Arbe Robotics Ltd. (NASDAQ: ARBE) ("Arbe"), a global leader in next-generation 4D Imaging Radar Solutions, today announced financial results for its fourth quarter and fiscal year 2021, that ended December 31, 2021.
Key Company Highlights:
"2021 was a milestone year for Arbe, as we became the first publicly traded automotive imaging radar company and demonstrated how our technological vision is becoming a reality," said Kobi Marenko, Chief Executive Officer.
"During the year, we achieved our targets ahead of schedule, won major customers, established strategic relationships with global Tier-1s and made low volume sales to more than 30 customers. Arbe's Imaging Radar chipset offers the best performance in the industry, enabling free space mapping for safe Level 2.5 and Level 3 autonomy that relies solely on radar without the need for costly sensors such as LiDARs. Arbe maintains significant product leadership, and we believe that our technology today is superior to the performance projected for 2025 by our competitors. As we continue to engage with top tier car manufacturers and OEMs and establish a path to production, we see a growing consensus validating the critical role that imaging radar plays in the global automotive market. We believe that Arbe is well positioned to capture a significant share as this market adopts advanced technologies," concluded Kobi Marenko.
Fourth Quarter and Full Year 2021 Financial Highlights
Revenues for Q4 2021 were $0.5 million, an increase from $0.2 million in Q4 2020. Full year 2021 revenues were $2.2 million, an increase from $0.3 million in 2020. New orders for the full year 2021 were $4.0 million. Backlog as of December 31, 2021 is $2.3 million, expected to be recognized as revenues during 2022.
Gross margin for Q4 2021 was 37.7%, compared to 41.8% in Q4 2020. Gross margin for the full year of 2021 was 36.0%.
Operating expenses in Q4 2021 were $14.2 million, compared to $3.9 million in Q4 2020. Operating expenses for the full year of 2021 were $34.1 million, compared to $15.0 million in 2020. The increase in operating expenses was primarily driven by Labor increase, additional investment in research and development toward production, share based compensation, foreign currency exchange rates impact and cost resulting from the additional legal, accounting, and general overhead resulting from Arbe's status as a public company.
Net loss in the fourth quarter of 2021 was $15.8 million, which included $1.9 million in financial expenses, compared to a net loss of $4.5 million in the same period of 2020. Net loss for the full year of 2021 was $58.1 million.
Adjusted EBITDA in Q4 of 2021, a non-GAAP measurement which excludes expenses for non-cash share-based compensation and for non-recurring items, yielded a loss of ($11.9) million, compared with a loss of ($3.7) million in the fourth quarter of 2020. Adjusted EBITDA for the full year of 2021 amounted to ($30.4) million, a decrease of 113% from ($14.2) million in 2020.
Balance Sheet & Liquidity
As of December 31, 2021, Arbe had $100.8 million in cash and cash equivalents. Most of the cash consists of the $118 million in gross proceeds which Arbe netted from the business combination with Industrial Tech Acquisitions, Inc. ("ITAC"), a SPAC, which was completed in October 2020. Total debt at December 31, 2021, was $4.9 million which we expect to pay by July 1, 2022.
Outlook
Management provided an outlook for the full year ending December 31, 2022. Based on current estimates, management expects:
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 using the following link: https://dpregister.com/sreg/10164030/f18e362fce. 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: (866) 777-2509
International: (412) 317-5413
A telephonic replay of the conference call will be available until March 15, 2022, 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: 7229831
A live webcast of the call can be accessed here:https://services.choruscall.com/mediaframe/webcast.html?webcastid=VqRCaz63 or from Arbe's Investor Relations website at https://ir.arberobotics.com. 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 next-generation 4D Imaging Radar Chipset Solutions, is spearheading a radar revolution, enabling truly safe driver-assisted 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 Level 2+ 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 a projected total addressable market of an estimated $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 contains certain "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 this press release are based on Arbe's preliminary financial statements, which are subject to audit by the Company's independent accounting firm and are subject to any adjustments resulting from the completion of such audit. These risks and uncertainties include, but are not limited to: (i) unanticipated delays or difficulties in connection with the evaluation of Arbe's products in evaluation and test programs; (ii) the success of road pilot programs for Arbe's