the period
ending December 31, 2023. Based on
current estimates:
- Our goal for 2023 is to achieve 4 design-ins with
automakers.
- Revenues are expected to be in the range of $5 to $7
million.
- Revenues will be heavily weighted towards the end of the year
as Arbe expects to start shipping production chips.
- 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 Aug. 23, 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: 4917417
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 Chipset
Solutions, is spearheading a radar revolution, enabling truly safe
driver-assist systems today while paving the way to full
autonomous-driving. Arbe's imaging radar 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, delivery robots, 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 a projected total
addressable market of $11 billion in
2025. Arbe is based in Tel Aviv,
Israel, and has an office in 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. The financial
results described in the press release and the financial
information include as an exhibit to the press release are based on
Arbe's preliminary financial statements, which are subject to
review by the Company's independent accounting firm and are subject
to any adjustments resulting from the completion of such review.
The non-GAAP financial information provides information that is
different from the Company's financial statements, which are
prepared in accordance with GAAP. These risks and uncertainties
include, but are not limited to (i) the extent of binding purchase
orders from the preliminary orders made by Weifu; (ii) our ability
to obtain design-ins during 2023; (iii) unanticipated delays or
difficulties in connection with the evaluation of Arbe's products
in evaluation and test programs; (iv) 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; (v) Arbe's ability to leverage its existing
relationships and secure orders resulting from the test programs;
(vi) Arbe's ability to meet its projected revenue level and its
ability to operate profitably; (vii) Arbe's ability to meet its
timetable both to achieve full production and to meet the delivery
requirements of its customers; (viii) the development of safe
autonomous vehicles that include Arbe's radar systems; (ixi)
Arbe's expectation that it will obtain orders from Tier 1 suppliers
and automakers that would build the radars based on its Chipset
solution; (x) Arbe's belief that the Arbe Radar Chipset and Lynx
Surround Imaging Radar herald a breakthrough in radar technology
that provide Tier 1 suppliers and automakers with the ability to
replace the current radars with an advanced solution that meets the
safety requirements of Euro-NCAP and NHTSA for autonomous vehicles
at all levels of autonomous driving; (xi) the ability of its Tier 1
customers to successfully market radar systems using Arbe's radar
to automobile manufacturers; (xii) Arbe's ability to develop and
market products based on its radar technology for uses outside of
the automotive industry; (xiii) 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; (xiv) the effect of laws and changes in laws
that have an effect on the market for or the requirement for
autonomous vehicles; (xv) 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; (xvi) changes or inaccuracies in
market projections; and (xvii) 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. 1 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 9,
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.
Information contained on, or that can be accessed through,
Arbe's website or any other website is expressly not incorporated
by reference into and is not a part of this Form 6-K.
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in thousands)
|
|
|
|
|
|
|
June 30, 2023
|
|
December 31, 2022
|
Current Assets:
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash and cash
