indie Semiconductor, Inc.
For the period ended Mar 31, 2025. Filed May 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 2025
INDI$1.81+33.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001628280-24-046662
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001628280-25-024788
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 54 current paragraphs.
25 unchanged; 25 reworded; 3 added; 27 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
We are impacted by macroeconomic conditions including continued inflation, rising prices, geopolitical tensions, the risk of recession, and the effect of trade policies, which have a combined dampening effect on overall economic activity and consumer demand for automotive products that has resulted in lower production levels for our products. In particular, ongoing tensions related to increased tariffs imposed by the United States and retaliatory tariffs imposed by targeted countries may adversely impact our revenue. Tariffs against semiconductor producing countries such as Taiwan, and retaliatory tariffs by countries such as China, could cause a decrease in the sales of our products to customers, other customers selling to end users, or other global customers, which could materially and adversely affect our business, financial condition and results of operation.
Current report
The ultimate impact of any tariffs will depend on various factors, including the outcome of ongoing negotiations, the timing of implementation, and the amount, scope and nature of the tariffs. We are continuing to evaluate the potential impacts, as well as the options available to us for mitigating their impact.
Current report
On December 6, 2024, we issued $218.5 million in aggregate principal amount of our 2029 Notes. The 2029 Notes will be convertible into cash, shares of common stock or a combination of cash and common stock at our election in accordance with the terms of the indenture governing the 2029 Notes. In connection with the 2029 Notes, we entered into privately negotiated capped call transactions with certain of the initial purchasers or their respective affiliates and other financial institutions. The capped call transactions are expected generally to reduce potential dilution to our common stock upon any conversion of 2029 Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted 2029 Notes, as the case may be. We used approximately $23.4 million of the net proceeds from issuance of the 2029 Notes to pay the cost of the capped call transactions. We intend to use the remainder of the net proceeds from the issuance of the 2029 Notes for working capital and general corporate purposes, which may include potential acquisitions. Refer to Note 6, Debt, in our accompanying unaudited condensed consolidated financial statements for additional detail.
Removed paragraphs (27)
Previous report
Recent Acquisitions
Previous report
Kinetic Technologies
Previous report
On January 25, 2024 (the “Deal Closing Date”), indie and ADK LLC completed its acquisition of Kinetic Technologies, LLC (“Kinetic”). The acquisition was consummated pursuant to an Asset Purchase Agreement (the “APA”), carving out certain assets, including R&D personnel and intellectual properties (“IP”) from Kinetic Technologies (“Kinetic”), in support of a custom product development for a North American electric vehicle OEM. The closing consideration consisted of (i) $3.2 million in cash as the initial cash consideration, net of an adjustment holdback amount of $0.5 million and an indemnity holdback amount of $0.8 million, (ii) $2.3 million of contingent consideration, payable in cash or Class A common stock, subject to achievement of certain production based milestones 24 months after the Deal Closing Date, and (iii) $2.3 million of contingent consideration, payable in cash or Class A common stock, subject to achievement of a revenue based milestone 12 months after the Deal Closing Date. The purchase price is subject to working capital and other adjustments as provided in the APA.
Previous report
See Note 2 —Business Combinations for additional descriptions of our recent acquisitions.
Previous report
Cost of goods sold for the three months ended September 30, 2024 was $32.7 million, compared to $35.2 million for the three months ended September 30, 2023. The decrease of $2.5 million or 7% was primarily due to a $1.5 million decrease in product shipments in connection with the decline in products sold as described above and a $1.5 million decrease in product cost. Total cost of goods sold for the three months ended September 30, 2024 also included an additional $0.9 million in amortization related to acquired intangible assets and amortization for inventory step-up value both as a result of the business combinations that took place during the period.
Previous report
Restructuring costs for the three months ended September 30, 2024 was $4.3 million due to the restructuring plan initiated in August 2024. See Note 3 —Restructuring and Other Chargesfor additional discussion of our recent restructuring plan.
Previous report
Interest expense for the three months ended September 30, 2024 remained relatively consistent at approximately $2.2 million for both the three months ended September 30, 2024 and 2023, respectively.
Previous report
i) Warrants: During the three months ended September 30, 2023, we recognized an unrealized gain from change in fair value of our warrants of $15.7 million, which reflected the decrease in fair value of our warrant liability, resulting from the decrease of the closing price of our Class A common stock listed on the Nasdaq to $6.30 per share on September 30, 2023 from $9.40 per share on June 30, 2023. As of November 9, 2023, we completed our exchange of Warrants. Subsequently there will be no future remeasurement.
