Q1 2026 Aeye Inc Earnings Call

May 13, 2026

Operator: Ladies and gentlemen, thank you for standing by. My name is Joyce, I will be your conference operator today. At this time, I would like to welcome you to AEye's Q1 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, please press star key, then number 1 on your telephone keypad. If you would like to withdraw your question, press star key, then number 1 again. Thank you. I would like to turn the conference over.

Operator: [Break]. Ladies and gentlemen, thank you for standing by. My name is Joyce, I will be your conference operator today. At this time, I would like to welcome you to AEye's Q1 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, please press star key, then number 1 on your telephone keypad. If you would like to withdraw your question, press star key, then number 1 again. Thank you. I would like to turn the conference over.

Speaker #1: Ladies and gentlemen, thank you for standing by. My name is Joyce, and I will be your conference operator today. At this time, I would like to welcome you to AEye's first quarter 2026 earnings call.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, please press star key, then the number 1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, press star key, then number 1 again. Thank you. I would like to turn the conference over.

Speaker #2: Good afternoon, and thank you for joining AEye's first quarter 2026 earnings call. I'm Keith Nolson, Investor Relations Manager for AEye, and with me today are Matt Fisch, Chief Executive Officer and Conor Tierney, Chief Financial Officer.

Keaton Olsen: Good afternoon, thank you for joining AEye's Q1 2026 earnings call. I'm Keaton Olsen, investor relations manager for AEye, and with me today are Matt Fisch, chief executive officer, and Conor Tierney, chief financial officer. Earlier today, AEye announced its financial results for Q1 ended 31 March 2026. A copy of the press release is available in the investor relations section of the company's website. Before we begin, today's discussion may include forward-looking statements as defined in the securities laws and regulations of the US with reference to future events, operating results, or performance and are based on our current expectations and assumptions. Any forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances. Our actual results may differ materially from those contemplated by these forward-looking statements.

Speaker #2: Earlier today, AEye announced its financial results for the first quarter ended March 31, 2026. A copy of the press release is available in the Investor Relations section of the company's website.

Speaker #2: Before we begin, today's discussion may include forward-looking statements as defined in the Securities Laws and Regulations of the United States with reference to future events, operating results, or performance, and are based on our current expectations and assumptions.

Speaker #2: Any forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances. Our actual results may differ materially from those contemplated by these forward-looking statements.

Speaker #2: You can find more information about the risks, uncertainties, and other factors in the reports AEye files for time to time with the Securities and Exchange Commission, including in a most recent periodic report.

Keaton Olsen: You can find more information about the risks, uncertainties, and other factors in the reports AI files from time to time with the Securities and Exchange Commission, including in our most recent periodic report. AI does not intend to update any forward-looking statements regardless of any new information, future developments, or otherwise, except as may be required by law. In addition, we will be discussing non-GAAP financial measures on this call, which we believe are relevant in assessing the financial performance of the business. These measures are presented as supplemental information only and should not be considered a substitute for financial information presented in accordance with GAAP. You can find reconciliations of these metrics to the most directly comparable GAAP measures within the press release. Now let me pass the call over to Matt.

Speaker #2: The statements to be made are as of today only, and AEye does not intend to update any forward-looking statements regardless of any new information, future developments, or otherwise except as may be required by law.

Speaker #2: In addition, we will be discussing non-GAAP financial measures on this call, which we believe are relevant in assessing the financial performance of the business.

Speaker #2: These measures are presented as supplemental information only and should not be considered a substitute for financial information presented in accordance with GAAP. You can find reconciliations of these metrics to the most directly comparable GAAP measures within the press release.

Speaker #2: Now let me pass the call over to Matt.

Speaker #3: Thank you, Keith. And thank you all for joining our first quarter 2026 earnings call. The quarter unfolded exactly as planned. Steady execution, no surprises, and a commercial pipeline that continued to grow.

Matt Fisch: Thank you, Keaton, and thank you all for joining our Q1 2026 earnings call. The quarter unfolded exactly as planned. Steady execution, no surprises, and a commercial pipeline that continued to grow. Our ecosystem partnerships and manufacturing capability remain strong, and we now have more commercial engagement than at any point in our history. Our funnel continues to be the best barometer to benchmark our progress as revenue tends to be a lagging indicator. As of today, our revenue-generating customer count has grown from 16 to 21 since our last earnings call. I'm also pleased to report that both our issued quotes and active engagements have increased by nearly 40% quarter over quarter. These leading indicators, new technical engagements, inbound RFIs, and POC activity across automotive, trucking, defense, rail, infrastructure, and ITS are all moving in the right direction.

Speaker #3: Our ecosystem partnerships in manufacturing capability remain strong, and we now have more commercial engagement than at any point in our history. Our funnel continues to be the best barometer to benchmark our progress as revenue tends to be a lagging indicator.

Speaker #3: As of today, our revenue-generating customer count has grown from 16 to 21 since our last earnings call. I'm also pleased to report that both our issued quotes and active engagements have increased by nearly 40% quarter over quarter.

Speaker #3: These leading indicators—new technical engagements, inbound RFIs, and POC activity across automotive, trucking, defense, rail, infrastructure, and ITS—are all moving in the right direction. These indicators are the data that investors should focus on to understand where we are headed.

Matt Fisch: These indicators are the data that investors should focus on to understand where we are headed. Quarterly revenue is up almost 60% year over year. This meaningful growth is driven by our software-defined architecture and long-range sensing performance and reflects the strong pipeline activity building behind it. AEye's technology gives machines vision, the foundation of physical AI and the prerequisite for every intelligent autonomous system being built today. The market is potentially very large and is accelerating. Barclays projects the physical AI market opportunity could reach as much as $1 trillion by 2035, and lidar is the enabling layer that makes it real. AEye's software-defined architecture positions us at the core of that ecosystem, and the lidar sector's ongoing consolidation has only strengthened our relative position. AEye is on stronger footing coming out of that consolidation than going in.

Speaker #3: Quarterly revenue is up almost 60% year over year. This meaningful growth is driven by our software-defined architecture, and long-range sensing performance, and reflects the strong pipeline activity building behind it.

Speaker #3: AEye's technology gives machines vision, the foundation of physical AI, and the prerequisite for every intelligent autonomous system being built today. The market is potentially very large, and is accelerating.

Speaker #3: Barclays projects the physical AI market opportunity could reach as much as $1 trillion by 2035. And LiDAR is the enabling layer that makes it real.

Speaker #3: AEye's software-defined architecture positions us at the core of that ecosystem, and the LiDAR sector's ongoing consolidation has only strengthened our relative position. AEye is on stronger footing coming out of that consolidation than going in.

Speaker #3: Better capitalized, leaner in structure, and with a commercial pipeline that continues to expand. The automotive industry appears to be squarely shifting toward AI-driven safety and software-defined vehicle architectures.

Matt Fisch: Better capitalized, leaner in structure, and with a commercial pipeline that continues to expand. The automotive industry appears to be squarely shifting toward AI-driven safety and software-defined vehicle architectures. We believe long-range lidar is becoming essential to that architecture, not optional. Apollo offers best-in-class detection range when operating behind a windshield and is the only sensor we know of to be customer-proven to reliably detect objects at distances of up to 1 kilometer. Our OEM engagement has increased, driven by recent robotaxi investment announcements, growing trade policy implications, and supply chain resilience concerns. With OEMs in the passenger vehicle segment actively seeking domestically sourced alternatives, AEye's manufacturing partnership directly addresses that demand. Multiple new RFIs arise in Q1 across both passenger and commercial vehicle segments. OEMs have begun to re-engage as L3 and L4 roadmaps are being reactivated and expanded.

Speaker #3: And we believe long-range LiDAR is becoming essential to that architecture—not optional. Apollo offers best-in-class detection range, when operating behind a windshield, and is the only sensor we know of to be customer-proven to reliably detect objects at distances of up to 1 kilometer.

Speaker #3: Our OEM engagement has increased, driven by recent robotaxi investment announcements, growing trade policy implications, and supply chain resilience concerns. With OEMs in the passenger vehicle segment actively seeking domestically sourced alternatives, AEye's manufacturing partnership directly addresses that demand.

Speaker #3: Multiple new RFIs arose in Q1 across both passenger and commercial vehicle segments, and OEMs have begun to re-engage as L3 and L4 roadmaps are being reactivated and expanded.

Speaker #3: In ground mobility, evaluations by autonomous trucking companies are deepening. Multiple companies have programs underway, and we are now shipping sensors into those evaluations. Apollo should be well-suited to serve this expanding addressable market.

Matt Fisch: In ground mobility, evaluations by autonomous trucking companies are deepening. Multiple companies have programs underway, and we are now shipping sensors into those evaluations. Apollo should be well-suited to serve this expanding addressable market. In transportation and infrastructure, 4Sight is now live at an active intersection in California in partnership with FlashEye and Blue Band. Additional US smart intersection deployments are in progress. Our APAC expansion strategy is also progressing. An Australian ITS POC has advanced into a discussion of commercial terms. In Korea, we recently concluded a successful customer roadshow engaging with more than 10 OEMs across ITS, rail, and mobility sectors. Our business partnership with ATI in China remains strong, and we have 4 additional customers now evaluating our Apollo lidar product. In defense, active shipments continue with an existing US contractor for UAV wire detection.

