AEye, Inc. Q1 FY2026 earnings call

Commercial & Pipeline Progress

• Revenue-generating customer count grew from 16 to 21 quarter-over-quarter, with new customers spread evenly across all target verticals
• Issued quotes and active engagements increased by nearly 40% quarter-over-quarter, with growing new technical engagements, inbound RFIs, and proof of concept (POC) activity across all core markets
• The company's LIDAR sector consolidation has left AI stronger, with better capitalization, a leaner structure, and an expanded commercial pipeline
• Repeat business is emerging across existing customer accounts, validating product-market fit for the company's architecture

Strategic Positioning & Product Differentiation

• The global physical AI market is projected to reach $1 trillion by 2035, and long-range software-defined LIDAR is becoming an essential core component of AI-driven autonomous and safety-focused vehicle architectures
• Key differentiator: software-defined architecture allows tuning of performance (range, frame rate, field of view, scan pattern) for multiple use cases on the same deployed hardware, eliminating the need for new hardware development to serve different markets or customer requirements
• The company pursues a partner-led end-to-end solution model: rather than building all perception software in-house, it leverages a diversified ecosystem of software partners to deliver complete solutions quickly and efficiently, creating a cost and speed advantage over vertically integrated peers

Key Partnership Updates

• Supply chain is globally diversified via a manufacturing partnership with LightOn, using off-the-shelf telecom components to enable mass manufacturability, cost competitiveness, and supply chain resilience that addresses growing customer demand for domestically sourced alternatives
• Partnership with NVIDIA remains a cornerstone of market positioning: Apollo is validated on Drive AGX Orin, demonstrated on the next-generation Drive AGX4 platform, and AI joined the NVIDIA Halos AI Systems Inspection Lab (ANAB-accredited, a critical quality marker for automotive OEMs)
• New Q1 2026 commercial partnership with global defense systems firm Syntec to unlock international defense and aviation markets outside the U.S., with initial shipments already underway
• The business partnership with ATI in China remains strong, with four additional customers currently evaluating Apollo

Recent Operational Milestones

• Optus is now live at an active smart intersection in California, with additional U.S. deployments in progress
• An Australian ITS POC completed successfully and has advanced to commercial negotiation; a customer roadshow in Korea engaged more than 10 OEMs across ITS, rail, and mobility
• Active shipments to an existing U.S. defense contractor for UAV wire detection continue, with repeat business emerging and Apollo being evaluated for additional UGV and counter-UAV applications, with multiple new RFQs expected
• Evaluations with multiple autonomous trucking companies are deepening, with development sensors currently shipping
• New sell-side analyst coverage was added in Q1, with increased engagement from both sell-side and buy-side investors

AI does not break out formal financial performance by discrete product segment in this call. Total company Q1 2026 revenue is $101,000, which represents a 60% year-over-year increase from $64,000 in Q1 2025 and a slight sequential increase from Q4 2025. The core product portfolio includes three primary LiDAR/ solution offerings: 1) Apollo: long-range LiDAR with up to 1km detection, used across automotive, trucking, defense, and intelligent transportation systems (ITS). It contributes to all revenue-generating customer programs across verticals and is the company's flagship product. 2) Stratos: third-generation LiDAR with up to 1.5km detection range, 500m performance behind a windshield, launched to extend the company's performance tier with no disproportionate increase in development investment. 3) Optus: end-to-end physical AI perception solution for intelligent transportation and infrastructure markets, powered by NVIDIA Jetson Orin. New deployments of Optus are active in Q1 2026, with additional deployments planned for the remainder of the year. Commercial traction is spread evenly across 6 core vertical segments: automotive, trucking, defense, rail, infrastructure/ITS, and security. Defense is currently the fastest growing vertical in terms of customer conversion velocity.

