Cyngn Reports Third Quarter 2024 Financial Results

 Recent Operating Highlights:

• Executed its first paid DriveMod Forklift Deployment.
• Signed a commercial contract with a major automotive service equipment manufacturer.
• Executed LOI to sell multiple DriveMod Tuggers to global automotive supplier.
• Successfully completed DriveMod Tugger Initial Deployment with a major defense contractor.
• Hired Experienced Industrial Automation VP of Sales, Marty Petraitis.
• Started deploying its next-gen 12,000 lb. DriveMod Tugger at customer facilities. 
• Expanded its sales channels through Motrec dealers and 3rd party system integrators that combine for billions of dollars of robotics and material handling equipment annual sales.
• Secured its 20th and 21st U.S. Patent.
• Expanded DriveMod capabilities to outdoor operations in response to demand.

Menlo Park, California, November 6, 2024 — Cyngn (or the “Company”) (Nasdaq: CYN), developer of industrial autonomous vehicles, today announced financial results for its third quarter, ended September 30, 2024.

“Our third quarter marked meaningful additional commercial traction of our autonomous DriveMod technology,” said Lior Tal, Cyngn CEO. “Building on the progress we made with direct sales efforts in the first half of the year, including being selected by Deere to supply the DriveMod Tugger, we have expanded our strategy to increase our channel sales efforts.

“We have also achieved a significant milestone with the first paid deployment of our DriveMod Forklift, an important progression into sales activities after initial R&D and projects focused on funding development.”

“Through our OEM partner Motrec, we are able to expand our sales strategy beyond direct sales by leveraging a strong incumbent dealer network while also adding specialized distributors and system integrators like Kennedy Robotics AI and RobotLAB.

“By expanding our sales and distribution collaborations, we are enhancing our sales channels and creating consistent opportunities that strengthen our sales pipeline.” 

In addition to increasing lead generation and building a more robust pipeline, we also hired Marty Petraitis, a seasoned vet of the industrial automation industry, as our VP of Sales to capitalize on our growing opportunities. Broadly, our sales pipeline has matured into more advanced stages as per the process outlined in our recent update. We are actively converting more Pilot Purchases, creating a larger pool of existing and newly onboarded customers to grow into Fleet Purchases.

We are continuing to see validation of our solution through traction in heavy manufacturing industries like automotive and defense, highlighted by the first deployments of our next-generation 12,000 lb. DriveMod Tugger at customer facilities and multiple new customer contracts and LOIs as outlined above.

The next-gen DriveMod Tugger boasts increased towing capacity and enhanced autonomous capabilities that enable it to support outdoor operations. These improvements have expanded our use cases, broadened the environments where our autonomous vehicles deliver value, and ultimately created new sales opportunities.

Having ramped up the production of our DriveMod Tugger, we have also been able to shift to revenue-generating activities with our autonomous forklift solution. Our first paid DriveMod Forklift deployment marks a key turning point in monetizing the valuable solution offered by an autonomous forklift.

The global forklift market is expected to double to $103.9 billion by 2031. The opportunity for autonomous forklifts is significant, and this milestone positions us for the critical next steps that will result in the DriveMod Forklift being widely available to under-served forklift automation applications that require >10,000 lb. load capacity and use non-standard pallets.

When reviewing the financial information below, note that all share and per share information, Common stock and Additional paid-in capital, has been restated to reflect the 1-for-100 reverse stock split effected on July 3, 2024.

Q3 2024 Three Month Financial Review:

• Third quarter revenue was $47.6 thousand compared to $25.2 thousand in the third quarter of 2023. Similar to prior year, third quarter 2024 revenue consisted of EAS software subscriptions from DriveMod Stockchaser vehicle deployments.
• Total costs and expenses of $5.6 million in the third quarter of 2024 were consistent with the third quarter of 2023. However, R&D expenses in 2024 decreased by $133.6 thousand and G&A expenses decreased by $60.3 thousand, and these decreases were offset by an increase in cost of revenue of $114.8 thousand. The decrease in R&D expense was primarily driven by capitalizing costs for specific customers and capitalizing costs related to the development of software.  The decrease in G&A expenses is due to a decrease in personnel costs, reduced insurance premiums and spending improvements on general office expenses. The increase in cost of revenue is driven by more customer deployments in 2024. Headcount at the end of the third quarter of 2024 was 81 versus 85 at the end of the third quarter of 2023.
• Net loss for the third quarter was $(5.4) million compared to $(5.5) million in the corresponding quarter of 2023. Third quarter 2024 net loss per share was $(2.74), based on basic and diluted weighted average shares outstanding of approximately 1,982 thousand in the quarter. This compares to a net loss per share of $(11.03) in the third quarter of 2023, based on approximately 496 thousand basic and diluted weighted average shares outstanding.

Q3 2024 Nine Month Financial Review:

• Year-to-date third quarter revenue was $61.8 thousand compared to $1.4 million in the third quarter of 2023. Third quarter 2024 revenue consisted of EAS software subscriptions from DriveMod Stockchaser vehicle deployments whereas prior year revenue was the result of NRE contracts.
• Total costs and expenses in the third quarter were $17.3 million, down from $19.4 million in the third quarter of 2023. This decrease was primarily due to  a decrease in R&D expenses of $547.7 thousand, a $666.9 thousand reduction in G&A expenses, and a $835.8 thousand decrease in cost of revenue. The decrease in R&D expense was primarily driven by capitalizing costs for specific customers and capitalizing costs related to the development of software while the decrease in G&A expenses is due to a decrease in personnel costs, reduced insurance premiums and spending improvements on general office expenses. The decrease in cost of revenue is driven by the lower costs associated with EAS revenue compared to the NRE contracts in 2023. 
• Net loss for the third quarter was $(17.2) million compared to $(17.5) million in the corresponding quarter of 2023. Third quarter 2024 net loss per share was $(12.91), based on basic and diluted weighted average shares outstanding of approximately 1,333.3 thousand in the period. This compares to a net loss per share of $(35.50) for the nine months of 2023, based on approximately 491.7 thousand basic and diluted weighted average shares outstanding during the period.

Balance Sheet Highlights:

Cyngn’s cash and short-term investments at September 30, 2024 total $2.8 million compared to $8.2 million as of December 31, 2023.  At the end of the same period, working capital was $2.6 million and total stockholders’ equity was $6.65 million, as compared to year-end working capital of $7.4 million and total stockholders’ equity of $10.6 million, respectively as of December 31, 2023.  The Company had no debt as of September 30, 2024 and December 31, 2023 and to date, no one on the current management team has sold any shares of Company stock

For more information on Cyngn, visit the Investor Relations Page of the Company’s website.