indie Semiconductor (INDI), a company specializing in automotive semiconductors, reported third-quarter revenue of $54 million, surpassing its guidance and marking a 3.1% sequential growth. The company's non-GAAP gross profit reached $27.2 million, resulting in a gross margin of 50.4%. Despite this, indie Semiconductor posted a non-GAAP operating loss of $16.8 million and a net loss of $17.7 million, or $0.09 per share.
The earnings call revealed a positive outlook for the fourth quarter, with revenue projections between $56 million and $60 million, indicating over 7% sequential growth. The company's strategic backlog has grown to $7.1 billion, with a strong focus on Advanced Driver Assistance Systems (ADAS) which constitute over 72% of the backlog.
Key Takeaways
- indie Semiconductor exceeded Q3 revenue expectations with $54 million, a 3.1% increase from the previous quarter.
- Non-GAAP gross profit was reported at $27.2 million, with a gross margin of 50.4%.
- The company experienced a non-GAAP operating loss of $16.8 million and a net loss of $17.7 million.
- Cash reserves are at $107.2 million after using $31.2 million in operations, mainly due to inventory buildup.
- Q4 revenue is expected to be between $56 million and $60 million.
- The strategic backlog increased to $7.1 billion, with ADAS wins making up over 72%.
- Recent design wins include major OEMs like Porsche (ETR:P911_p) and General Motors (NYSE:GM).
- The company is optimistic about its long-term outlook, with a focus on ADAS and electrification innovation.
Company Outlook
- indie Semiconductor anticipates over 7% sequential growth in Q4.
- The strategic backlog has increased to $7.1 billion, up from $6.3 billion.
- ADAS wins are a significant contributor to the backlog, comprising over 72%.
- Revenue contributions from the radar program are expected to start in 2025.
- The company targets a breakeven revenue run rate of approximately $80 million.
- The backlog grew by 12%, with significant business wins.
- The geographic distribution of the backlog is mainly in the US and Europe, with a strong presence outside China.
Bearish Highlights
- indie Semiconductor reported a net loss of $17.7 million or $0.09 per share.
- The company used $31.2 million in operations due to inventory buildup.
- Some delayed program ramps have impacted the growth rate of the backlog.
Bullish Highlights
- The company's strategic backlog has grown significantly, with recent wins from major OEMs.
- indie Semiconductor is well-positioned to benefit from new NHTSA and NCAP regulations.
- The company has a conservative yet positive outlook for 2025 and beyond, with no need for further ATM offerings anticipated before reaching cash flow positivity.
Misses
- The company's expected net loss for the quarter was $0.07 per share.
- Operational efficiency and expense management are areas of focus to enhance profitability.
Q&A Highlights
- CEO Donald McClymont emphasized the strong foundational drivers for the company's differentiated products.
- The company is comfortable with the analyst consensus for 2025.
- indie Semiconductor has a significant presence in the dynamic Chinese automotive market, with customers like BYD (SZ:002594) and Nio (NYSE:NIO).
- Previous challenges in the pipeline have been addressed, and forecasts for 2025 and 2026 are now more secure.
- The company has a strong design win momentum in China, with significant engagement with both established and new OEMs.
Overall, indie Semiconductor remains optimistic about its future, planning to leverage its innovative product portfolio and operational excellence to overcome market challenges and drive growth.
InvestingPro Insights
Complementing indie Semiconductor's (INDI) recent financial report, InvestingPro data reveals some additional insights that investors should consider. The company's market capitalization stands at $965.37 million, reflecting its position in the competitive semiconductor industry.
Despite the company's optimistic outlook and growing strategic backlog, InvestingPro Tips highlight some challenges. One tip notes that INDI "suffers from weak gross profit margins," which aligns with the reported non-GAAP gross profit of $27.2 million and a 50.4% gross margin in Q3. This metric underscores the importance of the company's focus on operational efficiency to improve profitability.
Another relevant InvestingPro Tip indicates that INDI is "not profitable over the last twelve months." This is consistent with the company's reported net loss of $17.7 million in Q3 and the projected path to breakeven at an $80 million revenue run rate. The P/E ratio of -5.26 for the last twelve months further illustrates the current profitability challenges.