Speaker #3: In transportation and infrastructure, Optus is now live at an active intersection in California. In partnership with FlashEye and Blueband. Additional U.S. smart intersection deployments are in progress.

Speaker #3: Our APAC expansion strategy is also progressing. An Australian ITS POC has advanced into a discussion of commercial terms. In Korea, we recently concluded a successful customer roadshow engaging with more than 10 OEMs across ITS, rail, and mobility sectors.

Speaker #3: Our business partnership with ATI in China remains strong. And we have four additional customers now evaluating our Apollo LiDAR product. In defense, active shipments continue with an existing U.S.

Speaker #3: contractor for UAV wire detection. Repeat business is emerging within that account. And Apollo is being evaluated for additional applications, including UGV and counter-UAV, with an expectation of multiple new RFQs.

Matt Fisch: Repeat business is emerging within that account, and Apollo is being evaluated for additional applications, including UGV and counter UAV, with an expectation of multiple new RFQs. A significant development this quarter is our new commercial relationship with Syntech, a global defense systems company with established ties to leading defense primes. Syntech is actively promoting Apollo to its customers, and initial shipments are already underway. This partnership has the potential to unlock international defense and aviation markets outside of the United States, meaningfully expanding our addressable pipeline while complementing the domestic engagements we have already built. What drives selection across all of these verticals is consistent. AEye's proven and reliable 1-kilometer detection range with unlimited software-driven adjustability. That flexibility is paying dividends.

Speaker #3: A significant development this quarter is our new commercial relationship with Syntech, a global defense systems company with established ties to leading defense products. Syntech is actively promoting Apollo to its customers, and initial shipments are already underway.

Speaker #3: This partnership has the potential to unlock international defense and aviation markets outside of the United States. Meaningfully expanding our addressable pipeline while complementing the domestic engagements we have already built.

Speaker #3: What drives selection across all of these verticals is consistent. AEye's proven and reliable 1-kilometer detection range with unlimited software-driven adjustability. That flexibility is example, a defense customer that initially engaged us for a single UAV wire detection application is now evaluating Apollo across three separate use cases, without any change to the hardware they have already deployed in the field.

Matt Fisch: For example, a defense customer that initially engaged us for a single UAV wire detection application is now evaluating Apollo across 3 separate use cases without any change to the hardware they have already deployed in the field. This is a key differentiation factor that drives customers to select AI. STRATOS, the newest addition to our product lineup, extends our capability up to 1.5 kilometers of detection range with 500 meters performance behind a windshield at a disruptive price point. Through our manufacturing partnership with Lydon, AI's supply chain is globally diversified, providing the flexibility and resilience to navigate geopolitical risk and shifting trade policies that we believe our peers cannot match. Our tech stack is derived from off-the-shelf telecom components, which allows us to compete on cost while delivering the mass manufacturability and high performance our customers require.

Speaker #3: This is a key differentiation factor that drives customers to select AEye. Stratos, the newest addition to our product lineup, extends our capability up to 1.5 kilometers of detection range with 500-meter performance behind a windshield.

Speaker #3: At a disruptive price point. Through our manufacturing partnership with Lyton, AEye's supply chain is globally diversified, providing the flexibility and resilience to navigate geopolitical risk and shifting trade policies that we believe are peers cannot match.

Speaker #3: Our tech stack is derived from off-the-shelf telecom components, which allows us to compete on cost while delivering the mass manufacturability and high performance our customers require.

Speaker #3: We continue to build on our partnership with NVIDIA, as it is the cornerstone of our automotive and industrial market positioning. Apollo is validated on DRIVE AGX Orin and has been demonstrated on DRIVE AGX 4, NVIDIA's next-generation centralized automotive compute platform.

Matt Fisch: We continue to build on our partnership with NVIDIA as it is the cornerstone of our automotive and industrial market positioning. Apollo is validated on NVIDIA DRIVE AGX Orin and has been demonstrated on Drive AGX4, NVIDIA's next-generation centralized automotive compute platform. In March, we joined the NVIDIA Halos AI Systems Inspection Lab, the world's first ANAB-accredited AI systems inspection lab. ANAB accreditation is generally viewed by OEMs as a critical marker of confidence, reliability, and quality assurance within their supply chain. Our Optus platform, powered by NVIDIA Jetson Orin, extends our reach into infrastructure and industrial markets via our diversified software ecosystem. We are giving infrastructure and industrial customers a ready-made path into physical AI without having to build perception capability from scratch. I will now turn the call over to Conor to review our Q1 results.

Speaker #3: In March, we joined the NVIDIA Halos AI Systems inspection lab, the world's first ANAB-accredited AI systems inspection lab. ANAB accreditation is generally viewed by OEMs as a critical marker of competence, reliability, and quality assurance within their supply chain.

Speaker #3: Our Optus platform, powered by NVIDIA Jetson Orin, extends our reach into infrastructure and industrial markets via our diversified software ecosystem. We are giving infrastructure and industrial customers a ready-made path into physical AI without having to build perception capability from scratch.

Speaker #3: I will now turn the call over to Connor to review our first-quarter result.

Speaker #2: Thank you, Matt. Our strong commercial momentum is broad-based. Showing up across our full addressable market, rather than any single vertical. Our active customer base now spans defense, intelligent transportation, rail, and logistics and security.

Conor Tierney: Thank you, Matt. Our strong commercial momentum is broad-based, showing up across our full addressable market rather than any single vertical. Our active customer base now spans defense, intelligent transportation, rail, and logistics and security, a level of diversification we did not have a year ago, and the quality of that growth matters as much as the breadth. We are also seeing a growing pattern of repeat business across the customer base, a meaningful signal of product market fit, and a direct validation of the performance advantages of our architecture. Our commercial progress is beginning to attract broader institutional attention. We added new sell-side analyst coverage this quarter, and we are seeing a meaningful increase in both sell-side and buy-side interactions, an external signal that the commercial activity we have been describing is registering with the investment community.

Speaker #2: A level of diversification we did not have a year ago. And the quality of that growth matters as much as the breadth. We are also seeing a growing pattern of repeat business across the customer base, a meaningful signal of product-market fit at a direct validation of the performance advantages of our architecture.

Speaker #2: Our commercial progress is beginning to attract broader institutional attention. We added new sell-side analyst coverage this quarter, and we are seeing a meaningful increase in both sell-side and buy-side interactions.

Speaker #2: An external signal that the commercial activity we have been describing is registering with the investment community. The revenue ramp is in its early stages, but the underlying metrics building behind it give us confidence in the trajectory ahead.

Conor Tierney: The revenue ramp is in its early stages, but the underlying metrics building behind it give us confidence in the trajectory ahead. Before I move to the financials, I want to spend a minute on what we are increasingly hearing from customers. In my role bridging the financial and commercial sides of the business, this has become one of the most important strategic aspects investors are interested in right now. Customers today are not buying a sensor, they are buying a solution. The question they are asking is no longer, Whose lidar has the best spec sheet? It's, Who can help me deliver the end-to-end perception capability that my application needs faster and with less integration risk? That shift is showing up in nearly every RFI and RFQ we see. A customer in the security industry recently put it to us bluntly. They don't want to buy from a hardware company.

Speaker #2: Before I move to the financials, I want to spend a minute on what we are increasingly hearing from customers. In my role bridging the financial and commercial sides of the business, this has become one of the most important strategic aspects investors are interested in right now.

Speaker #2: Customers today are not buying a sensor. They are buying a solution. The question they are asking is no longer, "Whose LiDAR has the best spec sheet?" It's, "Who can help me deliver the end-to-end perception capability that my application needs?" Faster and with less integration risk.

Speaker #2: That shift is showing up in nearly every RFI and RFQ we see. A customer in the security industry recently put it to us bluntly.

Speaker #2: They don't want to buy from a hardware company. They want to buy from the front-end solution provider that integrates everything. That dynamic applies across all of our target markets.

Conor Tierney: They want to buy from the front-end solution provider that integrates everything. That dynamic applies across all of our target markets, it is exactly the model AI has built. Financially, the implication is meaningful. We do not need to absorb the cost or balance sheet impact of acquiring or building those capabilities ourselves to deliver a complete perception solution, a real efficiency advantage as we scale. The proof is in the deal flow. We are seeing a healthy uptick in customer demand for a full end-to-end physical AI solution, not just a standalone sensor. We have been able to assemble those solutions through our partner ecosystem with a speed and breadth that we believe our peers, constrained by what they own internally, cannot match. As our recent customer additions illustrate, this model is working.

Speaker #2: And it is exactly the model AEye has built. Financially, the implication is meaningful. We do not need to absorb the cost or balance sheet impact of acquiring or building those capabilities ourselves to deliver a complete perception solution.

Speaker #2: A real efficiency advantage as we scale. The proof is in the deal flow. We are seeing a healthy uptick in customer demand for a full end-to-end physical AI solution.

Speaker #2: Not just a standalone sensor. We have been able to assemble those solutions through our partner ecosystem with a speed and breadth that we believe are peers constrained by what they own internally cannot match.

Speaker #2: And, as our recent customer additions illustrate, this model is working. Meaningful new programs in defense, infrastructure, and adjacent mobility have come to us through or alongside our partners.