Previous report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Previous report
Revenue
Previous report
Operating expenses
Previous report
Research and development (“R&D”) expense for the nine months ended September 30, 2024 was $136.9 million, compared to $120.2 million for the nine months ended September 30, 2023. This increase of $16.6 million or 14% was primarily due to a $3.9 million increase in headcounts to support our continued growth in research and development needs. Research and development expense for the nine months ended September 30, 2024 also included an $14.7 million increase in share-based compensation expense due to both increase in headcounts and additional equity awards granted since the same period in prior year. We expect research and development expense to stabilize over time.
Previous report
Selling, general and administrative expense for the nine months ended September 30, 2024 was $60.6 million, compared to $55.3 million for the nine months ended September 30, 2023. The increase of $5.3 million or 10% was primarily due to a $1.5 million increase in personnel costs due to increase in headcounts and a $3.1 million increase in share-based compensation expense. The increase in share-based compensation expense is due to both increase in headcounts and additional equity awards granted since the same period in prior year. We expect selling, general, and administrative expense to stabilize over time.
Previous report
Restructuring costs for the nine months ended September 30, 2024 was $4.3 million due to the restructuring plan initiated in August 2024.
Previous report
Interest expense for the nine months ended September 30, 2024 remained relatively consistent at approximately $6.4 million for both the nine months ended September 30, 2024 and 2023.
Previous report
i) Warrants: During the nine months ended September 30, 2023, we recognized an unrealized loss from change in fair value of our warrants of $6.6 million, which reflected the increase in fair value of our warrant liability, resulting from the increase of the closing price of our Class A common stock listed on the Nasdaq to $6.30 per share on September 30, 2023 from $5.83 per share on December 31, 2022. As of November 9, 2023, we completed our exchange of Warrants. Subsequently there will be no future remeasurement.
Previous report
ii) Contingent considerations and acquisition-related holdbacks: During the nine months ended September 30, 2024, we recognized an net gain from change in fair value of our contingent considerations and acquisition-related holdbacks of $28.2 million, which is primarily contributed by an unrealized gain of $28.5 million and $3.2 million for the contingent considerations and acquisition-related holdback related to the GEO and Silicon Radar acquisitions, respectively, partially offset by an unrealized loss of $4.6 million for the contingent considerations related to Exalos. During the nine months ended September 30, 2023, we recognized an unrealized net gain from change in fair value of our contingent considerations and acquisition-related holdbacks of $4.2 million, which is primarily contributed by an unrealized gain of $5.0 million for the contingent considerations and acquisition-related holdback related to GEO, offset by $0.3 million and $0.4 million unrealized loss for the contingent considerations related to the Symeo and Silicon Radar acquisitions, respectively.
Previous report
Income Taxes
Previous report
Income tax benefits for the nine months ended September 30, 2024 are primarily related to our foreign operations. Income tax benefits for the nine months ended September 30, 2023 are primarily related to the tax effects of our acquisition of GEO and subsequent tax reorganizations.
Previous report
Acquisitions
Previous report
We have completed multiple acquisitions in the last couple of years and we plan to selectively pursue and assess inorganic growth opportunities that are complementary to our existing technologies and portfolio of products and/or accelerate our growth initiatives.
Previous report
In connection with our acquisitions (See Part I, Item 1, Note 2, Business Combinations, of this quarterly report on Form 10-Q), we may from time to time be required to make future payments or issue additional shares of our common stock to satisfy our obligations under the acquisition agreements, including to satisfy certain earn-out requirements. In January 2022, we completed the acquisition of Symeo, for which we made an initial cash payment of approximately $10.0 million and an additional $10.0 million was paid in January 2023. We are still subject to an equity based earn out of Class A common stock based on Symeo’s future revenue growth.
Previous report
In February 2023, we entered into an agreement to acquire GEO, and completed the transaction on March 3, 2023. The closing consideration consisted of (i) $93.4 million in cash (including accrued cash considerations at closing and net of cash acquired); (ii) the issuance by indie of 6,868,768 shares of Class A common stock at closing, with a fair value of $75.6 million; (iii) 1,907,180 shares of Class A common stock, with a fair value of $21.0 million at closing, payable in the next 24-month period after closing; and (iv) an earn-out with a fair value of $59.3 million at closing payable in cash or in Class A common stock, subject to achieving certain GEO-related revenue targets through September 30, 2024.