On a positive note, InvestingPro data shows a revenue growth of 22.97% over the last twelve months, which supports the company's narrative of expanding its strategic backlog and securing new design wins with major OEMs. However, the quarterly revenue growth of -10.77% in Q3 2024 indicates some short-term headwinds, possibly related to the delayed program ramps mentioned in the earnings call.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide deeper insights into INDI's financial health and market position. There are 6 more InvestingPro Tips available for indie Semiconductor, which could be valuable for those looking to make informed investment decisions in the semiconductor sector.
Full transcript - indie Semiconductor Inc (NASDAQ:INDI) Q3 2024:
Operator: Good afternoon, and welcome to indie Semiconductor’s Third Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I will now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.
Ashish Gupta: Thank you, operator. Good afternoon and welcome to indie Semiconductor’s third quarter 2024 earnings call. Joining me today are Donald McClymont, indie's Co-Founder and CEO; Raja Bal, indie's CFO and Mark Tyndall, Head of Corporate Development and Investor Relations. Don will provide opening remarks and discuss business highlights followed by Raja’s review of indie's Q3 results and Q4 outlook. Please note that we will be making forward-looking statements based on current expectations and assumptions which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative about views of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For material risks and other important factors that could affect our financial results, please review our risk factors and our annual report on Form 10-K for the fiscal year ended December 31, 2023, as well as other public reports filed with the SEC. Finally, the results and guidance discussed today are based on consolidated non-GAAP financial measures such as non-GAAP gross margin, non-GAAP operating income loss, non-GAAP net loss and non-GAAP net loss per share. For a complete reconciliation to GAAP and the definition of the non-GAAP reconciling items, please see our Q3 earnings press release which was issued in advance of this call and can be found on our website at www.indiesemi.com. And I'll turn the call over to Donald.
Donald McClymont: Thanks Ashish and welcome everybody. Let me first briefly cover our financial performance within the context of the overall automotive market environment before focusing on indie's business achievements. During the third quarter of 2024, indie achieved total revenue of $54 million coming in above the midpoint of our guidance. Given the persisting unfavorable global macroeconomic environment and the well reported short-term challenges impacting the automotive industry, these results are a testament to indie's resilience. As we look forward, the growth reflected in our fourth quarter outlook and strategic backlog update highlights our ability to take share and outperform. Last quarter, we highlighted some of the factors negatively impacting the automotive industry, including the high cost of credit influencing consumer purchasing decisions and the ongoing elevated levels of vehicle and semiconductor inventory. We also noted that these challenges were widely anticipated to persist through the second half of 2024. Fast forward 90 days, this is indeed what the industry has experienced, but to paraphrase Mark Twain, the reports of the automotive industry's demise were greatly exaggerated. While we still see some uncertainty for the automotive market, the long-term market drivers of in-cabin experience, safety and electrification remain strong. With safety and electrification being further accelerated by stringent new global regulations and increasingly demanding vehicle assessment programs from NHTSA and Euro NCAP. indie remains incredibly well positioned to deliver growth across these three megatrends, leveraging our innovative and growing product portfolio to secure design wins which will translate into significant volume shipments in global production vehicles. Additionally, the Chinese automotive industry, EVs, in particular are showing relative strength and to that end, demand for indie's ICs in China remained strong through the quarter. Let's turn to our business progress in the third quarter across our focus sectors. The news for the quarter across our target markets was unequivocally positive. We continue to gain commercial customer traction with our class leading products. For ADAS, starting with vision, our recently launched indie 880 vision processor family is driving new design wins by hitting the customer sweet spot of performance, power and cost requirements. In exhaustive customer testing, our solution is demonstrably exceeding the performance requirements of upcoming and very rigorous U.S. and European safety regulation for vulnerable road users that I discussed last quarter. Additionally, the numerous European and Asia based OEM design activities across occupant and driver monitoring applications that we also highlighted