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Financial Statement Components
 6 Months Ended
Jun. 30, 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):
 June 30, 2024December 31, 2023
Cash$11,708 $35,659 
Money market funds40,627 101,842 
Commercial paper— 497 
Corporate bonds— 1,097 
Total cash and cash equivalents$52,335 $139,095 
Inventory
Inventory comprised of the following (in thousands):
 June 30, 2024December 31, 2023
Raw materials$7,317 $5,614 
Work-in-process2,550 2,521 
Finished goods4,159 4,061 
Total inventories, net$14,026 $12,196 
The Company’s inventory write-downs were $0.9 million and $17.8 million for the three and six months ended June 30, 2024 and $8.0 million and $13.4 million for the three and six months ended June 30, 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):
 June 30, 2024December 31, 2023
Prepaid expenses$14,746 $12,434 
Contract assets10,807 14,132 
Advance payments to vendors1,180 3,038 
Other receivables6,442 3,346 
Total prepaid expenses and other current assets$33,175 $32,950 
Property and Equipment
Property and equipment consisted of the following (in thousands):
 June 30, 2024December 31, 2023
Machinery and equipment$61,017 $58,815 
Computer hardware and software7,907 7,025 
Land1,001 1,001 
Leasehold improvements22,620 22,531 
Vehicles, including demonstration fleet2,139 2,207 
Furniture and fixtures929 900 
Construction in progress1,569 2,256 
Total property and equipment97,182 94,735 
Accumulated depreciation
(38,992)(28,435)
Total property and equipment, net$58,190 $66,300 
Property and equipment capitalized under finance lease were not material.
Depreciation expense associated with property and equipment was $5.4 million and $12.5 million for the three and six months ended June 30, 2024 and $3.5 million and $5.4 million for the three and six months ended June 30, 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 essentially completed in 2024. The reduction in the estimated useful lives of the impacted assets resulted in the Company recording $1.3 million and $3.4 million of incremental accelerated depreciation charges in the three and six months ended June 30, 2024, respectively.
Intangible Assets
The following table summarizes the activity in the Company’s intangible assets (in thousands):
June 30, 2024December 31, 2023
Beginning of the period$22,994 $22,077 
Additions— 8,240 
Amortization
(2,000)(4,323)
Impairment
— (3,000)
End of the period$20,994 $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):
June 30, 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 $(1,887)$— $1,843 3.3$3,730 $(1,479)$— $2,251 3.7
Customer backlog650 (650)— — —650 (650)— — —
Tradename620 (401)— 219 1.8620 (339)— 281 2.3
Assembled workforce
130 (130)— — —130 (130)— — —
Developed technology20,150 (5,718)— 14,432 5.020,150 (4,188)— 15,962 5.5
IPR&D4,500 — — 4,500 —7,500 — (3,000)4,500 —
Total intangible assets$29,780 $(8,786)$— $20,994 4.8$32,780 $(6,786)$(3,000)$22,994 5.2
Amortization expense related to intangible assets was $1.0 million and $2.0 million for the three and six months ended June 30, 2024 and $1.1 million and $2.2 million for the three and six months ended June 30, 2023, respectively.
As of June 30, 2024, the expected future amortization expense for intangible assets was as follows (in thousands):
PeriodExpected Future
Amortization Expense
2024 (remaining six months)
$2,000 
20254,001 
20263,355 
20273,138 
20281,646 
Thereafter2,354 
IPR&D4,500 
Total$20,994 
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 June 30, 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 that occurred during the fourth quarter of 2023, including a decision to delay development activities on certain new products resulting from an increasing 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. As the Autonomy Solutions segment continues to develop its product roadmap, certain resources from the ATS segment assist in these activities. If these resources are utilized for longer than anticipated, the Company would expect additional development delays in its external facing products, which could result in future declines in its goodwill and IPR&D balances. 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 an 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 impairment charge related to the IPR&D intangible asset during the fourth quarter of 2023.
Other Non-Current Assets
Other non-current assets consisted of the following (in thousands):
 June 30, 2024December 31, 2023
Security deposits$2,637 $2,410 
Non-marketable equity investment
10,000 14,000 
Prepaid expenses non-current
2,492 — 
Contract assets4,944 2,471 
Other non-current assets719 3,475 
Total other non-current assets$20,792 $22,356 
Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following (in thousands): 
 June 30, 2024December 31, 2023
Accrued compensation and benefits$9,052 $20,658 
Accrued expenses13,172 14,723 
Contract losses10,914 8,790 
Warranty reserves786 4,154 
Contract liabilities1,707 3,127 
Accrued interest payable and other liabilities
1,771 1,153 
Total accrued and other current liabilities$37,402 $52,605 
During the three and six months ended June 30, 2024, the Company recorded $10.2 million and $12.5 million, respectively, and $4.8 million and $7.6 million for the three and six months ended June 30, 2023, respectively, in cost of sales (services) with respect to estimated losses expected to be incurred on NRE projects with certain customers. The estimated contract losses were primarily driven by delays in achievement of certain milestones and changes in scope of project deliverables agreed upon with a customer.