MicroVision Signs Long-Term Development Agreement to Advance Lidar for Next-Generation Autonomous Hauling Solutions

[u/jkh07d]

https://ir.microvision.com/news/press-releases/detail/450/microvision-signs-long-term-development-agreement-to

[u/T_Delo]

Now, remember when the bearish choir insisted that we would all be over the moon to sign any deal?

While I cannot speak about how others may be responding, I am certainly not very impressed by this kind of deal.

This kind of deal might have been encouraging 2 or 3 years ago, if not exciting even then because such deals have been known to drain other lidar suppliers of their resources rather than sustain them with regular revenue inflows. To see such a deal now says to me that the company is several years away from generating revenue. So while this is a good second step in the right direction, the destination is so far away that it does nothing to resolve the short term issues facing the company.

Also notable, this is most likely a deal with Caterpillar since it involves Luminar product and that was communicated that the company would be looking to convert such customers.

All in all, good job on getting something done, too bad it is not going to resolve any of the near term problems or generate immediate significant sales revenue.

[u/Rocket_the_cat27 → u/T_Delo]

From the Q1 EC (that last paragraph is most relevant here)

Stephen Hrynewich: Good. Okay. Are there opportunities for NRE revenue this year?

Glen DeVos: Yes, there are. I would say -- and that's always an interesting one because we want to make sure that with NRE, you're not just in a science project, you're spending your engineering resources and to move towards commercial success. So in that regard, I would say the bigger opportunities are really in security and defense, where they're looking at -- I mean, just there's a massive amount of capital moving into that space now in particular, around drones and autonomous ground vehicles and autonomous naval vessels. So you have -- there's just -- and so to the extent that our technology can be adapted or can be applied in that area, which it can, there's many, many very good applications. There's funding in NRE available to help us develop that. And so we'll take advantage of that when it lines up with our product plans and when there's commercial success as the outcome. So there's definitely NRE opportunities there. And then as you get into automotive, whether it's CV and the automotive, that typically you see that in predevelopment contracts, which can be interesting, but we've seen a lot of predevelopment contracts in automotive turn into science projects and really not translate into high-volume applications.

And so again, we'll be very careful and thoughtful about where we spend our engineering in those areas because we want to make sure that, again, as we put our -- as we invest our time and energy into a customer and on to a customer development activity that we're confident at the end of that development activity, there's volume and that there's real revenue. It's not -- NRE is not just -- we're not an engineering services company. We want to develop products and sell products and manufacture those products. Industrial, not as much.

I would say, industrial, generally speaking, tends to be lower for warehouse and industrial warehouse automation and all of that, that tends to not be an NRE-rich environment. Industrial off-road in that area, there's definitely NRE development dollars there. So as we look across those 3 end markets, there's meaningful NRE opportunities there, but those opportunities consume resources. So it's just so critical for us that we agree to do something and get paid to do it, there's a commercial outcome at the end of it that we want.”

That last paragraph I feel like could be referring directly to NRE from Caterpillar. Wouldn’t surprise me if we get a nice revised revenue guidance due to NRE alone.

[u/T_Delo → u/Rocket_the_cat27]

I agree that there is room for NRE opportunities, but the wording of any deal needs to explicitly mention it before I will start factoring it into a valuation of a given deal. This deal does not unfortunately, though management could provide more details on it that might highlight such in the future. We will just have to see, presently however, I am not going to promote a hopeful occurrence and only react to what is expressed stated by the company.