Aeva Technologies (NASDAQ:AEVA) Q2 2026 Earnings Call

0:00 Good day. My name is Stephanie and I'll be your conference facilitator. I'd like to welcome everyone to today's AEVA Technologies Second Quarter twenty twenty six Earnings Conference Call. During opening remarks, all participants will be in a listen only mode. Following the opening remarks, we will conduct a question and answer session. As a reminder, today's conference is being recorded and simultaneously webcast. I would like to now turn the call over to Andrew Plung, Senior Director of Investor Relations and Corporate Development. Andrew, please go ahead.

0:32 Thank you and welcome everyone to AEVA's Second Quarter twenty twenty six Earnings Conference Call. Joining on the call today are Suraj Sawahian, AEVA's Co Founder and CEO and Surab Sinha, AEVA's CFO. Ahead of this call, we issued our second quarter twenty twenty six press release and presentation, which we will refer to today and can be found on our Investor Relations website at investors.aeva.com. Please note that on this call, we will be making forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date.

1:18 These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our most recent Form 10 Q and Form 10 ks. In addition, during today's call, we will discuss non GAAP financial measures, which we believe are useful as supplemental measures of AEVA's performance. These non GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company website under the Investor Relations link. And with that, let me turn the call over to Suresh.

2:06 Thanks, Andrew, and good afternoon, everyone. Q2 was another strong quarter at AEVA. We continue to build on our leadership position with more milestones delivered to our customers and partners and important expansion into new areas leveraging our same core technology developed in the last decade. In particular, we announced today our entrance into a very exciting new market beyond sensing applications that I will talk more about in a bit. Reflecting our commercial momentum, we achieved another strong revenue quarter with continued strong center shipments and NRE higher than the previous year. With demand for AEVA's technology continuing to grow, we are progressing on the targets we set this year to scale our manufacturing.

2:53 And we are working on ramping across our supply chain from our CN partners to foundries and component suppliers to support higher volumes to meet demand. We also strengthened our balance sheet in June with a follow on equity offering that brought our total available liquidity to over $300,000,000 at the end of Q2. We believe this further differentiates and positions AEVA to support our current customers to commercial deployment and expand our commercial traction across the board. I would now like to highlight recent achievements and business developments. First, we are excited to announce the launch of the Aeva optical connectivity business, which is our expansion to a new market that leverages AEVA's high optical power source and silicon photonic technology to enable next generation AI data centers.

3:48 AEVA has spent the past decade developing and proving out our proprietary laser based technology for the automotive and industrial applications. Because our technology is built on the same foundational technology used in the telecom industry, it uniquely positions AEVA to repurpose it without significant development to pursue the massive data center market opportunity as the major AI compute companies like NVIDIA, AMD, and hyperscalers such as Amazon, Microsoft, Google transition to optical connectivity where we believe AEVA can provide differentiated solutions to achieve the increasing performance, power efficiency and scalability requirements for AI data centers.

4:35 Earlier this year, we published a paper detailing the industry leading performance of AEVA's high power optical source technology. Since then, we have moved quickly to meet growing interest from leaders in AI infrastructure in AEVA's capabilities. In just a few short months, we have been working with a number of AI chip companies and optical solution providers to hyperscalers to validate some of those capabilities. And the results so far have been very encouraging. We have been able to demonstrate how AEVA's technology can deliver across stringent key metrics the required high optical power, low noise, reliability, and power efficiency in a scalable solution to address the rapidly growing bandwidth and power demands of multiple next generation AI data center architectures, including near package optics and co package optics or CPO.

5:34 And I am thrilled to share today that we have just signed a key joint development agreement with a leading provider of high speed optical engines to integrate AEVAUS technology into a near package optic solution for a major hyperscaler with planned commercial deployments as soon as feasible with the potential to start initial volumes in 2027 and ramping in 2028. This is a significant validation of the performance, maturity and scalability of AEVA's technology. And we believe it will advance the business we're launching today, including our other ongoing engagements across the industry. The potential scale for this market is large. And we believe a deployment like with this deal, once qualified as the hyperscaler, has the potential to exceed multiple millions of units annually with revenues in the multiple hundreds of millions of dollars per year.

6:33 To support the significant potential for optical connectivity, we plan to leverage AEVA's existing manufacturing and foundry supply chain for volume production. We've also established a dedicated team with Pradeep Srinivasan, AEVA's VP of Photonics, taking an expanded role as Senior VP of Optical Connectivity. Pradeep has been instrumental in developing and industrializing AEVA silicon photonics IP, and together with the team will enable AEVA to accelerate the development, deployment, and adoption of optical connectivity. With our technology team and the growing commercial interest, we are very excited about the future of optical connectivity and plan to share more updates on this as we progress.