last time for indie 880 and its predecessor products continue apace. And in China, the popular Avatr e-vehicle is now on the road with our vision processor supplying e-mirror solutions. We're also delighted that the indie 880 processor family was recognized with the award of Sensor Innovation of the Year by the AutoTech Breakthrough Awards last month. AutoTech Breakthrough is a leading independent organization that recognizes the top companies, technologies and products in the automotive and transportation technology markets. Winning this prestigious award in a strong field of peers is an incredible validation of the class leading image signal processing innovation embodied in indie's latest generation vision products. Our key 77 GHz radar program continues to progress well. Our lead customer is advancing through their internal productization stages and we remain steadfastly on track to support our customer to bring our highly competitive radar ECUs to production with multiple OEMs within the 2025 timeline as previously communicated. For LiDAR, our photonics team has secured a customer funded program for a complete LiDAR optical engine plus a separate design win for a high performance optical module. Both programs will leverage our world-class in-house optical component and system integration abilities. Moving to in-cabin user experience, I described in detail last quarter our various lighting, power delivery and wireless charging products and latest program wins and all these are progressing well and on schedule for volume deployments commencing now and ramping in 2025. Our commercial momentum is strong with numerous design wins across western OEMs including Porsche, General Motors, Volkswagen (ETR:VOWG_p) and multiple Ford (NYSE:F) models. And in China, we are pleased to report Xiaomi (OTC:XIACF), Avatr, BYD, Li Auto (NASDAQ:LI) and many more OEMs are using indie's ambient lighting ICs. This quarter I want to highlight an unsung hero and more recent addition to our user experience portfolio with smart connectivity. The transportation and effective reproduction of high bandwidth data across the vehicle is essential for the growing multitude of in-cabin applications supporting audio, video entertainment and ADAS sensor data visualization. indie's smart connectivity lineup of high performance interface converters and retimers now has multiple active design and engagements with global OEMs including a large North American e-vehicle manufacturer. Finally, let me briefly touch upon our electrification portfolio. We have not elaborated on our capabilities in this segment as our solutions today are primarily custom ASICs commissioned by its specific customers. However, it's worth highlighting that indie's unique engineering capabilities of analog power management, digital and system design are highly valued by Tier 1 system integrators who are dissatisfied with off-the-shelf solutions for their electrification applications, compelling them to commission indie to deliver what they truly need. Although, the past several quarters have been challenging, the long-term automotive outlook continues to remain strong. While analysts forecast modest growth in the new vehicle production for 2025, indie's growth is not dependent on this. indie continues to remain incredibly well positioned to deliver growth above market and many of our peer groups projections leveraging our uniquely differentiated and expanding product portfolio. The best indicator of our design win momentum and success in the field is the size of our strategic backlog which we update annually in November. As a reminder, for a full definition of our strategic backlog, please see our Q3 earnings press release. We have recently completed this review process and I'm pleased to share that our strategic backlog has increased to $7.1 billion, up over 12% from $6.3 billion last year and $4.3 billion in 2022. Based on our strategic backlog today, we would expect to achieve annual revenue of greater than $700 million in 2028. ADAS wins comprise over 72% of our updated strategic backlog with in-cabin user experience and electrification accounting for the balance. The notable additions to our strategic backlog this year include some of the major DMS OMS wins for our indie 880 vision processor family that we shared previously, plus a combination of our next-generation wireless charging and smart connectivity solutions. Lastly, I would like to congratulate Raja on his appointment as our full-time Chief Financial Officer. As you know, Raja has served as Chief Accounting Officer from the time of our launch and more recently as our acting CFO since June when Tom took medical leave. I want to personally thank Raja for his dedication and support over the last months. This promotion is extremely well deserved. Tom, who has been recuperating, will return soon in an advisory capacity to assist with strategic projects. Given Raja's tenure with indie and Tom's continued engagement with us, we expect a seamless transition. I will now turn the call over to Raja for a discussion of our Q3 results and our Q4 outlook.
