Good afternoon, everyone, and welcome to Indy Semiconductor Second Quarter 2021 Earnings Call. This call is being recorded. At this time, I would like to turn the call over to Pilar Barrigas, Head of Global Corporate Communications for Indi's. Thank you. You may begin.
Thank you, operator. Good afternoon, everyone, and welcome to Indy Semiconductor's Second Quarter 2021 Earnings Call. Joining me today are Donald McClimont, Indi's Co Founder and CEO and Tom Schiller, Indi's Chief Financial Officer and Executive Vice President of Strategy. Donald will provide opening remarks and discuss business highlights from the quarter, followed by Tom's review of Indy's 2nd quarter results and 3rd quarter outlook. Please note that 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 about views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our risk factors and our recent registration statement on Form S-one and other filings with the SEC. Additionally, the results and guidance discussed today are based on our non GAAP financial measures. For a complete reconciliation to GAAP, please see our Q2 earnings press release, which was issued in advance of this call and can be found on our website at indiesemi.com under the News tab.
With that, I'll turn the call over to Donald.
Thanks, Pilar, and welcome, everyone. We're excited to be kicking off our inaugural conference call as a publicly traded company. As many of you know, in December of 2020, we announced our intentions to enter into a definitive agreement with Thunderbridge Acquisition 2 for a business combination that would result in the combined entity continuing as a publicly listed company. On June 10, We successfully closed the strategic transaction. We start this next chapter from a position of strength and with significant secular tailwinds.
Having founded India in 2007, we have a long heritage and history of innovation. We've established a global footprint and developed key relationships with a dozen Tier 1 customers and multiple international OEMs. As a private company, we shipped more than 100,000,000 units, demonstrating our ability to scale in the future. Equally important, our debut as a public company comes at a time when powerful market dynamics are playing out at a macro level. Specifically, the global automotive semiconductor market is forecasted to grow from CAD33 1,000,000,000 in 2020 to CAD59 1,000,000,000 by 2025 according to IHS.
Automakers are supporting large scale investments in next generation vehicles. For example, Ford recently committed to $22,000,000,000 in EVs through 2025 and another $7,000,000,000 in autonomous cars, while Volkswagen has similarly announced plans to boost its investment in electric and autonomous technology to $86,000,000,000 over the next 5 years and ultimately has publicly committed compounded annual growth driven by several megatrends spanning the user experience in connected car, safety systems and electrification. Further, the average semiconductor content per car is anticipated to reach the level of multiple 1,000 of dollars per vehicle, up from approximately 500 today. Needless to say, the automotive landscape is undergoing a massive transformation and India is at the heart of this. Our advanced technologies are directly addressing these market needs and the step function increase in electronic performance and complexity required by our customers to help improve safety, facilitate seamless data connectivity, enhance the user experience and accelerate electrification.
Our Q2 2021 revenue and margin results demonstrate how we are capitalizing on these opportunities and are delivering on our promises. Particularly, during the quarter, we won a new EV product design with Vitesco, one of the largest European Automotive Tier 1s. We expanded shipments of our highly integrated onboard telematics solution, secured record orders for ultrasound automatic park assist systems, ramped our advanced lighting controllers with multiple new OEMs and extended our engagement with Markhorpe, a global innovator of sensor technology in support of Automotive sector create a one stop shop for all sensor modalities, including LiDAR, vision, radar and ultrasound Continue to drive advanced roadmaps of our existing product lines and expand our geographic design and development footprint to uniquely serve our customers' needs. In short, India is excited to be playing its part in empowering the AutoTech revolution. I will now turn the call over to Tom for a discussion of our Q2 results and Q3 outlook.
Thanks, Donald. Indy delivered solid top and bottom line performance in the Q2 ahead of analyst expectations. Revenue was up 148% year over year to a record $9,200,000 reflecting increasing demand for our highly integrated Auto Tech solutions. Gross profit was $3,900,000 translating into a 42.1 percent gross margin, up 140 basis points from the same period a year ago. Operating expenses were $13,400,000 an increase from $6,000,000 in the June 2020 quarter As we more than doubled down on R and D and SG and A to accelerate product development, extend our market reach and Implement Public Company Infrastructure.
Operating loss was $9,600,000 versus analyst consensus estimates for a $10,200,000 loss. Interest and other expenses were 300,000 yielding a net loss of $9,900,000 Turning to the balance sheet, we closed our merger with ThunderBridge Acquisition 2 on June 10th With gross proceeds of $400,000,000 comprised of $250,000,000 from cash and trust, plus $150,000,000 in pipe investment. We exited Q2 with $354,000,000 reflecting retirement of Indy's long term debt and Settlement of the vast majority of transaction expenses. Now to our Q3 2021 outlook. Despite global supply chain tightness, we anticipate top line outperformance to a record indie sales level with sustained gross margin expansion in the Q3 of 2021.
Specifically, we expect 30% sequential revenue growth as we approach a $50,000,000 Annualized revenue run rate and gross margin of roughly 43%. We are also planning for operating expenses to be $20,000,000 as we further increase product development investment in response to pent up customer demand. Accordingly, assuming no other net expense or taxes below the line and 135,000,000 shares outstanding, We expect a net loss of approximately $0.11 per share. Finally, and perhaps most importantly, Solid bookings coupled with new program ramps are setting the stage for Indy to nearly double revenue in 2021, demonstrating one of the highest immediate growth trajectories within Auto Tech. On that note, I'll turn it back to Donald for his closing comments.
Thank you, Tom. In closing, we couldn't be more excited about Indy's future. We have market leadership positions in several of the highest growth automotive segments And our innovative portfolio serves several key megatrends, namely ADAS and autonomous vehicle, connected car and user experience and electrification. With past success in delivering Leading Edge Technologies, we plan to apply the same core principles and follow the cultural values that got us here Operator, let's open the call for Q and A.