7:23 Now moving to automotive. We also made really good progress across our key automotive programs this past quarter. On Daimler Truck, we continue to scale shipments of production intent Atlas sensors to the OEM for their AV stack validation ahead of series production. Importantly, we've begun manufacturing at our fully automated assembly line at Jabil in North America, a major milestone towards AEVA's readiness and ability to scale manufacturing for automotive and others, including Daimler Trucks production program. In passenger vehicles, we've also progressed on milestones with the delivery of our Atlas Ultra systems and continuous integration work for joint stack development with a top 10 European passenger OEM production program, as well as with NVIDIA on the DRIVE Hyperion platform.

8:15 Our collaboration with Vendex has also progressed to a critical next stage. Bendix has selected to use AEVA's four d LiDAR and perception software and integrate them into its next generation ADAS series production system for key added safety functionality for trucks, such as collision mitigation across a broader range of scenarios and nighttime driving. Bendex is the leader in commercial vehicle ADAS. Its current Bendex Fusion, which is a vision and radar based system is the market leading collision mitigation and active safety solution in North America. It is available on most of the 300,000 Class A trucks that are sold annually in North America alone.

9:02 And with Bendix having the goal to make its next generation ADAS system standard future for the flagship models of their major OEMs, names like PACCAR or international, This selection not only highlights how the industry continues to adopt LiDAR to improve performance, but it's also a strong validation of the manufacturability and the cost effectiveness of AEVA solutions in level two plus ADAS applications, where LiDAR has traditionally not penetrated yet. Now turning to factory automation, we reached an important milestone with another customer launch of Aeva product, our EVE sensor. This quarter SIC AG, one of the largest industrial sensor providers globally, commercially launched its first industrial sensor using AEVA's EVE precision sensing system.

9:54 This is part of our long term strategic collaboration with SIC to leverage AEVA's advantages such as immunity to ambient light and sensor to sensor interference to deliver more precise and reliable measurements across a broader range of environments at scale. In addition to SIC, we've continued to see strong interest for our precision technology from leaders in manufacturing and factory automation, and are working towards converting these engagements to commercial awards in the near term. Separately, in defense, we continue to support Fortera's autonomous ground vehicle or AGV programs as they transition from time of flight to AEVA's 40 LiDAR for long range and velocity detection, as well as for vehicle positioning and sales operational capability in GPS denied environments.

10:44 This quarter, we also progressed on other opportunities with major defense companies and organizations beyond ground applications, including for example, on aerial autonomy. We look forward to sharing more on these in the coming months. And last but not least, in smart infrastructure, we continue to see good traction with the recently introduced AEVA CityOS, our AI powered platform for real time intelligent traffic management. Following our first large scale deployment in the Atlanta, Georgia area, the city of Fargo in North Dakota selected us to deploy CityOS to improve roadway safety and traffic management, leveraging 40 Liters ability to operate in inclement weather, such as snow, fog and rain and at all lighting conditions.

11:32 AEVA's ITS team is also active with other DOTs and municipality and we believe that our differentiated solution will continue to penetrate for additional deployments. So in summary, we achieved a lot this past quarter. And our differentiated technology and balance sheet positioned us to further solidify a leadership position in the industry as we execute on our commercial momentum. Now before I turn the call to Saurabh to walk through our Q2 financial results, I want to say a few words on the CFO transition we announced today. So Rob, who joined AEVA six years ago as our CFO, will be moving on in September to pursue a new opportunity outside the sensing industry. I want to personally thank him for his many contributions to AEVA, including his role in helping to take the company from early public stage to where we are today.

12:25 And we wish him all the best on his next role. We have already initiated a search for a permanent successor, which will be announced separately once complete. In the interim, Rupesh Maheshwari, our VP Corporate Controller will step in as interim CFO. Rupesh brings more than twenty years of accounting and finance leadership experience at large and growing technology companies and we'll work alongside Saurabh to ensure a successful and seamless transition. With that, let me now turn the call over to Saurabh. Thank you, Saurabh for your kind words, and good afternoon, everyone. Now on to AEVA's Q2 results. As demand for our unique technology continues to grow, AEVA's financials also reflect the building momentum of the business, our expansion to an exciting new market opportunity and the continued financial discipline as we execute on our plan.