Previous report
Additionally, in February 2023, we acquired Silicon Radar, for approximately (i) $9.2 million in cash (including debt payable at closing and net of cash acquired), (ii) the issuance by indie of 982,445 shares of Class A common stock at closing, with a fair value of $9.8 million; and (iii) a contingent consideration with fair value of $9.2 million at closing, payable in cash or in Class A common stock subject to Silicon Radar’s achievement of certain revenue-based and design-win milestones through February 21, 2025.
Previous report
In September 2023, we acquired Exalos. The closing consideration consisted of (i) the issuance by indie of 6,613,786 shares of Class A common stock at closing, with a fair value of $42.8 million; (ii) a contingent consideration with fair value of $9.8 million at closing, payable in cash, subject to Exalos’ achievement of certain revenue-based milestones through September 30, 2025; and (iii) a holdback of $2.5 million subject to final release 12 months from the acquisition date payable in shares of Class A common stock.
Previous report
On January 25, 2024, we completed the acquisition of certain business properties from Kinetic through an asset purchase agreement. The closing consideration consisted of (i) $3.2 million in cash as the initial cash consideration, net of an adjustment holdback amount of $0.5 million and an indemnity holdback amount of $0.8 million, (ii) $2.3 million of contingent considerations, payable in cash or Class A common stock, subject to achievement of certain production based milestone for the next 24 months, or through January 25, 2026, and (iii) $2.3 million of contingent considerations, payable in cash or Class A common stock, subject to achievement of certain revenue based milestones 12 months after January 25, 2024. The indemnity holdback amount is payable within five business days after the 18-month anniversary of the closing date of January 25, 2024.
Previous report
We expect to continue to incur net operating losses and negative cash flows from operations. We also expect our research and development expenses, general and administrative expenses and capital expenditures will increase over time as we continue to expand our operations, product offerings and customer base.
Reworded paragraphs (25)
Previous wording
Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us, or “our” refer to the business of indie and its subsidiaries prior to the consummation of the Transaction. Throughout this section, unless otherwise noted, “indie” refers to indie Semiconductor, Inc. and its consolidated subsidiaries.
Current wording
Throughout this section, unless otherwise noted, “indie” refers to indie Semiconductor, Inc. and its consolidated subsidiaries.
Previous wording
The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q. Certain amounts may not foot due to rounding. This discussion and analysis contains forward-looking statements. See “Forward Looking Statements.” We urge you to consider the risks and uncertainties discussed in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the Fiscal Year ended December 31, 2023, including, but not limited to, those described under the sections entitled “Risk Factors” and in the other documents we have filed with the SEC in evaluating our forward-looking statements. We assume no obligation to update any of these forward-looking statements except as required by law. Actual results may differ materially from those contained in any forward-looking statements.
Current wording
The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q. Certain amounts may not foot due to rounding. This discussion and analysis contains forward-looking statements. See “Forward Looking Statements.” We urge you to consider the risks and uncertainties discussed in this Quarterly Report and our Annual Report on Form 10-K for the Fiscal Year ended December 31, 2024, including, but not limited to, those described under the sections entitled “Risk Factors” and in the other documents we have filed with the SEC in evaluating our forward-looking statements. We assume no obligation to update any of these forward-looking statements except as required by law. Actual results may differ materially from those contained in any forward-looking statements.
Previous wording
We maintain design centers for our semiconductor engineers and designers in the United States, Argentina, Canada, Hungary, Germany, Scotland, Morocco, Israel, Switzerland and China. We engage subcontractors to manufacture our products. These subcontractors, as well as the majority of our customers’ locations, are primarily in Asia. For the nine months ended September 30, 2024 and 2023, approximately 65% and 63%, respectively, of our product revenues were recognized for shipments to customer locations in Asia.
Current wording
We maintain design centers for our semiconductor engineers and designers in the United States, Argentina, Canada, Hungary, Germany, Scotland, Morocco, Israel, Switzerland and China. We engage subcontractors to manufacture our products. These subcontractors, as well as the majority of our customers’ locations, are primarily in Asia. For the three months ended March 31, 2025 and 2024, approximately 63% and 66%, respectively, of our product revenues were recognized for shipments to customer locations in Asia.
