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CI

Cepton, Inc. (CPTN)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue was $1.95M (product $1.14M; development $0.81M), up 31% YoY, with GAAP net loss of $6.83M (−$0.43 per share) and Non-GAAP net loss of $8.34M (−$0.52 per share) .
  • The quarter featured a new multi‑year OEM series production award for near‑range lidar with Koito and a $10M engineering services (NRE) contract to be recognized in Q2 2024; management expects to be cash flow positive in Q2 2024, a first for the company and (they believe) the lidar industry .
  • A $4.0M cash recovery from the canceled GM program was recorded as a gain in Q1 (excluded from Non‑GAAP), strengthening liquidity (cash and cash equivalents $49.2M at 3/31/24) .
  • FY 2024 outlook introduced: revenue $15–$25M and operating expenses below $50M, driven by Q2 NRE and additional potential development milestones; mix and timing across additional OEM programs explains the wide range .

What Went Well and What Went Wrong

What Went Well

  • Secured a new series production award with a global OEM (near‑range lidar) and signed a $10M engineering services contract with Koito for Q2, indicating increased commercial traction and near‑term revenue visibility .
  • Rapid progress on Ultra (next‑gen long‑range lidar): reached B‑sample ahead of plan, integrated MagnoSteer, and demonstrated to OEMs in the U.S., Europe, and Japan; customer feedback was “overwhelmingly positive” .
  • Management expects positive cash flow in Q2 2024, citing the sizable NRE and early sample sales; “we expect to become cash flow positive this quarter for the first time in the company's history” .

What Went Wrong

  • Sequential revenue decelerated from Q4 2023 ($4.95M) to Q1 2024 ($1.95M), reflecting lower product/development revenue quarter‑over‑quarter even as YoY growth remained positive .
  • Automotive program dynamics remain elongated: high‑volume production revenue from the new award is typically 2.5–3.0 years ahead of SOP; near‑term visibility is more weighted to NRE/samples than mature production .
  • Non‑GAAP net loss remained sizable at −$8.34M despite the $4.0M GM cost‑recovery gain (excluded from Non‑GAAP), underscoring ongoing investment and the early revenue scale of automotive lidar .

Financial Results

MetricQ3 2023Q4 2023Q1 2024
Revenue ($USD Millions)$3.833 $4.951 $1.946
GAAP Diluted EPS$(0.71) $(0.52) $(0.43)
Non‑GAAP Diluted EPS$(0.58) $(0.41) $(0.52)
Gross Profit ($USD Millions)$0.494 $2.696 $0.424
Gross Margin %13% 54% — (not disclosed)
Adjusted EBITDA ($USD Millions)$(9.876) $(7.086) $(8.883)

Segment revenue mix:

Revenue BreakdownQ3 2023Q4 2023Q1 2024
Product Revenue ($M)$3.802 $2.457 $1.141
Development Revenue ($M)$0.031 $2.494 $0.805

Selected operating KPIs:

KPIQ3 2023Q4 2023Q1 2024
Operating Expenses ($M)$12.842 $11.892 $11.918
Cash & Cash Equivalents ($M)$43.860 $50.406 $49.218
GAAP Net Loss ($M)$(11.294) $(8.320) $(6.833)
Non‑GAAP Net Loss ($M)$(9.212) $(6.448) $(8.339)

Notes:

  • Q1 2024 included a $4.0M GM project cancellation cost‑recovery gain (cash received) recorded in other income and excluded from Non‑GAAP results .
  • Consensus estimates (revenue/EPS) from S&P Global were unavailable for CPTN this quarter; therefore, no estimate comparison is shown.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024— (no prior FY24 guidance in Q4 release)$15–$25M Initiated
Operating ExpensesFY 2024—Below $50M Initiated
Cash FlowQ2 2024—Expect positive cash flow in Q2 2024 New disclosure
Engineering Services (NRE) RecognitionQ2 2024—~$10M recognized in Q2 2024; additional development revenue in H2’24 New disclosure

Rationale/Color:

  • FY24 range reflects signed Q2 NRE and potential additional OEM program milestones; mix/timing uncertainty drives the breadth of the revenue range .