Conor Tierney: Meaningful new programs in defense, infrastructure, and adjacent mobility have come to us through or alongside our partners. Moving on to financials, the Q1 2026 revenue was $101,000, up almost 60% compared to $64,000 in Q1 2025, and up slightly versus Q4 2025. Q1 GAAP operating expenses were $8.9 million compared to $8.3 million in Q4 2025, reflecting higher stock-based compensation and professional fees, alongside continued investment in go-to-market and deployment execution. Q1 non-GAAP operating expenses were $7.4 million, slightly lower than $7.5 million in Q4 2025, primarily due to lower payroll costs, partially offset by increased professional fees.

Speaker #2: Moving on to financials, the first quarter 2026 revenue was $101,000, up almost 60% compared to $64,000 in Q1 2025, and up slightly versus Q4 2025.

Speaker #2: First quarter GAAP operating expenses were $8.9 million, compared to $8.3 million in Q4 2025. This reflects higher stock-based compensation and professional fees, alongside continued investment in go-to-market and deployment execution.

Speaker #2: First quarter non-gap operating expenses were $7.4 million, slightly lower than $7.5 million in Q4 2025. Primarily due to lower payroll costs partially offset by increased professional fees.

Speaker #2: We reported a gap net loss of $8.3 million or 18 cents per share in the first quarter, compared to a gap net loss of $7.3 million or 17 cents per share in Q4 2025.

Conor Tierney: We reported a GAAP net loss of $8.3 million, or $0.18 per share in Q1, compared to a GAAP net loss of $7.3 million, or $0.17 per share in Q4 2025. The increase was primarily driven by higher stock-based compensation and professional fees, partially offset by lower personnel costs. On a non-GAAP basis, our net loss was $6.7 million, or $0.15 per share, essentially flat compared to a non-GAAP net loss of $6.8 million, or $0.15 per share in Q4 2025. Q1 cash burn was $9.2 million, up from $7.5 million in Q4 2025, primarily reflecting Q1 seasonality. Our manufacturing model, built on tier one partnerships rather than owned infrastructure, continues to keep our cash burn among the lowest in the sector.

Speaker #2: The increase was primarily driven by higher stock-based compensation and professional fees, partially offset by lower personnel costs. On a non-gap basis, our net loss was $6.7 million, or 15 cents per share, essentially flat compared to a non-gap net loss of $6.8 million, or 15 cents per share in Q4 2025.

Speaker #2: First quarter cash burn was $9.2 million, up from $7.5 million in Q4 2025. Primarily reflecting Q1 seasonality. Our manufacturing model built on Tier 1 partnerships rather than owned infrastructure continues to keep our cash burn among the lowest in the sector.

Speaker #2: We ended the first quarter with cash, cash equivalents, and marketable securities of approximately $77.2 million, compared to $86.5 million at the end of Q4 2025.

Conor Tierney: We ended Q1 with cash equivalents, and marketable securities of approximately $77.2 million, compared to $86.5 million at the end of Q4 2025. The sequential decrease reflects the deliberate deployment of resources into commercial operations, the go-to-market investment and operational execution required to convert the pipeline we are building. This is planned resource deployment, fully consistent with the guidance we set at the start of 2026, and we are tracking in line with that plan. We are reaffirming our 2026 full-year cash burn target of $30 to $35 million, reflecting planned investment in commercial execution, sales and marketing, and the operational build required to support customers as they move from evaluation into deployment.

Speaker #2: The sequential decrease reflects the deliberate deployment of resources into commercial operations, the go-to-market investment, and operational execution required to convert the pipeline we are building.

Speaker #2: This is planned resource deployment, fully consistent with the guidance we set at the start of 2026. And we are tracking in line with that plan.

Speaker #2: We are reaffirming our 2026 full-year cash burn target of $30 to $35 million, reflecting planned investment in commercial execution sales and marketing, and the operational build required to support customers as they move from evaluation into deployment.

Speaker #2: On a brief housekeeping note, while we are discussing capital, in the days immediately following this call, AEye plans to file a new shelf registration statement with the securities at exchange commission.

Conor Tierney: On a brief housekeeping note while we are discussing capital, in the days immediately following this call, AEye plans to file a new shelf registration statement with the Securities and Exchange Commission. Our existing shelf is expiring, and this filing is a routine replacement, standard course of business. Our strategy has not changed, our capital framework has not changed, and the filing does not reflect any near-term financing intentions. The company remains well-capitalized with runway well into 2028. Our capital structure also remains simplified and strong, with AEye virtually debt-free. That matters directly to the OEMs and industrial customers we are targeting, where multi-year program confidence is a prerequisite for selection. The architectural point Matt made earlier compounds here.

Speaker #2: Our existing shelf is expiring, and this filing is a routine replacement—standard course of business. Our strategy has not changed; our capital framework has not changed, and the filing does not reflect any near-term financing intentions.

Speaker #2: The company remains well capitalized, with runway well into 2028. Our capital structure also remains simplified and strong. With AEye virtually debt-free, that matters directly to the OEMs and industrial customers we are targeting.

Speaker #2: For multi-year program confidence is a prerequisite for selection. And the architectural point Matt made earlier compounds here. The same software-defined platform that lets us tune Apollo to a customer-specific frame rate, range, and field of view is what lets us extend our accessible markets without rebuilding from the ground up each time.

Conor Tierney: The same software-defined platform that lets us tune Apollo to a customer's specific frame rate, range, and field of view is what lets us extend our accessible markets without rebuilding from the ground up each time. STRATOS makes that compounding advantage concrete, a third-generation sensor that reaches new performance tiers without a proportional increase in investment, and one that drops directly into the same partner-led solutions model. Our peers with fixed sensor capability and internally owned software stacks cannot replicate that flexibility without absorbing significant development and integration costs. For customers who need capability without compromise, that equation continues to resonate. Our expectation for 2026 is unchanged. As technical engagements convert into program commitments, we are building the foundation from which a meaningful revenue inflection can follow. Getting there doesn't require outspending the field.

Speaker #2: Stratus makes that compounding advantage concrete at third-generation sensor that reaches new performance tiers without a proportional increase in investment. And one that drops directly into the same partner-led solutions model.

Speaker #2: Our peers with six-sensor capabilities and internally owned software stacks cannot replicate that flexibility without absorbing significant development and integration costs. For customers who need capability without compromise, that equation continues to resonate.

Speaker #2: Our expectation for 2026 is unchanged. As technical engagements convert into program commitments, we are building the foundation from which a meaningful revenue inflection can follow.

Speaker #2: Getting there doesn't require outstanding the field. Apollo's performance lead, our software-defined architecture, and the partner-led model combined with the cost structure built for scale, not overhead, make ours a capital-efficient path to a meaningful revenue inflection.

Conor Tierney: Apollo's performance lead, our software-defined architecture, and a partner-led model, combined with a cost structure built for scale, not overhead, make ours a capital-efficient path to a meaningful revenue inflection. I will now hand it back to Matt for closing remarks.

Speaker #2: I will now hand it back to Matt for closing remarks.

Speaker #1: Thank you, Connor. As we look ahead to the remainder of 2026, the focus is unchanged. Convert engagements into deployment. The physical AEye ye tailwinds driving this market are real, and accelerating.

Matt Fisch: Thank you, Conor. As we look ahead to the remainder of 2026, the focus is unchanged. Convert engagements into deployments. The physical AI tailwinds driving this market are real and accelerating. Our technology continues to differentiate us. Our balance sheet provides the stability to execute. The partnerships we have built, from NVIDIA to LightOn to Syntech and others, lay the foundation for commercial scale. We are seeing the engagement activity and conversion momentum that give us confidence in our trajectory, and we look forward to demonstrating that progress in the quarters ahead. Operator, we are now ready to open the floor for questions.

Speaker #1: Our technology continues to differentiate us, our balance sheet provides the stability to execute, and the partnerships we have built, from NVIDIA to LightOn to Syntech and others, lay the foundation for commercial scale.

Speaker #1: We are seeing the engagement activity and conversion momentum that give us confidence in our trajectory. And we look forward to demonstrating that progress in the quarters ahead.

Speaker #1: Operator, we are now ready to open the floor for questions.

Operator: We will now begin the question and answer session. For this session, we will allow up to three questions per person. If you would like to ask a question, please press star key then number one on your telephone keypad. To withdraw your question, press star key then number one again. Your first question comes from the line of Poe Fratt. Please go ahead.

Speaker #3: We will now begin the question and answer session. For this session, we will allow up to three questions per person. If you would like to ask a question, please press star key, the number one on your telephone keypad.

Speaker #3: To withdraw your question, press star key, the number one again. Your first questions come from the line of OFRAT, please go ahead.

Poe Fratt: Hey, can you just update us on the collaboration and partnership with NVIDIA, and then maybe give us a couple milestones that we should be looking for over the rest of the year on furthering that partnership?

Speaker #1: Hey, can you just update us on the collaboration and partnership with NVIDIA? And then maybe give us a couple of milestones that we should be looking for over the rest of the year on furthering that partnership?

Speaker #4: Hey, welcome back, both. Good to hear your voice. Look, I'd summarize the relationship at this point as strong and progressing. We talked about in Q1 that we had integrated with their latest platform, NVIDIA Drive AGX4, as well as joining the NVIDIA HALOS AI Lab, which demonstrates our commitment and NVIDIA's support to automotive-grade solutions.

