Aeva Technologies, Inc. — Q3 2021 Form 10-Q
Business context and reporting period. Unaudited results cover the three and nine months ended September 30, 2021, compared with the same 2020 periods. Aeva develops FMCW-based 4D LiDAR and related software. It remained a development-stage business: sales were primarily prototype products and non-recurring engineering services for customer research and development programs, not scaled commercial deliveries. The March 12, 2021 business combination was accounted for as a reverse recapitalization.
Financial highlights
Amounts below are in U.S. dollars, millions, except per-share data and percentages.
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $3.5 | $1.9 | $6.4 | $4.1 |
| Gross profit | $1.2 | $1.0 | $2.5 | $1.9 |
| Gross margin | 34% | 49% | 39% | 47% |
| Operating loss | $(27.4) | $(4.8) | $(72.3) | $(16.7) |
| Net loss | $(26.6) | $(4.8) | $(70.1) | $(16.6) |
| Basic and diluted loss per share | $(0.13) | $(0.03) | $(0.36) | $(0.12) |
- Q3 revenue rose 79%; nine-month revenue rose 55%. Management attributed the increases mainly to engineering services, with a smaller contribution from prototype sales.
- Gross margin declined year over year in both periods. Management cited lower prototype selling prices and higher employee costs on engineering services.
- Operating expenses increased substantially. Nine-month R&D was $51.0 million, general and administrative expense $21.6 million, and selling and marketing expense $2.1 million; the respective 2020 amounts were $14.3 million, $3.3 million, and $1.0 million.
- At September 30, cash and cash equivalents were $107.5 million and marketable securities were $370.2 million, totaling $477.7 million. Current assets were $490.7 million and current liabilities $14.8 million.
- Operating cash use was $57.2 million for the first nine months, versus $14.6 million in 2020. Financing provided $513.5 million, mainly from the business combination and PIPE; investing used $373.5 million, principally reflecting purchases of marketable securities.
- No borrowings are reported. Lease liabilities totaled $11.0 million; a further $1.1 million warrant liability was recorded. The filing reports $131.2 million of accumulated deficit.
Material changes and unusual items
- The business combination and PIPE generated $560.8 million in gross proceeds; approximately $47.7 million of transaction costs were deducted. Net proceeds increased liquidity materially.
- Stock-based compensation was $16.0 million in the first nine months of 2021, compared with $2.8 million in 2020. The filing also reports $58.6 million of unrecognized RSU compensation expense expected to be recognized over a weighted-average 3.1 years.
- A $1.9 million year-to-date gain from a decrease in the fair value of private placement warrant liabilities contributed to other income. The warrants are remeasured each reporting period.
- Two customers represented 81% and 15% of Q3 revenue; for the nine-month period, two customers represented 81% and 11%. Two customers also accounted for 93% of receivables at quarter-end.
Outlook, risks, and controls
- Management expects continued operating losses as it invests in product development, and stated that available cash and marketable securities should fund operating and capital expenditure needs for at least 12 months from issuance of the financial statements.
- The filing states commercial product deliveries were not expected to begin until 2024 and could occur later or not at all. It provides no quantified revenue, earnings, or margin guidance.
- Management highlighted customer commercialization and program delays, uncertain LiDAR adoption, competition, reliance on limited or single-source suppliers, outsourced manufacturing execution, pricing and margin pressure, customer concentration, and COVID-19-related uncertainty.
- Disclosure controls and procedures were deemed ineffective due to material weaknesses, including issues with warrant accounting and the financial close and reporting process. Management was developing remediation measures, including hiring additional qualified accounting personnel; remediation was not yet complete.
- Operating lease commitments were $12.1 million in undiscounted payments. The company disclosed ordinary-course legal matters but no specific material litigation outcome or quantified contingency in the text provided.
Key facts for investors to verify
- Whether customer development programs progress to production, and whether the stated 2024 delivery timeline remains achievable.
- Revenue quality and concentration: the split between engineering services and prototype sales, customer commitments, and dependence on a small number of customers.
- Cash consumption relative to the $477.7 million cash-and-securities balance, including the effect of continued R&D, hiring, leases, and commercialization spending.
- Whether gross margins can recover as products scale, given lower prototype pricing, engineering labor costs, and customer pricing pressure.
- Progress in remediating the material weaknesses and maintaining accurate, timely SEC reporting.
- Supply-chain availability, manufacturing partner performance, and whether LiDAR demand and customer adoption develop as management expects.