Executive Summary

Q2 revenue surged to $10.43M, driven almost entirely by ~$10.05M of development (NRE) fees tied to an engineering services contract with Koito; GAAP net income was $0.18M and adjusted EBITDA was $1.10M, a sharp swing from losses in prior periods .
Management highlighted being in the final stage of an RFQ with a Top-10 global OEM for long-range lidar and continuing discussions with a Top-3 global OEM; the quarter also featured the signed definitive agreement to be acquired by Koito for $3.17/share in cash, expected to close in Q1 2025, subject to approvals .
No earnings call was held (cancelled due to the pending Koito transaction), so there was no Q2 Q&A or incremental guidance update beyond prior communication; FY24 guidance was last provided in Q1 (revenue $15–$25M; OpEx below $50M) and was not updated in Q2 .
The sequential revenue jump and EBITDA positivity were primarily due to the Koito NRE milestone recognition in Q2; product revenue fell sequentially to $0.37M as mix skewed to development revenue .
Key stock reaction catalysts: the definitive Koito takeout at $3.17/share and management’s positioning around OEM RFQs for long- and near-range lidar solutions .

What Went Well and What Went Wrong

What Went Well

Revenue inflected to $10.43M (vs. $1.95M in Q1 and $2.79M in Q2’23) on recognition of Koito NRE milestones; adjusted EBITDA turned positive at $1.10M and GAAP net income reached $0.18M, reflecting operating leverage on development revenue .
Strategic momentum: “final stage of RFQ with a Top 10 global automotive OEM” for long‑range lidar and active discussions with a Top‑3 global OEM; Ultra long‑range B‑sample demos and the StudioViz simulator launch support customer adoption narratives .
Merger agreement: signed definitive agreement for Koito to acquire Cepton for $3.17 per share in cash, expected to close in Q1 2025, providing a clear valuation anchor and funding visibility pending approvals .

Quotes:

“We are in the final stage of RFQ with a Top 10 global automotive OEM for our long-range lidar...” – Jun Pei, CEO .
“Launched Cepton simulator StudioViz to accelerate OEM lidar adoption.” .

What Went Wrong

Product revenue softness: Lidar sensor and prototype revenue declined to $0.37M (from $1.14M in Q1 and $2.46M in Q4’23), highlighting reliance on development (NRE) revenue this quarter .
No Q2 earnings call: with the conference call cancelled given the pending Koito transaction, there was no Q2-period Q&A to clarify pipeline timing, margin durability, or FY24 cadence beyond prior guidance .
Equity remains negative and the capital structure continues to feature $98.89M of convertible preferred stock (aggregate liquidation preference $106.3M at 6/30), underscoring balance sheet complexity despite a stronger cash position ($56.02M) .

Financial Results

P&L and Profitability (USD Millions, except per-share)

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue	$4.95	$1.95	$10.43
Product Revenue	$2.46	$1.14	$0.37
Development Revenue	$2.49	$0.81	$10.05
Gross Profit	$2.70	$0.42	$6.35
Gross Margin %	54%	21.8% (derived from )	60.9% (derived from )
GAAP Net Income (Loss)	$(8.32)	$(6.83)	$0.18
Adjusted EBITDA	$(7.09)	$(8.88)	$1.10
GAAP EPS (basic/diluted)	$(0.52)	$(0.43)	$(0.06)
Non‑GAAP EPS (basic/diluted)	$(0.41)	$(0.52)	$0.03

Notes: Gross margin for Q1 and Q2 2024 are computed from reported gross profit and revenue; Q4 2023 gross margin disclosed directly in the release .

Q2 2024 vs Prior Quarter and Prior Year; vs Estimates

Metric	Q2 2024 Actual	Q1 2024	Q2 2023	S&P Global Consensus
Revenue ($M)	$10.43	$1.95	$2.79	Unavailable via S&P Global (no CIQ mapping)
GAAP EPS	$(0.06)	$(0.43)	$(0.97)	Unavailable via S&P Global (no CIQ mapping)
Non‑GAAP EPS	$0.03	$(0.52)	$(0.76)	Unavailable via S&P Global (no CIQ mapping)
Adjusted EBITDA ($M)	$1.10	$(8.88)	$(11.64)	Unavailable via S&P Global (no CIQ mapping)

Estimate context: S&P Global/Capital IQ consensus metrics were unavailable for CPTN this quarter (SPGI mapping not found).

Segment/Category Revenue Mix

Revenue Category ($M)	Q4 2023	Q1 2024	Q2 2024
Lidar Sensor and Prototype	$2.46	$1.14	$0.37
Development (NRE)	$2.49	$0.81	$10.05
Total	$4.95	$1.95	$10.43

KPIs and Operating Items

KPI	Q4 2023	Q1 2024	Q2 2024
Cash & Cash Equivalents ($M)	$50.41	$49.22	$56.02
Accounts Receivable ($M)	$3.63	$5.08	$0.33
Inventory ($M)	$2.40	$1.86	$1.24
R&D Expense ($M)	$6.57	$5.65	$3.23
SG&A Expense ($M)	$5.32	$6.26	$3.71
Weighted Avg Shares (Basic)	15.85M	15.89M	15.98M

Drivers: The Q2 revenue inflection and EBITDA profitability were primarily due to recognizing ~$10M of engineering services (NRE) fees tied to a new OEM program with Koito; management had guided that the $10M fee would be recognized in Q2, with additional development revenues to follow in H2’24 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance (Q2’24)	Change
Revenue	FY 2024	$15M–$25M (given in Q1’24)	No update in Q2 PR; no call held	Maintained (no update)
Operating Expenses	FY 2024	Below $50M (given in Q1’24)	No update in Q2 PR; no call held	Maintained (no update)

Earnings Call Themes & Trends

Note: The Q2 2024 earnings call was cancelled; “Current Period” reflects Q2 press release commentary.

