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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) | | | | | |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2022
or | | | | | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 001-38791
LUMINAR TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter) | | | | | | | | | | | | | | |
Delaware | | 83-1804317 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
2603 Discovery Drive | Suite 100 | Orlando | Florida | 32826 |
(Address of Principal Executive Offices) | (Zip Code) |
(407) 900-5259
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | | | | | | | |
Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
Class A common stock, par value of $0.0001 per share | | LAZR | | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. | | | | | | | | | | | | | | | | | |
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |
| | | Emerging growth company | ☐ | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of April 29, 2022, the registrant had 252,526,777 shares of Class A common stock and 97,088,670 shares of Class B common stock, par value $0.0001 per share, outstanding.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
FORM 10-Q
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which involve substantial risks and uncertainties. These statements reflect the current views of management with respect to future events and our financial performance. In some cases, you can identify these statements by forward-looking words such as “outlook,” “believes,” “expects,” “future,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words or phrases, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies, product plans, future growth, market opportunities, strategic initiatives, industry positioning, customer acquisition and retention, revenue growth and anticipated trends in our business.
These statements are only predictions based on our current expectations and projections about future events. These statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including, our history of losses and our expectation that we will continue to incur significant expenses, including substantial R&D costs, and continuing losses for the foreseeable future as well as our limited operating history which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter; our strategic initiatives which may prove more costly than we currently anticipate and potential failure to increase our revenue to offset these initiatives; whether our lidar products are selected for inclusion in autonomous driving or ADAS systems by automotive OEMs or their suppliers, and whether we will be de-selected by any customers; the lengthy period of time from a major commercial win to implementation and the risks of cancellation or postponement of the contract or unsuccessful implementation; potential inaccuracies in our forward looking estimates of certain metrics and our future cost of goods sold (COGS) and bill of materials (BOM) and total addressable market; the discontinuation, lack of success of our customers in developing and commercializing products using our solutions or loss of business with respect to a particular vehicle model or technology package and whether end automotive consumers will demand and be willing to pay for such features; our inability to reduce and control the cost of the inputs on which we rely, which could negatively impact the adoption of our products and our profitability; the effect of continued pricing pressures, competition from other lidar manufacturers, automotive original equipment manufacturers (“OEMs”) cost reduction initiatives and the ability of automotive OEMs to re-source or cancel vehicle or technology programs which may result in lower than anticipated margins, or losses, which may adversely affect our business; general economic uncertainty and the effect of general economic conditions on our industry in particular, including the level of demand and financial performance of the autonomous vehicle industry and market adoption of lidar as well as developments in alternative technology and the increasingly competitive environment in which we operate; our ability to manage our growth and expand our business operations effectively, including into international markets, such as China, which exposes us to operational, financial and regulatory risks; adverse impacts due to limited availability and quality of materials, supplies, and capital equipment, or dependency on third-party service providers whether we will be able to successfully transition our engineering designs into high volume manufacturing, including our ability to transition to an outsourced manufacturing business model and whether we and our outsourcing partners and suppliers can successfully operate complex