Matt Fisch: Hey, welcome back, Bo. Good to hear your voice. I'd summarize the relationship at this point as strong and progressing. We talked about in Q1 that we had integrated with their latest platform, NVIDIA DRIVE AGX4, as well as joining the NVIDIA Halos AI Lab, which demonstrates our commitment and NVIDIA support to automotive-grade solution. Even today, we've got a team out at NVIDIA's headquarters down in Silicon Valley. They're testing. They started lunchtime. They're not leaving there until midnight, testing the latest Apollo software update. Really, it's just about validation. The horsepower and the technology that NVIDIA brings to the table, they're so prolific with their platform in the automotive industry. What this is about is validating our capabilities and performance to be ready for that OEM integration phase.

Matt Fisch: Hey, welcome back, Poe. Good to hear your voice. I'd summarize the relationship at this point as strong and progressing. We talked about in Q1 that we had integrated with their latest platform, NVIDIA DRIVE AGX4, as well as joining the NVIDIA Halos AI Lab, which demonstrates our commitment and NVIDIA support to automotive-grade solution. Even today, we've got a team out at NVIDIA's headquarters down in Silicon Valley. They're testing. They started lunchtime. They're not leaving there until midnight, testing the latest Apollo software update. Really, it's just about validation. The horsepower and the technology that NVIDIA brings to the table, they're so prolific with their platform in the automotive industry. What this is about is validating our capabilities and performance to be ready for that OEM integration phase.

Speaker #4: Even today, we've got a team out at NVIDIA's headquarters down in Silicon Valley. They're testing; they started lunchtime. They're not leaving there until midnight, testing the latest Apollo software update.

Speaker #4: And really, it's about validation. The horsepower and the technology that NVIDIA brings to the table, they're so prolific with their platform, the automotive industry.

Speaker #4: What this is about is validating our capabilities and performance to be ready for that OEM integration phase. And if you check the NVIDIA ecosystem website today, we're at the top of the list.

Matt Fisch: You know, if you check the NVIDIA ecosystem website today, we're at the top of the list. Our performance is validated, and we're the top performer on that list today. Look what we can, you know, think about, let's just say, between now and the end of the year. There's a validation process. I think that's the key task for us to be officially validated on NVIDIA DRIVE AGX, and that's gonna be our focus. For example, it's one of the main reasons why we're out there spending 12 hours today, so we can continue that validation process, get the feedback from NVIDIA, make the product stronger, tune it better, and be ready for that OEM integration on their platform.

Speaker #4: Our performance is validated, and we're the top performer. On that list today, so look what we can think about. Let's just say between now and the end of the year, there's a validation process.

Speaker #4: I think that's the key task for us to be officially validated on NVIDIA AGX Drive for, and that's going to be our focus. And for example, it's one of the main reasons why we're out there spending 12 hours today so we can continue that validation process, get the feedback from NVIDIA, make the product stronger, tune it better, and be ready for that OEM integration on their platform.

Speaker #1: Great. That's helpful. And then when you look at your customer engagements, up to 21 revenue-generating—I I think shipments—can you just give us a little more color or detail on the commercial traction within certain key markets?

Poe Fratt: Great. That's helpful. When you look at your customer engagements, up to 21 revenue generating, I think you shipments, can you just give us a little more color or detail on the commercial traction within certain key markets? Maybe, Matt, if you could highlight which markets have the shortest selling time versus other markets.

Speaker #1: And then maybe, Matt, if you could highlight which markets have the shortest selling time versus other markets?

Speaker #4: Sure, absolutely. Thanks, Paul. Great question. Look, we're super excited. We're at basically at the highest level of commercial engagement we've ever had in this company.

Matt Fisch: Sure. Absolutely. Thanks, Poe. Great question. Look, we're super excited. We're at basically the highest level of commercial engagement we've ever had in this company. I will tell you, we've added in that 31% growth, customers in every one of those six market segments that Conor talked about earlier. Let's just jump into it. I mean, there's a lot of segments to cover, but let's focus on really a couple of key highlights first. One is defense. That's a real major standout. You know, first of all, our detection range, we believe, is best in industry. The defense guys and the aerospace guys and the ground vehicle part of that, they love that aspect of AEye's Apollo solution.

Speaker #4: And I will tell you, we've added in that 31% growth, customers in every one of those six market segments that Connor talked about earlier.

Speaker #4: So let's just jump into—I mean, there's a lot of segments to cover, but let's focus on a really a couple of key highlights first.

Speaker #4: One is defense. That's a real major standout. First of all, our detection range, we believe, is best in the industry. The defense guys and the aerospace guys and the ground vehicle part of that, they love that aspect of AI's Apollo solution.

Matt Fisch: The software-defined lidar piece allows us to be super flexible across different use cases, let's just say, in the defense market, for today, and really, you know, point out the evidence we talked about in the earnings call. We're working with many major US defense primes, there's one in particular that we called out, where not only we're getting repeat business, but they are scaling now Apollo across multiple of their business units. We do that essentially with a new software configuration. There's no hardware change required. By the way, that expands to the six market segments that we mentioned. We can work across each of those without requiring a new hardware build or major hardware changes. You know, that's pretty big.

Speaker #4: And the software-defined LiDAR piece allows us to be super flexible across different use cases. Let's just say in the defense market for today and really point out the evidence we talked about in the earnings call.

Speaker #4: And we're working with a many major US defense prime—there's one in particular that we called out. We're not only getting repeat business, but they are scaling now Apollo across multiple of their business units.

Speaker #4: And we do that essentially with a new software configuration. There's no hardware change required. And by the way, that expands to the six market segments that we mentioned.

Speaker #4: We can work across each of those without requiring a new hardware build or major hardware changes. And so that's pretty big. I mean, in terms of market velocity, we are pleasantly surprised by how fast defense is moving.

Matt Fisch: I mean, in terms of market velocity, we are pleasantly surprised by how fast defense is moving. There's a new breed of players in the market also that are moving things along very quickly. I would just highlight that as, you know, high velocity market versus what we might expect traditionally. Look, in other areas as well, we're now, you know, we have our 4Sight. This is our full perception solution. Conor talked about this earlier. It's not just about the sensor, it's about being able to collect data and then act. We have our 4Sight solution up on a traffic intersection in the Bay Area today, demonstrating that end-to-end capability. There'll be more to come in that space for sure.

Speaker #4: There's a new breed of players in the market also, that are moving things along very quickly. I would just highlight that as high-velocity market versus what we might expect to traditionally.

Speaker #4: But look, in other areas as well, we're now—we have our Optus. This is our full perception solution. Connor talked about this earlier. It's not just about the sensor.

Speaker #4: It's about being able to collect data and then act—and we have our Optus solution up on a traffic intersection. In the Bay Area, today, demonstrating that end-to-end capability.

Speaker #4: There'll be more to come in that space for sure. And we also just completed in the intelligent traffic system space a POC in Australia.

Matt Fisch: We also just completed in the intelligent traffic system space, a POC in Australia where they were trying to count trucks and delays in trucking and parking lots and manage fleet capacity. They tried to do it with camera and radar, and then they couldn't make it work. We've got them up and running now. The end customer has seen it and they're very happy with it. Look, it's about number one, customers are coming to us for that industry-leading detection range, 1 km for Apollo and 1.5 km for STRATOS. Secondly, that software defined element of our product not only allows us to scale across market segments, but it also scaling within customers.

Speaker #4: Where they were trying to count trucks and delays and trucking and parking lots and manage feet capacity, and they tried to do it with camera and radar.

Speaker #4: And then they couldn't make it work. And we've got them up and running now. The end customer has seen it. And they're very happy with it.

Speaker #4: So look, it's about number one: customers are coming to us for that industry-leading detection range—one kilometer for Apollo and 1.5 kilometers for Stratus.

Speaker #4: And then secondly, that software-defined element of our product now not only allows us to scale across market segments, but it also is scaling within customers.

Speaker #4: And I think those two attraction and differentiation points are really propelling us forward here.

Matt Fisch: I think, those two attraction and differentiation points are really propelling us forward here.

Speaker #5: Yeah, I think, Paul, you also brought up the question about lead times, and what we would say is probably two distinct patterns there, certainly on the automotive side.

Conor Tierney: Yeah, I think, Paul, you also brought up the question about lead times. What we would say is probably two distinct patterns there. Certainly on the automotive side, we're seeing longer lead times. It could take maybe 2 to 3 years to get to SOP. On non-automotive, that timeline has certainly accelerated. That said, we're still seeing at least 6 to 12 months. It can vary between customers. Some customers, some sectors move quicker, others move slower. It's just, it all depends on the end customer and what their goals and priorities are.

Conor Tierney: Yeah, I think, Poe, you also brought up the question about lead times. What we would say is probably two distinct patterns there. Certainly on the automotive side, we're seeing longer lead times. It could take maybe 2 to 3 years to get to SOP. On non-automotive, that timeline has certainly accelerated. That said, we're still seeing at least 6 to 12 months. It can vary between customers. Some customers, some sectors move quicker, others move slower. It's just, it all depends on the end customer and what their goals and priorities are.

Speaker #5: We're seeing longer lead times; it could take maybe two to three years to get to SOP. But on non-automotive, that timeline is certainly accelerated.

Speaker #5: That said, we're still seeing at least 6 to 12 months. Now, it can vary between customers. Some customers, some sectors move quicker. Other move slower.

