Luminar Technologies, Inc. (LAZRQ) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm Al Prescott, Luminar's Chief Legal Officer. It's my pleasure to welcome you to Luminar Technologies, Inc.'s very first Annual Meeting of Stockholders. Thank you for joining us today live via our Internet webcast. Please note that this meeting is being recorded, and a replay will be posted to the Investor Relations section of our website at https://investors.luminartech.com. Due to COVID-19, we're holding this meeting virtually over the Internet. It's now 12 noon Eastern Time, and I call this Annual Meeting of Stockholders to order. I will act as Chair and Secretary of this meeting. I'd like to introduce certain members of our management team who are joining me on this virtual meeting today. Austin Russell, our Founder, CEO and Chairman; Tom Fennimore, our Chief Financial Officer; Scott Faris, our Chief Business Officer; Jason Eichenholz, our Chief Technology Officer; and other executives with the company. Additionally, we have several other members of the Board of Directors present today; Alec Gores, Dr. Mary Lou Jepsen, Katharine A. Martin; and Matthew J. Simoncini. Also with us today is Evan Gregory, representing Deloitte & Touche LLP, our independent registered public accountants, and he is available to respond to appropriate questions. Lastly, also present are Mitch Zuklie and Dan Kim, representing Orrick, Herrington & Sutcliffe LLP, our outside Corporate Counsel; and Michael Barbera, representing First Coast Results, Inc., acting as our inspector of elections. We'll first conduct the formal part of the meeting, which includes voting on the proposals to be considered. After voting is over and the polls are closed, I'll open it up for a brief question-and-answer session. [Operator Instructions] The polls are currently open. If you would like to vote, you may do so by clicking on the proxy voting site link on the left-hand panel of the screen. Voting procedures will be addressed in greater detail shortly. The annual meeting is being held in accordance with the company's bylaws and Delaware law. The items on the agenda for the formal meeting are: The election of 3 Class I directors and the ratification of the appointment of Deloitte & Touche LLP as independent public accountants for the fiscal year ending December 31, 2021. After we vote on these matters, an announcement will be made regarding the preliminary results, and the formal meeting will be adjourned. We have adopted rules of conduct for the meeting, which are available on the meeting website. [Operator Instructions] During the formal meeting, we will only respond to questions regarding procedures to the meeting and the proposals under consideration. I have proof by affidavit that notice of the meeting was duly given, and the notice of Internet availability and proxy card were mailed on or about April 30, 2021, to all stockholders of record at the close of business on April 13, 2021, the record date for the meeting. We've appointed Michael Barbera again as representative of First Coast Results, Inc. as our inspector of elections for the meeting. And the inspector of elections has signed an oath of office, which will be filed with the minutes for this meeting. The inspector of elections has advised me that we have present online or by proxy a sufficient number of shares to constitute a quorum. Therefore, this meeting is duly constituted, and we may proceed with the business. Let me briefly describe the voting procedures. Stockholders attending the meeting via Internet webcast may vote their shares in real-time until the polls are closed. The votes cast today will be counted in the final tally along with the proxies previously received. The inspector of elections will provide the preliminary results of voting at the end of the meeting. If anyone has a question regarding voting procedures, please submit the question by clicking the Chatbox icon. Do we have any questions?

No questions.

The polls are open for each of the matters to be voted on. If you haven't -- if any of the stockholders, if you haven't voted or you wish to change your vote, you may do so now using the proxy voting site link on the left-hand panel of the screen. So to go over the proposals, we have 2 proposals from the company properly before the meeting, and detailed information on each proposal was presented in the proxy statement made available to all Luminar stockholders. At this time, I'd like to ask whether there are any questions concerning the 2 proposals.

We did just get one question. So if we -- approximately how many stockholders are participating in the virtual meeting. I believe we have approximately 25 to 30.

