Sign in
IS

indie Semiconductor, Inc. (INDI)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 revenue was $52.4M, flat year over year and roughly flat sequentially, with non-GAAP gross margin of 50.3%; GAAP EPS was -$0.11 and non-GAAP EPS was -$0.09, both impacted by unfavorable product mix and ongoing inventory digestion in the auto supply chain .
  • Management guided Q3 2024 revenue up 0–5% q/q (midpoint +2.5%) with gross margin ~50% and OpEx of $44M; below the line, ~$1M net interest and no taxes, implying ~-$0.09 EPS at the midpoint on ~199.5M shares .
  • Execution milestones: full functional verification of the 77GHz radar SoC at the lead customer, iND880 vision SoC sampling/selection for high-volume programs, and 400M cumulative devices shipped; programs remain on track for 2025 ramps (radar/vision) .
  • Mix shift continued toward product revenue (ASSPs) while contract (NRE) revenue declined; contract revenue as % of total fell ~50% y/y, a trend management expects to persist as the business tilts to standard products .
  • Wall Street consensus comparisons (S&P Global) were unavailable due to data access limits; results landed at the low end of prior Q2 outlook and margin slightly below internal plan (Q2 non-GAAP GM 50.3% vs Q1 guide for 51–52%), driven by product mix and inventory normalization .

What Went Well and What Went Wrong

  • What Went Well

    • Achieved full functional verification of the flagship 77GHz radar (range-doppler performance exceeding benchmarks), keeping 2025 production timing on track: “These advancements keep indie firmly on track to bring this radar program to production within the 2025 time skills” .
    • iND880 next-gen vision SoC was sampled, received positive feedback, and won high-volume programs across multiple OEMs (OMS, Surround View/e-mirror, and a 36-camera application), positioning a 2025 ramp .
    • Design-win momentum and portfolio breadth: AEB wins across three global OEMs; lighting wins at two North American OEMs and a key Korean OEM; OMS ramps at Hyundai-Kia and multiple Chinese OEMs; milestone of 400M devices shipped .

  • What Went Wrong

    • Q2 revenue came in at the low end of outlook, with gross margin slightly below plan due to unfavorable product mix; industry inventory digestion persisted longer than expected .
    • Automotive OEM “decontenting” and prioritization of lower-priced vehicles reduced semiconductor content; EV stimulus rollback weighed on mix, pressuring near-term addressable demand .
    • Contract/NRE revenue declined ~50% y/y; while strategically shifting to ASSPs is positive long term, the near-term drop created a revenue dichotomy vs product revenue growth .

Financial Results

MetricQ4 2023Q1 2024Q2 2024
Total Revenue ($USD Millions)$70.133 $52.353 $52.355
GAAP EPS ($)-$0.09 -$0.19 -$0.11
Non-GAAP EPS ($)-$0.01 -$0.10 -$0.09
Non-GAAP Gross Margin (%)52.7% 50.3% 50.3%
Revenue Breakdown ($USD Millions)Q4 2023Q1 2024Q2 2024
Product Revenue$63.153 $48.578 $49.009
Contract (NRE) Revenue$6.980 $3.775 $3.346
Total Revenue$70.133 $52.353 $52.355
Profitability and Cash MetricsQ4 2023Q1 2024Q2 2024
Non-GAAP Operating Loss ($USD Millions)-$2.415 -$17.152 -$17.206
Non-GAAP EBITDA ($USD Millions)-$0.963 -$15.616 -$15.783
Cash & Cash Equivalents ($USD Millions)$151.678 $138.174 $112.347
Restricted Cash ($USD Millions)$— $10.000 $10.300
Total Cash (Cash + Restricted) ($USD Millions)$151.678 $148.174 $122.647
Operating Expenses (GAAP) ($USD Millions)Q4 2023Q1 2024Q2 2024
R&D$34.162 $49.589 $41.301
SG&A$14.364 $22.322 $17.447
Total Operating Expenses$90.762 $102.000 $88.989

Notes:

