Innoviz Technologies Ltd. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under U.S. GAAP and audited by EY, which issued an unqualified opinion.
Business context
Innoviz develops solid-state LiDAR sensors and perception software for automotive and other autonomy applications. Its business remains at an early commercialization stage, with revenue largely from development and product sales. The company’s key automotive program is BMW’s Level 3 program, supplied through Magna. Innoviz completed its business combination and began trading on Nasdaq in April 2021.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $5.5 million | $(9.4) million reported; $5.4 million excluding a $14.8 million preferred-share-related revenue reduction |
| Gross loss | $5.0 million | $15.8 million reported |
| Gross margin | (92)% | (168)% reported; comparison is distorted by the 2020 revenue reduction |
| Operating expenses | $152.6 million | $66.2 million |
| Operating loss | $157.7 million | $82.0 million |
| Net loss | $153.6 million | $81.5 million |
| Operating cash flow | $(82.5) million | $(61.9) million |
- Revenue was nearly flat year over year on a comparable basis, up about 1% excluding the 2020 reduction. InnovizOne revenue rose 28% to $4.3 million; discontinued InnovizPro revenue fell 90% to $0.1 million.
- Cost of revenue rose 64% to $10.5 million, partly due to $4.4 million of inventory write-offs and low production volume and efficiency. The filing reports no positive gross margin.
- R&D expense increased 64% to $93.3 million; selling and marketing rose to $23.7 million and G&A to $35.6 million. Increases primarily reflected business-combination-related stock compensation, higher headcount, and transaction costs. FY2021 share-based compensation was $64.7 million.
- Financial income, net was $4.4 million, including a $2.0 million gain on sale of an investee, warrant remeasurement, and interest income.
- At year-end, cash and cash equivalents were $23.6 million, short-term deposits $230.5 million, and marketable securities $49.9 million—about $304.0 million combined. Current assets were $274.4 million versus current liabilities of $21.7 million.
- Financing cash flow was $337.2 million, mainly from the business combination and related transactions. Investing cash outflow was $281.6 million, principally transfers into short-term deposits and marketable securities. The company reported no outstanding loan balance at year-end; it repaid approximately $2.6 million of loans during 2021.
Changes, outlook and risks
- Despite the larger reported revenue increase, comparable revenue grew only 1%; the 2020 headline figure was depressed by the $14.8 million preferred-share issuance accounted for as a revenue reduction. Net loss increased substantially, with material non-cash stock compensation contributing to the expense growth.
- Management said year-end cash, deposits and securities should fund the business plan for the next two years. It expects losses, excluding one-time share compensation, to rise as it invests in R&D, production capacity, inventory, sales and commercialization. The filing gives no quantified revenue or earnings guidance.
- Remaining performance obligations were $12.2 million, expected to be recognized in future years; this is not equivalent to firm near-term revenue. Application-engineering revenue was not recognized in 2021 because customer acceptance criteria were unmet.
- Customer concentration is material: Magna accounted for approximately 82% of 2021 revenue, and the company identifies its BMW program and Magna relationship as significant dependencies. Automotive design-to-production cycles can span five to seven years, with cancellation, delay, and pricing risks.
- Supply-chain constraints increased component prices and lead times, though Innoviz said it had sufficient near-term inventory. COVID-19 disruptions were expected to continue affecting operations in 2022. Other prominent risks include product-development delays, competition, customer adoption of LiDAR, and the need for additional funding if plans or timing change.
- A new office lease has stated future minimum payments of $44.3 million, including relevant option periods. Adoption of lease accounting in 2022 was expected to add approximately $33–$35 million each in right-of-use assets and lease liabilities.
- Management concluded disclosure controls and internal control over financial reporting were effective at year-end. The auditor did not provide an internal-controls attestation, citing applicable transition and emerging-growth-company exemptions. No material legal proceedings were reported.
Important facts for investors to verify
- Reconcile the cover-page statement that the company had “0 ordinary shares outstanding” at December 31, 2021 with the audited balance sheet showing 134,098,120 issued and outstanding shares.
- Review the audited statements and notes for the treatment of the 2020 $14.8 million revenue reduction, 2021 inventory write-offs, and $64.7 million of share-based compensation.
- Assess the timing, terms, and revenue conversion of the BMW/Magna program and the $12.2 million of remaining performance obligations; verify customer acceptance milestones.
- Evaluate cash burn against management’s two-year funding estimate, including planned R&D and commercialization spending, lease commitments, and any potential need for new capital.
- Check dilution exposure from outstanding warrants, options, RSUs, and other potential share issuances; the filing reports 16.2 million warrants outstanding at year-end.