Earnings Call Themes & Trends

TopicQ3 2023 (Q‑2)Q4 2023 (Q‑1)Q1 2024 (Current)Trend
AI/Technology initiatives (Ultra, MagnoSteer)Emphasis on software validation suite; next‑gen long‑range lidar on track Launch of Ultra at CES; MagnoSteer demonstrated Ultra advanced to B‑samples; MagnoSteer integrated; positive OEM demos Accelerating product maturity/demos
Supply chain/industrializationSeries production readiness; AUTOSAR/cybersecurity integrated Continued commercial readiness with Tier‑1 Koito New global OEM award; Koito NRE supports execution Strengthening industrialization with Tier‑1
Tariffs/Macro/RegulatoryOEM headwinds; delays in vehicle launches Macro headwinds persisted; pipeline intact Regulators’ AEB push (“NISA”) viewed as lidar tailwind From headwinds to policy tailwinds
Product performance/shipmentsRecord shipments; positive gross margin 54% gross margin in Q4 Mix‑shifts; Q1 GP positive; sequential revenue down Normalizing after strong Q4
RFQs/design winsFinal sourcing talks (long‑range; trucking short‑range) Continued final round with Top‑10 OEM; new Top‑3 RFQ New series production win; final submission to Top‑10 OEM; first submission to Top‑3 OEM Broadening pipeline/awards
Regulatory/legal/strategic—Koito non‑binding indication to acquire 100% (Dec‑23) Process ongoing; no new details Strategic uncertainty persists
R&D executionValidation tools and software integration milestones Ultra launch; continued development Ultra B‑sample achieved faster than expected Faster cadence

Management Commentary

  • “We have successfully advanced the Ultra from its initial concept to the B sample stage… The feedback from these global showcases has been overwhelmingly positive.” — Jun Pei, CEO .
  • “We expect to become cash flow positive this quarter for the first time in the company's history… Starting with revenue this quarter.” — Mitch Hourtienne, CCO (re: Q2 NRE and samples) .
  • “We recorded a $4.0 million gain from cost recovery of the cancelled OEM project in the first quarter of 2024 and received a cash payment subsequently.” — Press Release ; confirmed as cash received in Q1 .
  • “We’ve recently completed the final submission for an RFQ to a top 10 global automotive OEM… We’ve also made our first RFQ submission to a top 3 global automotive OEM.” — CCO .

Q&A Highlights

  • $4M GM cost‑recovery was cash received in Q1 .
  • New OEM award timeline: high‑volume production revenue typically 2.5–3.0 years pre‑SOP; Q2 will include development and sample revenues .
  • NRE cadence: full $10M recognized in Q2 with additional development revenue expected in H2’24 (lumpy vs product) .
  • FY24 revenue guide mix: a blend of NRE and product; range reflects timing/customer sign‑off across “2 or 3 other OEM projects” .
  • Regulatory backdrop: recent AEB focus viewed as a “huge hallmark” for lidar adoption; technology becoming cost‑effective and integration‑ready .
  • Strategic update: Koito proposal process ongoing; no additional details yet .

Estimates Context

  • S&P Global consensus estimates for Q1 2024 (revenue/EPS) were unavailable for CPTN due to missing mapping in the SPGI dataset at time of retrieval, so we cannot provide a beat/miss analysis this quarter. Comparisons to estimates are therefore not shown.

Key Takeaways for Investors

  • Near‑term revenue/CF catalyst: ~$10M Koito NRE recognized in Q2 and early sample sales; management expects Q2 2024 positive cash flow — a potential stock catalyst in a capital‑intensive vertical .
  • Strategic traction: new multi‑year series production award (near‑range), with ongoing RFQs at Top‑10 and Top‑3 OEMs for long‑range and near‑range — expanding future production optionality .
  • Liquidity cushion: $49.2M cash & equivalents at Q1‑end, bolstered by $4.0M cost‑recovery cash; runway supports execution through NRE‑heavy 2024 .
  • FY24 setup: revenue guide $15–$25M and OpEx below $50M hinges on OEM milestones and mix; watch for additional development contracts and sample revenue in H2’24 .
  • Technology leadership: Ultra B‑sample ahead of plan with MagnoSteer; multi‑continent demos show positive feedback — supports future sourcing outcomes .
  • Policy tailwinds: increasing regulatory emphasis on AEB/safety features could accelerate lidar adoption — management views this as a structural tailwind .
  • Strategic optionality: Koito’s ongoing proposal creates an overhang/upside scenario; any update could be a meaningful catalyst .