Speaker #5: It's just it all depends on the end customer and what their goals and priorities are.

Speaker #4: Yeah. Hey, Paul, I forgot to mention Syntec as well. Another commercial partner we've added. This quarter, just further highlighting the expansion across multiple players in the defense space.

Matt Fisch: Hey, Paul, I forgot to mention Syntech as well, another commercial partner we've added this quarter, just further highlighting the expansion across multiple players in the defense space.

Matt Fisch: Hey, Poe, I forgot to mention Syntech as well, another commercial partner we've added this quarter, just further highlighting the expansion across multiple players in the defense space.

Speaker #1: Great. Are you in discussions with any additional partners, Matt? Should we see an expansion like, say, the defense industry? It's huge. Are there others out there that you're looking at partnering with?

Poe Fratt: Great. Are you in discussions with any additional partners, Matt? Should we see an expansion like, say, you know, the defense industry, you know, is huge. Are there others out there that you're looking at partnering with?

Speaker #4: Yeah, absolutely. I count that on two fronts, Paul. One is just the integrator or the end customer themselves. As we mentioned, in the script, we've got like a 40% growth in our pipeline.

Matt Fisch: Yeah, absolutely. I count that on two fronts, Paul. One is just the integrator or the end customer themselves. As we mentioned in the script, we've got like a 40% growth in our pipeline. That's just a leading indicator to entering the POC phase. Absolutely, across all of those segments. The second piece is, let's talk about Optus. This is where we have four partners today. Again, just if you take a step back above lidar and into the overall perception and intelligence solution, that's where those four partners are coming in, and they're enabling us to drop into each of those segments very quickly. We have an open platform. It's based on the NVIDIA Jetson platform. Makes it very easy for developers to work with it.

Speaker #4: So that's just a leading indicator to entering the POC phase. Absolutely across all of those segments. And then the second piece is let's talk about Optus.

Speaker #4: This is where we have four partners today. And again, just if you take a step back perception and intelligence solution, that's where those four partners are coming in.

Speaker #4: And they're enabling us to drop into each of those segments very quickly. We have an open platform. It's based on the NVIDIA Jetson platform.

Speaker #4: Makes it very easy for developers to work with it. And even more importantly, as Connor had pointed out, in the finance section, as we're not having to—we're not constrained by what software we develop in-house.

Matt Fisch: Even more importantly, as Conor had pointed out, in the finance section, is we're not constrained by what software we develop in-house. We've got these four guys that enable us to jump into these multiple market segments very quickly. Throughout the rest of the year, I think, you can look forward to expansion of those number of software partnerships as well.

Speaker #4: We've got these four guys that are enabling us to jump into these multiple market segments very quickly. And throughout the rest of the year, I think you can look forward to expansion of those number of software partnerships as well.

Speaker #1: Great. Very helpful. Thanks, Matt. Thanks, Connor.

Poe Fratt: Great. Very helpful. Thanks, Matt. Thanks, Conor.

Speaker #5: Thanks, Paul.

Conor Tierney: Thanks, Paul.

Conor Tierney: Thanks, Poe.

Speaker #6: Your next question comes from the line of Casey Ryan of AmerX. Please go ahead.

Operator: Your next question comes from the line of Casey Ryan of WestPark Capital. Please go ahead.

Casey Ryan: Matt, Connor, good afternoon. Thanks for the great update. There's a lot to chew on here. I actually just wanted to jump into the trucking opportunity. I think independently, we've actually been hearing some good things about your sensor performance in that space. With those opportunities in trucking, are they, would they ever be displacing internal lidar production or is it all kind of greenfield new type of truck builds for various manufacturers? How would you describe kind of the nature of the opportunity with some of the truck possibilities?

Speaker #4: Matt Connor, good afternoon. Thanks for the great update. There's a lot to chew on here. I actually just wanted to jump into the trucking opportunity.

[Analyst]: Matt, Connor, good afternoon. Thanks for the great update. There's a lot to chew on here. I actually just wanted to jump into the trucking opportunity. I think independently, we've actually been hearing some good things about your sensor performance in that space. With those opportunities in trucking, are they, would they ever be displacing internal lidar production or is it all kind of greenfield new type of truck builds for various manufacturers? How would you describe kind of the nature of the opportunity with some of the truck possibilities?

Speaker #4: I think, independently, we've actually been hearing some good things about your sensor performance in that space. So, with those opportunities in trucking, are they—would they ever be displacing internal LiDAR production?

Speaker #4: Or is it all kind of greenfield, new type of truck builds for various manufacturers? How would you describe kind of the nature of the opportunity with some of the truck possibilities?

Speaker #5: Hey, Casey. Thanks. And welcome aboard your new assignment here. We appreciate the coverage. Also, thank you for that. Look, it is true. We talked in the script evaluation with multiple L4 trucking players.

Matt Fisch: Hey, Casey. Thanks. Welcome aboard your new assignment here. We appreciate the coverage.

Casey Ryan: Absolutely.

[Analyst]: Absolutely.

Matt Fisch: Thank you for that. Look, it's true, we talked in the script about Apollo sensors now in evaluation with multiple L4 trucking players. I think this has been further catalyzed with some of the announcements out there about big investments and capital being injected into that market. I would say that it's a mix of both of those things. You know, our concerns out there in the market today about, you know, we'll call it supply chain resiliency, where the sensors are built and where the IP.

Speaker #5: And I think this has been further catalyzed by some of the announcements out there about big investments and capital being injected into that market.

Speaker #5: I would say that it's a mix of both of those things. There are concerns. Out there in the market today about—we'll call it supply chain resiliency.

Speaker #5: Where the sensors are built, and where the IP comes from. And this has opened up new doors for us. There are transitions happening away from supply chains that may be considered much higher risk.

Matt Fisch: comes from. This has opened up new doors for us. There are transitions happening away from, you know, supply chains that may be considered, much higher risk. That's been one source. You know, the second piece is, I'll call it more complementary, where either, one of those guys is sourcing not sourcing, but now evaluating, Apollo because of the range. We do really well at seeing far ahead, even as you mentioned, you need to do that for heavy vehicles because they have a longer-

Speaker #5: That's been one source. And the second piece is—I'll call it more complementary—where either one of those guys is sourcing—not sourcing, but now evaluating Apollo because of the range we do really well at CM4 ahead.

Speaker #5: And as you mentioned, you need to do that for heavy vehicles because they have a longer braking distance. And in some cases, it's complementing their existing LiDAR solution.

Matt Fisch: braking distance. In some cases, it's complementing their existing lidar solution. You know, trucks are maybe objects that has to worry about lots of different situations, not just driving down the highway, but maybe pulling off on the shoulder and then having to pull back on safely. One of the learnings we see coming out of that space is they need more coverage from lidar.

Speaker #5: Truck's a big object that has to worry about lots of different situations, not just driving down the highway, but maybe pulling off on the shoulder and then having to pull back on safely.

Speaker #5: And one of the learnings we see coming out of that space is they need more coverage from LiDAR. And that's been helping us as well.

Matt Fisch: That's been helping us as well.

Casey Ryan: Um-

[Analyst]: Um-

Conor Tierney: Just one thing to add to that, Casey.

Speaker #5: I just wanted to add to that, Casey—just.

Conor Tierney: Just one thing to add to that, Casey.

Casey Ryan: Oh, yeah. Please go ahead.

[Analyst]: Oh, yeah. Please go ahead.

Speaker #4: Oh, yeah. Please, go ahead.

Conor Tierney: I would just say, look, the natural conclusion is this is an L4 opportunity, but there has been some interest on the L2 side. You know, obviously that's a more cost competitive market, but we've seen a certain amount of interest there as well. It's, you're talking about L4 and L2 potentially as well.

Speaker #5: I would just say, look, the natural conclusion is this is an L4 opportunity. But there has been some interest on the L2 side. Obviously, that's a more cost-competitive market.

Speaker #5: But we've seen a certain amount of interest there as well. So it's—you're talking about L4 and L2 potentially as well.

Speaker #4: Got it. And then, not to beat a dead horse here, but in many truck deployments or sort of architectures, there's kind of a long-range sensor and a short-range sensor.

Casey Ryan: Got it. You know, not to beat a dead horse here, but in many truck deployments or, you know, sort of architectures, there's kind of a long range sensor and a short range sensor. It sounds like you guys might be able to fulfill both of those needs with your product portfolio.

[Analyst]: Got it. You know, not to beat a dead horse here, but in many truck deployments or, you know, sort of architectures, there's kind of a long range sensor and a short range sensor. It sounds like you guys might be able to fulfill both of those needs with your product portfolio.

Speaker #4: It sounds like you guys might be able to fulfill both of those needs with your product portfolio.

Conor Tierney: Yeah. I'd say one thing that we really have going for us is the tunability of the sensor itself, the fact that it's customizable.

Speaker #5: Yeah, yeah. I'd say one thing that we really have going for us is the tunability of the sensor itself. The fact that it's customizable.

Conor Tierney: Yeah. I'd say one thing that we really have going for us is the tunability of the sensor itself, the fact that it's customizable.

Speaker #5: And what customers really like is the fact that we can do both long-range and short-range. Obviously, when you're on a highway, long-range is paramount.

Conor Tierney: What customers really like is the fact that we can do both long range and short range. Obviously, when you're on a highway, long range is paramount. It's critical, right? That you have the braking distance. Sometimes, right, in urban environments, you need a wider field of view, right? You're maybe looking 100 meters down the road.

