Aeluma, Inc. (ALMU) Earnings

Management highlights

### Market Opportunity & Technology Positioning • The explosive growth of AI data center buildouts has created massive demand for high-performance photonics, resulting in critical supply chain bottlenecks for traditional indium phosphide-based components. Major indium phosphide substrate and laser suppliers are sold out for years, with capacity expansion taking multiple years and facing geopolitical uncertainty. • Illuma's proprietary platform solves this constraint by using non-indium phosphide substrates to manufacture photonic components, combining compound semiconductor performance with scalable, lower-cost microelectronics manufacturing. The company's product portfolio addresses both near-term supply gaps and long-term next-generation architectures (including co-packaged optics/CPO). ### Target Market Progress • **AI Datacom**: The company's high-speed InGas photodiodes pair with all common transmitter architectures, while its MOCVD-grown quantum dot lasers offer superior power handling, reliability, and scalability compared to incumbent technologies. Customer engagements have accelerated sharply following the March 2026 Optical Fiber Communication Conference (OFC), with opportunities for both near-term component supply and long-term strategic partnerships. • **Mobile & Consumer Electronics**: The industry is moving toward adopting shortwave infrared (SWIR) image sensors for smartphones, which require InGaAs performance that competing alternative technologies cannot match. Illuma's InGaAs photodiode arrays on non-indium phosphide substrates are optimized for large-scale manufacturing, with progressing feasibility and evaluation engagements across the supply chain, albeit with a multi-year qualification timeline. • **Defense & Aerospace**: Illuma's technology is dual-use, with non-dilutive government funding used to mature technology that benefits both defense and commercial end markets. The company met its 2026 target of securing 3-7 new non-dilutive R&D contracts, with six new contracts totaling over $5 million in value awarded to date. ### Operational & Supply Chain Updates • Illuma has established strategic partnerships with multiple foundries and materials suppliers to support scalable manufacturing across different wafer sizes (100mm to 300mm) matched to market volume requirements. Key public partnerships include Sumitomo Chemical Advanced Technologies for scaled wafer production and Tower Semiconductor for 200mm manufacturing serving multiple markets. • The company expanded its leadership team with two key senior hires: Dr. Christiane Poblenz as VP of Materials Operations to scale epitaxial wafer production, and Dr. Willie Rachmady as VP of Strategic Partnerships and Ecosystem to lead foundry and commercialization efforts. • Total active commercial engagements in the pipeline have grown to over 30, up from 20 last quarter, with most new engagements stemming from AI Datacom. The company prioritizes high-quality, clearly defined opportunities as it progresses toward commercialization.

Guidance

• Full-year fiscal 2026 revenue guidance was narrowed to a range of $4.2 million to $4.6 million, down from the prior range of $4 million to $6 million. The entire downward adjustment is attributable to timing delays in government contract execution and startup, caused in part by U.S. government shutdowns, with all delayed revenue expected to shift to fiscal 2027 rather than being permanently lost. • Going forward, Illuma will prioritize later-stage development and technology transition government contracts over early-stage fundamental research, to align with the company's focus on commercialization. • The company expects to increase operating and R&D spending in coming periods to add staff and advance opportunities in its growing commercial pipeline, while maintaining disciplined, capital-efficient operations. • Illuma established a $50 million at-the-market (ATM) equity facility using existing shelf capacity to provide flexible capital access as market conditions warrant; no shares have been sold through the facility to date.

Segment performance

Illuma is an early-stage company with revenue derived primarily from government R&D contracts. In Q3 fiscal 2026, total company revenue was $1.2 million, compared to $1.3 million in the year-ago quarter and $1.3 million in the prior quarter. No separate product segment revenue figures are reported, as the company is still in pre-commercialization development across three core target market segments: AI Datacom, Mobile & Consumer Electronics, and Defense & Aerospace. Non-dilutive government R&D contracts, the only current revenue source, contributed 100% of Q3 2026 revenue. Six new defense-focused R&D contracts totaling over $5 million in value were secured in the fiscal year to date, meeting the company's 2026 target of 3-7 new non-dilutive development contracts.

Risks & headwinds

• Government R&D contracts, Illuma's primary current source of revenue, carry inherent uncertainty around timing of execution and revenue recognition, as demonstrated by the fiscal 2026 guidance adjustment related to government shutdown-driven contract delays. • Traditional indium phosphide photonics supply chains face multi-year capacity shortages, substrate scarcity, and geopolitical uncertainty, which create market opportunity for Illuma but also reflect broader industry supply chain volatility that could impact the company's own operations. • As an early-stage pre-commercial company, Illuma has not yet secured customer qualification for commercial products, and there is no guarantee that current technology evaluations will lead to contracts, production, or revenue. • Commercial adoption of Illuma's novel platform technology depends on customer qualification timelines and industry transition schedules that are outside the company's control.

Analyst Q&A

• Q: Does Illuma's technology position the company to win near-term AI Datacom component contracts amid current indium phosphide supply shortages? /

  A: Incumbent suppliers cannot meet current demand for indium phosphide-based components, creating a clear near-term opportunity for Illuma's non-indium phosphide technology. Illuma can scale existing component types that are already used in pluggable optics faster than incumbents, while also winning on cost due to lower substrate prices. The company is also positioned for long-term opportunities in next-generation integrated architectures like CPO, as customers invest in new technology for sustained AI data center buildout.

• Q: What progress has been made in the mobile SWIR market, and what is the timeline for adoption? /

  A: The mobile industry has confirmed that InGaAs offers the best performance for SWIR image sensors, as competing technologies (colloidal quantum dots, germanium) do not meet performance requirements. The industry is now focused on identifying a scalable InGaAs solution, which Illuma provides through its non-indium phosphide substrate platform. No specific adoption timeline was shared, but end customers are actively mobilizing the supply chain to develop a solution for deployment.

• Q: What are the specific roles of Illuma's new partnerships with Sumitomo and Tower Semiconductor, and which markets do they serve? /

  A: Sumitomo Chemical Advanced Technologies partners with Illuma to scale wafer production: Illuma produces epitaxial wafers in-house for development, but will leverage Sumitomo's capacity to avoid large in-house capital expenditures for high-volume production. Tower Semiconductor's 200mm California foundry supports manufacturing for multiple end markets, including AI Datacom, mobile consumer electronics, quantum, and defense. 150mm wafers are sufficient for lower-volume markets like defense, while 200mm/300mm wafers are needed to deliver the required volume and economies of scale for large consumer markets.

• Q: Has the market opportunity for quantum dot lasers shifted earlier than expected, and is Illuma pursuing other short-demand laser types? /

  A: Quantum dot laser opportunity has pulled in, as AI data center demand for high-power, high-temperature reliable lasers has grown, and the technology enables simpler isolator-free packaging. Industry interest has increased sharply since OFC, so Illuma has accelerated internal development of the technology ahead of original plans. Near-term, Illuma is primarily addressing unmet demand for high-speed photodiodes and photodiode arrays; the company does not plan to manufacture traditional incumbent lasers, focusing instead on its differentiated quantum dot laser technology.