13:22 Revenue was $6,100,000 in Q2, driven by continued strong product shipments and contribution from NRE as we delivered sensors and achieved milestones with a growing group of customers. Non GAAP operating loss was $26,000,000 this quarter, which is close to prior year levels and reflects our target to maintain operating expenses at similar levels to up slightly year over year while continuing to scale the business. Q2 gross cash use, which we define as operating cash flow less capital expenditure, was $31,400,000 In June, we raised gross proceeds of $115,000,000 in a follow on equity offering.

14:14 This brought our total available liquidity at the end of Q2 to $302,900,000 With this liquidity position and our differentiated technology, we believe AEVA is uniquely positioned in the industry to continue building our momentum, including into exciting new markets such as optical connectivity and meet more of the growing demand for AEVA technology. And finally, as this will be my last earnings call at AEVA, I wanted to say that it has truly been an honor to serve as AEVA's CFO over the past six years.

14:54 I am very proud of what we have built as a team, and I look forward to following the growing momentum and continued success of the company. Let me now turn it back to Sourish for his closing remarks. Thank you, Sourabh. In closing, I'd like to thank the AEVA team for delivering on our key achievements in Q2. AEVA's unified perception platform continues to gain the trust of a growing list of leaders across multiple markets.

15:22 And our ability to launch optical connectivity and realize commercial traction so quickly is another indication of the scalability of our technology and the execution of our team. As we continue to expand, we remain laser focused on the objectives we set out at the beginning of this year, achieve milestones on existing programs while adding new wins, scaling manufacturing to support increasing demand and maintaining financial discipline as we grow. We have made strong progress on the first half of the year and are well positioned to deliver on these objectives in 2026. And with that, let's now turn to Q and A. Thank you.

16:15 And we'll take our first question from Colin Rusch with Oppenheimer and Company. Your line is open. Please Thanks go so much guys and Sarelle congratulations the transition. Guys, can you talk about with this development agreement what the key technical hurdles are that you're going be addressing here over the next twelve to eighteen months to really get ready for commercial ramp? Yeah, Colin, this is Suresh, happy to answer that. So obviously this is, I would say, a major customer win for us here and rapid progress, would call it lightning speed in the past few months for us to get to here. So I think the key focus has been for us first, showing that we have the capability and working and validating that with the actual end customers including the chip companies as well as the hyperscalers that I mentioned in the call.

17:10 And we have been engaged with, you know, the key players in this period as well. So key for us is we see a massive opportunity using the same core technology in terms of what we call high power optical sources, using our laser based solutions, as well as our silicon photonics technology that we have spent the past ten years, past decade developing and really proving it out for automotive, industrial and those applications.

17:38 So now we're leveraging this to launch this new business of connectivity for a integration of the solution into the hyperscaler and data center environment. And key focus for us is, you know, we've seen the feedback really very encouraging because the validation is there. We have a ton of data on reliability and field testing. And importantly, we have a different approach. And I can get into this a little bit more later, but the approach allows us to effectively provide and meet the very strict requirements, providing high optical power, low noise, reliability, power efficiency, and importantly, scalability to really need what needs to be done. So the key focus what I'm trying to get to is

18:24 the technology is proven. Obviously, we have to do some development to make sure for example, with this customer and this joint development that the solution and our high power sources and photonic solution integrate properly. So, you know, some joint development integration work together on that. And we're doing that as fast as possible because the hybrid spec wants to deploy this immediately. Right? And with that, we go into the qualification.

18:52 And once qualified, then this is gonna go into scale. And the timing here, I mean, I mentioned on the call briefly is in the next number of months, next few months here, we're doing these activities, this joint integration. Then we'll do the qualification. But the goal and what the hyperscaler wants to do is as early as second half next year, '27, to start the initial deployments and then from there scale up into production for '28. So that's that's kind of the the short answer and the potential obviously here is massive because this is a very, you know, top three or four hyperscaler with millions and millions that they're deploying. Can I just pick up on that last comment there? Certainly, that volume of units is substantially more than you would have been able to produce in your end markets. I'm just curious about potential impact on cost structure for you guys in terms of being able to reduce cost and pass that on or drive market share and some of your other applications and the capacity of your partners to help you scale up to those volumes.