Previous wording
On August 26, 2022, we entered into an At Market Issuance Agreement (“ATM Agreement”) with B. Riley Securities, Inc., Craig-Hallum Capital Group LLC and Roth Capital Partners, LLC (collectively as “Sales Agents”) relating to shares of our Class A common stock, par value $0.0001 per share (the “Class A common stock”). In accordance with the terms of the ATM Agreement, we may offer and sell shares of our Class A common stock having an aggregate offering price of up to $150.0 million from time to time through the Sales Agents, acting as our agent or principal. We implemented this program for the flexibility that it provides to the capital markets and to best time our equity capital needs. As of September 30, 2024, we had raised gross proceeds of $83.9 million and issued 9,393,259 shares of Class A common stock at an average per-share sales price of $8.93 through this program. During the nine months ended September 30, 2024, we raised gross proceeds of $13.5 million and issued 2,042,000 shares of Class A common stock at an average sales price of $6.62 per share. During the nine months ended September 30, 2023, we raised gross proceeds of $53.1 million and issued 5,219,500 shares of Class A common stock at an average sales price of $10.18 per share. For the three months ended September 30, 2024, we incurred total issuance costs of $0.2 million. For the three months ended September 30, 2023, there was no activity. For the nine months ended September 30, 2024 and 2023, indie incurred total issuance costs of $0.3 million and $1.1 million, respectively.
Current wording
On August 26, 2022, we entered into an At Market Issuance Agreement (“ATM Agreement”) with B. Riley Securities, Inc., Craig-Hallum Capital Group LLC and Roth Capital Partners, LLC (collectively as “Sales Agents”) relating to shares of our Class A common stock, par value $0.0001 per share (the “Class A common stock”). In accordance with the terms of the ATM Agreement, we may offer and sell shares of our Class A common stock having an aggregate offering price of up to $150.0 million from time to time through the Sales Agents, acting as our agent or principal. We implemented this program for the flexibility that it provides to the capital markets and to best time our equity capital needs. As of March 31, 2025, we had raised gross proceeds of $90.2 million and issued 11,138,984 shares of Class A common stock at an average per-share sales price of $8.10 through this program. During both the three months ended March 31, 2025 and 2024, there was no ATM related activity.
Previous wording
Current and continued inflationary conditions have led to, and may continue to lead to, rising prices or rising interest rates, which has had a dampening effect on overall economic activity and consumer demand for automotive products. Additionally, the ongoing conflict in the Middle East and the implications of these events has created global political and economic uncertainty. We are closely monitoring developments, including potential impact to our business, customers, suppliers, our employees and operations in Israel, the Middle East and elsewhere. At this time, the impact to indie is subject to change given the volatile nature of the situation.
Current wording
Additionally, the ongoing conflict in the Middle East and the implications of these events has created global political and economic uncertainty. We are closely monitoring developments, including potential impact to our business, customers, suppliers, our employees and operations in Israel, the Middle East and elsewhere. At this time, the impact to indie is subject to change given the volatile nature of the situation.
Previous wording
Revenue for the three months ended September 30, 2024 was $54.0 million, compared to $60.5 million for the three months ended September 30, 2023, a decrease of $6.5 million, which was primarily driven by a $2.1 million decrease in product revenue and a $4.4 million decrease in contract revenue. The decrease in product revenue was due primarily to change in product volume (units sold) as a result of the cyclical trough in the automotive market. The decrease in contract revenue of $4.4 million was primarily due to a large multi-year non-recurring engineering project that commenced in early 2022 that is winding down in the current year towards its completion stage.
Current wording
Revenue for the three months ended March 31, 2025 was $54.1 million, compared to $52.4 million for the three months ended March 31, 2024, an increase of $1.7 million, which was primarily driven by a $1.8 million increase in product revenue, partially offset by a $0.1 million decrease in contract revenue. The increase in product revenue was due primarily to change in product volume (units sold) as a result of the cyclical trough in the automotive market and partially offset by change in average selling price. The decrease in contract revenue of $0.1 million was primarily due to a large multi-year non-recurring engineering project that commenced in early 2022 that is winding down in the current year towards its completion stage.
Previous wording
Cost of goods sold for the nine months ended September 30, 2024 was $93.1 million, compared to $91.4 million for the nine months ended September 30, 2023. The increase of $1.7 million or 2% was primarily due to a $9.9 million increase due to change in product mix, a $3.4 million increase in product shipments in connection with the increase in products sold as described above, offset by a $4.3 million decrease in product cost. Total cost of goods sold for the nine months ended September 30, 2024 also included a decrease in amortization related to acquired intangible assets and inventory step-up value both in connection with finalizing the opening net assets acquired from the recent acquisitions.