machinery; whether we can successfully select, execute or integrate our acquisitions; whether the complexity of our products results in undetected defects and reliability issues which could reduce market adoption of our new products, limit our ability to manufacture, damage our reputation and expose us to product liability, warranty and other claims; our ability to maintain and adequately manage our inventory; our ability to remediate the material weakness in our internal controls over financial reporting; our ability to protect and enforce our intellectual property rights; changes in personnel and availability of qualified personnel and dependence on Austin Russell, our Founder, President and Chief Executive Officer; the amount and timing of future sales and whether the average selling prices of our products could decrease rapidly over the life of the product as well as our dependence on a few key customers, who are often large corporations with substantial negotiating power; the effects of the ongoing coronavirus (COVID-19) pandemic or other infectious diseases, health epidemics, pandemics and natural disasters on Luminar’s business; interruption or failure of our information technology and communications systems and cybersecurity risks to our operational systems, security systems, infrastructure, integrated software in our lidar solutions; and those other factors discussed in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 under the heading “Risk Factors” and Part II, Item 1A, of this Quarterly Report under the heading “Risk Factors” which we encourage you to carefully read. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. We undertake no obligation to update any forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we
believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
WEBSITE AND SOCIAL MEDIA DISCLOSURE
We use our website (https://www.luminartech.com/) and various social media channels as a means of disclosing information about the Company and its products to its customers, investors and the public (e.g., @luminartech on Twitter, Luminartech on YouTube, and Luminar Technologies on LinkedIn). The information on our website (or any webpages referenced in this Quarterly Report on Form 10-Q) or posted on social media channels is not part of this or any other report that the Company files with, or furnishes to, the SEC. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands) | | | | | | | | | | | |
| March 31, 2022 | | December 31, 2021 |
| (Unaudited) | | |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 159,416 | | | $ | 329,977 | |
Restricted cash | 710 | | | 725 | |
Marketable securities (including $12,250 and $12,200 with a related party as of March 31, 2022 and December 31, 2021, respectively, see Note 15) | 547,440 | | | 462,141 | |
Accounts receivable | 3,256 | | | 13,013 | |
Inventory | 10,012 | | | 10,342 | |
Prepaid expenses and other current assets | 37,545 | | | 29,195 | |
Total current assets | 758,379 | | | 845,393 | |
Property and equipment, net | 16,437 | | | 11,009 | |
Operating lease right-of-use assets | 14,005 | | | 9,145 | |
Intangible assets, net | 2,361 | | | 2,424 | |
Goodwill | 2,945 | | | 3,110 | |
Other non-current assets | 13,673 | | | 12,455 | |
Total assets | $ | 807,800 | | | $ | 883,536 | |
| | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities: | | | |
Accounts payable | $ | 17,293 | | | $ | 14,419 | |
Accrued and other current liabilities | 24,848 | | | 19,844 | |
Operating lease liabilities | 5,079 | | | 4,735 | |
| | | |
Total current liabilities | 47,220 | | | 38,998 | |
Warrant liabilities | 16,399 | | | 31,230 | |
| | | |
Convertible senior notes | 609,766 | | | 608,957 | |
Operating lease liabilities, non-current | 10,102 | | | 5,768 | |
Other non-current liabilities | 429 | | | 598 | |
Total liabilities | 683,916 | | | 685,551 | |
Commitments and contingencies (Note 13) | | | |
Stockholders’ equity: | | | |
Class A common stock | 27 | | | 27 | |
Class B common stock | 10 | | | 10 | |
Additional paid-in capital | 1,314,742 | | | 1,257,214 | |
Accumulated other comprehensive loss | (4,556) | | | (908) | |
Treasury stock | (275,519) | | | (235,871) | |
Accumulated deficit | (910,820) | | | (822,487) | |
Total stockholders’ equity | 123,884 | | | 197,985 | |
Total liabilities and stockholders’ equity | $ | 807,800 | | | $ | 883,536 | |
See accompanying notes to the unaudited condensed consolidated financial statements.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited, in thousands, except share and per share data)
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2022 | | 2021 | | | | |
Revenue: | | | | | | | |
Products | $ | 1,541 | | | $ | 2,933 | | | | | |
Services | 5,314 | | | 2,380 | | | | | |
Total revenue | 6,855 | | | 5,313 | | | | | |