19:57 Yeah, absolutely. I think this is a crucial point, right? Because what we have done with the product here is focused on solutions at the chip level that are very cost effective. As a matter of fact, when we look at kind of what's out there, a lot of the focus has so far been on using investing heavily in the laser sources to achieve high power. And without going to do much of the technical details,

20:24 to do that there are certain trade offs you have to make. The size of the dies get bigger, when you align multiple of these to get number of weight lengths or a lot of power out, these things get larger, more alignment as needed. All this impact at the end of the day, the yields, which hits the cost and as well as the repeatable scalability of the solution. Our approach is quite different.

20:46 That allows us in a way to have smaller size dyes and ability to actually provide the high power optical way without having to have as many, let's say, chips for the solution. And we see that that allows for much higher yield, much higher repeatability and reliability as well. So that's I think one of the key differentiations for us. Obviously, as we go into millions, the cost structure already, you know, we have existing foundries. That's where our focus is next is on the foundries on manufacturing partners to scale the volume. And these foundries already are very capable. And we have secured some of the capacity we already need to deploy in the market and are working to increase that given this massive pooling potential with this new deal that we have. So that's gonna be the focus and absolutely, you know, costs already are, you know, at a very competitive way given what I mentioned.

21:47 But we are of course gonna be using that economies of scale to also drive down the cost and really help with the next generation of sensing side as well for all of our other products as well. Thanks so much, guys. Thank you. Our

22:07 next question will come from Matthew Picouli with Canaccord Genuity. Please go ahead. Your line is open. Hi, guys. Congrats again on a great quarter and best of luck, Saurabh. Maybe just to continue on to Colin's question. Could you just give us a little detail around what you expect the revenue model to be for the optical connectivity business? You know, how should we think about it from an ASP perspective? And, you know, some details around that would be appreciated.

22:33 Yeah, I'm happy to answer that. So, at a high level, I would say I mentioned on the call, obviously, we just signed this deal and we're very excited about it. And the key focus here is we see the potential for ramp up starting in 'twenty seven, you know, the back half, second half of 'twenty seven, and then wrapping into 'twenty eight. So I mentioned a little bit on the call, but at a high level, the way we see this, the volume forecast in the hyperscaler is quite massive, right? And a short answer, I think whatever supply that we can provide, I think we have an opportunity to do some of it. That's what I would say. But what that means is the expectation is this ramping, you know, the start into '28 with minimal millions of units that, you know, go in production and we're talking multiple units.

23:24 And that, you know, would result translate into multiple hundreds of millions of dollars of revenue. Both of these figures are annual. So multiple millions of units annually and multiple hundreds of hundreds of dollars annually, revenue wise opportunity wise. So that's why it's a massive opportunity. Think the key for us is being able to do that without a ton of significant developments or reconfiguration is where we see the ROI as being quite interesting for the company and why we're launching this new business. So that also should give you rough sense, obviously on the ASPs, but that's where I would start in terms of the numbers.

24:00 Great, thank you. And then maybe just to switch gears on, you've made a lot of progress with Bendix. If you could just give us a little more color around what that program will look like, the content per vehicle, what the ASPs are, to the extent that you can share, I would appreciate that.

24:17 Yeah, sure. So, you're right. I mean, I think the team has been firing on multiple cylinders. I think automotive is progressing really well as well. Not only are we executing our existing programs, trucking, Daimler truck, top 10 European passenger OEM, but also we are making additional traction with a new opportunity. So Bendex is the market leader for commercial vehicle ADAS technology, right? And we have been working together for some time. We have now advanced into a critical next phase, which effectively they have selected us

24:47 for leveraging our 40 LIDAR to provide new functionality for level two plus ADAS on commercial vehicles. These functionalities will specifically our aim to enable new types of emergency braking like passenger braking or nighttime driving and so on. So just better functionality for the end customer. And Vendex is

25:12 part of a large tier one and it's a market leader in North America for ADAS solutions. There's about 300,000 class A trucks and with their Bendix Fusion system, which today so far has been vision and radar based, they have a majority market share on that. And a lot of their customers already use their product on their flagship vehicle models as standard. Any other customers are the likes of PACCAR, Navistar, International and all of that work. They are shipping and going already for many, many years. So there I think the opportunity for us is a significant one. It's using the same exact sensing product Atlas, well intended for trucking for with Blender.

