Mobileye 3Q16 Earnings Call Notes

Mobileye’s (MBLY) CEO Ziv Aviram on Q3 2016 Results

Don’t anticipate any regulatory change

“No, we think that autonomous driving has a very, very big economical value going into the future and the regulators and any administration the next thing that they want to do is to impede technological developments and impede economical development, so we don’t anticipate any change.”

Amnon Shashua

Nvidia isn’t really a competitor

“Okay. This is Amnon. Let me be clear, we have launched deep learning algorithms like in free space, like in holistic planning. A year and a half ago all our code today is all around the deep learning. I think that we are the – we launched the first deep learning algorithms on embedded systems, not only in autonomous, but I think of many industry. So saying that we are a conservative approach algorithms and somebody else is doing Eye [ph] this all what we do, we do artificial intelligence.

I find sometimes it’s hard to grasp Nvidia’s statement. I think Nvidia is not a competitor to the Mobileye. Nvidia their competition is Intel, its Samsung, it is NXpedia, Qualcomm, they provide high-performance computing, autonomous driving is not about the computing its about the software, its about the algorithm, there in Nvidia is not a player and I don’t think that ever mentioned that they are a player there.

So high performance computing is nice, but what is – what you need to put there is the content and those are the algorithms and this is what we do for living.’

Mobileye 2Q16 Earnings Call Notes

Mobileye’s (MBLY) CEO Ziv Aviram on Q2 2016 Results

Amnon Shashua

level 3 and level 4 autonomous vehicles in volume production on the road by 2021

“Moving to autonomous driving, the second quarter highlights include on July 1, Mobileye, BMW and Intel announced a program to put level 3 and level 4 autonomous vehicles in volume production on the road by 2021 using the full capabilities of EyeQ5.”

Clear commitment to volume production of level 4 autonomy

“We believe this represents a turning point in the auto industry, both in terms of a clear commitment to volume production of level 4 autonomy, but also the start of a paradigm shift where partnerships among OEMs, Mobileye and additional players emerge in order to tackle together as equal partners the ambitious challenge of putting a safe level 4 autonomous vehicle on the road.”

We will not extend our relationship with Tesla

“I have few words to say about our relationship with Tesla. Mobileye’s work with Tesla will not extend beyond EyeQ3. We continue to support and maintain the current Tesla Autopilot product plans. This includes the significant upgrade of several functions that affect both our ability to respond to crash avoidance and to optimize auto-steering in the near-term without any hardware updates. Nevertheless, in our view, moving forward, more advanced autonomy is a paradigm shift both in terms of function complexity and the need to ensure an extremely high level of safety. There is much at stake here to Mobileye’s reputation and to the industry at large. Mobileye believes that achieving this objective requires partnerships that go beyond the typical OEM supplier relationship, such as our recently announced collaboration with BMW and Intel. Mobileye will continue to pursue similar such relationships.”

I don’t want to put too much color around the Tesla statement

“With respect to Tesla, we made a statement, I don’t want to put too much color into it, I don’t want to open the floor to now speculations. I think EyeQ3 shipments to Tesla would continue for the near future and maybe even the longer future. We simply decided where we need to put our resources for the future of autonomous driving and there are all sorts of considerations where you need to put your resources and we decided what we decided.”

Camera only steering is not something you can provide a driver in an unlimited way, otherwise technology can be abused

“The difference between camera-only and camera plus radar is cost. And in this case, Nissan is planning a high volume penetration of these kinds of features. Of course introduced in a way which is safe, now that driver cannot use this technology freely, your hands needs to be on the steering wheel and all sorts of other safety mechanisms are put there. Because again camera only auto steering is not something that you can provide a driver in an unlimited way, otherwise the technology can be abused and create problems. But it is if used properly, it is something that is increases safety, increases the possibility to avoid crashes and having it in high-volume penetration is a good thing and by removing the radar from a cost perspective, you can do that.”