Current wording
Cost of goods sold for the three months ended March 31, 2025 was $31.5 million, compared to $30.1 million for the three months ended March 31, 2024. The increase of $1.4 million or 5% was primarily due to a $1.2 million increase in product shipments in connection with the increase in products sold as described above.
Previous wording
Research and development expense for the three months ended September 30, 2024 was $46.0 million, compared to $41.6 million for the three months ended September 30, 2023. The increase of $4.4 million or 11% was primarily due to a $3.7 million increase in share-based compensation expense and $0.8 million increase in personnel cost. Increases in share-based compensation expense were primarily driven by new equity awards granted since the same period in prior year. We expect research and development expense to stabilize over time.
Current wording
Research and development expense for the three months ended March 31, 2025 was $42.1 million, compared to $49.6 million for the three months ended March 31, 2024. The decrease of $7.5 million or 15% was primarily due to a $5.9 million decrease in share-based compensation expense and a $2.4 million decrease in personnel cost. Decreases in share-based compensation expense were primarily driven by an equity bonus accrual for the three months ended March 31, 2024 that did not reoccur in the current period. We expect research and development expense to stabilize over time.
Previous wording
Selling, general and administrative expense for the three months ended September 30, 2024 was $20.8 million, compared to $19.8 million for the three months ended September 30, 2023. The increase of $1.0 million or 5% was primarily due to a $0.8 million increase in share-based compensation expense due to an increase in employee headcount and additional equity awards granted since the same period prior year. We expect selling, general, and administrative expense to stabilize over time.
Current wording
Selling, general and administrative expense for the three months ended March 31, 2025 was $19.4 million, compared to $22.3 million for the three months ended March 31, 2024. The decrease of $3.0 million or 13% was primarily due to a $2.5 million decrease in share-based compensation expense due to an equity bonus accrual for the three months ended March 31, 2024 that did not reoccur in the current year. We expect selling, general, and administrative expense to stabilize over time.
Previous wording
Interest income for the three months ended September 30, 2024 was $1.0 million, compared to $1.9 million for the three months ended September 30, 2023. Interest income decreased in the current period primarily as a result of lower cash balances due to multiple acquisitions in 2023 and the first quarter of 2024.
Current wording
Interest income for the three months ended March 31, 2025 was $2.3 million, compared to $1.3 million for the three months ended March 31, 2024. Interest income increased in the current period primarily as a result of higher cash balances due to the cash inflow from the 2029 Notes in December 2024.
Previous wording
Interest income for the nine months ended September 30, 2024 was $3.4 million, reflecting a decrease of $2.8 million or 45% from the nine months ended September 30, 2023. Interest income decrease in the current period primarily as a result of lower cash balances due to multiple acquisitions in 2023 and the first quarter of 2024.
Current wording
Interest expense for the three months ended March 31, 2025 was $4.5 million, compared to $2.1 million for the three months ended March 31, 2024. Interest expense increased in the current period primarily as a result of the addition of the 2029 Notes in December 2024.
Previous wording
For the three months ended September 30, 2024 and 2023, we recognized gains (losses) from change in fair value for warrants, contingent considerations and acquisition-related holdbacks. The gains (losses) recorded for the three months ended September 30, 2024 and 2023 represent the following:
Current wording
For the three months ended March 31, 2025 and 2024, we recognized gains (losses) from change in fair value for contingent considerations and acquisition-related holdbacks. The gains (losses) recorded for the three months ended March 31, 2025 and 2024 represent the following:
Previous wording
ii) Contingent considerations and acquisition-related holdbacks: During the three months ended September 30, 2024, we recognized a net loss from change in fair value of our contingent considerations and acquisition-related holdbacks of $4.5 million. The net loss is primarily attributed to a net unrealized loss of $7.4 million for the contingent considerations related to the Exalos acquisition, offset by an net unrealized gain of $3.1 million for the contingent considerations and acquisition-related holdbacks related to the GEO acquisition. During the three months ended September 30, 2023, we recognized a net unrealized gain from change in fair value of our contingent considerations and acquisition-related holdbacks of $3.5 million which is primarily contributed by an unrealized gain of $2.9 million and $0.8 million for the contingent considerations and acquisition-related holdbacks related to the GEO and Symeo acquisitions, respectively.