equivalents
|
|
31,586
|
|
54,171
|
Restricted
cash
|
|
131
|
|
144
|
Short term Bank
deposits
|
|
25,602
|
|
400
|
Trade
receivable
|
|
2,040
|
|
2,202
|
Prepaid expenses and
other receivables
|
|
1,335
|
|
1,839
|
Total current assets
|
|
60,694
|
|
58,756
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
Operating lease
right-of-use assets
|
|
362
|
|
465
|
Property and equipment,
net
|
|
1,484
|
|
1,609
|
Total non-current
assets
|
|
1,846
|
|
2,074
|
|
|
|
|
|
Total assets
|
|
62,540
|
|
60,830
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Trade
payables
|
|
992
|
|
1,244
|
Operating lease
liabilities
|
|
234
|
|
364
|
Employees and payroll
accruals
|
|
2,311
|
|
2,861
|
Deferred
revenues
|
|
351
|
|
351
|
Accrued expenses and
other payables
|
|
1,903
|
|
5,609
|
Total current
liabilities
|
|
5,791
|
|
10,429
|
|
|
|
|
|
Long term liabilities
|
|
|
|
|
Operating lease
liabilities
|
|
44
|
|
17
|
Warrant
liabilities
|
|
1,393
|
|
1,631
|
Total long-term
liabilities
|
|
1,437
|
|
1,648
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
Ordinary
Shares
|
|
*)
|
|
*)
|
Additional paid-in
capital
|
|
237,970
|
|
208,893
|
Accumulated
deficit
|
|
(182,658)
|
|
(160,140)
|
Total shareholders'
equity
|
|
55,312
|
|
48,753
|
|
|
|
|
|
Total liabilities and shareholders'
equity
|
|
62,540
|
|
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
|
|
6 Months Ended
|
|
6 Months Ended
|
|
|
|
June 30, 2023
|
|
June 30, 2022
|
|
June 30, 2023
|
|
June 30, 2022
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Revenues
|
|
289
|
|
1,236
|
|
644
|
|
2,112
|
|
Cost of
revenues
|
|
292
|
|
337
|
|
608
|
|
721
|
|
Gross Profit
|
|
(3)
|
|
899
|
|
36
|
|
1,391
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
9,091
|
|
9,534
|
|
17,215
|
|
17,337
|
|
Sales and
marketing
|
|
1,478
|
|
1,177
|
|
2,402
|
|
2,360
|
|
General and
administrative
|
|
2,014
|
|
2,273
|
|
3,644
|
|
4,418
|
|
Total operating
expenses
|
|
12,583
|
|
12,984
|
|
23,261
|
|
24,115
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
(12,586)
|
|
(12,085)
|
|
(23,225)
|
|
(22,724)
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses
(income), net
|
|
25
|
|
(492)
|
|
(707)
|
|
(3,274)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(12,611)
|
|
(11,593)
|
|
(22,518)
|
|
(19,450)
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per
ordinary share
|
|
(0.19)
|
|
(0.18)
|
|
(0.34)
|
|
(0.31)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares used in computing basic net loss per ordinary
share
|
|
67,762,711
|
|
63,286,563
|
|
66,225,739
|
|
63,390,139
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per
ordinary share
|
|
(0.23)
|
|
(0.18)
|
|
(0.39)
|
|
(0.31)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares used in computing diluted net loss per ordinary
share
|
|
56,450,209
|
|
63,286,563
|
|
58,419,059
|
|
63,390,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
3 Months
Ended
|
|
3 Months Ended
|
|
6 Months Ended
|
|
6 Months Ended
|
|
|
|
June 30, 2023
|
|
June 30, 2022
|
|
June 30, 2023
|
|
June 30, 2022
|
|
Cash flows from operating
activities:
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Net
Loss
|
|
(12,611)
|
|
(11,593)
|
|
(22,518)
|
|
(19,450)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
139
|
|
111
|
|
276
|
|
217
|
|
Stock-based
compensation
|
|
3,713
|
|
2,348
|
|
5,721
|
|
4,207
|
|
Warrants to service
providers
|
|
157
|
|
96
|
|
254
|
|
96
|
|
Revaluation of warrants
and accretion
|
|
(369)
|
|
(2,014)
|
|
(238)
|
|
(5,149)
|
|
|
|
|
|
|
|
|
|
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in
trade receivable
|
|
48
|
|
(367)
|
|
162
|
|
(832)
|
|
Decrease (increase) in
prepaid expenses and other receivables
|
|
330
|
|
1,003
|
|
504
|
|
663
|
|
Operating lease ROU
assets and liabilities, net
|
|
(8)
|
|
(59)
|
|