products, (iii) Arbe's ability to develop significant revenue as a result of the test programs involving its radar system and from customers who purchased Imaging Radar samples; (iv) Arbe's ability to leverage its existing relationships and secure test programs and orders resulting from the test programs; (v) Arbe's ability to meet its projected revenue level and its ability to operate profitably; (vi) Arbe's ability to meet is timetable for full production; (vii) Arbe's expectation that it will be engaging with Tier 1 suppliers and OEMs which would be building the radars based on its Chipset solution, eliminating expenses associated with system completion, requirement for undertaking significant capital expenditures associated with developing mass production manufacturing and the expenses of operating any such manufacturing capability; (viii) the effect of inflation and supply chain issues on Arbe's cost and its development schedule, including Arbe's ability to obtain semiconductor products when needed and at a reasonable price; (ix) Arbe's expectation that radars are crucial to the automotive industry and will be deployed in nearly all new vehicles as a long range, cost-effective sensor with the fewest environmental limitations; (x) Arbe's belief that the Arbe Radar Chipset heralds a breakthrough in radar technology that will enable Tier 1 manufacturers and OEMs 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) Arbe's ability to develop or have access to the latest developments relating to radar and autonomous driving vehicles; (xii) Arbe's ability to have products manufactured for it by third parties that meet Arbe's and its customers quality standards and delivery requirements; (xiii) Arbe's ability to attract and retain highly skilled personnel and senior management, including research and development, sales and marketing personnel; (xiv) Arbe's ability to develop and market products based on its radar technology for uses outside of the automotive industry; (xv) 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; (xvi) the failure of the markets for Arbe's current or new technologies and products to materialize to the extent or at the rate that Arbe expects; (xvii) unexpected delays or difficulties related to the development of Arbe's technologies and products; (xviii) the effect of laws and changes in laws that have an effect on the market for or the requirement for autonomous vehicles; (xix) the effect of COVID-19 and any new variants or any pandemics or multinational epidemics and actions taken by governments and industry to address the effects of the pandemic and the corresponding macroeconomic uncertainty; (xvii) risks related to the potential impact of new accounting standards on Arbe's financial position, results of operations or cash flows; (xx) changes or inaccuracies in market projections; (xxi) changes in Arbe's business strategy; and (xxii) the risk and uncertainties described in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Cautionary Note Regarding Forward-Looking Statements" and the additional risk described in Arbe's prospectus dated November 2, 2021, which was filed by Arbe with the Securities and Exchange Commission on November 4, 2021, as well as the 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) | ||||
December 31, 2021 | December 31, 2020 | |||
Current Assets: | (Unaudited) | (Audited) | ||
Cash and cash equivalents | 100,811 | 2,857 | ||
Restricted cash | 125 | 97 | ||
Short term bank deposits | - | 100 | ||
Trade Receivable | 187 | 137 | ||
Prepaid expenses and other receivables | 3,058 | 830 | ||
Total current assets | 104,181 | 4,021 | ||
Non-Current Asset | ||||
Property and equipment, net | 1,165 | 384 | ||
Total non-current assets | 1,165 | 384 | ||
Total assets | 105,346 | 4,405 | ||
Current liabilities: | ||||
Current maturities of long-term loan | - | 1,879 | ||
Short term loan | 4,916 | - | ||
Trade payables | 2,005 | 1,209 | ||
Employees and payroll accruals | 3,095 | 1,538 | ||
Deferred revenues | 726 | 281 | ||
Accrued expenses and other payables | 4,725 | 364 | ||
Total current liabilities | 15,467 | 5,271 | ||
Long term liabilities | ||||
Long-term loan | - | 676 | ||
Convertible loan | - | 1,641 | ||
Warrant Liabilities | 10,056 | - | ||
Warrants to purchase Series B-1 preferred shares | - | 375 | ||
Warrants to purchase Series B-2 preferred shares | - | 1,159 | ||
Total long-term liabilities | 10,056 | 3,851 | ||
REDEEMABLE CONVERTIBLE PREFERRED SHARES | - | 55,440 | ||
SHAREHOLDERS' EQUITY (DEFICIENCY): | ||||
Ordinary Shares | *) | *) | ||
Additional paid-in capital | 199,469 | 1,397 | ||
Accumulated Deficit | (119,646) | (61,554) | ||
Total shareholders' equity (deficiency) | 79,823 | (60,157) | ||
Total liabilities, redeemable convertible preferred | 105,346 | 4,405 | ||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(U.S. dollars in thousands, except share and per share data) | ||||||||
3 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||||
December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||