Thank you. We ask that you limit yourself to one question and one follow-up question. Our first question is from Suji Desilva, your line is open. Please go ahead.
Hi, Tom. Congratulations on the strong start here. So, no problem. And so then, the customer base, why don't you give a sense, Tom or Donald, how it's Maybe in the last 3 to 6 months or whether the incremental growth is coming from more program wins at the existing customers, just to give us a sense how that dynamic is playing out?
Well, the simple answer is it's both. We included new customer adds through the quarter, but also you Get the best return sometimes from additional business of the existing customers. And so in short, it's really both.
Okay, great. And then, Donald, you had a lot of product announcements during the quarter of all very impressive opportunities, lighting and other things. Maybe if you could tell us which of those represent Perhaps the highest unit volume runners today, if that's a helpful thing to understand and which ones might be on the come in 12 months to kind of see how they layer on?
Well, you can assume that we're seeing growth in all areas at this point. We're not really breaking out the exact contribution of each product at this point as a policy. But for sure, all of the products that we announced are deploying and are Beginning to generate revenue. So I mean the demand for all of them has been very strong.
Okay, helpful. We'll watch those closely. Then lastly, maybe the competitive landscape you could talk about, just saw announcements or discussions of something like combination between Veoneer and Qualcomm. And just Maybe you can kind of reset us on the competitive landscape and what those kind of actions may mean to someone like you or whether, Indy is differentiated enough that those are A different area than Endy's target.
Yes, I mean, we're a pretty unique company in the space. I believe We're really the only company that's wholly focused on automotive. And to that end, we don't really feel that we have Direct competition for the opportunity that's out there today. The Qualcomm and Veoneer projected combination, If they get it closed, it is interesting because it's kind of a vendor buying its own customer and will have some interesting dynamics. But from our side, it's It's largely neutral to anything we might be doing.
Our next question is from Anthony Stoss with Craig Hallum. Please proceed.
Hey, Donald. Hey, congrats as well on the strong growth. Donald, I wanted to follow-up on An item in the press release where you're talking about record orders for parking assist. I'm curious if you can elaborate a little bit more on that. And maybe love to hear if there's new customers being added for that product.
And then one for Tom on the higher OpEx The $20,000,000,000 is there any particular programs that you guys are now keyed in on? Is it LIDAR? Is it kind of across the board? Any help you could give us on where that's directed would be helpful?
Yes. So with respect to the parking assist that refers to our ultrasound SOCs, Which we've had in the market for a little while. But as you know, it takes a long time to ramp in automotive and we have added new sell through customers Our existing Q1s into the OEMs by sell through, I mean, OEM customers. And that is driving our order book today, quite simply.
And then on the latter part of your question, it is more R and D oriented and particularly in the ADAS product area As well as it's the 1st full quarter we'll have of public company infrastructure costs.
Got it. And then maybe as a
follow-up, just Big picture wise, now that you have this cash, Donald, I'd love to hear if there's several OEMs that were kind of waiting in the wings, waiting to see if you guys would Be able to survive and now that you have cash, clearly you can. I'd just love to hear your thoughts on kind of new engagements or the strategic backlog Now that you've got plenty of cash.
Yes. I mean, the response has been phenomenal. The customer base It was strong before and to some extent we were quite limited by our balance sheet as a private company. And with that off the table now, the Programs that we have access to that we can bid on and have very strong chance to turnover are phenomenally larger Than what we had in place before. So, yes, I mean, it's been a huge advantage for us in terms of that.
The strategic backlog, obviously, as we announced design wins here has increased. We won't really quantify that at this point, but It's kind of the thin end of the wedge and watch the space for more to come.
Our next question is from Ross Seymore with Deutsche Bank. Please proceed.
Hi, guys. Echoing the others, giving you congrats Making it public and strong first quarter and guide. You mentioned about the shortages in your press release. Despite the global supply chain tightness, you guys are still delivering growth. Just wondered, Donald, if there's any update, are you guys seeing any direct indications on your side or even any indirect Parts where you could shift your components, but something else in the supply chain was a gating factor in either your quarter or guide.
So I didn't catch the first part, Ross.
I just wanted to see if the shortages across the industry were impacting you either Indirectly or directly?
I mean, not at present. I mean, the supply chain is very tight. It does demand Careful controls and management from our side. So it's not a trivial problem to solve at the moment, but we are navigating it pretty well, I would say. I would say there's not much inventory in the channel.
And so far, we haven't really been strongly hit by perhaps Factories being shuttered because of other component unavailability. So I would say, generally speaking, so far so good. It is an ongoing situation, which we have to manage. But so far, I would say we're reasonably happy with the situation.
Good to hear on that. And I guess for my follow-up, you mentioned in the press release about an EV product design win at, I think you said, one of the largest European Automotive Tier 1. Can you just talk a little bit about the timing of when that would ramp and some of the functionality? I know you'd talk about charging controllers and diagnostic solutions, etcetera. I assume it's For that functionality, but any additional color even on the timing or size of that?
It seems like opening up a new area that
We'll keep that confidential for the time being until we're closer to the mark. Obviously, Automotive ramps take several years, so it won't be next quarter or the quarter after that. It isn't actually directly related to the 2 application areas that you mentioned, but it is germane to the directly to the propulsion aspect of the e vehicle platform.
And that concludes the Q and A session. I will now turn the call back over to Donald McLeimat.
Well, thanks everybody for joining us today. Look forward to seeing you at the upcoming investor conferences and the non deal roadshows. So looking forward to continuing the story.
Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.