MicroVision, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; unaudited. Unless otherwise stated, amounts are in U.S. dollars.
Business context
MicroVision develops lidar hardware and perception and validation software, primarily for automotive ADAS applications, with additional commercial and industrial markets. Its products include MAVIN long-range lidar, MOVIA short-range lidar and MOSAIK validation software. The company reports as one operating segment. Management says its development and productization efforts are focused on lidar and related software; it does not expect historical Microsoft royalty revenue to continue.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $0.956 million | $0.782 million |
| Gross profit (loss) | $(0.321) million | $0.238 million |
| Gross margin | (33.6)% | 30.4% |
| Operating expenses | $26.389 million | $21.429 million |
| Loss from operations | $(26.710) million | $(21.191) million |
| Net loss | $(26.313) million | $(19.027) million |
| Net loss per share, basic and diluted | $(0.13) | $(0.11) |
| Cash used in operating activities | $20.759 million | $13.482 million |
Revenue rose 22.3%, primarily from increased MOVIA L shipments to Daimler Truck North America and affiliates for RFQ evaluation, intangible-asset amortization and one-time license fees. Cost of revenue grew 134.7% to $1.277 million, exceeding revenue; the filing attributes the increase to minimum license fees and intangible-asset amortization, among other mix effects. R&D expense increased 36.4% to $17.311 million; sales, marketing, general and administrative expense increased 3.9% to $9.078 million.
At March 31, 2024, cash and cash equivalents were $44.298 million and short-term investment securities were $28.770 million, for reported liquidity of $73.068 million. Restricted cash was an additional $2.039 million. Total assets were $124.182 million, total liabilities $30.379 million, and shareholders’ equity $93.803 million. The balance sheet shows no borrowings; operating lease liabilities totaled $14.525 million. Accumulated deficit was $791.679 million.
Financing activities provided $21.018 million, mainly from $20.956 million of net common-stock proceeds. Cash, cash equivalents and restricted cash declined $3.054 million during the quarter. The company raised $20.6 million net from selling 10.4 million shares under a new $150 million at-the-market (ATM) facility; approximately $128.2 million remained available at quarter-end.
Material changes and notable items
- Net loss widened by $7.286 million year over year. Q1 2023 included a $1.706 million Ibeo bargain-purchase gain; Q1 2024 did not.
- Operating cash use increased by $7.277 million, which management primarily attributes to higher operating expenses supporting lidar development.
- In Q1 2024, MicroVision reduced its global workforce by approximately 18%, shifting away from sensor-fusion development. It recorded approximately $2.5 million of restructuring and reorganization charges, mostly severance; approximately $2.4 million was unpaid at quarter-end.
- Approximately $3.0 million of final Ibeo acquisition consideration remained accrued and was expected to be paid in Q2 2024. The company also had approximately $5.7 million of remaining MOVIA manufacturing-partner payments expected by year-end 2024 or Q1 2025.
- Revenue was highly concentrated: two customers contributed approximately $0.5 million (52%) and $0.3 million (33%), respectively.
Outlook, risks and contingencies
Management says existing cash and cash equivalents are expected to fund operations for at least the next 12 months under its current operating plan. Separately, the filing warns that additional capital will be needed to fund the plan beyond that period and that further financing may not be available on acceptable terms. The company expects significant losses and negative cash flow at least through 2024 and likely thereafter; it gives no revenue or earnings guidance.
Key risks include continued low revenue relative to operating costs, dependence on a small number of customers, the need to secure automotive OEM or Tier 1 production awards, uncertain market adoption and pricing, competition from lidar and alternative technologies, and reliance on limited-source suppliers and manufacturing partners. The company also cites capital-raising and shareholder-dilution risk, execution and integration risks related to Ibeo, and foreign-exchange, cybersecurity, intellectual-property and product-liability risks.
MicroVision reported no legal proceedings that management believes are reasonably likely to have a material adverse effect. It disclosed a $9.3 million MOVIA purchase commitment, with approximately $5.7 million of future payments remaining. Management concluded disclosure controls were effective and reported no material changes in internal control over financial reporting during the quarter.
Investor facts to verify
- Whether MOVIA evaluation shipments and other customer activity convert into durable revenue, production awards and improved gross margins.
- Actual quarterly cash burn, the assumptions behind the stated 12-month funding runway, and the timing and terms of any additional financing.
- Further ATM share sales, dilution and the remaining availability under the $150 million facility.
- Progress and costs related to restructuring, Ibeo integration, the final acquisition payment and MOVIA manufacturing commitments.
- Customer concentration and exposure to single- or limited-source suppliers.