Business Overview
MicroVision, Inc. (NASDAQ:MVIS) is a global leader in the development and commercialization of advanced lidar hardware and software solutions. With a rich history spanning nearly three decades, the company has established itself as a pioneer in the field of micro-electromechanical systems (MEMS) and laser beam scanning technology. MicroVision's innovative approach has positioned it at the forefront of the automotive lidar and advanced driver-assistance systems (ADAS) markets, where it continues to push the boundaries of what is possible.
Established in 1993, MicroVision has evolved from its roots as a developer of augmented reality and display technologies to becoming a prominent player in the rapidly growing lidar industry. The company's expertise in MEMS, laser diodes, opto-mechanics, electronics, algorithms, and software integration has enabled it to create innovative solutions that address the ever-increasing demands of the automotive and industrial sectors. Throughout its history, MicroVision has leveraged its proprietary technologies to develop a wide range of products, including augmented reality microdisplay engines, interactive display modules, consumer lidar components, and automotive lidar sensors and software solutions.
In recent years, the company has shifted its focus entirely to lidar sensors and related software solutions. This strategic pivot came after developing various other technologies, such as micro-display concepts and designs for use in head-mounted augmented reality headsets, a 1440i MEMS module supporting AR headsets, and an interactive display solution targeted at the smart speaker market. MicroVision also previously developed a small consumer lidar sensor for use indoors with smart home systems, showcasing its versatility in applying its core technologies to different market needs.
In January 2023, MicroVision made a strategic move by acquiring certain assets of Ibeo Automotive Systems, a Germany-based lidar hardware and software provider. This acquisition has further strengthened the company's technological capabilities, allowing it to leverage Ibeo's experience in automotive-grade qualification and software development. The integration of Ibeo's team and technologies has positioned MicroVision as a formidable force in the lidar market, with a comprehensive portfolio of sensors and perception software solutions.
Product Portfolio
MicroVision's flagship products, the MAVIN dynamic-range lidar sensor and the MOVIA flash-based lidar sensor, are designed to meet the stringent requirements of the automotive and industrial markets. The MAVIN sensor, with its unique MEMS-based scanning technology and advanced perception software, is targeted towards premium automotive OEMs and Tier 1 suppliers for ADAS and autonomous vehicle applications. On the other hand, the MOVIA sensor, with its short-range capabilities and versatile software, caters to a wide range of industrial applications, including smart infrastructure, robotics, and agricultural equipment.
The company's focus on cost-effective solutions and scalable manufacturing processes has been a key differentiator in the highly competitive lidar industry. MicroVision's approach to utilizing custom ASIC technology and sequential flash lidar design has enabled it to achieve significant cost advantages over competitors relying on more expensive 1550nm laser technology or complex electrostatic mirror-based systems.
MicroVision operates in one reportable segment related to the sale and servicing of lidar hardware and software. The company's key products and solutions include automotive lidar sensors and software, short-range lidar sensors, and validation software. The MAVIN dynamic-range lidar sensor and perception software solution is primarily targeted at the automotive market, while the MOVIA flash-based lidar sensor caters to both automotive and industrial applications. MicroVision previously offered its MOSAIK suite of validation software tools but has reduced development and sales efforts on this product to better align resources towards its core lidar sensor and perception software solutions.
Financials
MicroVision's financial position has undergone significant changes in recent times. In October 2024, the company secured a $75 million convertible note facility, which has strengthened its balance sheet and provided the necessary resources to execute its strategic roadmap. This capital infusion, coupled with a leaner cost structure and a focus on industrial revenue streams, has positioned MicroVision to navigate the challenges of the automotive market and explore new opportunities in the near term.
For the fiscal year 2023, MicroVision reported revenue of $7.26 million and a net loss of $82.84 million. The company's operating cash flow (OCF) was -$67.09 million, and free cash flow (FCF) was -$69.03 million. In the most recent quarter (Q3 2024), revenue was $190,000, with a net loss of $15.52 million. OCF for the quarter was -$14.10 million, and FCF was -$14.08 million.
The decrease in revenue was primarily due to a decrease in sales related to an OEM for the company's MOSAIK software, partially offset by royalties from an automotive supplier. The increase in net loss, OCF, and FCF was due to higher operating expenses, particularly in research and development (R&D) and selling, general, and administrative (SG&A) expenses.
For the nine months ended September 30, 2024, MicroVision reported total revenue of $3.05 million, with a gross profit of $368,000. The company continues to incur significant operating expenses, primarily in R&D, as it develops and commercializes its lidar solutions.
Looking ahead, MicroVision has provided guidance for Q4 2024, expecting revenue of $8 million to $10 million. This revenue is expected to come from the sale of lidar sensors to automotive OEMs and non-automotive customers, as well as NRE (one-time development fees) for customization projects for customers in both automotive and industrial sectors. For the full year 2024, the company expects revenue of $8 million to $10 million. MicroVision also anticipates its annual OpEx (including R&D and SG&A) to be $48 million to $50 million in 2025.
Liquidity
Despite the ongoing industry-wide challenges, MicroVision remains steadfast in its commitment to delivering innovative lidar solutions that address the evolving needs of its customers. The company's diverse customer base, spanning both the automotive and industrial sectors, provides a strong foundation for growth and diversification.
As of September 30, 2024, MicroVision's debt-to-equity ratio stood at 0.17, with cash and cash equivalents of $16.52 million. The company has a $150 million ATM equity offering program, of which $122.6 million was available as of September 30, 2024. Additionally, the company has a $75 million convertible note facility, of which $30 million remains available. MicroVision's current ratio was 5.00, and its quick ratio was 4.58 as of the same date.
The company believes it has extended its cash runway into 2026 based on its new lower annual OpEx rate and the recently secured $75 million convertible note facility.
Future Outlook
Looking ahead, MicroVision's ability to capitalize on the growing demand for lidar technology in the automotive and industrial markets will be crucial to its long-term success. The company's focus on developing cost-effective, scalable, and high-performance lidar solutions, combined with its strategic partnerships and customer engagements, positions it well to disrupt the industry and emerge as a leading player in the years to come.
The lidar market is growing at a compound annual growth rate (CAGR) of approximately 30% and is expected to reach $6 billion by 2025, driven by increasing adoption in automotive ADAS and autonomous vehicle applications as well as industrial use cases. MicroVision is engaged in 7 high-volume RFQs with automotive OEMs for passenger vehicle ADAS applications, while also pursuing opportunities in the industrial market, such as heavy equipment, where it believes it can generate near-term revenue and cash flow.
Conclusion
In conclusion, MicroVision's unique blend of technological expertise, innovative product offerings, and strategic adaptability makes it a compelling investment proposition in the dynamic lidar landscape. As the company continues to navigate the evolving market dynamics, its ability to execute on its growth strategies and capitalize on emerging opportunities will be closely watched by industry observers and investors alike. With its focus on automotive lidar and perception software offerings as the core of its business strategy, MicroVision's success in securing design wins and series production awards from automotive OEMs will be critical to its future financial performance and growth potential.