Current wording
i) Contingent considerations and acquisition-related holdbacks: During the three months ended March 31, 2025, we recognized a net gain from change in fair value of our contingent considerations and acquisition-related holdbacks of $4.8 million. The net gain is primarily attributed to a net unrealized gain of $0.6 million and $1.5 million for the contingent considerations related to the Exalos and Kinetic acquisitions, respectively, and a net realized gain of $2.7 million for the acquisition-related holdbacks related to the GEO acquisition. During the three months ended March 31, 2024, we recognized a net unrealized gain from change in fair value of our contingent considerations and acquisition-related holdbacks of $15.4 million which is primarily attributed to an unrealized gain of $16.2 million and $3.0 million for the contingent considerations and acquisition-related holdbacks related to the GEO and Exalos acquisitions, respectively, offset by an unrealized loss of $3.7 million for the contingent considerations related to the Silicon Radar acquisition.
Previous wording
Other income (expense) for the three months ended September 30, 2024 and 2023 was $0.7 million and $(0.7) million, respectively. Other income (expense) relates primarily to the realized and unrealized foreign currency gains and losses during the period, which was primarily driven by a net gain (loss) of $0.5 million and $(0.8) million related to the change in fair value of our currency forward contracts entered during the periods.
Current wording
Other expense for the three months ended March 31, 2025 and 2024 was $0.7 million and $0.2 million, respectively. Other income expense relates primarily to the realized and unrealized foreign currency gains and losses during the period, which was primarily driven by a net loss of $0.6 million and $0.6 million, respectively related to the change in fair value of our currency forward contracts entered during the periods.
Previous wording
Income tax benefits for the three months ended September 30, 2024 are primarily related to our foreign operations. Income tax expense for the three months ended September 30, 2023 is primarily related to our operations in Canada and Europe.
Current wording
Income tax provision for the three months ended March 31, 2025 is primarily related to our foreign operations and a nonconsolidated U.S. Subsidiary. Income tax benefit for the three months ended March 31, 2024 is primarily related to our foreign operations.
Previous wording
Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, working capital requirements related to inventory, accounts payable and general and administrative expenditures. In addition, from time to time, we use cash to fund our mergers and acquisitions, purchases of various capital, intellectual property and software assets and scheduled repayments for outstanding debt obligations. Our immediate sources of liquidity are cash, cash equivalents and funds anticipated to be generated from our operations, available borrowings under our revolving credit facility and the issuance of Class A common stock under the ATM Agreement. We believe these sources of liquidity will be sufficient to meet our needs for at least the next 12 months. Our future capital requirements may vary from those currently planned and will depend on many factors, including our rate of sales growth, the timing and extent of spending on various business initiatives, including potential merger and acquisition activities, our international expansion, the timing of new product introductions, market acceptance of our solutions, and overall economic conditions including the potential impact of global supply imbalances, rising interest rates, inflationary pressures, the impact of the ongoing conflicts in Ukraine and the Middle East, and volatility in the global financial markets. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. We have cash deposits with large financial institutions that have stable outlooks and credit ratings as of November 8, 2024. These cash deposits may exceed the insurance provided on such deposits. As part of our cash management strategy going forward, we concentrate cash deposits with large financial institutions that are subject to regulation and maintain deposits across diverse retail banks.
Current wording
Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, working capital requirements related to inventory, accounts payable and general and administrative expenditures. In addition, from time to time, we use cash to fund our mergers and acquisitions, purchases of various capital, intellectual property and software assets and scheduled repayments for outstanding debt obligations. Our immediate sources of liquidity are cash, cash equivalents and funds anticipated to be generated from our operations, and available borrowings under our revolving credit facility and the issuance of Class A common stock under the ATM Agreement. We believe these sources of liquidity will be sufficient to meet our liquidity needs for at least the next 12 months. Our future capital requirements may vary from those currently planned and will depend on many factors, including our rate of sales growth, the timing and extent of spending on various business initiatives, including potential merger and acquisition activities, our international expansion, the timing of new product introductions, market acceptance of our solutions, and overall economic conditions including the potential impact of global supply imbalances, rising interest rates, inflationary pressures, and volatility in the global financial markets. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. We have cash deposits with large financial institutions that have stable outlooks and credit ratings as of May 12, 2025. These cash deposits may exceed the insurance provided on such deposits. As part of our cash management strategy going forward, we concentrate cash deposits with large financial institutions that are subject to regulation and maintain deposits across diverse retail banks.
Previous wording
On March 29, 2024, we entered into a revolving line of credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”) with a credit limit of $10 million, bearing interest at the Secured Overnight Financing Rate (“SOFR”) plus 1.75%. The outstanding principal balance is due and payable in full on March 28, 2025. Interest is payable monthly beginning on May 1, 2024 through the maturity date. This line of credit required us to collateralize a cash balance equal to the total outstanding balance in a cash security account with Wells Fargo.
