MicroVision, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; filed February 29, 2024. This is an annual report, not a standalone fourth-quarter report.
Business context
MicroVision develops lidar hardware and software, primarily for automotive ADAS and autonomous-driving applications. Its product portfolio includes MAVIN automotive lidar, MOVIA short- and mid-range lidar, perception software and MOSAIK validation software. The January 2023 acquisition of selected Ibeo assets expanded its technology, products and European operations. The company reported approximately 340 employees at year-end and said it was not producing at significant volume.
Financial results and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $7.3 million | $0.7 million |
| Gross profit | $4.5 million | $0.6 million |
| Gross margin | 61.8% | 84.9% |
| Operating expenses | $93.4 million | $54.5 million |
| Operating loss | $88.9 million | $53.9 million |
| Net loss | $82.8 million | $53.1 million |
| Net loss per share | $0.45 | $0.32 |
| Cash used in operating activities | $67.1 million | $38.0 million |
Revenue included $4.9 million of license and royalty revenue, $1.0 million of product revenue and $1.4 million of contract revenue. Three customers represented 79% of revenue; the largest contributed $4.6 million, or 63%. The filing says no further revenue is expected from that largest customer after 2023.
At year-end, cash and cash equivalents were $45.2 million and short-term investments were $28.6 million, for combined liquidity of $73.8 million. Current assets were $86.8 million and current liabilities $20.5 million. Total liabilities were $33.8 million, including $15.0 million of operating lease liabilities; the filing reports no material conventional borrowings outstanding. Shareholders’ equity was $95.8 million. The accumulated deficit was $765.4 million.
Changes and unusual items
- Revenue rose by $6.6 million from FY2022, mainly from recognizing the remaining $4.6 million under the Microsoft display-system contract and revenue from Ibeo-related customer contracts. The Microsoft contract terminated on December 31, 2023; the company expects no further revenue under it.
- Operating expenses increased by $38.9 million. Management attributed much of the increase to Ibeo-related staffing, facilities and IT costs, including a $26.3 million increase in research and development expense and a $12.6 million increase in sales, marketing, general and administrative expense.
- FY2023 included a $1.7 million bargain purchase gain from Ibeo and $5.5 million of other income, including a $3.0 million building-lease termination incentive and investment income.
- Cash provided by financing activities was $72.4 million, primarily from common-stock issuance. The company sold shares through ATM programs and had approximately $19.0 million of capacity remaining under its $35.0 million ATM agreement at year-end.
- The Ibeo acquisition consideration was approximately $21.6 million. A further $3.0 million payment was expected in Q1 2024; $3.3 million held in escrow was available for potential claims under the purchase agreement.
Outlook, risks and contingencies
Management expects significant losses in 2024 and negative cash flow at least through 2024, and likely beyond. It stated that available cash and cash equivalents should fund operations for at least 12 months from the filing’s assessment, but additional capital will be needed to fund the operating plan past that period. The company may seek financing, product sales, development revenue or licensing; financing may be unavailable or dilutive.
Key risks include failure to win automotive series-production awards, lengthy OEM qualification cycles, uncertain market adoption and pricing, intense competition, reliance on limited-source suppliers and manufacturing partners, customer concentration, and the need for additional capital. The company also cited integration and execution risks following Ibeo, potential product, IP, cybersecurity and international-operation risks. It had $10.7 million of open purchase obligations, including a $9.3 million MOVIA inventory commitment; approximately $6.2 million of related payments were expected in the first half of 2024. Operating lease commitments totaled $25.0 million in the contractual-obligations table.
The company reported no legal proceedings management believed reasonably likely to materially harm its financial position, results or cash flows. The financial-statement auditor issued an unqualified opinion. Management and the auditor reported effective internal control over financial reporting at year-end, although the auditor’s ICFR assessment excluded MicroVision GmbH; management planned to include its controls in the FY2024 assessment.
Important facts for investors to verify
- Whether MicroVision secures OEM or Tier 1 production awards and converts development activity into material, recurring lidar revenue.
- How the loss of the largest customer’s revenue affects FY2024 results, and the amount and timing of revenue from Ibeo-related customers.
- Actual cash burn against the $73.8 million of year-end cash and investments, including the effects of supplier and acquisition payments.
- Whether further equity or debt financing is required, its terms, and the resulting dilution; compare share counts with the 194.7 million shares outstanding at year-end.
- Progress on manufacturing scale-up, MOVIA inventory sales, supplier diversification and Ibeo integration.
- Whether MicroVision GmbH’s controls are incorporated effectively into the FY2024 internal-control assessment.