Cost of sales: | | | | | | | |
Products | 11,818 | | | 5,309 | | | | | |
Services | 4,836 | | | 2,330 | | | | | |
Total cost of sales | 16,654 | | | 7,639 | | | | | |
Gross loss | (9,799) | | | (2,326) | | | | | |
Operating expenses: | | | | | | | |
Research and development | 33,109 | | | 14,010 | | | | | |
Sales and marketing | 9,398 | | | 2,635 | | | | | |
General and administrative | 30,025 | | | 10,273 | | | | | |
Total operating expenses | 72,532 | | | 26,918 | | | | | |
Loss from operations | (82,331) | | | (29,244) | | | | | |
Other income (expense), net: | | | | | | | |
| | | | | | | |
Change in fair value of warrant liabilities | (3,857) | | | (46,649) | | | | | |
| | | | | | | |
Interest expense and other | (3,280) | | | (200) | | | | | |
Interest income and other | 1,539 | | | 170 | | | | | |
Total other income (expense), net | (5,598) | | | (46,679) | | | | | |
Loss before provision for income taxes | (87,929) | | | (75,923) | | | | | |
Provision for income taxes | 404 | | | — | | | | | |
Net loss | $ | (88,333) | | | $ | (75,923) | | | | | |
| | | | | | | |
Net loss per share: | | | | | | | |
Basic and diluted | $ | (0.25) | | | $ | (0.23) | | | | | |
Shares used in computing net loss per share: | | | | | | | |
Basic and diluted | 348,683,836 | | | 332,987,523 | | | | | |
Comprehensive Loss: | | | | | | | |
Net loss | $ | (88,333) | | | $ | (75,923) | | | | | |
Net unrealized losses on available-for-sale debt securities | (3,648) | | | (43) | | | | | |
Comprehensive loss | $ | (91,981) | | | $ | (75,966) | | | | | |
See accompanying notes to the unaudited condensed consolidated financial statements.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited, in thousands, except share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Class A Common Stock | | Class B Common Stock | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Treasury Stock | | Accumulated Deficit | | Total Stockholders’ Equity (Deficit) |
| | | | | | | | | | | | | | Shares | | Amount | | Shares | | Amount | | | | | |
Balance as of December 31, 2020 | | | | | | | | | | | | | | 218,818,037 | | | $ | 22 | | | 105,118,203 | | | $ | 11 | | | $ | 733,175 | | | $ | 34 | | | $ | — | | | $ | (584,501) | | | $ | 148,741 | |
Issuance of Class A common stock upon exercise of Public and Private Warrants | | | | | | | | | | | | | | 15,574,037 | | | 1 | | | — | | | — | | | 492,219 | | | — | | | — | | | — | | | 492,220 | |
Issuance of Class A common stock upon exercise of stock options | | | | | | | | | | | | | | 183,918 | | | — | | | — | | | — | | | 322 | | | — | | | — | | | — | | | 322 | |
Share-based compensation | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | 1,843 | | | — | | | — | | | — | | | 1,843 | |
Other comprehensive loss | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | (43) | | | — | | | — | | | (43) | |
Net loss | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (75,923) | | | (75,923) | |
Balance as of March 31, 2021 | | | | | | | | | | | | | | 234,575,992 | | | $ | 23 | | | 105,118,203 | | | $ | 11 | | | $ | 1,227,559 | | | $ | (9) | | | $ | — | | | $ | (660,424) | | | $ | 567,160 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2021 | | | | | | | | | | | | | | 266,076,525 | | | $ | 27 | | | 97,088,670 | | | $ | 10 | | | $ | 1,257,214 | | | $ | (908) | | | $ | (235,871) | | | $ | (822,487) | | | $ | 197,985 | |
Shares repurchased | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | (39,648) | | | — | | | (39,648) | |
Issuance of Class A common stock upon exercise of Private Warrants | | | | | | | | | | | | | | 401,365 | | | — | | | — | | | — | | | 18,689 | | | — | | | — | | | — | | | 18,689 | |
Issuance of Class A common stock upon exercise of stock options and vesting of restricted stock units | | | | | | | | | | | | | | 2,117,059 | | | — | | | — | | | — | | | 1,085 | | | — | | | — | | | — | | | 1,085 | |
Retirement of unvested restricted common stock | | | | | | | | | | | | | | (40,763) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Vendor stock-in-lieu of cash program | | | | | | | | | | | | | | 1,424,350 | | | — | | | — | | | — | | | 14,613 | | | — | | | — | | | — | | | 14,613 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Share-based compensation | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | 23,657 | | | — | | | — | | | — | | | 23,657 | |
Payments of employee taxes related to vested restricted stock units | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | (516) | | | — | | | — | | | — | | | (516) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other comprehensive loss | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | (3,648) | | | — | | | — | | | (3,648) | |
Net loss | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (88,333) | | | (88,333) | |