Okay. Seeing no other questions, we'll continue. At this point, the votes -- the polls are about to close. If you haven't voted, please do so now. I'll take a moment to pause. It's now 12:05 p.m. Eastern Time on June 9, 2021. The polls are now closed. No additional online ballots, proxies or votes and no changes or revocations will be accepted from this point. The proxies and online ballots will be tabulated by the inspector of elections. At this time, based on the preliminary information provided by the inspector of elections, I am pleased to report that Jun Hong Heng, Dr. Shaun Maguire; and Katharine A. Martin have been elected as directors of the company to hold office until the 2024 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified and the appointment of Deloitte & Touche LLP as the company's independent auditor for the fiscal year ending December 31, 2021, has now been ratified. The final results will be reported in our public reports filed with the Securities and Exchange Commission. This Annual Meeting of Stockholders is now adjourned, and I thank you for your attendance and participation. Now we'll proceed with some remarks from our Chairman, followed by a question and answer. I'd like to note that our Chairperson's remarks and during the question and answer, we may make forward-looking statements regarding future events, which involve risks and uncertainties. Such statements are only predictions, and actual events or results could differ materially from those predictions due to a number of risks and uncertainties. I refer you to the documents the company files from time to time with the SEC, specifically the company's most recently filed annual report Form 10-K filed on April 14, 2021, or our most recently filed quarterly report on Form 10-Q, which was filed on May 14, 2021. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Now with that out of order here, I would like to introduce Austin Russell, our President, CEO, Founder, Chairperson and Master of Disaster [indiscernible] of Luminar Technologies, Inc. Austin?

There we go. You figure master and master or something. But yes as a play off in Tesla, I think what was a master of coin and Techno King that is Elon and the CFO [indiscernible]. Well, thank you, Al. Thanks, everyone, for joining here, too. This is great to be able to kick off our first annual meeting as a public company of shareholders. Our goal with this meeting is really less about trying to make a flashy event out of it, rather just be able to get through efficiently and help answer any outstanding questions that you guys have. We have a -- we do have a Studio Day I'm assuming just around the corner that's live from New York on the 15th. We welcome all of your attendance for. There's going to be some interesting stuff. So with that -- of course, just a quick word. With regard to our journey, I mean since we founded Luminar back in 2012, we've been really focused on solving one of the world's most challenging problems of enabling autonomy, while at the same time, dramatically improving vehicle safety. And to realize the goal, we've had to deliver revolutionary breakthroughs, going down to the fundamentals of the hardware, building the system for the chip level up, while at the same time, now even starting to build the software to power full stack autonomy systems and enable the industry. So as we've made this transition, we've certainly demonstrated some huge progress across not just the technology and products. But from a commercial landscape, I'm now fortunate enough to call the majority of some of the top OEMs in the world as partners and continuing to accelerate into that as the first company that can truly scale to the stage of series production for autonomy. So with that, we got a lot left ahead, a lot left to execute against, but we continue to do so in a strong capacity meeting and beating goals, as you guys heard on the quarterly updates and earnings calls. So those will be great, and we'll continue to do those to be able to provide more comprehensive updates as we progress as a company, but great outlook. So with that, of course, we'd like to extend great thanks to our incredible team, partners, OEMs, suppliers, investors and everyone that's on board for the next phase of the critical journey. So with that, let's answer your questions.

Yes. Thanks, Austin. So we've already received a number of questions. [Operator Instructions]

The first question is, if you can explain the differences between Luminar Technology and how it's superior to other LIDAR companies that have recently gone public?

Yes. So really, the core with Luminar and what it all comes down to is that we've built a system entirely from the chip level up, reinvesting that whole process of what it means to build a LIDAR. When we first founded the company, we had to make the call of what are all the different combinations, permutations and ways that you can be able to construct a LIDAR sensing system that can truly meet the performance requirements, safety requirements, scalability requirements, economic requirements that are needed to ultimately make its way into series production vehicles. And that's where we took a bottoms-up approach at building a LIDAR and solving the problem and a tops-down approach in understanding what are the true requirements that are needed to do so. And over a number of years, after building each of these components, we're able to holistically have that first and only system that can meet the true performance requirements and all the other requirements that are needed that make its way into series production vehicles. And that's really what's been validated by our OEM partners and by everything out there, that this is not just for test and development systems. This is not just to get -- try and get to a next stage. This is the first opportunity that we can really have the chance, the autonomy through into the real-world industry into cars that can scale and feasible use cases that involve not just full autonomy, but at the same time, enabling even more constrained by high-volume use cases, dramatically improving vehicle safety, and that's really the goal. So there's a lot of technical details that go into and a lot of additional information that we have that we've been able to share that can provide some of the specifics of everything from how we're able to do this with a single laser, single receiver-based architecture rather than using hundreds of lasers in an array and hundreds of receivers, all these things that have to work to make this happen. But with the breakthroughs that we've had, that's how we've generated these order of magnitude type improvements.