Raja Bal: Thanks, Donald. For the third quarter of 2024, revenue came in at $54 million, slightly above the midpoint of our outlook, up 3.1% sequentially. Non-GAAP gross profit was $27.2 million or 50.4% gross margin, which was above our outlook and up sequentially, resulting primarily from improved product mix. R&D was $33.7 million, while SG&A was $10.3 million, bringing total operating expenses to $44 million, consistent with our forecast. As a result, our third quarter non-GAAP operating loss was $16.8 million. With net interest expense of $900,000, our net loss was $17.7 million and loss per share was $0.09 on a base of 199.9 million shares. Turning to the balance sheet. We exited the third quarter with total cash including restricted cash of $107.2 million versus $122.6 million in Q2, reflecting a net usage of $15.4 million of cash during the quarter. This was primarily comprised of $31.2 million of cash used in operations, partially offset by $10.9 million raised from the ATM facility and $5.7 million increase in our short-term credit facility. The higher than anticipated cash usage in operations during the quarter was primarily driven by an accelerated inventory build in anticipation of future revenue growth. Moving to our outlook. For the fourth quarter of 2024, we expect to deliver strong quarter-over-quarter revenue growth within the range of $56 million to $60 million or $58 million at the midpoint. This translates to over 7% sequential growth, outpacing projections for the automotive industry. Moving down the income statement. We expect Q4 gross margins to be roughly flat sequentially. We also expect a marginal reduction of OpEx to $43.5 million with approximately $33.5 million of R&D expense and $10 million of SG&A expense in the fourth quarter. Below the line, we anticipate approximately $1.1 million of net interest expense and no taxes. Assuming the midpoint of the revenue range and with 206 million shares outstanding, we expect a $0.07 net loss per share for the quarter. I want to take a moment to address our intensifying focus on operational efficiency and expense management. In my new role, we are conducting a comprehensive review of our cost structure to identify and capitalize on cost improvement opportunities and working capital efficiency across the organization, including manufacturing, engineering, and all administrative functions. The intended result of these initiatives is to pull forward profitability. This is one of the highest priorities for the executive team and particularly important as we navigate the current market environment. We look forward to providing updates as we progress on this front. With that, I’ll turn the call back to Donald for his closing comments.
Donald McClymont: Thanks, Raja. In closing, while it is clear that the industry is experiencing persisting headwinds, the core market drivers for indie’s differentiated products are strong. We are comfortable with current analyst consensus for 2025 and indie’s long-term strategic outlook remains extremely positive as evidenced by our growing strategic backlog and continuing design win momentum supported by our innovative product portfolio and unerring focus on operational excellence. Our silicon innovation transforming the megatrends of ADAS user experience and electrification will ensure that indie’s continues to be an automotive leader and partner of choice for global automators and system integrators. That concludes our prepared remarks. Operator, please open the line for questions.
Operator: Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. [Operator Instructions] The first question comes from the line of Suji Desilva with Roth Capital Partners (WA:CPAP). Please go ahead.
Suji Desilva: Hi Donald, Raja, congratulations and best of luck in the new role and great to hear that Tom become vaccinated.
Raja Bal: Thanks, Suji.
Suji Desilva: Yes, sure. So the 2025 revenue growth. Thanks for the color there on the consensus estimates, just can you give a sense of what the large radar programs that you announced several quarters ago are doing in terms of initial looks into OEM programs and uptake? And then you mentioned the term customer homologation. I wasn’t really familiar with that term. So if that has any impact on the ramp opportunity growth, that’d be helpful to know.
Donald McClymont: So the radar program, as we talk a lot about it, remains on track. We’ve made maybe a little bit better than planned progress through this quarter. We have a small amount of significant revenue in 2025, which is part of our sort of the thin end of the wedge of the ramp of that program. But we feel very good about where that is. And then homologation just is a fancy word for qualification and approval or frequently using the automotive.
Suji Desilva: Thanks, Donald. I’ll try to keep up there. And then a separate question on the – you talked about the regulations NHTSA and NCAP. Can you talk about the specific benefits for indie in terms of product sets and maybe what the timing of those regulations kicking in would imply for ships – I’d imagine you’d – you try to ship ahead of those requirements, but just any color there would be helpful as well.
Donald McClymont: I mean, basically, cars are getting – we’re getting designed into now are being governed by regulations for several areas, particularly automatic emergency braking and driver monitoring systems. They’re becoming regulated in the timeframe that we are sort of dealing with now as far as our design ends go. So that’s basically what’s driving it. It becomes – it’s a tailwind for us in terms of where our product base is and that’s kind of where that’s about.
Suji Desilva: Okay, last question and I’ll move on. The cost improvements, are there any product that Raja talked about – any product areas impacted specifically there? And what kind of revenue run rate would be breakeven implied by the cost efforts? Thanks.
Raja Bal: Yes. So no product areas are going to be impacted. That wasn’t the intent of my comment. Really we’re just taking a fresh look in my new role across the board at cost efficiencies. We’re looking at manufacturing, OpEx, all of our support functions, working capital metrics, et cetera. So I definitely see opportunity there and we look forward to keeping you updated. But we’re not changing our view on the breakeven point at this point. I think the consensus models have – has us at roughly $80 million of top line getting to breakeven, and we’re comfortable with that for now.
Suji Desilva: Great. Thanks, guys.
Operator: Thank you. The next question is from the line of Ross Seymore with Deutsche Bank (ETR:DBKGn). Please go ahead.