Speaker #5: It's critical, right, that you have the braking distance. But sometimes, right, in an urban environment, you need a wider field of view, right? If you're maybe looking 100 meters down the road, so the fact that we could have multi-scan patterns embedded on the device and you could toggle back between different modes is really a game changer.

Conor Tierney: The fact that we could have multi scan patterns embedded on the device, and you could toggle back between different modes is really a game changer. I don't think there's anybody out in the market that can offer that level of customization. That's something that appeals a lot to the customers that we speak with.

Speaker #5: And I don't think there's anybody out in the market that can offer that level of customization. And so that's something that appeals a lot to the customers that we speak with.

Speaker #4: Yeah, okay. Terrific. Yeah, that's very exciting—something that I think we all have our eye on.

Casey Ryan: Yeah. Okay. Terrific. Yeah, that's a very exciting you know, something that I think we all, I.

[Analyst]: Yeah. Okay. Terrific. Yeah, that's a very exciting you know, something that I think we all, I.

Conor Tierney: Sorry, Casey. I guess the point I'm trying to make here is we don't necessarily have to do a hardware change. That's certainly something we could do, but we can solve the problems we solve. Yeah.

Speaker #5: Oh, I'm trying to make sure. Yeah, sorry, Casey. The point I'm trying to make here is we don't necessarily have to do a hardware change.

Speaker #5: That's certainly something we could do, but we can solve the problem through software. Yeah.

Speaker #4: Yeah, that's sort of the good answer, is that basically you guys can sort of address, sort of a one-stop shop, essentially, for A, a customer.

Casey Ryan: Yeah. Which, that's sort of the good answer is that basically you guys can sort of address, you know, sort of a one-stop shop essentially for a customer.

[Analyst]: Yeah. Which, that's sort of the good answer is that basically you guys can sort of address, you know, sort of a one-stop shop essentially for a customer.

Speaker #5: Exactly.

Conor Tierney: Yeah.

Speaker #4: Okay. So jumping over to automotive, it's exciting to hear that people at least are thinking about L3 and L4 offerings at some point. Do you see LiDAR being consumed as part of sort of driver safety packages still?

Casey Ryan: Okay. Jumping over to automotive, it's exciting to hear that people at least are thinking about L3 and L4, you know, offerings at some point. Do you see lidar being consumed as part of sort of driver safety packages still? Or are you hearing and meeting customers who are talking about offering some sort of vehicle with L4 autonomy and sort of offering autonomy as a feature versus say, just, you know, super good driver safety tools and safety packages?

[Analyst]: Okay. Jumping over to automotive, it's exciting to hear that people at least are thinking about L3 and L4, you know, offerings at some point. Do you see lidar being consumed as part of sort of driver safety packages still? Or are you hearing and meeting customers who are talking about offering some sort of vehicle with L4 autonomy and sort of offering autonomy as a feature versus say, just, you know, super good driver safety tools and safety packages?

Speaker #4: Or are you hearing and meeting customers who are talking about offering some sort of vehicle with L4 autonomy and sort of offering autonomy as a feature versus, say, just super good driver safety tools and safety packages?

Speaker #5: It's a mix of both. And I think you'll see that—again, I had mentioned earlier about the L4 trucking space—that there's been a lot of capital going in.

Matt Fisch: It's a mix of both.

Matt Fisch: I think you'll see that, you know, again, I had mentioned earlier about the L4 trucking space, that there's been a lot of capital going in. Now you're seeing these partnerships with Uber, for example.

Speaker #5: Now you're seeing these partnerships with Uber, for example, to leverage some of those technology providers to bring capability outside of trucking into, say, robotaxis or other markets.

Matt Fisch: technology providers, to bring capability outside of trucking into, say, robotaxis or other markets. We're definitely seeing a catalyst there. I think there have been a number of OEMs out there that talked about what they call hands-off, eyes-off driving. Maybe we consider that more into the L3 range. Again, I have to really call out that the concern about supply chain resiliency has really, you know, brought a number of customers to our front door because of, you know, concerns and risk in that area, certainly in the level 3 space. Also a little bit of L2 and ADAS, as Conor had mentioned, solve some corner conditions that currently aren't efficiently covered by like ultrasounds and, you know, panoramic cameras. It's a mix of all three.

Speaker #5: We're definitely seeing a catalyst there. And then I think there have been a number of OEMs out there that talked about what they call hands-off, eyes-off driving.

Speaker #5: Maybe we consider that more into the L3 range. And again, I have to really call out that the concern about supply chain resiliency has really brought a number of customers to our front door because of concerns and risk in that area, certainly in the Level 3 space.

Speaker #5: And also a little bit of L2 and 8S, as Conor had mentioned, to solve some corner conditions that currently aren't efficiently covered by ultrasonics and panoramic cameras.

Speaker #5: So, it's a mix of all three. The sweet spot's definitely in the L3 side—eyes-off, hands-off. But you've got all three in the mix.

Matt Fisch: The sweet spot's definitely in the L3 side, eyes-off, hands-off, but, you know, you've got all three in the mix.

Speaker #4: Yeah, okay. That's very exciting—I'm happy to hear about that. And yeah, I mean, certainly, you're right. Kind of the new flow around Robotaxi and L4 from a whole bunch of providers has certainly ramped up quite a bit.

Casey Ryan: Yeah. Okay. That's very exciting. I'm happy to hear about that. Yeah, I mean, certainly you're right, kind of the new slope around robotaxi and L4 from a whole bunch of providers is certainly ramped up quite a bit. In defense and specifically in drones, I think there's an issue around a topic around the weight of a lidar sensor. I wonder if you could just talk about the weight of your solutions and if, you know, there's like a roadmap to make it, you know, a certain model lighter or sort of where you guys sit on that weight front in terms of consideration for potentially all defense applications, but primarily drones, obviously.

[Analyst]: Yeah. Okay. That's very exciting. I'm happy to hear about that. Yeah, I mean, certainly you're right, kind of the new slope around robotaxi and L4 from a whole bunch of providers is certainly ramped up quite a bit. In defense and specifically in drones, I think there's an issue around a topic around the weight of a lidar sensor. I wonder if you could just talk about the weight of your solutions and if, you know, there's like a roadmap to make it, you know, a certain model lighter or sort of where you guys sit on that weight front in terms of consideration for potentially all defense applications, but primarily drones, obviously.

Speaker #4: In defense and specifically in drones, I think there's an issue around—it's not an issue. A topic around the weight of a LiDAR sensor. And I wonder if you could just talk about the weight of your solutions and if there's a roadmap to make it a certain model lighter or sort of where you guys sit on that weight front in terms of consideration for potentially all defense applications, but primarily drones, obviously.

Speaker #5: Yeah, we're really light, and we fit into that envelope quite well. I'm not sure if we published the specs on that, but we're definitely at the low end of the spectrum on weight.

Matt Fisch: Yeah. We're really light, and we fit into that envelope, quite well. I'm not sure if we published the specs on that.

Matt Fisch: We're definitely at the low end of the spectrum on weight. Also keep in mind that the kind of drones that you and I may sort of be directly exposed to may not be the kind of drones, necessarily where, you know, you need long range lidar. For example, drones that travel at very high speeds, so I'm talking about over 200 miles per hour. Because they're at that kind of speed, they need to see 1 kilometer out or 1.5 kilometers out.

Speaker #5: Also, keep in mind that the kind of drones that you and I may sort of be directly exposed to may not be the kind of drones necessarily where you need long-range LiDAR, for example, drones that travel at very high speeds, I'm talking about over 200 miles per hour.

Speaker #5: And because they're at that kind of speed, they need to see a kilometer out or a kilometer and a half out. And they're not the drones that Amazon uses to drop off packages.

Matt Fisch: Not the, you know, the drones that Amazon uses to drop off packages. They're much more sophisticated, you know, surveillance and other type of drones. It's, we're absolutely fine in those, and we're light enough to be considered for stronger drones as well. The other hot topic that's cropping up is drone detection.

Speaker #5: They're much more sophisticated surveillance and other types of drones, so we're absolutely fine in those. And we're light enough to be considered for stronger drones as well.

Speaker #5: The other hot topic that's cropping up is drone detection, and being able to assist intervention systems to track when you have an inbound drone, which are pretty small.

Matt Fisch: Being able to assist an intervention system to track when you have an inbound drone, which are, you know, pretty small. Those kind of drones tend to be very small, coming in, and you wanna get them while they're very far out. That's again, where the defense primes are coming to us because of the long range that we have.

Speaker #5: Those kind of drones tend to be very small coming in. And you want to get them while they're very far out. And that's, again, where the defense primes are coming to us because of the long-range that we have.

Speaker #4: Okay. Good. Well, that's very exciting, actually. And then just one last little smaller sort of, I guess, it's not technical question, but you guys have talked about a $30 million contract opportunity for some longer period of time.

Casey Ryan: Okay, good. Well, that's very, very exciting actually. Just one last little, smaller sort of, I guess it's not technical question, but, you guys have talked about a $30 million, you know, contract opportunity over some longer period of time. I just wonder if that customer pulled some units or was part of the commercial count in Q1 and/or if you expect them to be part of Q2.