Topic	Previous Mentions (Q4 2023)	Previous Mentions (Q1 2024)	Current Period (Q2 2024)	Trend
Product/AI-tech initiatives (Ultra, MagnoSteer, StudioViz)	Launched Ultra; MagnoSteer; positioning for mass-market; CES showcase	Ultra progressed to B‑sample; StudioViz simulator launched to expedite ADAS/AV dev	Continued Ultra B‑sample demos; launched StudioViz highlighted in business updates	Improving adoption narrative
OEM pipeline/RFQs	Final sourcing with Top‑10 OEM; RFQ from Top‑3 OEM	Final submission to Top‑10; first submission to Top‑3; expect NRE/product revenues to start	Final stage of RFQ with Top‑10; ongoing Top‑3 discussions	Advancing
Regulatory/macro	U.S. listing of Chinese lidar entity as risk for U.S. OEMs seen as an opportunity	AEB rules seen as a tailwind for lidar adoption	Not specifically updated in Q2 PR	Supportive backdrop
Revenue mix/Op leverage	Q4 mix split product/dev evenly; record revenue	Guided FY24 rev $15–$25M; expected Q2 positive cash flow aided by $10M NRE	Q2 revenue largely NRE-driven; EBITDA positive	Mixed shift to NRE
Koito strategic/transaction	Non-binding IOI from Koito under evaluation	“Actively working” on Koito process	Definitive merger agreement at $3.17/share; expected close Q1’25	De-risked path

Management Commentary

“We are in the final stage of RFQ with a Top 10 global automotive OEM for our long-range lidar, and we anticipate final decision in the second half of this year.” – Jun Pei, CEO .
“Launched Cepton simulator StudioViz to accelerate OEM lidar adoption.” .
Prior quarter context: “To jump start this project, Cepton has entered into a significant engineering services contract with Koito, which includes $10 million in fees for work to be performed in the second quarter of 2024… We expect to have positive cash flow for the 3 months ended Q2 2024” – Jun Pei .

Q&A Highlights

No Q2 Q&A – the earnings call was cancelled in light of the pending Koito transaction .
Prior quarter areas of focus (context):
- NRE timing: Entire $10M fee recognized in Q2; follow-on development revenues expected in H2’24 .
- Production revenue timing: High-volume production typically 2.5–3 years post-award .
- GM project rescope/recovery: $4M initial recovery payment received in Q1; process ongoing .

Estimates Context

S&P Global/Capital IQ consensus estimates for Q2 2024 EPS, revenue, and EBITDA were unavailable (no CIQ mapping for CPTN); therefore, comparisons versus consensus cannot be provided this quarter.

Key Takeaways for Investors

Q2 inflection: Revenue of $10.43M and adjusted EBITDA of $1.10M underscore the financial impact of Koito NRE milestones; non-GAAP EPS positive at $0.03, though mix was heavily development-driven this quarter .
Mix matters: Product revenue was just $0.37M, highlighting dependence on near-term NRE; sustaining profitability will require product revenue scaling as OEM programs progress .
Strategic de-risking: Koito definitive agreement at $3.17/share in cash offers a tangible valuation floor pending approvals and could alleviate funding concerns through close targeted in Q1 2025 .
Pipeline catalysts: Final-stage RFQ with a Top‑10 OEM (decision 2H 2024) and active Top‑3 OEM discussions present potential medium-term awards; Ultra B‑sample demos and StudioViz aim to accelerate design traction .
Balance sheet: Cash rose to $56.02M by Q2 close; nevertheless, negative equity and the sizable convertible preferred stock remain considerations until transaction close .
FY24 framework: With no Q2 guidance update, prior FY24 guide ($15–$25M revenue; OpEx below $50M) still frames the year; the sizeable Q2 NRE recognition implies a modest H2 revenue requirement to reach the range .
Trading lens: Near-term stock performance is likely anchored to merger progress and any updates on the Top‑10/Top‑3 OEM RFQs; absence of Q2 call limits incremental data points until subsequent filings .

Appendix: Additional Data

Cash flow context: H1’24 operating cash use of $(0.34)M and net increase in cash, cash equivalents, and restricted cash of $5.62M reflect the NRE milestone and maturities of short-term investments .
YoY change details: Q2’24 total revenue $10.43M vs $2.79M in Q2’23; non-GAAP EPS $0.03 vs $(0.76); adjusted EBITDA $1.10M vs $(11.64)M .

Sources: Cepton Q2 2024 8‑K press release and exhibits ; Cepton Q1 2024 8‑K press release ; Cepton Q1 2024 earnings call transcript ; Cepton Q4 2023 8‑K press release ; Cepton Q4 2023 earnings call transcript .

Cepton, Inc. (CPTN)·Q2 2024 Earnings Summary