Balance as of March 31, 2022 | | | | | | | | | | | | | | 269,978,536 | | | $ | 27 | | | 97,088,670 | | | $ | 10 | | | $ | 1,314,742 | | | $ | (4,556) | | | $ | (275,519) | | | $ | (910,820) | | | $ | 123,884 | |
See accompanying notes to the unaudited condensed consolidated financial statements.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands) | | | | | | | | | | | |
| Three Months Ended March 31, |
| 2022 | | 2021 |
Cash flows from operating activities: | | | |
Net loss | $ | (88,333) | | | $ | (75,923) | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | |
Depreciation and amortization | 805 | | | 657 | |
Noncash lease expense related to operating lease right-of-use assets | 885 | | | 890 | |
Amortization of premium on marketable securities | 444 | | | 262 | |
| | | |
Change in fair value of warrants | 3,857 | | | 46,649 | |
Vendor stock-in-lieu of cash program | 7,848 | | | — | |
Amortization of debt discount and issuance costs | 809 | | | — | |
Impairment of inventories | 1,356 | | | 257 | |
| | | |
| | | |
Share-based compensation | 26,698 | | | 1,837 | |
| | | |
| | | |
| | | |
Product warranty and other | 107 | | | 853 | |
Changes in operating assets and liabilities: | | | |
Accounts receivable | 9,757 | | | 3,828 | |
Inventories | (768) | | | (442) | |
Prepaid expenses and other current assets | (3,300) | | | (5,797) | |
Other non-current assets | 158 | | | (1,318) | |
Accounts payable | 5,983 | | | 1,766 | |
Accrued and other current liabilities | 1,200 | | | (813) | |
Other non-current liabilities | (343) | | | (720) | |
Net cash used in operating activities | (32,837) | | | (28,014) | |
Cash flows from investing activities: | | | |
| | | |
Purchases of marketable securities | (193,687) | | | (226,245) | |
Proceeds from maturities of marketable securities | 91,454 | | | 69,275 | |
Proceeds from sales of marketable securities | 12,842 | | | 29,505 | |
| | | |
Purchases of property and equipment | (5,004) | | | (889) | |
| | | |
Net cash used in investing activities | (94,395) | | | (128,354) | |
Cash flows from financing activities: | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Proceeds from exercise of warrants | — | | | 153,927 | |
Proceeds from exercise of stock options | 1,092 | | | 321 | |
| | | |
Payments of employee taxes related to vested restricted stock units | (516) | | | — | |
| | | |
Repurchase of common stock and redemption of warrants | (43,920) | | | (2) | |
Other financing activities | — | | | (142) | |
Net cash provided by (used in) financing activities | (43,344) | | | 154,104 | |
Net decrease in cash, cash equivalents and restricted cash | (170,576) | | | (2,264) | |
Beginning cash, cash equivalents and restricted cash | 330,702 | | | 209,719 | |
Ending cash, cash equivalents and restricted cash | $ | 160,126 | | | $ | 207,455 | |
Supplemental disclosures of cash flow information: | | | |
Cash paid for interest | $ | — | | | $ | 19 | |
| | | |
Supplemental disclosures of noncash investing and financing activities: | | | |
| | | |
| | | |
| | | |
| | | |
Issuance of Class A common stock upon exercise of warrants | $ | 18,689 | | | $ | 338,293 | |
| | | |
Operating lease right-of-use assets obtained in exchange for lease obligations upon adoption of ASC 842 | — | | | 10,849 | |
Operating lease right-of-use assets obtained in exchange for lease obligations | 5,746 | | | 2,876 | |
Deferred financing costs recorded in accrued liabilities | — | | | 223 | |
| | | |
| | | |
Purchases of property and equipment recorded in accounts payable and accrued liabilities | 1,950 | | | 504 | |
| | | |
| | | |
| | | |
See accompanying notes to the unaudited condensed consolidated financial statements.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1. Organization and Description of Business
Luminar Technologies, Inc. and its wholly-owned subsidiaries (the “Company” or “Luminar”) was originally incorporated in Delaware on August 28, 2018 under the name Gores Metropoulos, Inc (“Gores”). The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On December 2, 2020 (the “Closing Date”), the Company (at such time named Gores Metropoulos, Inc.) consummated the business combination (the “Business Combination”) pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated August 24, 2020 with the pre-Business Combination Luminar Technologies, Inc. (“Legacy Luminar”). Legacy Luminar was incorporated in Delaware on March 31, 2015. In connection with the consummation of the Business Combination, the Company changed its name from Gores Metropoulos, Inc. to Luminar Technologies, Inc. The Company’s common stock is listed on the NASDAQ under the symbol “LAZR.” The Company’s public warrants to purchase shares of Class A common stock were listed on the NASDAQ under the symbol “LAZRW,” until they were delisted on March 5, 2021 upon exercise and redemption.