• Management reaffirms the 2026 full-year cash burn target of $30 to $35 million, which covers planned investment in commercial execution, sales and marketing, and operational build to support customer deployment
• The company maintains its prior outlook for revenue acceleration in the second half of 2026, with a higher volume of units already in the Q2 pipeline and growth expected to continue through Q3 and Q4
• Management expects a meaningful revenue inflection to occur as current technical engagements convert to formal program commitments, built on the company's capital-efficient go-to-market model
• The company confirms it is well capitalized with cash runway extending well into 2028, and is virtually debt-free, with no near-term financing intentions associated with the upcoming routine shelf registration filing to replace an expiring existing shelf

• All forward-looking statements are subject to inherent risks and uncertainties, and actual results may differ materially from current expectations, particularly related to the timing of OEM automotive program development and conversion of the pipeline to revenue
• Automotive OEM L3 and L4 program timelines are unpredictable, with uncertainty around how quickly new RFIs will advance to the RFQ and production stages
• Global geopolitical risks and shifting trade policies create supply chain uncertainty for the industry, though management notes AI's diversified supply chain is positioned to mitigate this risk relative to peers
• The company's revenue ramp is still in early stages, and there is no guarantee that current pipeline momentum will translate to the expected revenue inflection on the projected timeline

Q: What is the current status of the NVIDIA partnership, and what milestones should be expected for the rest of 2026? / A: The partnership remains strong and progressing. AI has already integrated Apollo with NVIDIA's latest Drive AGX Thor platform and joined the NVIDIA Halos AI Lab to deliver automotive-grade validated solutions. The key remaining milestone for 2026 is completing official validation for Apollo on NVIDIA Drive AGX4, to prepare for OEM integration on NVIDIA's next-generation compute platform. Apollo is already listed as the top-performing validated LIDAR on NVIDIA's public ecosystem directory today.

Q: Where is commercial traction strongest, which markets have the shortest sales cycles, and which verticals do the five new revenue-generating customers come from? / A: Defense is the biggest standout for near-term traction and faster-than-expected sales velocity, driven by strong demand for Apollo's long detection range and software flexibility that allows scaling across multiple use cases on existing hardware. Automotive has much longer 2-3 year lead times to production, while all non-automotive segments have accelerated 6-12 month sales cycles on average. The five new customers are spread evenly across all six of AI's core vertical segments. Defense is the fastest growing segment, with additional growth also coming from commercial aviation.

Q: What is the nature of the autonomous trucking market opportunity for AI, and can Apollo cover both long-range and short-range sensing needs for trucking platforms? / A: The opportunity is a mix of new greenfield projects and displacement transitions away from higher-risk supply chains, as well as complementary coverage for existing platforms that need additional long-range or multi-mode capability. Apollo's software tunability allows it to support both long-range highway needs (critical for heavy truck braking distances) and short-range, wide-field-of-view urban operation without any hardware changes. This one-stop-shop flexibility is a key differentiator that appeals to trucking developers, and there is emerging interest for both L4 autonomous and L2 ADAS trucking applications.

Q: What is driving renewed OEM engagement on automotive L3/L4 roadmaps, and how fast are new opportunities likely to progress? / A: The two core drivers are increased funding for robo-taxi and L4 development that has catalyzed overall industry activity, and growing OEM concern over supply chain resiliency that has opened doors for AI as a qualified alternative supplier. Apollo's ability to operate behind the windshield (for improved aesthetics and sensor protection) is an additional key value proposition for OEMs. While the number of new RFIs has increased significantly, OEM timelines remain unpredictable, so AI does not guide for specific conversion timing, but maintains manufacturing readiness to scale as soon as programs are awarded.

Q: What is the current status and pipeline for the Optus end-to-end infrastructure solution? / A: Optus is now live at a California smart intersection, with more U.S. deployments planned for 2026, and a completed successful POC for intelligent fleet management in Australia. Demand for end-to-end solutions like Optus is growing quickly, as many customers do not want to build perception capability in-house and come to AI after camera/radar solutions fail to meet their performance needs. Optus' long-range capability to detect vehicles in intersection dilemma zones is a unique differentiator that has earned positive feedback from U.S. transportation departments. Management expects end-to-end solutions to make up a higher share of new revenue in the second half of 2026.