Current wording
On March 29, 2024, we entered into a revolving line of credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”) with a credit limit of $10.0 million, bearing interest at the Secured Overnight Financing Rate (“SOFR”) plus 1.75%. The outstanding principal balance is due and payable in full on March 28, 2025. This revolving line of credit was renewed on March 29, 2025, and the outstanding principal balance is due and payable in full on March 27, 2026. Interest is payable monthly beginning on May 1, 2025 through the maturity date. Fees of $50 incurred will be amortized over the life of the credit agreement. This line of credit required us to collateralize a cash balance equal to the total outstanding balance in a cash security account with Wells Fargo.
Previous wording
On September 27, 2024, Wuxi entered into a short-term loan agreement with the Bank of Ningbo Co., Ltd. with an aggregate principal balance of CNY40,000 (or approximately $5,705) bearing interest of 3.50% per annum and maturing on December 27, 2024.
Current wording
On September 27, 2024, Wuxi entered into a short-term loan agreement with the Bank of Ningbo Co., Ltd. with an aggregate principal balance of CNY40.0 million (or approximately $5.7 million) bearing interest of 3.50% per annum and maturing on December 27, 2024. This short-term loan was fully repaid on December 27, 2024.
Previous wording
Historically, we derive liquidity primarily from debt and equity financing activities as we have historically had negative cash flows from operations. As of September 30, 2024, our balance of cash and cash equivalents, including restricted cash, was $107.2 million.
Current wording
As of March 31, 2025, our balance of cash and cash equivalents, including restricted cash, was $246.9 million.
Previous wording
The following table summarizes our condensed consolidated cash flows for the nine months ended September 30, 2024 and 2023:
Current wording
The following table summarizes our condensed consolidated cash flows for the three months ended March 31, 2025 and 2024:
Previous wording
For the nine months ended September 30, 2024, net cash used in operating activities was $51.9 million, which included net loss of $109.8 million and reflected adjustments for certain non-cash items and changes in operating assets and liabilities. Non-cash decreases primarily consisted of $27.5 million of net losses resulting from a change in fair value for contingent considerations and currency forward contracts, and non-cash increased consisted of $55.4 million in share-based compensation expense and $30.9 million in depreciation and amortization. Changes in operating assets and liabilities from operations used $8.8 million of cash, primarily driven by an increase in inventory and a decrease in accrued expenses, offset by a decrease in accounts receivable and an increase in accounts payable.
Current wording
For the three months ended March 31, 2025, net cash used in operating activities was $29.0 million, which included net loss of $37.2 million and reflected adjustments for certain non-cash items and changes in operating assets and liabilities. Non-cash decreases primarily consisted of $4.2 million of net losses resulting from a change in fair value for contingent considerations and currency forward contracts, and non-cash increases consisted of $17.2 million in share-based compensation expense and $9.7 million in depreciation and amortization. Changes in operating assets and liabilities from operations used $16.1 million of cash, primarily driven by a decrease in accounts payable, and an increase in accounts receivable, offset by an increase in accrued expenses. Cash used in operating activities during the three months ended March 31, 2024 was $9.3 million, which included net loss of $34.2 million and reflected adjustments for certain non-cash items and changes in operating assets and liabilities. Non-cash increases primarily consisted of $14.8 million of net losses resulting from a change in fair value for contingent considerations and currency forward contracts, $25.6 million in share-based compensation expense and $9.6 million in depreciation and amortization. Changes in operating assets and liabilities from operations provided $3.2 million of cash, primarily driven by decrease in accounts receivable, offset by an increase in prepaid and other current assets and inventory, and a decrease in accrued expenses and other current liabilities and prepaid and other current assets.
Previous wording
Net cash used in investing activities for the nine months ended September 30, 2024 and 2023 was $16.7 million and $103.6 million, respectively. During the period ended September 30, 2024, the decrease in cash was primarily due to the acquisition of Kinetic for $3.2 million, net of cash acquired, as well as an increase in cash used of $12.5 million for the purchase of capital expenditures. During the period ended September 30, 2023, the decrease in cash was primarily due to the acquisitions of Exalos, GEO and Silicon Radar for $95.0 million, net of cash acquired, as well as an increase in cash used of $8.6 million for the purchase of capital expenditures. We expect that we will make additional capital expenditures in the future, including licenses to various intangible assets, in order to support the future growth of our business.