Unless the context otherwise requires, the “Company” refers to the combined company and its subsidiaries following the Business Combination, “Gores” refers to the Company prior to the Business Combination and “Legacy Luminar” refers to Luminar Technologies, Inc., prior to the Business Combination. Refer to Reverse Merger with Gores in Note 3 to the financial statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information relating to the Business Combination.
The Company is a developer of advanced sensor technologies and software for the autonomous vehicle industry, encompassing Laser Imaging, Detection and Ranging (lidar) technology. The Company manufactures and distributes commercial lidar sensors and certain components for the autonomous vehicle industry. The Company is headquartered in Orlando, Florida and has various facilities located in the United States and internationally in Munich, Germany.
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosures. The significant estimates made by management include inventory reserves, valuation allowance for deferred tax assets, valuation of warrants, forecasted costs associated with non-recurring (“NRE”) services, product warranty reserves, stock-based compensation expense and other loss contingencies. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results could differ from those estimates.
Segment Information
The Company has determined its operating segments using the same indicators which are used to evaluate its performance internally. The Company has two business activities which are its operating segments:
(i) “Autonomous Solutions” for automotive applications, which includes manufacturing and distribution of lidar sensors that measure distance using laser light to generate a 3D map, non-recurring engineering services related to the Company’s lidar products, and development of software products that enable autonomy capabilities; and
(ii) “Components” which includes development of application-specific integrated circuits, pixel-based sensors, as well as designing, testing and providing consulting services for non-standard integrated circuits. In August 2021, the Company acquired Optogration, Inc. (“Optogration”), which has been included in the Components segment.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Concentration of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, marketable investments and accounts receivable. A significant portion of the Company’s cash and cash equivalents is held at high-quality domestic financial institutions. Deposits held with the financial institutions may, at times, exceed the amount of insurance provided on such deposits. Cash held by the Company in foreign entities as of March 31, 2022 and December 31, 2021 was not material.
The Company’s revenue is derived from customers located in the United States and international markets. Four customers accounted for 39%, 20%, 11% and 10%, respectively, of the Company’s accounts receivable at March 31, 2022. Two customers accounted for 39% and 31% of the Company’s accounts receivable at December 31, 2021.
Significant Accounting Policies
The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2021. There has been no material change to the Company’s significant accounting policies during the three months ended March 31, 2022.
Recently Adopted Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. No. 2021-08 (“ASU 2021-08”), Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, it requires an acquirer to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts, which should generally result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements. The Company elected to early adopt ASU 2021-08 as of January 1, 2022. The adoption of ASU 2021-08 did not have a material impact on the Company’s consolidated financial position, operating results or cash flows.
Note 3. Revenue
The Company’s revenue is comprised of sales of lidar sensors hardware, components and NRE services.
