Aeva Seeks 80%-100% Revenue Boost in 2025 With New $50M Partnership Expansion

Insights from Earnings Call: Aeva Technologies (AEVA) First Quarter 2025

Management View

CEO Soroush Saleh Salehian emphasized the increasing pace of business growth, stating, “We’re seeing our commercial momentum speed up across an expanding array of uses.” He referred to ongoing advancements in the automotive sector, particularly through the Daimler Truck Manufacturing Initiative and the worldwide leading Passenger Vehicle Original Equipment Manufacturer Development Program, where they have reached their initial significant benchmark.
Salehian unveiled the Eve 1 series of highly accurate sensors designed for industrial automation, noting that these products "have the potential to revolutionize the $4 billion annual market for laser displacement sensors." More than 1,000 units have already been preordered, with deliveries scheduled for later in the year.
Aeva joined the Intelligent Transportation System sector through an alliance with Sensys Gatso, becoming their sole provider of LiDAR technology for upcoming mobile speed monitoring devices in Australia. Aeva highlighted the precise velocity measurement capability of their 4D LiDAR as a key advantage.
Earlier today, Aeva declared a strategic alliance with a tech division of a Global Fortune 500 corporation, set to inject as much as $50 million into Aeva. The agreement encompasses an equity investment of $32.5 million along with potential additional funds totaling $17.5 million dedicated to collaborative product creation. Their objective is to produce high-level perceptual sensors for sectors like consumer electronics, industry applications, and automobiles. Salehian highlighted, “This fresh cooperation should bolster our standing significantly, aiding widespread implementation in subsequent years through the world-leading passenger vehicle OEM initiative.”
CFO Saurabh Sinha stated, "In Q1, we saw revenues of $3.4 million. Although we're still at an initial stage in our commercial efforts, this marked a new high for our product sales within the quarter and highlights the ongoing expansion in business with both automotive and industrial clients."

Outlook

Sinha stated, "with our increasing commercial momentum across the board, we now have added confidence to increase our revenue range to at least by 80% to 100% growth on a full year basis compared to 2024." This guidance does not incorporate the new strategic collaboration announced.
The management team will share updates during Aeva Day on July 31.

Financial Results

The Q1 revenues were announced at $3.4 million, with Sinha pointing out that this marked a record for product revenue quarters.
The Q1 non-GAAP operating loss amounted to $25.9 million, marking a decrease of 19% compared to the previous year, consistent with the strategy to cut non-GAAP operating expenses by 10% to 20% over the entire fiscal year.
In the first quarter, gross cash usage amounted to $31.3 million. By the end of the period, Aeva reported an overall accessible liquidity totaling $206 million. This figure includes $81 million held as cash and marketable securities along with an unutilized credit line of $125 million.
The current liquidity situation has not incorporated the funds from the new $32.5 million equity investment, anticipated to be completed in the next few months.

Q&A

Colin Rusch asked Salehian about potential additional market targets facilitated by the newly formed collaboration and production method. Salehian stated that this alliance seeks to penetrate both consumer and industrial sectors, utilizing their partner's extensive reach for expansion purposes, adding enthusiastically, “We look forward to harnessing that broad scope to propel us towards future opportunities within these various domains.”
Rusch inquired about the connection with SICK and how their collaboration has developed over time. Salehian responded, "On their own, SICK commands roughly 15% of this market segment, selling around 300,000 units," and he conveyed his assurance that a substantial part of those sales could be shifted towards Aeva’s FMCW technology.
Joseph Moore from Morgan Stanley asked about increasing sales to new customers for the laser displacement sensors. Salehian indicated that these new projects would likely have significantly shorter lead times compared to earlier contracts, reflecting optimism regarding their ability to scale up production to handle increased demand this year.
George Gianarikas from Canaccord Genuity inquired about the current momentum with other passenger original equipment manufacturers (OEMs) and what was behind the raised revenue forecast. Salehian mentioned active discussions with several OEMs, while Sinha highlighted that the boost in the revenue projection mainly stemmed from positive trends in product revenues, noting that the impact of their recent partnership has not been factored into this prediction yet.
Tyler Anderson from Craig-Hallum asked about the revenue generated by the industrial market segment as well as their plans for increasing production capabilities. Salehian mentioned that they anticipate initial order contributions amounting to several million dollars and aim to establish a manufacturing capability of producing up to 100,000 units annually by 2025.
Suji Desilva from Roth Capital asked for an update on the upcoming key events for the leading ten worldwide passenger car manufacturers. Salehian explained that the subsequent actions include integrating and packaging solutions across various vehicle models, with an emphasis on moving towards mass production.

Sentiment Analysis

The analysts kept up an optimistic tone, often praising management for their advancements and showing excitement over fresh collaborations and growing product success. They directed their queries towards potential additional opportunities and how well recent achievements can be expanded upon.
Management stayed confident throughout, with Salehian asserting, "Our company has never been better positioned to keep implementing our significant interest in Aeva’s distinctive FMCW technology." This sentiment carried over into both scripted statements and the question-and-answer session, focusing on growing business momentum and forming new alliances as evidence of progress.
In comparison to the last quarter, the sentiment continues to be positive; however, this time it comes with increased confidence and clarity related to the newly provided revenue forecasts and the recent announcement of our strategic alliance.

Quarter-over-Quarter Comparison

This quarter includes an announcement of a $50 million strategic investment and collaboration with a Global Fortune 500 corporation, marking a shift from last quarter’s emphasis on achieving product development goals and securing original equipment manufacturer deals.
The revenue forecast has been raised from 70%-100% growth to a minimum of 80%-100% YoY, indicating increasing faith in the upward trajectory of product revenues.
Management’s tone shifted from cautious optimism to assertive confidence, underlined by record product revenue and expanded commercial traction.
Analysts in both quarters were positive, but current quarter questions focused more on execution and scalability rather than validation of strategy.

Risks and Concerns

Management observed that Q1 cash usage usually increases because of the payment schedule and working capital needs; however, they confirmed that adequate liquidity is still accessible.
Gross margins might vary in the short term due to scaling up production, however, management anticipates robust margins when the volume rises.
The planned investment hinges on regulatory approval and meeting standard closing prerequisites.
The integration with the globally leading top 10 passenger vehicle Original Equipment Manufacturer (OEM) is dependent on successfully finishing the development program by the end of this year.

Final Takeaway

In the first quarter of 2025, Aeva experienced significant commercial progress, underscored by unprecedented product sales, the introduction of advanced industrial-grade sensors, and a pivotal $50 million strategic alliance aimed at extending the firm’s influence into automotive, industrial, and consumer sectors. Leadership conveyed robust optimism about reaching an annual revenue increase between 80% and 100%, bolstered by increasing order volumes, enhanced production capabilities, and endorsement from top market participants. The corporation maintains a healthy cash reserve, anticipating further funds through this recent collaboration, which sets up Aeva well to seize numerous emerging prospects throughout 2025 and subsequent years.

Review the complete earnings call transcript here.