Revenues | 520 | 194 | 2,249 | 332 | ||||
Cost of revenues | 324 | 113 | 1,440 | 340 | ||||
Gross Profit (Loss) | 196 | 81 | 809 | (8) | ||||
Operating Expenses: | ||||||||
Research and development, net | 11,580 | 3,279 | 28,564 | 12,794 | ||||
Sales and marketing | 677 | 311 | 1,814 | 1,063 | ||||
General and administrative | 1,916 | 301 | 3,709 | 1,093 | ||||
Total operating expenses | 14,173 | 3,891 | 34,087 | 14,950 | ||||
Operating loss | (13,977) | (3,810) | (33,278) | (14,958) | ||||
Financial expenses, net | 1,870 | 694 | 24,814 | 667 | ||||
Net loss | (15,847) | (4,504) | (58,092) | (15,625) | ||||
Basic and diluted net loss per | (0.27) | (0.49) | (2.64) | (1.70) | ||||
Weighted-average number of | 58,632,414 | 9,272,428 | 22,027,292 | 9,205,169 | ||||
* The number of ordinary shares retroactively reflects the 46.25783-for-one stock split of the ordinary shares which was effective on October 7, 2021. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(U.S. dollars in thousands) | |||||
12 Months Ended | 12 Months Ended | ||||
December 31, 2021 | December 31, 2020 | ||||
Cash flows from operating activities: | (Unaudited) | (Audited) | |||
Net Loss | (58,092) | (15,625) | |||
Adjustments to reconcile loss to net cash used in operating activities: | |||||
Depreciation | 342 | 228 | |||
Stock-based compensation | 2,211 | 439 | |||
Warrants to service providers | 115 | 52 | |||
Revaluation of warrants and accretion | 6,599 | 1,106 | |||
Revaluation of convertible loan | 17,866 | - | |||
Change in operating assets and liabilities: | |||||
Decrease (increase) in trade receivable | (50) | (137) | |||
Decrease (increase) in prepaid expenses and other receivables | (2,228) | (371) | |||
Increase (decrease) in trade payables | 458 | (1,063) | |||
Increase in employees and payroll accruals | 1,557 | 367 | |||
Increase in deferred revenue | 445 | 75 | |||
Increase in accrued expenses and other payables | 4,361 | (356) | |||
Net cash used in operating activities | (26,416) | (15,285) | |||
Cash flows from investing activities: | |||||
Change in bank deposits | 100 | 9,860 | |||
Purchase of property and equipment | (784) | (156) | |||
Net cash provided by (used in) investing activities | (684) | 9,704 | |||
Cash flows from financing activities: | |||||
Repayment of long-term loan | (2,639) | (1,585) | |||
Proceeds from short term loan | 4,715 | - | |||
Proceeds from issuance of redeemable convertible preferred shares and warrants for the purchase of Series B-2 redeemable convertible preferred shares, net | - | 1,190 | |||
Proceeds from recapitalization and pipe offering, net of issuance cost | 98,587 | - | |||
Proceeds from exercise of warrants | 12,859 | 256 | |||
Proceeds from exercise of options | 223 | 30 | |||
Proceeds from convertible loan | 11,337 | 1,641 | |||
Net cash provided by financing activities | 125,082 | 1,532 | |||
Increase (decrease) in cash, cash equivalents and restricted cash | 97,982 | (4,049) | |||
Cash, cash equivalents and restricted cash at the beginning of the year | 2,954 | 7,003 | |||
Cash, cash equivalents and restricted cash at the end of the year | 100,936 | 2,954 | |||
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 | 12 Months Ended | 12 Months Ended | ||||||
December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||
GAAP net loss attributable to ordinary shareholders | (15,847) | (4,504) | (58,092) | (15,625) | |||||
Add: | |||||||||
Stock-based compensation | 1,723 | 149 | 2,211 | 439 | |||||
Warrants to service providers | 59 | 9 | 115 | 52 | |||||
Revaluation of warrants and accretion | 1,861 | 838 | 6,599 | 1,106 | |||||
Revaluation of convertible loan | - | - | 17,866 | - | |||||
Non-recurring initial public offering expenses | 234 | - | 234 | - | |||||
Non-GAAP net loss | (11,971) | (3,508) | (31,067) | (14,028) | |||||
Basic and diluted Non-GAAP net loss per share | (0.20) | (0.38) | (1.41) | (1.52) | |||||
Weighted-average number of shares used in | 58,632,414 | 9,272,428 | 22,027,292 | 9,205,169 | |||||
* The number of ordinary shares retroactively reflects the 46.25783-for-one stock split of the ordinary shares which was effective on October 7, 2021. | |||||||||
RECONCILIATION OF GAAP NET LOSS TO AJUSTED EBITDA | |||||||||
(U.S. dollars in thousands) | |||||||||
3 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||
GAAP net loss attributable to ordinary shareholders | (15,847) | (4,504) | (58,092) | (15,625) | |||||
Add: | |||||||||
Financial expenses, net | 1,870 | 694 | 24,814 | 667 | |||||
Depreciation & Amortization | 96 | (27) | 342 | 228 | |||||
Stock-based compensation | 1,723 | 149 | 2,211 | 439 | |||||
Warrants to service providers | 59 | 9 | 115 | 52 | |||||
Non-recurring initial public offering expenses | 234 | - | 234 | - | |||||
Adjusted EBITDA | (11,865) | (3,679) | (30,376) | (14,239) | |||||
| Last Trade: | US$2.19 |
| Daily Change: | 0.39 21.67 |
| Daily Volume: | 8,499,953 |
| Market Cap: | US$186.610M |
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