Disaggregation of Revenues
The Company disaggregates its revenue from contracts with customers by (1) geographic region based on customer’s billed to location, and (2) type of good or service and timing of transfer of goods or services to customers (point-in-time or over time), as it believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. Total revenue based on the disaggregation criteria described above, as well as revenue by segment, are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, |
| 2022 | | 2021 |
| Revenue | | % of Revenue | | Revenue | | % of Revenue |
| | | | | | | |
Revenue by primary geographical market: | | | | | | | |
North America | $ | 4,968 | | | 73 | % | | $ | 2,539 | | | 48 | % |
Asia Pacific | 1,860 | | | 27 | % | | 321 | | | 6 | % |
Europe and Middle East | 27 | | | — | % | | 2,453 | | | 46 | % |
Total | $ | 6,855 | | | 100 | % | | $ | 5,313 | | | 100 | % |
Revenue by timing of recognition: | | | | | | | |
Recognized at a point in time | $ | 1,541 | | | 22 | % | | $ | 2,053 | | | 39 | % |
Recognized over time | 5,314 | | | 78 | % | | 3,260 | | | 61 | % |
Total | $ | 6,855 | | | 100 | % | | $ | 5,313 | | | 100 | % |
Revenue by segment: | | | | | | | |
Autonomy Solutions | $ | 5,898 | | | 86 | % | | $ | 4,336 | | | 82 | % |
Components | 957 | | | 14 | % | | 977 | | | 18 | % |
Total | $ | 6,855 | | | 100 | % | | $ | 5,313 | | | 100 | % |
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Volvo Stock Purchase Warrant
In March 2020, the Company issued a stock purchase warrant (“Volvo Warrants”) to Volvo Car Technology Fund AB (“VCTF”) in connection with an engineering services contract. The Volvo Warrants entitle VCTF to purchase up to 4,089,280 shares of Class A common stock, at a price of $3.1769 per share from the Company and were determined to be an equity classified award to VCTF. The Volvo Warrants vest and become exercisable in two tranches based on satisfaction of certain commercial milestones, upon reaching commercial production and delivering of production units. The grant date fair value of warrants, aggregating $2.9 million, represents consideration payable to VCTF and will be recognized as reduction in revenue consistent with the revenue recognition pattern when these warrants become probable of vesting. The Company’s management determined that the vesting of the first of the two tranches of Volvo Warrants was probable as of December 31, 2021. As such, the Company had recognized a reduction in revenue in the amount of $1.0 million related to the said first tranche of the Volvo Warrants in the year ended December 31, 2021. The Company’s management determined that the vesting of the second tranche of Volvo Warrants was not probable as of March 31, 2022.
Contract assets and liabilities
Contract assets primarily represent revenues recognized for performance obligations that have been satisfied but for which amounts have not been billed. The Company’s contract assets as of March 31, 2022 and December 31, 2021 were $14.8 million and $9.9 million, respectively. Contract liabilities consist of deferred revenue and customer advanced payments. Deferred revenue includes billings in excess of revenue recognized related to product sales and other services revenue and is recognized as revenue when the Company performs under the contract. Customer advanced payments represent required customer payments in advance of product shipments according to customer’s payment term. Customer advance payments are recognized in revenue as or when control of the performance obligation is transferred to the customer. The Company’s contract liabilities were $0.9 million as of March 31, 2022 and December 31, 2021, and were included in accrued and other current liabilities in the condensed consolidated balance sheets.
The significant changes in contract assets balances consisted of the following (in thousands):
| | | | | | | | | | | |
| |
| March 31, 2022 | | December 31, 2021 |
Beginning balance | $ | 9,907 | | | $ | — | |
Revenue recognized for performance obligations that have been satisfied but for which amounts have not been billed | 4,865 | | | 9,907 | |
Ending balance | $ | 14,772 | | | $ | 9,907 | |
The significant changes in contract liabilities balances consisted of the following (in thousands):
| | | | | | | | | | | |
| |
| March 31, 2022 | | December 31, 2021 |
Beginning balance | $ | 898 | | | $ | 2,284 | |
| | | |
