Introduction

Aeva Technologies, Inc. (AEVA) is a rising star in the realm of next-generation sensing and perception systems. Founded in 2017 by former Apple engineers Soroush Salehian and Mina Rezk, the company has quickly established itself as a leader in the development of innovative Frequency Modulated Continuous Wave (FMCW) LiDAR technology, with a vision to bring its cutting-edge solutions to a wide range of industries.

Core Technology

At the heart of Aeva's offering is its proprietary 4D LiDAR-on-chip technology, which combines the precision of silicon photonics with the power of instant velocity measurements. Unlike traditional 3D LiDAR systems that rely on Time-of-Flight (ToF) technology, Aeva's solution leverages FMCW to provide an additional dimension of information, allowing for enhanced perception and decision-making capabilities.

Early Development and Partnerships

In its early years, Aeva worked closely with customers on the development and commercialization of their perception solutions. The company provided prototype products and engineering services to customers for use in their research and development programs. Aeva focused on expanding its manufacturing capacity through third-party manufacturers to meet anticipated demand for its products.

Business Combination and Challenges

A significant milestone in Aeva's history was the Business Combination with InterPrivate Acquisition Corp. in 2021. This strategic move provided the company with additional capital to fund its operations and product development efforts. However, as a development stage company, Aeva has faced challenges in achieving profitability, reporting losses from operations and negative cash flows from operating activities. The company has had to continuously manage its liquidity position to support its ongoing investments in the business.

Company Origins

The company's journey began in 2017 when Salehian and Rezk, driven by their passion for sensor technology, founded Aeva with the goal of revolutionizing the way machines perceive the world. The co-founders recognized the limitations of existing LiDAR solutions and set out to develop a more robust and versatile technology that could enable a new wave of automation and perception applications.

Technological Advancements

Over the past four years, Aeva has made significant strides in its technological advancements, culminating in the introduction of its flagship product, the Aeries II sensor. This innovative LiDAR system not only provides precise 3D mapping and reflectivity data but also measures the instant velocity of every point, a capability that sets it apart from the competition.

The company's focus on FMCW technology has not only enabled superior performance characteristics but has also positioned Aeva as a disruptive force in the autonomous driving, industrial automation, and security sectors. Its ability to accurately measure velocity, coupled with its immunity to interference and sunlight, has garnered the attention of industry giants and early-stage customers alike.

Financials

Aeva's financial performance, while still in the early stages of its growth journey, has shown promising signs. As of the latest reported quarter (Q3 2024), the company generated $2.3 million in revenue, a significant increase from the $810,000 recorded in the same period a year prior. This revenue growth can be attributed to the scaling of sensor shipments to automotive and industrial customers, as well as the company's ongoing Daimler Truck program.

However, Aeva's focus on research and development, as well as its investments in building a robust manufacturing and supply chain, have resulted in substantial operating losses. In Q3 2024, the company reported a non-GAAP operating loss of $31.4 million, reflecting the significant resources it is dedicating to positioning itself as a leader in the rapidly evolving sensing and perception technology landscape.

The company's gross margin for Q3 2024 remained negative at ($721,000), as the cost of revenue increased by 18% to $2.97 million. Operating expenses for the quarter rose 10% to $37.16 million, primarily due to increases in research and development spending, which grew 14% to $27.12 million. This R&D investment reflects Aeva's focus on enhancing its existing products and developing new functionalities. General and administrative expenses were flat at $8.46 million, while selling and marketing expenses increased 4% to $1.58 million.

Overall, Aeva reported a net loss of $37.40 million for the third quarter, compared to a net loss of $33.24 million in the prior year period. The company's operating cash flow (OCF) for the quarter was negative $55.05 million, while free cash flow (FCF) stood at negative $56.37 million.

Liquidity

Despite these near-term financial challenges, Aeva's liquidity position remains strong, with $259.8 million in total liquidity at the end of Q3 2024. This includes $134.8 million in cash, cash equivalents, and marketable securities, as well as a $125 million undrawn equity facility. This robust financial foundation provides the company with the resources necessary to continue its technological advancements and capitalize on the growing demand for its solutions.

Aeva's current ratio stands at 4.321, while its quick ratio is 4.258, indicating a healthy short-term liquidity position. The company's gross cash used was $26.4 million in Q3 2024, which includes $25.9 million in operating cash use and $0.5 million in capital expenditures.

Partnerships and Wins

Aeva's success has not gone unnoticed, as the company has secured several high-profile partnerships and wins that underscore the potential of its technology. In 2024, the company announced a major industrial production win for security applications with The Indoor Lab, a leader in LiDAR-based AI analytics. This multi-year supply agreement represents a significant expansion into the industrial security market and is expected to generate revenue in the tens of millions of dollars over the next few years.

Furthermore, Aeva's collaboration with Torc Robotics, a subsidiary of Daimler Truck, has continued to bear fruit. In 2024, Torc and Daimler Truck achieved a significant milestone by successfully validating fully driverless operations of their autonomous trucks at highway speeds, with Aeva's 4D LiDAR technology playing a crucial role in enabling this breakthrough.

Beyond the automotive and industrial sectors, Aeva has also made inroads in the passenger vehicle market, with a major European OEM selecting the company's 4D LiDAR technology to validate its next-generation vehicle automation systems. This selection highlights the growing demand for Aeva's FMCW-based solutions, which provide a level of precision and velocity measurement that is essential for advanced driver assistance and autonomous driving applications.

Aeva remains on track with multiple RFQs for passenger vehicle production programs, including advancing through multiple phases of an RFQ process with a global top 10 passenger OEM, with Aeva being down-selected to the final stage. Additionally, the company has pulled forward the first shipments of its Atlas product by 6 months to better meet customer demand.

Future Outlook

As Aeva navigates the challenges and opportunities of the rapidly evolving sensing and perception technology landscape, the company's strong technological capabilities, robust customer relationships, and healthy financial position position it well for future growth. With a keen focus on innovation and a commitment to delivering transformative solutions, Aeva is poised to play a pivotal role in shaping the future of automation and perception across a wide range of industries.

The company operates in a single segment, focused on the design, manufacturing, and sale of its LiDAR sensing systems and related perception and autonomy-enabling software solutions. Aeva's core product, the 4D LiDAR-on-chip, leverages proprietary FMCW technology to measure not just depth and reflectivity, but also instant velocity for every pixel. This 4D capability is a key differentiator from traditional 3D Time-of-Flight (ToF) LiDAR solutions.

Aeva's LiDAR systems are targeted at a variety of end markets, including automotive for advanced driver assistance systems (ADAS) and autonomous driving, industrial automation, consumer devices, and security applications. The company works closely with customers on the development and integration of its products into their respective platforms and programs.

As a small cap company, Aeva likely focuses primarily on the US market at present, though its partnerships with global automotive manufacturers suggest potential for international expansion in the future. The company's financial performance continues to reflect its status as a development-stage company, with significant investments in research and development to drive the advancement of its 4D LiDAR technology. Aeva's ability to achieve profitability will depend on its success in commercializing its products and meeting required cost and volume targets with its customers.