-
|
|
(75)
|
|
Increase (decrease) in
trade payables
|
|
(1,116)
|
|
62
|
|
(284)
|
|
(605)
|
|
Increase (decrease) in
employees and payroll accruals
|
|
43
|
|
(155)
|
|
(550)
|
|
217
|
|
Increase (decrease) in
deferred revenue
|
|
-
|
|
(340)
|
|
-
|
|
(335)
|
|
Increase (decrease) in
accrued expenses and other payables
|
|
(499)
|
|
339
|
|
(3,706)
|
|
(2,526)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(10,173)
|
|
(10,569)
|
|
(20,379)
|
|
(23,572)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
|
|
Change in bank
deposits
|
|
(25,602)
|
|
-
|
|
(25,202)
|
|
(400)
|
|
Purchase of property
and equipment
|
|
(87)
|
|
(283)
|
|
(119)
|
|
(526)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
investing activities
|
|
(25,689)
|
|
(283)
|
|
(25,321)
|
|
(926)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of ordinary shares, net of issuance costs
|
|
22,496
|
|
-
|
|
22,496
|
|
-
|
|
Repayment of short-term
loan
|
|
-
|
|
(5,217)
|
|
-
|
|
(5,217)
|
|
Proceeds from exercise
of options
|
|
46
|
|
118
|
|
606
|
|
215
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used
in) by financing activities
|
|
22,542
|
|
(5,099)
|
|
23,102
|
|
(5,002)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash and cash equivalent
|
|
(574)
|
|
(1,587)
|
|
(66)
|
|
(1,522)
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash, cash
equivalents and restricted cash
|
|
(12,746)
|
|
(14,364)
|
|
(22,532)
|
|
(27,978)
|
|
Cash, cash equivalents
and restricted cash at the beginning of period
|
|
45,037
|
|
87,387
|
|
54,315
|
|
100,936
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at the end
of period
|
|
31,717
|
|
71,436
|
|
31,717
|
|
71,436
|
|
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
|
|
6 Months
Ended
|
|
6 Months
Ended
|
|
|
|
June 30, 2023
|
|
June 30, 2022
|
|
June 30, 2023
|
|
June 30, 2022
|
|
GAAP net loss
attributable to ordinary shareholders
|
|
(12,611)
|
|
(11,593)
|
|
(22,518)
|
|
(19,450)
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
3,713
|
|
2,348
|
|
5,721
|
|
4,207
|
|
Warrants to service
providers
|
|
157
|
|
96
|
|
254
|
|
96
|
|
Revaluation of warrants
and accretion
|
|
(369)
|
|
(2,014)
|
|
(238)
|
|
(5,149)
|
|
Non-recurring
expenses
|
|
214
|
|
-
|
|
214
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss
|
|
(8,896)
|
|
(11,163)
|
|
(16,567)
|
|
(20,166)
|
|
|
|
|
|
|
|
|
|
|
|
Basic Non-GAAP net loss
per ordinary share
|
|
(0.13)
|
|
(0.18)
|
|
(0.25)
|
|
(0.32)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares used in computing basic Non-GAAP net loss per ordinary
share
|
|
67,762,711
|
|
63,286,563
|
|
66,225,739
|
|
63,390,139
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Non-GAAP net
loss per ordinary share
|
|
(0.16)
|
|
(0.18)
|
|
(0.29)
|
|
(0.32)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares used in computing diluted Non-GAAP net loss per ordinary
share
|
|
56,450,209
|
|
63,286,563
|
|
58,419,059
|
|
63,390,139
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED
EBITDA
|
(U.S. dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months
Ended
|
|
3 Months Ended
|
|
6 Months Ended
|
|
6 Months
Ended
|
|
|
|
June 30, 2023
|
|
June 30, 2022
|
|
June 30, 2023
|
|
June 30, 2022
|
|
GAAP net loss
attributable to ordinary shareholders
|
|
(12,611)
|
|
(11,593)
|
|
(22,518)
|
|
(19,450)
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Financial expenses
(income), net
|
|
25
|
|
(492)
|
|
(707)
|
|
(3,274)
|
|
Depreciation
|
|
139
|
|
111
|
|
276
|
|
217
|
|
Stock-based
compensation
|
|
3,713
|
|
2,348
|
|
5,721
|
|
4,207
|
|
Warrants to service
providers
|
|
157
|
|
96
|
|
254
|
|
96
|
|
Non-recurring
expenses
|
|
214
|
|
-
|
|
214
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
(8,363)
|
|
(9,530)
|
|
(16,760)
|
|
(18,074)
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Arbe