[Analyst]: Okay, good. Well, that's very, very exciting actually. Just one last little, smaller sort of, I guess it's not technical question, but, you guys have talked about a $30 million, you know, contract opportunity over some longer period of time. I just wonder if that customer pulled some units or was part of the commercial count in Q1 and/or if you expect them to be part of Q2.

Speaker #4: I just wonder if that customer pulled some units or was part of the commercial count in one queue, and/or if you expect them to be part of queue two.

Speaker #5: Yeah, there’s certainty in that count number. So the 20 customers—what I would say is that customer itself is probably not going to be a meaningful contributor to revenue this year.

Conor Tierney: Yeah. They're certainly in that count number, so the 20 customers.

Casey Ryan: Okay.

[Analyst]: Okay.

Conor Tierney: What I would say is that customer itself is probably not going to be a meaningful contributor to revenue this year. I think the revenue is probably a little bit further out in time.

Speaker #5: I think the revenue is probably a little bit further out in time. And so, that said, what I would say is, since we made that announcement—it was almost over a year ago now—there's been more customers that have come into the mix, and more customers that have moved pretty quickly through that POC phase.

Casey Ryan: Okay

[Analyst]: Okay

Conor Tierney: that said, what I would say is since we made that announcement, it was almost over a year ago now, there's been more customers that have come into the mix and more customers that have moved pretty quickly through that POC phase. What we're seeing now is probably more nearer term opportunities with other customers. That's probably what's gonna really drive revenue potential for this year.

Speaker #5: So, what we're seeing now is probably more near-term opportunities with other customers, and that's probably what's really driving revenue potential for this year.

Speaker #4: Yeah, okay. Terrific. Well, this is really a super, very good, encouraging update, and I appreciate the time. I look forward to more as we go through the year.

Casey Ryan: Yeah. Okay. Terrific. Well, this is really a super, very good encouraging update, and I appreciate the time and, look forward to more as we go through the year. Thank you.

[Analyst]: Yeah. Okay. Terrific. Well, this is really a super, very good encouraging update, and I appreciate the time and, look forward to more as we go through the year. Thank you.

Speaker #4: Thank you.

Speaker #5: All right. Thanks, Casey.

Conor Tierney: All right. Thanks, Casey.

Speaker #3: Take care, Casey. Thank you.

Matt Fisch: Take care, Casey. Thank you.

Speaker #1: Your next question comes from Richard Shannon of Craig Hallum. Please go ahead.

Operator: Your next question comes from Richard Shannon of Craig-Hallum. Please go ahead.

Speaker #4: Well, great. Thanks, Matt and Connor, or, for taking my questions. Jump down a little late, so I may have missed some of the prepared remarks here.

Richard Shannon: Well, great. Thanks, Matt and Conor, for taking my questions. Jumped on a little late, so I may have missed some of the prepared remarks here, so I hope I don't repeat some past questions here. I did wanna touch on one of the key themes here of the press release here today about the engagement on the automotive side here, particularly with OEMs that are reengaging on L4 and L3 roadmaps here. Would love to get some dynamics and understanding of those dynamics going on here, and maybe you can elaborate on how many RFIs and how fast you think they'll move to RFQ in later stages.

Speaker #4: So I hope I don't repeat some past questions here. But I did want to touch on one of the key themes here in the press release here today about engagement and the automotive side here, particularly with OEMs that are re-engaging on L4 and L3 roadmaps here.

Speaker #4: Would love to get some dynamics and understanding of those dynamics going on here, and maybe you can elaborate on how many RFIs and how fast do you think they'll move to RFQ in later stages.

Speaker #3: Yeah, let me start with this. And I think Conor will probably follow on here. What I had mentioned earlier, Richard, did just come up in the Q&A, which is: what is driving some of this increase in attention?

Matt Fisch: Yeah, let me start with this, and I think Conor will probably follow on here. What I had mentioned earlier, Richard, this did come up in the Q&A, which is, you know, what is driving some of this increase in attention? I think it's two pieces. Mainly one is that you see a lot of funding coming into tech providers that, you know, they have to deal with Uber, for example. There's quite a few of them that are driving increased interest and velocity in level 4 robotaxis. That's one part of it.

Speaker #3: And I think it's two pieces. Mainly, one is that you see a lot of funding coming into tech providers, that they have to deal with Uber, for example.

Speaker #3: There's quite a few of them. That are driving increased interest in velocity in Level 4 Robotaxis. So that's one part of it. The other is we see definitely a growing concern over supply chain resilience and taking risks in those areas.

Matt Fisch: The other is, we see definitely a growing concern over supply chain resilience and taking risks in those areas, and that's, you know, shifted business, shall we say, as those, you know, passenger vehicle OEMs start, you know, waking up and their L3 programs are coming online. You know, those are the key drivers. I think we said earlier in the script, the number of RFIs coming in has definitely increased. You know, we've got out of the business of predicting OEM schedules, because they're, you know, some of these have come and gone. You know, we're just gonna keep an eye on it.

Speaker #3: And that’s shifted business, shall we say, as those passenger vehicles—the passenger vehicle OEMs—start waking up. And their L3 programs are coming online.

Speaker #3: Those are the key drivers. I think we said earlier in the script, the number of RFIs coming in has definitely increased, and we've got out of the business of predicting.

Speaker #3: OEM schedules because they're some of these have come and gone. And we're just going to keep an eye on it quite honestly. We're not we've got enough in our manufacturing pipeline and readiness to hit the switch and get going with the device production when that time comes.

Matt Fisch: Quite honestly, we're not, you know, we've got enough in our manufacturing pipeline and readiness to hit the switch and get going with the device production when that time comes. We'll expect a little bit of heads-up on this, our lead times and our risk wise are lined up with, you know, any earliest possible timeline that we can imagine. We just, we don't know. It's been very unpredictable, quite honestly.

Speaker #3: We'll expect a little bit of heads up on this. But our lead times and our risk bias are lined up with any earliest possible timeline.

Speaker #3: That we can imagine. But we just—we don't know. It's been very unpredictable, quite honestly.

Speaker #2: Yeah, the only thing I'd add to Matt is just the fact that we can go in-cabin, behind the glass, right? That seems to be a big value prop for the OEMs.

Conor Tierney: Yeah. The only thing I'd add to Matt's is just the fact that we can go in cabin behind the glass, right? That seems to be a big value prop for the OEMs, obviously the aesthetics of being able to do that and then have the windshield basically as a way to, you know, protect the sensor itself and obviously clean it. That's a really interesting value prop for the OEMs and something that certainly differentiates us.

Speaker #2: Obviously, the aesthetics of being able to do that, and then have the windshield basically to protect the sensor itself—and, obviously, to keep it clean.

Speaker #2: So those are that's a really interesting value prop for the OEMs and something that's certainly differentiates us.

Speaker #3: Yeah. Two other things, Richard. One is, what activity is happening today? Is data collection a big part of integration of LiDAR? Is training the AI and integrating to the software?

Matt Fisch: Yeah. Two other things, Richard. One is, you know, what activity is happening today is data collection. A big part of integration of lidar is training the AI and integrating to the software. That's what's been unpredictable in terms of conclusion of those activities. Secondly, you know, we just came through a major supply chain audit in the last 6 months and really digging in some cases down to glass and sand, where raw materials and intermediate components are coming from just to make sure that they have options on the supply chain side. We've been very busy with those two activities of late.

Speaker #3: And that's what's been unpredictable in terms of conclusion of those activities. And then secondly, we just came through a major supply chain audit in the last six months.

Speaker #3: And really digging in, in some cases down to glass and sand, where raw materials and intermediate components are coming from, just to make sure that they have options on the supply chain side.

Speaker #3: We've been very busy with those two activities of late.

Speaker #4: Okay, great detail there, guys. Thank you. The second one is just on the general customer engagement here. Glad to see the customer count moving up nicely here from, I think, 16 to 21 here, and actually, roughly the same question a couple of different ways here.

Richard Shannon: Okay. Great, great detail there, guys. Thank you. Second one is just on the general, customer engagement here. Glad to see the customer count moving up nicely here from 16 to 21 here. Can I ask you this? Roughly the same question a couple different ways here, one of which is just going to customer count, if you can elaborate and describe which end markets the incremental 5 have come from here. Where would you describe where, you know, where the biggest, you know, dynamics around engagement have been going that are filling the early part of the pipeline here as well?

Speaker #4: One of which is specifically on the customer count. If you can elaborate and describe which end markets the incremental 5 have come from here.

Speaker #4: And then, where would you describe where the biggest dynamics around engagement have been going that are filling the early part of the pipeline here as well?

Speaker #3: Yeah, I mean, I think if you would, you could probably do the math. But if you take those new five, they're pretty much spread evenly across all the market segments we mentioned during the prepared remarks.

Matt Fisch: Yeah. I mean, I think you could probably do the math, but the, if you take those new five, they're pretty much spread evenly across all the market segments we, you know, mentioned during the prepared remarks. I'm going to take a look at Conor here for the second part of the question, but

Speaker #3: I'm going to take a look at Connor here for the second part of the question.

Speaker #5: Yeah. I mean, look, I think defense, obviously, as Matt mentioned, is a big driver. And we're seeing a lot of interest. And it's not just in the defense sector.

