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Arbe Announces Q4 and Full Year 2021 Financial Results

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TEL AVIV, Israel, March 1, 2022 /PRNewswire/ -- 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.

Arbe Robotics Logo
Arbe Robotics Logo

Key Company Highlights:

  • Arbe maintains significant product leadership, delivering the only radar on the market that enables free space mapping and truly safe Level 2.5 and Level 3, without relying on LiDAR

  • On track for production with full automotive qualification by the end of 2022

  • Arbe's Imaging Radar was selected by AutoX to enable their fully autonomous RoboTaxi fleet

  • On schedule with a pre-production project with a Top 5 global OEM, which is progressing towards selection in 2022

  • Selected by a Top 10 global OEM for an "Imaging Radar - based perception" project

  • BAIC Group announced that Arbe's technology will be installed on its mass-produced Level 2.5 / Level 3 models

  • Selected for a smart mobility project

  • Five Tier-1s are building production radars based on Arbe's chipset, including Valeo, Weifu, Hirain, and Qamcom and a leading radar player that has commenced design in Q4

  • 30 customers bought Arbe's Imaging Radar samples

  • Arbe was advised that it is on the short list for 17 new projects for OEM, RoboTaxis, delivery robots, and autonomous trucks, on top of existing projects

  • Arbe appointed Thilo Koslowski, founder and former CEO of Porsche Digital, to its board of directors

  • Arbe believes that with current customers, Tier-1 partnerships, and with its strategic relationship with Global Foundries the company is on track to reach its $312 million revenue goal for 2025

"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:

  • Revenues to be in the range of $7 million to $11 million.

  • Adjusted EBITDA in the range of ($34 million) and ($38 million), primarily attributable to the increase in labor cost, most notably in R&D, foreign currency exchange rates impact and additional legal, accounting, and general overhead costs resulting from our status as a public company

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
shares and shareholders' equity (deficiency)

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
share attributable to Ordinary
Shareholders


(0.27)


(0.49)


(2.64)


(1.70)










Weighted-average number of
shares used in computing basic
and diluted net loss per share
attributable to Ordinary
Shareholders*


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
attributable to Ordinary Shareholders


(0.20)


(0.38)


(1.41)


(1.52)












Weighted-average number of shares used in
computing basic and diluted Non-GAAP net loss
per share attributable to Ordinary Shareholders*


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)


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