BMW solution will have EyeQ5 running camera information, fusion algorithms run on intel chip

” in the BMW – this is Amnon. So, in the BMW relationship, with respect to fusion, these are algorithms to be developed between Mobileye and BMW and deployed on the Intel chip. So, the EyeQ5 will be processing all the camera information, including radars and LIDARs for redundancy. Fusion algorithms will run on the Intel chip and very possibly also the driving policy algorithms developed by Mobileye in conjunction with BMW would also be deployed on the Intel chip”

Implying that TSLA didn’t use the technology in the way that they expected it to be used

“I think we made public statements following the crash, the May 7 crash that can give some color. I think in a partnership, we need to be there on all aspects of how the technology is being used and not simply providing technology and not being in control on how it is being used. I think that this provides a bit more color to the official statement that we made and it’s based on public statements that we have made following the crash.”

There is a need for standardization

” It’s not tomorrow there is going to be standardization. But I think the need for standardization exists and it will occur naturally because of the complexity of this problem and the need to reach a solution with a high level of safety. This will drive players to consolidate.”

Ofer Maharshak

OEM ASP was $44.05

” Our OEM ASP for the second quarter was $44.05 compared to $43.07 during the same period last year and $44.02 in Q1 of 2016. The increase in ASP this quarter is related to the mix of deliveries, which reflect a higher portion of pedestrians autonomous emergency braking.”

Raising 2016 revenue guidance to $350m

“We are raising our total 2016 revenue guidance range to be between $344 million and $350 million from the prior $336 million to $340 million, representing 44% year-over-year growth at the midpoint. ”

Mobileye 4Q15 Earnings Call Notes

Mobileye’s (MBLY) CEO Ziv Aviram on Q4 2015 Results

10m cars on the road using our tech

“There are now over 10 million cars on the road enjoying a safer driving experience through the use of our technology.”

We are in a forward position to create a standardized map asset for autonomous driving

“We have planned to include all car manufacturers and create a world index. Our position as a technological supplier puts us in a forward position to create a standardized map asset for the autonomous driving industry. Given that our announcements were reciprocated by similar announcements by GM and Volkswagen, this indicates that we are not alone in appreciating the significance of the value we bring to the mapping industry.”

The bar for competition is very high

“A worthy competitor must achieve production worthy performance on the entire spectrum of customer functions, including sensing, mapping and driver policy. Together with a huge database covering tens of millions of miles on driving required to validate the performance of the system, the necessary bar for competition is very high.”

Autonomous driving will be a multi-player game. Open architecture makes the most sense

“I think the motivation for open architecture is not to increase revenue, but to enable our partners to be able to provide their own value into the system, because when you talk about autonomous driving, it’s really a multi-player game. It’s very, very hard to think about it in terms of a closed system. Sensing alone, it’s okay to think about it as a closed system, but once you start adding mapping, you start adding your driver policy, you start adding differentiation between different players; an open architecture makes more sense.”

Our belief is that consumer electronics companies underestimate the challenge of automotive

“we supply to whoever wants us to supply to. So it’s not that we will not supply our chip to consumer electronics players, if and when they will become suppliers to the automotive industry. Now, as for whether the future would be that the car is electronics on wheels, and it will be supplied by consumer electronics companies rather than traditional car manufacturers, our belief is that consumer electronics companies today underestimate the challenge of automotive.”

Consumer electronics have more defects than are allowable in the auto industry

“And when you look at consumer electronics, the kind of product that we are used to have lots of imperfection, and we as consumers have learned to live with it. We buy an iPhone or an Android smartphone and we wait for the next software upgrade and then it gets better or it gets worse and so forth and so forth, it’s always imperfect. We are not tolerant to imperfection with cars. Now you buy a car, you don’t expect it to go to a mechanic every month. Once in five years this is our expectation. And when you think about autonomous driving, where there is safety involved, the level of perfection is really foreign and unparallel to the consumer electronics world.”

Ofer Maharshak

ASPs should grow as complexity increases

“So as we said, the longer-term trends that ASP is growing, it’s growing because of the complexity of features, as Prof. Shashua just mentioned and I also mentioned in the prepared comments. We see a trend with OEMs that even beyond NCAP they are requiring more sophisticated features.