XML 21 R11.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Financial Statement Components
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Financial Statement Components Financial Statement Components
Cash and Cash Equivalents
Cash and cash equivalents consisted of the following (in thousands):
 March 31, 2024December 31, 2023
Cash$24,391 $35,659 
Money market funds83,433 101,842 
U.S. treasury securities1,739 — 
Commercial paper— 497 
Corporate bonds— 1,097 
Total cash and cash equivalents$109,563 $139,095 
Inventory
Inventory comprised of the following (in thousands):
 March 31, 2024December 31, 2023
Raw materials$7,699 $5,614 
Work-in-process3,960 2,521 
Finished goods4,758 4,061 
Total inventories, net$16,417 $12,196 
The Company’s inventory write-downs were $16.9 million and $5.5 million for the three months ended March 31, 2024 and 2023, respectively. The write-downs were primarily due to obsolescence charges as a result of change in product design, lower of cost or market assessment, yield losses, and other adjustments.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
 March 31, 2024December 31, 2023
Prepaid expenses$20,144 $12,434 
Contract assets14,580 14,132 
Advance payments to vendors1,256 3,038 
Other receivables5,142 3,346 
Total prepaid expenses and other current assets$41,122 $32,950 
Property and Equipment
Property and equipment consisted of the following (in thousands):
 March 31, 2024December 31, 2023
Machinery and equipment$60,159 $58,815 
Computer hardware and software7,768 7,025 
Land1,001 1,001 
Leasehold improvements22,620 22,531 
Vehicles, including demonstration fleet2,026 2,207 
Furniture and fixtures928 900 
Construction in progress1,443 2,256 
Total property and equipment95,945 94,735 
Accumulated depreciation and amortization(33,818)(28,435)
Total property and equipment, net$62,127 $66,300 
Property and equipment capitalized under finance lease were not material.
Depreciation and amortization expense associated with property and equipment was $7.1 million and $1.9 million for the three months ended March 31, 2024 and 2023, respectively.
The Company continually evaluates opportunities for optimizing its manufacturing processes and product design. In 2023, the Company finalized and committed to a plan to change its sourcing of certain sub-assemblies and components from one supplier to another which requires the Company to abandon certain equipment located at the legacy supplier. As a result, the Company has reduced the useful lives of the long-lived assets within the impacted asset group in line with when these assets are expected to be abandoned. The Company expects the transition to the new supplier to be completed in 2024. The reduction in the estimated useful lives of the impacted assets resulted in the Company recording $2.1 million of incremental accelerated depreciation charges in the three months ended March 31, 2024.
Intangible Assets
The following table summarizes the activity in the Company’s intangible assets (in thousands):
March 31, 2024December 31, 2023
Beginning of the period$22,994 $22,077 
Additions— 8,240 
Amortization
(1,000)(4,323)
Impairment
— (3,000)
End of the period$21,994 $22,994 
Intangible assets were acquired in connection with the Company’s acquisition of Optogration in August 2021, Freedom Photonics in April 2022 and Solfice in June 2022. The components of intangible assets were as follows (in thousands):
March 31, 2024December 31, 2023
Gross
Carrying
 Amount		Accumulated
Amortization
Impairment
Net
Carrying
Amount		Weighted Average
Remaining Period
(Years)		Gross
Carrying
 Amount		Accumulated
Amortization
Impairment
Net
Carrying
Amount		Weighted
Average
Remaining
Period
(Years)
Customer relationships$3,730 $(1,683)$— $2,047 3.5$3,730 $(1,479)$— $2,251 3.7
Customer backlog— — — — —650 (650)— — —
Tradename620 (370)— 250 2.0620 (339)— 281 2.3
Assembled workforce
— — — — —130 (130)— — —
Developed technology20,150 (4,953)— 15,197 5.420,150 (4,188)— 15,962 5.5
IPR&D4,500 — — 4,500 —7,500 — (3,000)4,500 —
Total intangible assets$29,000 $(7,006)$— $21,994 5.1$32,780 $(6,786)$(3,000)$22,994 5.2
Amortization expense related to intangible assets was $1.0 million and $1.1 million for the three months ended March 31, 2024 and 2023, respectively.
As of March 31, 2024, the expected future amortization expense for intangible assets was as follows (in thousands):
PeriodExpected Future
Amortization Expense
2024 (remaining nine months)
$3,001 
20254,001 
20263,354 
20273,138 
20281,646 
Thereafter2,354 
IPR&D4,500 
Total$21,994 
Goodwill
The carrying amount of goodwill allocated to the Company’s reportable segments was as follows (in thousands):
 Autonomy SolutionsATSTotal
Balance as of December 31, 2022
$687 $18,129 $18,816 
Goodwill related to acquisition of Seagate’s lidar business
1,063 — 1,063 
Impairment of goodwill related to Freedom Photonics
— (12,489)(12,489)
Balance as of December 31, 2023
$1,750 $5,640 $7,390 
Balance as of March 31, 2024
$1,750 $5,640 $7,390 
During the year ended December 31, 2023, the Company recognized impairment charges of $12.5 million and $3.0 million related to goodwill and IPR&D related to Freedom Photonics. These impairment charges were due to events which occurred during the fourth quarter of 2023, including a decision to delay development activities on certain new products resulting from an increase in focus on supporting the product roadmap of the Autonomy Solutions segment, and a lowering of the growth outlook for the business due to less than anticipated traction in sales of new products. Total life-to-date goodwill impairment charge recorded by the ATS reportable segment was $12.5 million and no impairment charge has been recorded by the Autonomy Solutions reportable segment.
In relation to the goodwill, the Company engaged third-party valuation specialists and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management. The Company assessed the fair value of the Freedom Photonics reporting during the fourth quarter of 2023, using the discounted cash flow method under the income approach, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows. The significant assumptions used in the assessment of the reporting unit included revenue growth rates, profit margins, operating expenses, capital expenditures, terminal value and a discount rate. As a result of this assessment, the Company concluded that the carrying value of the Freedom Photonics reporting unit exceeded the estimated fair value by $12.5 million, which was recorded as a noncash impairment charge to goodwill.
In relation to the intangibles, the significant assumptions used in the assessment of the IPR&D intangible asset included revenue growth rates, a discount rate and a royalty rate. Based on this assessment, the Company recorded a $3.0 million noncash impairment charge related to the IPR&D intangible asset.
Other Non-Current Assets
Other non-current assets consisted of the following (in thousands):
 March 31, 2024December 31, 2023
Security deposits$2,604 $2,410 
Non-marketable equity investment
14,000 14,000 
Contract assets3,827 2,471 
Other non-current assets2,735 3,475 
Total other non-current assets$23,166 $22,356 
Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following (in thousands): 
 March 31, 2024December 31, 2023
Accrued compensation and benefits$17,533 $20,658 
Accrued expenses19,605 14,723 
Contract losses8,195 8,790 
Warranty reserves1,443 4,154 
Contract liabilities2,341 3,127 
Accrued interest payable and other liabilities
3,019 1,153 
Total accrued and other current liabilities$52,136 $52,605 
During the three months ended March 31, 2024 and 2023, the Company recorded $2.3 million and $3.3 million, respectively, in cost of sales (services) estimated losses expected to be incurred on NRE projects with certain customers. The estimated contract losses recorded in the three months ended March 31, 2024 and 2023 were primarily driven by changes in scope of project deliverables agreed upon with a customer.