25:57 We're gonna be using the same exact automated lines in Jabil and just using the capacity and economy of scale to then ship that product in there. And from a, obviously content per vehicle,

26:10 I would say this is think of it as it's somewhere similar between a ADAS product between a passenger to a commercial vehicle product. So it's not gonna be thousands of dollars, but it's also not very, very small. So a part of that is because we're helping to augment the system and with the aim to

26:30 actually replace not just, you know, add a new sensor, but also replace other modalities between radar and camera. So, that's kind of what we see. I think Bendix, just so you know, also is targeting to make this as a standard feature for the factory OEMs in terms of the ADAS functionality for the next solution. Thank you. We'll take our next question from Joe Moore with Morgan Stanley. Please go ahead. Your line is open. Yeah, thank you. Kind of wondering on this optical connectivity, you talk about starting a group around optical connectivity, like how much resource do you want to put into this? Is this a major pivot for the company, do you think?

27:18 I know you're going to continue to invest in your automotive and industrial businesses, but just, you know, do you need to scale up R and D around this opportunity given the size of it? Hey, Joe, yeah, is Suresh. Happy to answer that. I think, obviously, this is an important launch and investment for us. But I think the key here is we're really reusing, as I mentioned, all the core components we have already developed in the silicon photonics and the high power sources, and also our manufacturing partners and capabilities we have already established with our foundries, with our CMs, folks that actually do the module assembly. So we're gonna be leveraging a lot of the work that's already been done and all the investments that have already been done. So

27:58 that means we don't need to invest a ton of capital. And also importantly, a lot of development resources and time to go and make something completely from scratch. And that's why I think we are able to move very quickly. Right? So that's number one. Number two, I think from a resource standpoint, investment standpoint, of course, you know, this is we are serious about this. We are gonna be investing some and we are hiring in this area. I think obviously with Mina's leadership, as well as with Pradeep now being promoted, I have full confidence in the team to now go and execute on this and scale up this business. And we're gonna be making sure that we help that. And with this team, we're gonna have two resources that are dedicated. So we also make sure that we have both keep the focus and priority on the existing programs in automotive with the top 10 passenger OEM with Daimler, but also have, you know, separate basic resources that can work on the cost of connectivity so that we don't distract or lose focus on the other side. So short answer is yes, we will invest. It won't be massive amounts, but also it's not, you know, we're gonna take it seriously.

29:06 Great. Thank you. And is there a difference in content between NPO and CPO as you migrate the technologies? Yeah, that's a good question, Joe. I think so the way we think about this is we are forming this team and this group to generate product and solutions for optical connectivity in general, right?

29:26 And this is gonna be a combination of optical sources, including optical laser sources, on chip integrated sources, as well as over time looking at additional capabilities with what's called ELSFPs, external laser, small form factor pluggables. And I think that those have obviously massive opportunities, different levels of ASPs and we're very excited about that. So I think this is an area where both of these linear package optics and co package optics actually use the exact same core tech and source that we have developed in some of the silicon photonics with some additional integration that we need to do on the back end of it. So that's why we're able to use the same. And with this deal that we have, obviously, intention initially is your package optics, but also working on other things for co packaged and there's as well.

30:21 Thank you. We'll take our next question from Casey Ryan with Amarex. Please go ahead. Your line is open. Hi, gentlemen. First time for me, but very exciting series of updates. Can I just ask you in the defense space, do you see that as being a market for just new and newly developed platforms? Or do you see some sort of larger, you know, retrofit and current, you know, weapons platforms or vehicle platforms that can all be enabled with self driving features? Yeah. Happy to answer that. I think we see we see actually across the board both. You know, we are working already with companies like Forterra that have many ground vehicles on the ground. Some of those are retrofits, right, which is basically taking a vehicle and retrofit them with the autonomy kit. You know, autonomy kit includes three or four AMA LiDARs for three sixty degree coverage.

31:18 I think there we're making a lot of good progress. Very excited about that. Vehicles are already being deployed to the military. They're already being starting to be commissioned and used, which is, I think, pretty fast for the defense space, given we just announced this beginning of the year. And, you know, that has resulted because of some of the advantages we have for them, we talked about this besides velocity sensing, long range, but also ability to see outbreak, you know, in GPS environments, but also not have any issues with night vision goggles. So no interference with that, but compared to what they've been using so far or prior to us, we are seeing some additional traction others. And I think both on the ground, but also specific some of the applications in the aerial space that the team is working on. And I think I'm also excited about that, which I think could result into more meaningful opportunities to piggyback on this. So it's not gonna be a one off thing.