Ross Seymore: Hey guys, thanks for taking the question. Congrats on the solid results. I guess, I have a near-term question and a long-term question. Donald, a lot of the peers talked about kind of another leg down in the business and visibility getting worse, et cetera. China was strong, but the rest of the world, not so much. What are you seeing from customers, whether you want to talk kind of geographically or just in general inventory burn, those sorts of things? And why is indie able to buck the trend now?
Donald McClymont: So for sure the market is still choppy. We believe that the macro issues that had affected us in the last three or four quarters are largely behind us. And those are the ones that were particularly specific to us. And quite simply, the reason that we’re able to bump the trend is that we’ve gone through the period where we had delays in program ramps and we’re now beginning to see much more solidity in that. And it really takes us back to our original business as usual where our profile and revenue is at a first order governed by our own share gain rather than by the macro.
Ross Seymore: Got it. Make sense. And is there a geographic centricity to that or is it just where your designs are as where it is it’s not exactly that demand is stronger, weaker, any sort of macro sense from your perspective?
Donald McClymont: No, it’s more the latter than the former. We did see a little bit of a tailwind towards the end of last quarter and through this quarter in China, as others have seen also due to a bit of a recovery of their e-vehicle industry. But rather it’s more the former than the latter or the latter than the former. Yes, whatever you said, not geographic, but yes, more of our designs actually are centered.
Ross Seymore: Got it. And then I guess my last question is refreshing to hear you say you’re comfortable with where the Street is for next year. Can you remind us just kind of conceptually, one, is there any sort of seasonality we need to think about first half, second half, anything like that? But probably more importantly, what’s the bridge that you have to get from this year’s revenue to next year’s revenue? What are the key products that are launching vision, radar? Any sort of buckets like that to make us – just give us a little more color?
Donald McClymont: Well, we’re exiting the year at a run rate of approximately $60 million and we have a bridge to get there, which is largely evenly split into two main drivers between user experience and vision based products, which are ramping through the year. And then there's – as I said, a small amount for radar in the second half which we talked about last quarter also. And then some dogs and cats, but that's the guts of it.
Ross Seymore: Got it. Perfect. Thank you very much and Raja…
Raja Bal: Thanks, Ross.
Operator: Thank you. [Operator Instructions] Thank you. The next question is from the line of Cody Acree with The Benchmark Company. Please go ahead.
Cody Acree: Yes, thanks for taking my question and congrats on the progress. And Raja, congrats on the promotion. Maybe if you could talk about the backlog growth, the 12%, I would have thought maybe during this year with the machine vision wins and the radar wins that number could have been higher. Were there any of puts and takes in that backlog number that came out?
Donald McClymont: Yes, there were – I mean, we won way more business than the incremental number between the adjacent years. But we did have some fairly well publicized push outs and that had an impact on next year, which is reflected in that. But I mean we're very happy where the number landed. It's a great number and it's going to translate into annual run rate business in the near future.
Cody Acree: And maybe can you just provide any further detail on the program ramps that you're expecting for either machine vision or for radar next year?
Donald McClymont: Well, I mean machine vision is already heavily ramping through this year. We have a lot of programs in that space spread across a lot of OEMs and we expect that individual OEMs add more models to the same programs as they deploy and new model launches. I mean the classic example is BMW (ETR:BMWG) starting with seven series, going to five series, going to three series. So that's really how we expect that to roll out. Through the next year – through 2026, radar will be a big portion of that also. We do expect to ramp multiple OEMs in that year and then more computer vision on top of that.
Cody Acree: All right. Thank you very much.
Operator: Thank you. The next question is from the line of Anthony Stoss with Craig-Hallum. Please go ahead.
Anthony Stoss: Hi, good afternoon, guys. Congrats on the nice execution and congrats, Raja. I wanted to also drill in a little bit on the backlog, Donald, and if you can give us a sense of by geography, if it's evenly split, just a sense of where it's coming in? And then also are you seeing a reduction in content as maybe more vehicles ship to lower priced vehicles?
Donald McClymont: In terms of the geographic split in the backlog, we have won a lot of business which is U.S. and European based, also some in Japan and Korea. The China business, we also have wins in there. But the larger programs which span multiple product lines within OEMs and tier 1s is more centric outside of China. So it's – I mean it's probably 80% of it is outside. And then what was the second half of the question? Sorry, Tony.
