Aman Gupta

Aman Gupta, on behalf of Mark Delaney from Goldman Sachs, sought an update on the joint development agreement (JDA) with an existing customer announced last quarter, asking what steps are needed to transition to a full commercial agreement. He also inquired about the active engagement with a new top 10 global automotive OEM, specifically what it would take to move from engagement to a licensing or JDA agreement. Gupta then asked about QuantumScape's plans to expand its ecosystem beyond Corning and Murata Manufacturing, requesting insights into potential new partnership areas and their financial structures.

Answer

QuantumScape CEO, Siva Sivaram, expressed enthusiasm for the maturing opportunities with both the existing and new automotive OEM customers. He reiterated that official announcements regarding commercial agreements and product roadmaps are made by the OEMs themselves, similar to the Volkswagen Group's IAA presentation, and that more details would emerge as these customers disclose their plans. Sivaram explained that QuantumScape aims to include competent partners across various aspects of its technology, including materials, equipment, processes, software, and metrology, to provide a comprehensive, capital-light solution for OEM customers. CFO, Kevin Hettrich, reinforced that shareholder value is captured through three main avenues: monetization of collaboration work (evidenced by $12.8 million in Q3 customer billings), long-term licensing revenues from customer production, and value sharing with ecosystem partners.

Aman Gupta asked for an update on the joint development agreement (JDA) with an existing customer announced last quarter, including steps needed for a full commercial agreement. He also inquired about the progress with a new top 10 global automotive OEM, specifically what it would take to move from active engagement to a licensing or JDA agreement. Additionally, he asked about expanding the ecosystem beyond ceramic separators, exploring other areas for partnerships, and the financial structure of these collaborations.

Answer

Siva Sivaram (CEO, QuantumScape) expressed excitement about the two additional customer opportunities but reiterated QuantumScape's policy of allowing OEMs to make announcements regarding their plans and progress, similar to the IAA event with Volkswagen. He indicated that details about these engagements would become clearer as the OEMs themselves begin to discuss them. He further explained that QuantumScape seeks to include competent partners across various aspects of their technology development, including materials, equipment, processes, software, and metrology, to facilitate OEM ramp-up. Kevin Hettrich (CFO, QuantumScape) added that the capital-light business model generates value for shareholders in three ways: monetization of collaboration work (e.g., $12.8 million in Q3 customer billings), long-term licensing streams from customer production, and value sharing with ecosystem partners.

Aman Gupta, on for Mark Delaney, asked about the OpEx and CapEx implications of the expanded PowerCo deal and whether the new payments cover incremental spending. He also requested details on the milestones and timeline for the new JDA and the company's bandwidth to support it.

Answer

CFO Kevin Hettrich clarified that the company's long-term operational plans already included the bulk of the work covered by the new PowerCo agreement, making the cash inflows accretive. He reiterated that the payments will improve the bottom line. Both he and CEO Siva Sivaram noted that the work for the new JDA was also factored into existing plans, highlighting the operating leverage of their licensing business model.

Aman Gupta from Goldman Sachs asked to size the non-automotive opportunity, like the LG deal, in terms of revenue and PPU. He also requested an update on customer pricing pressure and the status of program delays.

Answer

CEO Brian Krzanich explained that non-auto markets have a lower PPU but significantly higher volume potential, making them additive to revenue. He stated that pricing pressure is being managed by offering broader feature sets for better value, not direct price cuts, as evidenced by the rising PPU. He also confirmed that while some program push-outs continue, Cerence has not experienced any major competitive losses.

Aman Gupta, on behalf of Mark Delaney, asked about the factors that led to an improved fiscal 2025 revenue outlook compared to the framework provided last quarter. He also inquired about the company's AI product strategy and whether Cerence is waiting for its second-generation platform before pursuing new design wins.

Answer

Interim CFO Antonio Rodriquez stated that the current FY25 guidance is very close to the previous framework, with a stronger outlook for Connected Services offsetting a planned reduction in Professional Services. CEO Brian Krzanich clarified that the company is not delaying sales efforts, explaining that the AI product generations are backward-compatible and part of a seamless continuum, allowing customers to adopt current technology and upgrade later.

Aman Gupta, on for Mark Delaney from Goldman Sachs, asked what is required for the safety observer to be removed from the PACCAR trucks and if there was a timeline. He also questioned if the $1.84 per mile figure from the presentation was a good proxy for revenue.

Answer

CEO Chris Urmson clarified that Aurora is comfortable removing the observer, and its presence is at PACCAR's request due to prototype parts in the base vehicle, with removal likely correlating with PACCAR's official platform launch. CFO David Maday explained the cost figure was an illustrative carrier example, not a direct model for Aurora's revenue, noting Aurora's value comes from lowering carrier costs and increasing revenue via higher utilization.

Aman Gupta of Goldman Sachs asked for more detail on Belden's tariff exposure from products imported into the U.S. and the progress on mitigation efforts. He also inquired about the status of the company's long-term goal of achieving $8 EPS in 2025.

Answer

CFO Jeremy Parks stated that the largest import exposure is from Mexico, which is mostly covered by USMCA exemptions. For products sourced from China by third-party suppliers, Belden is changing sourcing or passing on costs, resulting in a neutral net impact in the Q2 guidance. Regarding the $8 EPS goal, Parks referred to the detailed update provided last quarter and declined to guide beyond Q2.