Revenue recognized that was included in the contract liabilities beginning balance | (250) | | | (1,792) | |
Net increase due to cash received and not recognized as revenue and billings in excess of revenue recognized during the period | 259 | | | 406 | |
Ending balance | $ | 907 | | | $ | 898 | |
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 4. Investments
Debt Securities
The Company’s investments in debt securities consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2022 |
| | Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value |
U.S. treasury securities | | $ | 251,673 | | | $ | 1 | | | $ | (2,685) | | | $ | 248,989 | |
U.S. agency and government sponsored securities | | 4,996 | | | — | | | (89) | | | 4,907 | |
Commercial paper | | 130,103 | | | 1 | | | (126) | | | 129,978 | |
Corporate bonds | | 158,595 | | | 1 | | | (1,348) | | | 157,248 | |
Asset-backed securities | | 41,185 | | | — | | | (311) | | | 40,874 | |
Total debt securities | | $ | 586,552 | | | $ | 3 | | | $ | (4,559) | | | $ | 581,996 | |
Included in cash and cash equivalents | | $ | 80,201 | | | $ | 2 | | | $ | (28) | | | $ | 80,175 | |
Included in marketable securities | | 506,351 | | | 1 | | | (4,531) | | | 501,821 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2021 |
| | Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value |
U.S. treasury securities | | $ | 161,938 | | | $ | 1 | | | $ | (474) | | | $ | 161,465 | |
U.S. agency and government sponsored securities | | 4,995 | | | — | | | (25) | | | 4,970 | |
Commercial paper | | 40,788 | | | — | | | (4) | | | 40,784 | |
Corporate bonds | | 165,522 | | | 13 | | | (345) | | | 165,190 | |
Asset-backed securities | | 46,540 | | | — | | | (74) | | | 46,466 | |
Total debt securities | | $ | 419,783 | | | $ | 14 | | | $ | (922) | | | $ | 418,875 | |
Included in cash and cash equivalents | | $ | 950 | | | $ | — | | | $ | — | | | $ | 950 | |
Included in marketable securities | | 418,833 | | | 14 | | | (922) | | | 417,925 | |
The following table presents the gross unrealized losses and the fair value for those debt securities that were in an unrealized loss position for less than 12 months as of March 31, 2022 and December 31, 2021 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2022 | | December 31, 2021 |
| | Gross Unrealized Losses | | Fair Value | | Gross Unrealized Losses | | Fair Value |
U.S. treasury securities | | $ | (2,685) | | | $ | 228,993 | | | $ | (474) | | | $ | 146,454 | |
U.S. agency and government sponsored securities | | (89) | | | 4,907 | | | (25) | | | 4,970 | |
Commercial paper | | (126) | | | 114,980 | | | (4) | | | 30,285 | |
Corporate bonds | | (1,348) | | | 156,246 | | | (345) | | | 145,522 | |
Asset-backed securities | | (311) | | | 40,874 | | | (74) | | | 45,251 | |
Total | | $ | (4,559) | | | $ | 546,000 | | | $ | (922) | | | $ | 372,482 | |
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Equity Investments
The Company’s equity investments consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):
| | | | | | | | | | | | | | | | | |
| Condensed Consolidated Balance Sheets Location | | March 31, 2022 | | December 31, 2021 |
Money market funds(1) | Cash and cash equivalents | | $ | 47,497 | | | $ | 25,654 | |
Marketable equity investments(1) | Marketable securities | | 45,619 | | | $ | 44,216 | |
Non-marketable equity investment measured using the measurement alternative(2) | Other non-current assets | | $ | 10,002 | | | $ | 10,002 | |
Total | | | $ | 103,118 | | | $ | 79,872 | |
(1) Investments with readily determinable fair values.
(2) Investment in privately held company without readily determinable fair value.
In December 2021, the Company made an investment in 1,495 Class A Preferred Units of Robotic Research OpCo, LLC (“Robotic Research”) for consideration of $10.0 million, which was settled by issuing 618,924 shares of Class A common stock of the Company. The Company’s investment in Robotic Research represents less than 5% of Robotic Research’s capitalization. The Company neither has a significant influence over Robotic Research nor does its investment amount to a controlling financial interest in Robotic Research. As such, the Company measured the investment in Robotic Research at cost as provided under the guidance for measurement of equity investment using the measurement alternative.
Total realized and unrealized gains and losses associated with the Company’s equity investments was not material in the three months ended March 31, 2022 and 2021.