32:12 So we are seeing that the NAT from defense to also grow. And as we are, you know, locking those down, we'll also be sharing that in the coming months. Okay, yeah, terrific. That's helpful color on that space. And I just wanted to ask, like, like, I understand the Class eight for trucking is where probably the biggest CapEx dollars are and the most road miles are spent. But I'm just wondering, you know, we are seeing some autonomy and progress in sort of Class six and seven and sort of lower classes. Do you think AEVA has a place in those markets as well? I assume the answer is yes, but I'd be curious if that sort of looks different than what class eight offers. Yeah. I think we have, obviously, we're engaged in multiple programs and opportunities, not specifically to Class A, different kinds of vehicles and different classes.

33:03 And the way that I would think about it is, it's a common platform. It's being used for whatever you need to do autonomy. And if you need to do autonomy in a bigger vehicle versus smaller vehicle, Once, you know, you have something that's qualified, especially with like large players that kind of set the industry standard like Daimler truck or others, I think that allows us to also get these other programs. So the team is working with others. Some of them include for things around, you know, on road but also off road or yard sale or things like that, yard environments. So those not all have the same class of vehicles. So that's the way I would look at it. Obviously, when we first got into autonomy, it was initially about long range sensing and velocity.

33:49 It's, you know, for us as we have gone, you know, the automotive capability and proven technology and product out, you're seeing more demand from others as well, which I think is just gonna be tucked into the programs. Thank you. We'll take our next question from Mr. Shannon with Craig Hallum. Please go ahead, your line is open. Great guys, thanks for letting me ask a couple of questions. And first off, just wanted to say, Sarabh, congratulations on your new job. We're going to miss you. It's been good working with you for the last five years. I jumped on the call late here, so apologies if I'm completely repeating a prior question here. But the JDA you signed with optical connectivity is very interesting to me. I guess I'd love to understand, since you phrase this as a JDA, what needs to happen here in order to be fully qualified and to hit the timeframes by which you're expecting to deploy in the second half of 'twenty seven?

34:46 And then also following on one of the questions I did hear, is this solution expected to be in ELSFT format or something more component in nature? Yeah, Richard, happy to answer that. We talked a little bit about it, but I expand a bit on it. So, with the solution we have with optical connectivity and this deal is obviously a massive deal opportunity for us. We're very excited about it. We've moved that lightning speed here. I think the key effort here really is we're gonna be working together on integrating our core optical technology, including high power optical sources and photonics technology into this optical engine that's gonna be going to the hyperscaler. And the capabilities really is around, obviously, transfer, optical data transfer, specifically for near package optics. So that's kind of the first applications where we see there's a lot of volume that's being allocated. I think that's why we see also near term opportunity being quite interesting.

35:50 The hyperscaler wants to go as fast as possible. So the effort here is working together with the chips and the integrated solution and optical engine, qualifying that with hyperscaler in the next number of months with the goal that by second half of next year, we have initial release and initial volumes going into 2028 for production ramp. So that's kind of what we are pushing for now. And, know, the team is already kicking the efforts up. And I think importantly, we're gonna be using the core technology and the chips that we have without making a ton of changes. That's something that's important and crucial in our ability to move faster. So that's part of the JD is integrating that into that way to make that happen.

36:39 Okay, fair enough. Hey, a follow on question on the topic of secure. It sounds like they had a first product launch here. We'd love to get a sense of the overall contribution that you expect with them over time. I would assume that we're going to see more product launches from them in the future. If you could just characterize how we should kind of look for them over the medium to long term. Thank you. Yeah, happy to answer that. So, SIC obviously has been a strategic partner of ours in collaboration in the past number of years. And, you know, we're very pleased to see that, you know, this is resulting into actual, you know, product launches and portfolios. You know, SIC is already releasing the first product using our use sensors with the 1D, which is basically the distance sensing, displacement sensing.

37:26 And the feedback so far has been very promising from the end customers. And we do expect that over time to scale in the next twelve to eighteen months, both additional volumes. But also, as you mentioned, we have been working on other products together, will help to replace some of the other things like things that measure speeds, for example, encoders, different types of speed measurement devices, and there are actually portfolio products that SIG has that we are also working to use leveraging the same exact sensor, EEV, but in a different configuration what we call 1V, which is measuring velocity. That's also the other piece that we're working together on and we hope that that's gonna be maybe one of the follow ons as we are wrapping on the one thing to one thing to look out for. Separately from that, we are engaged also with others in the space that have shown a lot of interest And I think that is gonna help to create, I think, a nice nice segment for us. So as we're able to talk more about that, we will do so in the near term as well.

38:31 Thank you. This concludes our question and answer session in today's meeting. We appreciate your time and participation. You may now disconnect.