Conor Tierney: Yeah. I mean, look, I think defense obviously, as Matt mentioned, is a big driver, and we're seeing a lot of interest. It's not just in the defense sector. I would say it's also in the commercial aviation space as well. We have some customers in that particular vertical as well. I think the unifying factor is high performance, range, resolution, and then obviously the ability to tune the scan pattern. I think what's interesting is even in the defense sector, customers have different needs, different use cases. This is really where the tunability of the sensor, the ability to customize the scan pattern becomes really important.

Speaker #5: I would say it's also in the commercial aviation space as well. So we have some customers in that particular vertical as well. And I think the unifying factor is high performance range, resolution, and then obviously the ability to tune the scan pattern.

Speaker #5: And I think what's interesting is, even in the defense sector, customers have different needs and different use cases. And so this is really where the tunability of the sensor—the ability to customize the scan pattern—becomes really important.

Speaker #5: And even in some cases, for even just one use case, there might be different variants or different kind of performance factors that the customer is trying to solve for.

Conor Tierney: Even in some cases, for even just one use case, there might be different variants or different kind of performance factors that the customer is trying to solve for. It could be long range, even shorter range, increasing the frame rate. The ability to just dial up, dial down the sensor is really important. I think that, you know, when we're chatting with customers and we're chatting with investors, you know, one thing that we really try and guide people on is, you know, when you look at our sensor, think about it as a performance bucket, and you can kind of basically, you know, adapt that performance bucket to what you wanna achieve, right? If that means going longer range, you can put the performance there. If it means higher frame rate, you can do that.

Speaker #5: It could be long range, even shorter range, increasing the frame rate. So, the ability to just dial up, dial down the sensor is really important.

Speaker #5: And I think that when we're chatting with customers and we're chatting with investors, one thing that we're really trying to guide people on is, when you look at our sensor, think about it as a performance bucket.

Speaker #5: And you can kind of basically adapt that performance bucket to what you want to achieve, right? So, if that means going longer range, you can put the performance there.

Speaker #5: If it means higher frame weight, you can do that. And so we're giving that level of customization that you otherwise can't get in the marketplace.

Conor Tierney: We're giving that level of customization that you otherwise can't get in the marketplace.

Speaker #4: Okay, probably my last question here is on Optus. So, you probably just mentioned this live in an active California intersection. I think I saw something on maybe your LinkedIn page.

Richard Shannon: Okay. Probably my last question here is on 4Sight. You probably just mentioned this, that it's live in an active California intersection. I think I saw something on maybe your LinkedIn page not too long ago, which is great to see, which is a good excuse for me to ask about general maturity and breadth of engagement pipeline with 4Sight here. Where are you seeing this in terms of application set and geography? This would be a great update. Thank you.

Speaker #4: Not too long ago, which is great to see, which is a good excuse for me to ask about general maturity and kind of breadth of engagement pipeline with Optus here.

Speaker #4: Where are you seeing this in terms of application set and geography? This would be a great update. Thank you.

Speaker #3: Yeah. Again, I think it covers a fair part of our market segments, and in the remarks, we talked about we're seeing a growing number of customers.

Matt Fisch: Yeah. Again, I think it covers a fair part of our market segments. In the remarks, you know, we talked about we're seeing a growing number of customers. The trend is definitely we're looking for a partner in perception and sensing and data analytics that's becoming a bigger part of our pipeline. The examples that we pointed out, for example, with the traffic intersection, we also mentioned the completion of a POC within out in Australia with we just kind of, we call it smart or intelligent traffic systems where we're tracking for a fleet management company trucks going in and out of way stations and payloads and things like this. Again, we're seeing as we're talking with those customers, they don't know a lot about lidar.

Speaker #3: The trend is definitely a we're looking for a partnering perception and sensing and data analytics that's becoming a bigger part of our pipeline. The examples that we pointed out, for example, with the traffic intersection, we also mentioned the completion of a POC within out in Australia with we just kind of we call it smart or intelligent traffic systems where we were tracking for a fleet management company trucks going in at a waste stations and payloads and things like this.

Speaker #3: And again, we're seeing, as we're talking with those customers, they don't know a lot about LiDAR. They just came to us and said, 'Well, we tried working with an integrator that does cameras.'

Matt Fisch: They just came to us and said, Well, we tried working with an integrator that does cameras and radar, and it doesn't work. Can you help us make it work? We're seeing more and more of those type of customers where their level of sophistication and knowledge of the underlying sensor piece isn't quite there. They just want help to get an end-to-end solution. It's a growing part of that number that's increasing. Maturity, we've been out in the wild for almost a year now on that second example and, you know, a few months on the first one. We're gonna see more intersections going online this year. I think things are maturing nicely, and you can definitely expect to see a higher percentage of those end-to-end solutions coming in the H2 here.

Speaker #3: And radar, and it doesn't work. Can you help us make it work? And we're seeing more and more of those types of customers where their level of sophistication and knowledge of the underlying sensor piece isn't quite there.

Speaker #3: And they just want help to get an end-to-end solution. It's a growing part of that number that's increasing. Maturity we've been out in the wild for almost a year now on that second example.

Speaker #3: And a few months on the first one. We're going to see more intersections. Going online this year. So I think things are maturing nicely.

Speaker #3: And you can definitely expect to see a higher percentage of those end-to-end solutions coming in the back half of the year here.

Speaker #5: And just one thing to add. I think that's really what makes us unique in the ITS space, especially when it comes to intersections. One thing we're learning is there's a dilemma zone.

Conor Tierney: Just one thing to add. I, you know, I think there's really what makes us unique in the ITS space, especially when it comes to intersections, one thing we're learning is there's a dilemma zone, and that's, you know, maybe looking back 100m from the stop bar. The fact that we have the range and capabilities to do that is a differentiating feature in the solution that we're offering. That's something definitely getting positive feedback from the DOTs. It's something that nobody else can do right now. That's a classic case where we built a solution, and we're leaning into our capabilities and performance factors.

Speaker #5: And that's maybe looking back 100 meters from the stop bar. And the fact that we have the range and the capabilities to do that is a differentiating feature in the solution that we're offering.

Speaker #5: And that's something that's definitely getting positive feedback from the DOTs. It's something that nobody else can do right now. So that's a classic case where we've built a solution.

Speaker #5: And we're leaning into our capabilities and performance factors.

Speaker #3: And hearing increasingly, the narrative is the other sensors just couldn't see far enough. Really, that simple.

Matt Fisch: hearing increasingly that narrative is, the other sensors just couldn't see far enough.

Conor Tierney: Yeah.

Matt Fisch: Really that simple.

Speaker #5: Yeah, so I think customers are going beyond—they're looking more towards next-gen LiDAR solutions, high-performance solutions that can give them that level of range.

Conor Tierney: I think customers are going beyond. They're looking more towards next-gen lidar solutions, high-performance solutions that can give them that level of range and customization that they need.

Speaker #5: And customization that they need.

Speaker #4: Yeah, makes a lot of sense. Last quick question, Conor. Since I didn't hear your prepared remarks, I just wanted to make sure—or ask—whether you're still using the same language you used on the last earnings call about seeing an acceleration in the second half of the year.

Richard Shannon: Yeah. Makes a lot of sense. Last quick question, Conor, since I didn't hear your prepared remarks, just wanted to make sure that or ask whether you're still using the same language used on the last earnings call about seeing an acceleration in H2. Is that still your thought process there? Thank you.

Speaker #4: Is that still your thought process there? Thank you.

Conor Tierney: Yeah, for sure. Look, I think we're definitely gonna see an inflection in the revenue. I think we're already seeing, you know, more units in the pipeline here for Q2, and we think that trend's gonna continue on into Q3 and Q4. I think all in all, yeah, we're still guiding to that narrative.

Speaker #3: Definitely going to see an inflection in the revenue. I think we're already seeing more units in the pipeline here for Q2, and we think that trend is going to continue on.

Speaker #3: It's a Q3 and Q4, so I think all in all, yeah, we're still guiding to that narrative.

Speaker #4: Okay, perfect. That's all for me, guys. Thank you.

Richard Shannon: Okay. Perfect. That's all for me, guys. Thank you.

Speaker #3: Thanks, Richard.

Matt Fisch: Thanks, Richard.

Speaker #1: If you would like to ask a question, please press star key the number one on your telephone keypad. To withdraw your question, press star key the number one again.

Operator: If you would like to ask a question, please press star key then number one on your telephone keypad. To withdraw your question, press star key then number one again. We will pause for a minute for the questions to come in.

Speaker #1: We will pause for a minute for the questions to come in.

Matt Fisch: Hey, operator. I think it's okay. We can wrap it up if there's nothing else.

Speaker #6: Hey, Operator. I think it's okay. We can wrap it up if there's nothing else.

Operator: That will conclude our question and answer session. I will now turn the call back over to Matt Fisch for closing remarks.

Speaker #1: That will conclude our question-and-answer session. I will now turn the call back over to Matt Fisch for closing remarks.

Speaker #3: Hey, thank you all for your time today, and for your continued interest in AI. Remain focused on executing against our commercial pipeline and converting this momentum into a durable revenue ramp.

Matt Fisch: Hey, thank you all for your time today and for your continued interest in AI. Remain focused on executing against our commercial pipeline and converting this momentum into a durable revenue ramp. We look forward to updating you on our progress next quarter. Thank you.

Speaker #3: And we look forward to updating you on our progress next quarter. Thank you.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.