Note 5. Financial Statement Components
Cash and Cash Equivalents
Cash and cash equivalents consisted of the following (in thousands): | | | | | | | | | | | |
| |
| March 31, 2022 | | December 31, 2021 |
Cash | $ | 31,744 | | | $ | 303,373 | |
Money market funds | 47,497 | | | 25,654 | |
U.S. treasury securities | 19,997 | | | — | |
| | | |
Commercial paper | 60,178 | | | 950 | |
| | | |
Total cash and cash equivalents | $ | 159,416 | | | $ | 329,977 | |
Inventories, net
Inventories consisted of the following (in thousands):
| | | | | | | | | | | |
| |
| March 31, 2022 | | December 31, 2021 |
Raw materials | $ | 6,535 | | | $ | 5,866 | |
Work-in-process | 2,265 | | | 1,171 | |
Finished goods | 1,212 | | | 3,305 | |
Total inventories, net | $ | 10,012 | | | $ | 10,342 | |
The Company’s inventory write-down (primarily due to obsolescence, lower of cost or market assessment, and other adjustments) was $1.4 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
| | | | | | | | | | | |
| |
| March 31, 2022 | | December 31, 2021 |
Prepaid expenses | $ | 15,893 | | | $ | 14,651 | |
Contract assets | 14,772 | | | 9,907 | |
Advance payments to vendors | 4,417 | | | 1,810 | |
| | | |
Other receivables | 2,463 | | | 2,827 | |
Total prepaid expenses and other current assets | $ | 37,545 | | | $ | 29,195 | |
Property and Equipment
Property and equipment consisted of the following (in thousands):
| | | | | | | | | | | |
| |
| March 31, 2022 | | December 31, 2021 |
Machinery and equipment | $ | 8,286 | | | $ | 7,694 | |
Computer hardware and software | 2,871 | | | 2,854 | |
| | | |
Leasehold improvements | 885 | | | 869 | |
Vehicles, including demonstration fleet | 2,631 | | | 2,421 | |
| | | |
Furniture and fixtures | 829 | | | 272 | |
| | | |
Construction in progress | 8,454 | | | 3,677 | |
Total property and equipment | 23,956 | | | 17,787 | |
Accumulated depreciation and amortization | (7,519) | | | (6,778) | |
Total property and equipment, net | $ | 16,437 | | | $ | 11,009 | |
Property and equipment capitalized under finance lease (capital lease prior to adoption of ASC 842) were not material.
Depreciation and amortization expense associated with property and equipment was $0.7 million and $0.7 million for the three months ended March 31, 2022 and 2021, respectively.
Intangible Assets
The following table summarizes the activity in the Company’s intangible assets during the three months ended March 31, 2022 (in thousands):
| | | | | | | | | | |
| | Three Months Ended March 31, 2022 | | |
Beginning of the period | | $ | 2,424 | | | |
Amortization | | (63) | | | |
End of the period | | $ | 2,361 | | | |
The components of intangible assets were as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2022 | | December 31, 2021 |
| Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Weighted Average Remaining Period (Years) | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Weighted Average Remaining Period (Years) |
Customer relationships | $ | 780 | | | $ | (52) | | | $ | 728 | | | 9.3 | | $ | 780 | | | $ | (33) | | | $ | 747 | | | 9.6 |
Tradename | 120 | | | (120) | | | — | | | — | | | 120 | | | (120) | | | — | | | — | |
Developed technology | 1,750 | | | (117) | | | 1,633 | | | 9.3 | | 1,750 | | | (73) | | | 1,677 | | | 9.6 |
Total intangible assets | $ | 2,650 | | | $ | (289) | | | $ | 2,361 | | | 9.3 | | $ | 2,650 | | | $ | (226) | | | $ | 2,424 | | | 9.6 |
Amortization expense related to intangible assets was $0.1 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of March 31, 2022, the expected future amortization expense for intangible assets was as follows (in thousands): | | | | | | | | |
Period | | Expected Future Amortization Expense |
Remaining 2022 | | $ | 190 | |
2023 | | 253 | |
2024 | | 253 | |
2025 | | 253 | |
2026 | | 253 | |
Thereafter | | 1,159 | |
Total | | $ | 2,361 | |
Goodwill
The carrying amount of goodwill allocated to the Company’s reportable segments was as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Autonomy Solutions | | Components | | Total |
As of March 31, 2022 | $ | 687 | | | $ | 2,258 | | | $ | 2,945 | |
As of December 31, 2021 | $ | 687 | | | $ | 2,423 | | | $ | 3,110 | |
Other Non-Current Assets
Other non-current assets consisted of the following (in thousands):
| | | | | | | | | | | |
| |
| March 31, 2022 | | December 31, 2021 |
Security deposits | $ | 2,574 | | | $ | 1,187 | |
Non-marketable equity investment | 10,002 | | | 10,002 | |
| | | |
Other non-current assets | 1,097 | | | 1,266 | |
Total other non-current assets | $ | 13,673 | | | |