Anthony Stoss: Just sort of ship to cheaper vehicles we're seeing a reduction in content with your customers.
Donald McClymont: Not at present. I mean that's a sort of narrative that we brought into the story last quarter, which is really just an explanation for the overall macro malaise that we could offer for us. We typically deploy into mid to higher tier customers, but also the lower end of mid tier and particularly in some of the applications in computer vision where they're safety related and mandated by law. Then they're also going to be deployed in low end vehicles. So we – I don't think we'll feel too much of a split between model ranges, especially with the interest rates coming down right now. I think that may be something which decays as a narrative over the course of time.
Anthony Stoss: Thanks Donald and best of luck to Tom.
Donald McClymont: Thank you.
Operator: Thank you. The next question is from Craig Ellis with B. Riley Securities. Please go ahead.
Craig Ellis: Yes, thanks for taking the question. And Raja, congratulations on the appointment. Donald, I wanted to go back to backlog and just inquire about a longer-term dynamic relative to some of your prepared comments. So in the past and again today, the companies talked about the backlog providing some level of visibility if we look three years out. You mentioned the $710 million in revenues. I think it was calendar 2028. The question is, as we think beyond 2025, what are the bigger blocks that take us from where we'll be next year at that consensus level that you talked about towards that $710 million?
Donald McClymont: Yes, well, I think we mentioned in the prepared remarks also that a large percentage of our entire backlog is now driven by ADAS products, which really is driven by vision and radar and those are the key drivers for the company into the future. We do have some good backup from our user experience business. It still is a large portion of our running business today and will continue to be so. The design wins in those cases tend to be less chunky, more linear in terms of the growth that we add to it. And we do expect it will continue to grow, but the larger drivers will be vision and radar.
Craig Ellis: Got it. And then the follow-up question going back to some of the design wins that you talked about in China, I think there were four in the ambient lighting area and then one in vision processing. Can you just talk about the design win momentum in that geography and how you think about maybe the intermediate term revenue opportunity with some of those domestic customers? Thank you.
Donald McClymont: Yes, I mean it's good. I mean we've had presence at pretty much all the China OEMs, from the more traditional ones which have been around for a longer period to the more newer entries including such as Avatr and Li Auto, Nio et cetera. BYD is a large customer of ours also. So we have a great sales representation. We have a great sales channel into all of those guys. And it's a very dynamic market. It's very exciting. The term coined is moving at China speed. And we can move things much more quickly in that geography than in others. It is more volatile for that reason. Their behavior of the OEMs is similar to, let's say new entrants into the market in e-vehicle space. But we're excited about the market. It's a market we can't afford to ignore. It's 30% of the entire automotive market. So we intend to be well represented there.
Craig Ellis: Got it. Thank you.
Operator: Thank you. The next question is from the line of Jon Tanwanteng with CJS Securities. Please go ahead.
Jon Tanwanteng: Hi, good afternoon. Thanks for taking my questions and congrats Raja on the role. I was wondering if you could talk about the risk of potential for further pushouts or delays or anything like that. You mentioned visibility across the industry is low and we obviously seen that in the past. What kind of cushion have you put in into next year just to account for maybe they're not all completely done yet. Or do you think that most of those are pretty safe at this point, what you have in the pipeline?
Donald McClymont: I mean, we felt after we did a large review during last quarter that we built in enough conservatism and 90 days further on that remains to be the case. In fact, we're more secure in our belief of that 90 days down the road than we were 90 days ago. We believed it then, but we believe it even more strongly now. The specific issues that hurt us, we do strongly believe that they're behind us. In terms of overall influence on SAR [ph] or macro, we believe that we build a very conservative view of the overall units shipped into the automotive industry for 2025 and 2026 and beyond and anything that moves in the upward direction versus our model should be a tailwind in addition to what we put down on paper.
Jon Tanwanteng: Got it. That's helpful. And it's good to see the momentum coming back. Second, I guess. Raja, could you any thoughts on if you might need to use ATM again as growth reaccelerates? Or is that kind of the final one you expect to use before you get to cash flow positive?
Raja Bal: No, we don't anticipate any further use.
Jon Tanwanteng: Perfect. Thank you.
Operator: Thank you. As there are no further questions, I would now like to hand the conference over to Donald McClymont for closing comments.
Donald McClymont: Well, thanks everybody for attending and look forward to seeing you at the investor conferences over the course of the next few weeks.
Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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