Arbe Robotics Ltd. Ordinary Shares Canaccord Genuity's 46th Annual Growth Conference

Thank you. Thank you, everybody, for coming. I am Kobi Marenko. As you said, I am the Co-Founder and President of Arbe Robotics. Arbe is a radar company. We are providing ultra-high-resolution radar for a lot of activities. Basically, when we are looking today in the market, the physical AI, the robots, the robot taxis, the drones, they are all coming into the market. They all need reliable, real-world intelligence, a sensor that can see the environment in any weather, any lighting condition, and gives an output that an AI system, an AI model can really use it in order to do autonomous movement. This is what Arbe is all about. We started the company with a focus on automotive. We were actually chasing the autonomous driving, and the fact that we were focusing on automotive gives us a lot of advantages.

This is the real market where the quality that is needed is very high on one hand, and the price that the car manufacturers are willing to pay is very low. We are coming today to the market with a product that has the best performance, the lowest power consumption, and the lowest price. This year, this is the first year that our commercializing is expanding. Basically, when there is a perception, we always think of a camera. Camera, of course, is the best perception. It is almost like our eyes. It sees the environment, but the camera has limitations. The main limitation of the camera is bad weather, bad lighting condition, night, fog, rain, snow, all of those basically blocking the camera from seeing the environment. There is more than that. There is the distance. A camera is limited by the distance, and when we are talking about physical AI and we are trying to move fast, whether it is a drone or a robot or a robot taxi, the speed is critical, which means you need to see the obstacle in a very long range, and this is where the radar fits in.

Another big advantage of the radar is the fact that the radar can actually detect the velocity of the objects, not just the depth, not just the X and Y of the object, but also the velocity.

If you take the reliability of the radar that works in a long range, low latency, and can see the environment in any weather and any lighting condition, and you add to this a perception layer, then you get an output that is ready for the large models to fuse it with a camera and coming with a full self-driving or full self-moving robots. Basically, Arbe is a semiconductors company. We are producing chips for radar. Our chipset basically has two parts, the RF part, the transmitter and the receiver, and our core IP is our processor, a dedicated processor that has our IP on it and allowing us to process 10 times more than any other processor in the market in the amount of channels and in the amount of points and the output of this radar.

For the automotive market, we are selling this chipset to the Tier 1s, the companies that sell to the car manufacturers. Magna is our customer, our main Tier 1 in the Western world. HiRain is our Tier 1 in China. For other applications which are not automotive, we are producing the entire radar system, the entire box. Like you see, it's a box this size, more or less, and with this box, we are able to see the environment up to 500 meters, to see a very small drone, very small object on the road in any weather and any lighting condition. On top of it, together with Nvidia, we are providing an AI-based perception for the radar, so we are able to see the environment and to generate this point cloud.

With the AI stack, we are able to analyze the output of the radar and generate what is called free space mapping, this green area, which tells the car or the robot or the drone what is drivable and what is not, including, of course, classifying the objects and tracking them and making sure that the drive will happen smoothly and safely. Basically, we have three verticals. First vertical is automotive. We already have a robotaxi that's driving with our radar in the U.S., and a delivery van, fully autonomous in China that we own, that will start driving by the end of this year. We already supplied the chips to our Tier 1. On the second side of the story is the defense industry and the homeland security. Our radar can detect drones, even very small ones, in more than 500 meters.

By that, enable the defense system protect on a perimeter or on a vehicle in the battlefield or even a platoon of soldiers, we are able to detect the drones around them and make sure that they will be able to take a shelter or to operate an interceptor for that. With our radar, we are enabling also vehicles that are used in the battlefield. We won a contract with the American Army for autonomous supply chain trucks. It's big trucks driving off-road where there is a lot of dust, a lot of rain sometimes, and they are able to drive themselves fully autonomously with our radar and of course, with a camera. Perimeter security is another application that our radar can handle, and autonomous movement or autonomous flying of drones with our radar on the front of the drone. In between them, there is the civilian market.

We have traffic management customer delivery robots, which is something between a car and a robot. Even marine, we won a contract with a big yacht manufacturer that enabled the yacht to be fully autonomous, drive back to the port, and making sure they won't hurt swimmers on the way in. The fact that we are coming from automotive engineering is what gives us now the advantage in other industries. It's the performance. The automotive industry needs the best resolution, and with this best resolution that we can separate between a child and a car and a truck and something that is on the road, we are also able to see the small drones flying, even in an urban environment, very low, and to separate them from the ground and making sure that we will be able to detect them.

The architecture of a radar is a solid state. There's no moving parts. It's a box with chips inside it. It's very reliable, and it works in any weather and any lighting condition. Because of the fact that we built for scale, because automotive is a high scale, we are able to supply any other industries easily. Looking on the competition, basically today we are competing in two basic industries. The first is automotive. In the automotive, we have today the best price, performance, and power. Our next competitor is Mobileye. On the drones detection, our main competition is Echodyne with their EchoShield product that has a low resolution, and it's much more expensive than our solution. Also our radar is much smaller, which enable it to be on a mobile or on vehicles as opposed to Echodyne that is mainly protecting a perimeter stationary place.

There is a broad shift to physical AI, and the radar is a huge opportunity for that. We believe that by end of the decade, there would be around $27 billion in radar systems. Part of it is automotive, part of it is defense, part of it is the physical AI. For all of those markets, we have a solution and a good solution, a solution that can fit into the existing ecosystem, connect to the AI stack, and making a difference the minute that we are in. Basically, by the end of last year, we moved from development to production, and early this year we started generating revenues, and since then we are increasing our revenues in more than 50% quarter by quarter, and we believe that this going to continue to the rest of the year.

Next year, we're going to see a broader commercial deployment, especially in China. We have some project that going to full scale of production in automotive and also in defense projects or customers that we won this year, and we started shipping them hundreds of units will become thousands and 10 thousands of units next year, which will drive us to break even in 2028 and revenue growth in 2029. By 2030, we believe that we will start seeing also larger amount of revenues coming from automotive. Today, we have clients around automotive. In China, we have a full autonomous delivery van. We have a robotaxi project, a robotaxi company here in the U.S., and we won a European truck manufacturer for autonomous trucks.

In the defense and homeland security, together with Forterra, we won the contract of the American Army, and we have a defense and homeland security system integrator in three projects. One of them, the leading one, is drone detection. On the civilian and static, we have a project in China for traffic control. We have a customer for, as I mentioned, for autonomous yachts and some other smaller projects as well. Our production is already there. Our fab is GlobalFoundries, and we have with them a long-term strategic manufacturing agreement that providing us the ability to support our customers also in times where there is shortage in chips. We can really make sure that our customers will get it. Our guidance for this year is around $4 million to $6 million in revenues and adjusted EBITDA between $28 million to $30 million negative.

The cash burn is reducing dramatically toward the end of the year. Next quarter, Q3, we will burn less than $7 million, and by Q4, less than $6 million, and we are aiming to reduce it even more next year. We had $42 million in cash as of end of this quarter, which we believe will enable us to reach breakeven in 2028. A few words about ourself. We are traded on the Nasdaq for the last five years, 120 people, most of them in our R&D center in Israel. We have sales and support in Germany, China, and U.S., and as I mentioned, $42 million in cash. Physical AI needs reliable real-world perception, and we are the sensor for that that can work in any weather, any lighting conditions. Now for the questions. I'm good with that.