  • Management also disclosed Q2 non-GAAP OpEx of ~$43.5M (R&D $32.8M, SG&A $10.7M), highlighting the delta vs GAAP due to non-GAAP adjustments .
  • S&P Global consensus data for Q2 was unavailable (API limit exceeded), so a formal “vs estimates” comparison could not be included.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
RevenueQ2 2024Flat to +5% q/q; non-GAAP GM 51–52%; flat expenses; narrower operating loss Actual: $52.355M revenue; non-GAAP GM 50.3%; non-GAAP Op Loss -$17.2MSlight margin miss vs guide; revenue low end of range
RevenueQ3 2024—+0–5% q/q; midpoint +2.5% New guide (sequential modest growth)
Gross Margin (non-GAAP)Q3 2024—~50% New guide
OpEx (non-GAAP)Q3 2024—~$44M New guide
Net Interest ExpenseQ3 2024—~$1M New guide
TaxesQ3 2024—None New guide
EPS (non-GAAP)Q3 2024—-$0.09 on ~199.5M shares at midpoint New guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023, Q1 2024)Current Period (Q2 2024)Trend
Macro & Inventory DigestionQ4’23: expected Q1 trough, recovery in Q2 and back-half growth; industry-wide inventory correction noted . Q1’24: weakness market-wide; early-year most exposed to macro; guided conservatively .Inventory situation improving but persisted longer than expected; modest growth in H2; industry back to “just-in-time”; limited pricing impact .Stabilizing; digestion easing into H2 but still a headwind.
Decontenting / MixQ1’24: EV slowdown and consumer shift to lower-priced cars reduced semi content .Decontenting trend remains short-term; little expected impact on 2025 ramps .Near-term negative; 2025 outlook intact.
Radar ProgramQ1’24: sampling radar MMIC/baseband; 2025 ramp targeted .Achieved full functional verification; customer live testing underway; 2025 production timing reaffirmed; Bosch/Ficosa still on track for phased 2025 ramps .Execution risk reduced; on track to 2025.
Vision / iND880Q1’24: major wins (Honda BSD, GM OMS in 2026), sampling next-gen vision SoCs .iND880 sampled, selected for high-volume programs (OMS, Surround View/e-mirror, 36-camera application); pulls from NHTSA AEB and EU ISA mandates .Accelerating wins; regulatory tailwinds.
Contract vs Product MixQ1’24: business tilting to ASSPs .Contract revenue down 50% y/y; shift to ASSPs expected to continue .Structural transition; near-term revenue mix impact.
Cash & LiquidityQ1’24: $148.2M total cash; initiated revolver .Exited Q2 with ~$122.6M total cash (cash & equivalents + restricted) .Cash usage with CapEx; ample liquidity.
In-Cabin UX & ChargingQ1’24: wireless charging wins at North American OEM; Indian market program in 2025 .Announced Qi2 MPP-compliant iND87204; sampling now; production release Q4 2024 .Product roadmap expanding; potential OEM adoption.

Management Commentary

  • CEO strategic outlook: “We believe we’ve successfully navigated the cyclical trough… anticipate a return to revenue growth in the second half of 2024… and resuming outsized growth in 2025 and beyond propelled by… radar and computer vision programs” .
  • Radar execution: “Full functional verification… surpasses current industry benchmarks… radar currently being tested in live automotive application environments… firmly on track… 2025” .
  • Vision/iND880 traction: “iND880… selected for high-volume production programs… applications include OMS… 36 cameras per vehicle… Surround View and e-mirror… wins at 2 major European OEMs” .
  • CFO margins and OpEx: “Non-GAAP gross margin 50.3%, slightly below plan, resulting primarily from unfavorable product mix… Q3 gross margins ~50% and OpEx of $44M… expect $0.09 net loss per share at midpoint” .

Q&A Highlights

  • Inventory digestion and timing: Management sees significant improvement; digestion persisted longer than expected but should ease, providing more flexibility in H2 .
  • Radar ramp certainty: Large, phased ramp across multiple OEMs in 2025; execution risk reduced after successful testing; Bosch and Ficosa programs remain on track .
  • Gross margin trajectory: Slight downtick tied to product mix; management not seeing material pricing pressure despite “just-in-time” behavior returning at Tier 1s .
  • Decontenting impact: Short-term mix headwind; 2025 forecasts reasonably fixed; not expected to derail large ramps .
  • Product vs contract revenue: Contract/NRE down; continued strategic shift toward ASSPs expected, flattening contract contribution in coming quarters .

Estimates Context

  • S&P Global consensus estimates for Q2 2024, Q1 2024, Q4 2023, Q3 2024, FY 2024, and FY 2025 were unavailable due to data access limits at the time of analysis. As a result, formal “vs consensus” comparisons are not provided. Management indicated Q2 results were at the low end of their outlook and margin slightly below plan, which would likely temper near-term estimate revisions until H2 ramps and 2025 programs become more visible .

Key Takeaways for Investors

  • Near-term: Expect modest q/q revenue growth in Q3 with ~50% non-GAAP GM and ~$44M OpEx; inventory digestion and decontenting remain headwinds, but supply chain normalization is progressing .
  • Execution catalysts: 2025 radar and vision ramps are intact and de-risked technically; iND880 wins broaden indie’s ADAS footprint, supported by NHTSA AEB and EU ISA regulatory tailwinds .
  • Mix evolution: Contract/NRE declining as business transitions to ASSPs; product revenue growth should drive scalability and GM consistency over time .
  • Margin watch: Q2 non-GAAP GM at 50.3% (below prior 51–52% guide) tied to product mix; monitor mix shifts and new program ramps for GM recovery into H2 .
  • Liquidity: ~$122.6M total cash exiting Q2 provides runway for program ramps and CapEx; revolver adds flexibility .
  • Narrative for trading: Stock likely reacts to confirmations of 2025 ramp milestones (customer testing/award disclosures), visible H2 program launches (lighting, camera, power delivery), and evidence of inventory normalization and margin recovery; conversely, extended decontenting or pushouts would be negative .