Great. The next question is around expectations regarding when the first Luminar lidar product will be available in series production vehicles.

Yes. So really excited to pioneer these first implementations of autonomy into series production vehicles. We are still on track for our start-up production of Iris by end of 2022, and that is the time line that generally a lot of automakers for the initial ones have been working with. We don't necessarily set the exact vehicle ramp program and time line. That's set by the OEM. But we have things all queued up and ready to go for the relatively near future, and the plans are generally on track. So it's been good and that applies, I think, with like the SAICs and Volvos of this world that are out there at first and then you have some of the other OEMs that progress over the subsequent years between -- generally between 2022 to 2025 time frame windows where the majority of the start of production programs are for the different OEMs.

Great. Another question coming in is about product or application extensions beyond the lidar, and I'm thinking they're meaning LIDAR hardware.

Yes. Yes. So yes. It's interesting and I guess -- well, even within the LIDAR too, we've actually found other extensions. So we've been selling some of our components into other industries and other things that are not related to LIDAR and have a lot of those capabilities. But the core of it -- core of the question, clearly, we've been able to demonstrate our leadership and really have a one-of-a-kind company and product when it comes to LIDAR. That is the foundation of everything that we built around over the first handful of years of the business. And those breakthroughs have enabled us as a springboard to be able to then start developing and going beyond the LIDAR to be just as much an autonomous vehicle company as we are a LIDAR company. And that's where really -- the OEMs are able to see us as a thought leader and partner in this in solving a holistic solution and problem that goes beyond just any single component, albeit critical component. But nevertheless, this is important to be able to enable the broader industry to have the software application solution. And we are uniquely positioned as really the only company that's been able to build the LIDAR from the ground up for this, while also developing the software for the series production vehicles and cars and whatnot. So that's been a journey that also has in part culminated with some of the partnerships that we had with Zenseact going beyond our internal efforts while we have developed many aspects of the software stack in-house. We are also partnering with our OEMs to be able to then share this solution with the broader industry. In the case with Zenseact, they are a subsidiary of Volvo cars. And they've been a great partner with us, where we already have our launch customer with software already within Volvo. But then taking it beyond is something that we've already been working through like certain components are already going into SAIC and more and more accelerating every day. So that's just a bit.

Excellent. Austin, another investor is asking about broad application of Luminar technology. Can it be broadly applied in cars or just full self-driving models, I think getting it maybe some of the proactive safety versus kind of full autonomy?

Yes, yes, yes. That's exactly it. I think when it comes down to autonomy, a lot of times when people talk autonomy, they think robo taxis more than anything. Urban-oriented cars that are driving or picking up a passenger, taking it from Point A to Point B in an environment, an Uber like ridesharing scenario. The reality of what we're doing when we talk about autonomy is very different in 2 ways than virtually all the companies you talked about, like the Waymo, Cruise, Argo, Aurora, Zoox, all those guys out there in terms of what we've done is that we are building products for production vehicles, something that has an opportunity in the near term, not a decade-plus long time horizon. But in the near term, to be able to get designed into the existing multitrillion-dollar vehicle market, production vehicle market and scale with that to be able to deliver and to be able to build a real business out of it. And this is why we're so bullish on having the opportunity to see autonomy realize sooner than later. We're very much realist as it comes to everything in the industry, and that's why we've taken the focus on a constrained approach of the operating domain, working on highways as the focus to be able to start out, while at the same time, working with the partners that have the business to help us scale with. And there's a lot of stuff that what it takes to be designed into a production vehicle. If you take a look at the $100,000 roof racks full of sensing systems and a supercomputer in the trunk that you'll see on the autonomous vehicles of today, we've been able to shoe all of that for a seamlessly integrated design, into roof line or other areas of the car and actually having something in cars that you can buy and something that doesn't cost $100,000, obviously, we've been public about the $1,000 type vicinity and range that is what it takes to get designed in and scale with these guys, and that's what we've been able to deliver. So with that, when it comes to proactive safety, as we call it, it goes beyond just the highway autonomy that we're working with these OEMs on. The safety aspect is one of the most I think underrated aspects of what could be enabled with this kind of technology. Because there's just so much focus on the autonomy side of this, which is great. It makes sense that drives us into the higher-end vehicle models that start out with an option on these vehicles. But the ultimate goal for why this -- we see an opportunity for this -- for standardization across the industry is revolving around safety. And there is a direct opportunity to be able to dramatically improve vehicle safety, dramatically reduce accidents altogether by a multiple. And the whole reason for that is because right now, when you have like the camera and radar systems, the existing ADAS systems out there, they're great as a baseline. They've certainly done the job, but there's only so much confidence that you can get out of it in terms of knowing where an object is in 3D out of a camera on radar. With a LIDAR, when you have this level of performance that we have, we know exactly where that is down to centimeter-level precision. And that's what makes all the difference and the confidence where you can now start getting to a stage where you're rather than trying to just reduce the severity of accidents out there happening, be able to start preventing accidents altogether. And that's the ultimate goal of what OEMs want to be able to drive towards and there's been a shift. So that's how we see this accelerating to broad adoption in the industry. And we first said the first holy grail of the business was -- for the industry was to get designed into a series production vehicle and to enable these capabilities. And we started that out with Volvo and then expand into a bunch of other automakers. Now the next holy grail is moving towards standardization. And yes, we'll be excited.