Current wording
Net cash used in investing activities for the three months ended March 31, 2025 and 2024 was $2.4 million and $5.5 million, respectively. During the period ended March 31, 2025, the decrease in cash was due to the purchase of capital expenditures. During the period ended March 31, 2024, the decrease in cash was primarily due to the acquisition of Kinetic for $3.2 million, net of cash acquired, as well as an increase in cash used of $2.3 million for the purchase of capital expenditures. We expect that we will make additional capital expenditures in the future, including licenses to various intangible assets, in order to support the future growth of our business.
Previous wording
Net cash provided by financing activities for the nine months ended September 30, 2024 was $23.5 million, which was primarily attributed to $10.0 million of net proceeds from the issuance of the line of credit through Wells Fargo, $13.2 million of net proceeds from the issuance of common stocks through the ATM and $5.7 million of net proceeds from the issuance of a line of credit through the Bank of Ningbo Co., LTD, partially offset by $2.0 million payments on debt obligations and $4.4 million of payments on financed software.
Current wording
Net cash used in financing activities for the three months ended March 31, 2025 was $4.7 million, which was primarily attributed to $2.9 million payments on debt obligations and $1.7 million of payments on financed software.
Previous wording
Net cash provided by financing activities for the nine months ended September 30, 2023 was $34.2 million, which was primarily attributed to $52.0 million of net proceeds from the issuance of common stocks through the ATM, partially offset by $12.5 million payments on debt obligations, and $7.0 million of payments on financed software.
Current wording
Net cash provided by financing activities for the three months ended March 31, 2024 was $6.9 million, which was primarily attributed to $10.0 million of net proceeds from the issuance of the line of credit through Wells Fargo, partially offset by $1.5 million payments on debt obligations and $2.3 million of payments on financed software.
Previous wording
In connection with our acquisitions (See subheading titled Liquidity and Capital Resources—Acquisitions above, we may be required to make future payments or issue additional shares of our common stock to satisfy certain earn-out requirements under the acquisition agreements.
Current wording
In connection with our acquisitions, we may be required to make future payments or issue additional shares of our common stock to satisfy certain earn-out requirements under the acquisition agreements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Historically, we derive liquidity primarily from debt and equity financing activities as we have historically had negative cash flows from operations. On August 26, 2022, we entered into the ATM Agreement with the Sales Agents relating to shares of our Class A common stock. In accordance with the terms of the ATM Agreement, we may offer and sell shares of our Class A common stock having an aggregate offering price of up to $150.0 million from time to time through the Sales Agents, acting as our agent or principal. We implemented this program for the flexible access it provides to the capital markets. During the three months ended March 31, 2025, there was no activity. As of March 31, 2025, and since the inception of the program we have raised gross proceeds of $90.2 million and issued 11,138,984 shares of Class A common stock at an average per-share sales price of $8.10 and had approximately $59.8 million available for future issuances under the ATM Agreement. As of March 31, 2025, we have incurred total issuance costs of $1.9 million since inception.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Revenue for the nine months ended September 30, 2024 was $158.7 million, compared to $153.0 million for the nine months ended September 30, 2023, an increase of $5.6 million or 4%, which was primarily driven by a $16.4 million increase in product revenue, offset by a decrease in contract revenue. The increase in product revenue was due primarily to change in product mix as well as higher product volume (units sold) as well as the recent acquisitions, offset by a slight change in ASP. The decrease in contract revenue of $10.8 million or 52% was primarily due to a large multi-year non-recurring engineering project that commenced in early 2022 and is winding down in the current year towards its completion stage.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, we recognized gains (losses) from change in fair value for warrants, contingent considerations and acquisition-related holdbacks. The gains (losses) recorded for the both the nine months ended September 30, 2024 and 2023 represent the following:
Previous report — wording carried elsewhere
Refer to Note 17, Income Tax, in our accompanying unaudited condensed consolidated financial statements for additional detail.
Previous report — wording carried elsewhere
Cash used in operating activities during the nine months ended September 30, 2023 was $88.0 million, which included net loss of $114.2 million and reflected adjustments for certain non-cash items and changes in operating assets and liabilities. Non-cash increases primarily consisted of $2.7 million of net losses resulting from a change in fair value for warrants and contingent considerations, $36.6 million in share-based compensation expense and $26.5 million in depreciation and amortization. Changes in operating assets and liabilities from operations used $39.3 million of cash, primarily driven by an increase in accounts receivable, inventory and prepaid and other current assets.