Fabulous. Well, one final question, and -- but I'll have one clarification first. We got a question live around how we'll find out about Studio Day. And you can go to investors.luminartech.com. We've got an event on the page. You can sign up for the webcast there for having you join us next Tuesday. So the last question is whether or not we're impacted by the chip shortages in the industry right now?

Yes. So it's a good question. There's definitely has been a broader semiconductor shortage throughout the industry that has affected a lot of different OEMs with kind of some of their near-term planning, given their high volumes. Fortunately, for us, at this stage, it's really -- as we're going through the development cycles, industrialization cycles and everything, there's a lot of preparation for production, but the start of production isn't until later on next year. So as a result, I mean, there aren't really -- it's not particularly meaningful as an issue for us at this stage. Obviously, we're very hopeful. And I think people made great plans to be able to reduce the shortage. Over the course of the next year, people have learned their lessons and then some as it comes down to these things. But it goes to show just how important being able to have control over your supply chains and being able to -- and have the ability to own that. I mean we set things up early on, where we actually even outright acquired key and critical suppliers. We have exclusive agreements with a number of the other critical ones that we didn't acquire. And we set ourselves up to be de-risked and successful. If you take a look like even our -- we actually have our chip design team and everything, that's all in-house, which is -- was unheard of for a company like what we were and at the stage that we were to be doing that early on and pioneering so many different aspects of what ultimately enabled us to do what we're doing today over a number of years in iterations. So yes, we maintain that that's going to be a great strength for us in the future. And we're managing the supply chain and putting reservations in -- well in advance as we need it for the supply base leading up to SOP.

Thanks to all the investors who offered up questions. We really appreciate those.

One -- also a quick word, let's say, just a big welcome to Jun and Shaun coming on to the Board here. Both will be incredible assets for Luminar and hugely strategic in helping drive forward our vision and doing what it takes. Jun has been a great supporter of Luminar since it's actually early days, and ultimately became our largest investor while we were a private company, very familiar with the story early on, but his experience across capital markets as a leader in the finance and tech industry there, well, he will be absolutely very helpful for Luminar and driving forward our strategic vision on a number of fronts. And equivalently, Shaun has had some great experience across the board, a bit fortunate enough to be able to know, he's one of the smartest people I know, having actually founded successful technology companies and some huge hits there, general partner at arguably the top venture firm in the country, Sequoia. And all the while, he's a physics PhD from Caltech that everything from, his thesis on black holes all the way to deeply understanding laser systems and driving this forward. And it's awesome to be able to have folks with this caliber willing to come on and join our Board and couldn't be more excited for that. So thank you very much. And a big thank you as well for Scott McGregor as well as Ben Kortlang for their service on the Board and helping drive forward our vision since the earlier days of Luminar and continuing to help take it to the next level as continued supporters. So thank you, everyone.

Yes. I'd like to thank everyone for attending today's meeting and for all the interest you've shown in the affairs of the business. We really appreciate your attendance and all the support from our stockholders. Have a great day.

This concludes Luminar's 2021 annual meeting of shareholders. You may now disconnect.