MICROVISION, INC. Q3 FY2026 earnings call

• Strategic Transformation: Management confirmed that the strategy to broaden the LIDAR portfolio for industrial, security/defense, and automotive markets is yielding results, with Q3 marking an inflection point toward commercial success.
• Workforce Reduction: Implemented a reduction in force affecting ~28% of the organization, primarily targeting non-revenue-generating R&D and G&A functions to create a leaner structure while preserving supply chain and commercial resources.
• Product Portfolio Expansion:
  • IRIS: Long-range 1550nm LiDAR securing POs for 2026/2027; critical for defense (NDAA compliant) and industrial off-road autonomy.
  • HALO: Next-gen 1550nm LiDAR launching Q4 2027; currently in customer evaluation phase.
  • Movia Pro: Short-range flash LiDAR launched with onboard compute/IMU; over 70 end-customer engagements, up from ~25 previously.
  • Movia Air: Drone platforms (Air, Air+, ISR) demonstrated with partners like Robinson Unmanned.
  • Scantinel/ELSFP: Photonic integrated circuit technology expanding into AI data center optical interconnects via strategic partnerships.
• Commercial Alliances: Formed strategic alliance with Blueband to accelerate entry into Intelligent Transportation Systems (ITS); established MicroVision Semiconductor in Colorado Springs for ASIC development and external engineering services.
• Financial Discipline: New CFO Christine Chambers emphasized improving operating efficiency, reducing cash burn, and maximizing non-dilutive liquidity sources.

Microvision reported third-quarter revenue of $2.4 million, a significant increase from $0.2 million in Q3 2025 and equal to the total revenue generated in the first half of 2026. Year-to-date revenue reached $4.8 million. The company targets full-year 2026 revenue between $10 million and $15 million, supported by approximately $10 million in customer purchase orders awaiting shipment. Gross profit was $1.2 million (50% margin), recovering from a negative gross profit of $0.7 million in Q3 2025. Total operating expenses were $22.5 million, down approximately 7.5% from the H1 average. Adjusted EBITDA loss improved to $11.1 million from an H1 average of $18 million.

• 2026 Revenue: Maintained outlook of $10 million to $15 million, backed by $10 million in pending POs and $4.8 million recognized YTD.
• 2027 Cash Burn: Targeting ~$40 million operating cash burn, a reduction of roughly one-third from current levels.
• 2027 Revenue: Expectation that revenue will double from 2026 levels, driven by IRIS shipments, Movia sales, and expanded ITS applications.
• Gross Margins: Long-term target of 40-45% for key products, though near-term fluctuations are expected due to product mix and volume ramp-up.

• Supply Chain Constraints: Significant pressure on electronic components, specifically FPGAs and memory chips, driven by high data center demand and tariff impacts; mitigated partially through pre-buys.
• Geopolitical Sensitivity: While NDAA compliance and US manufacturing provide tailwinds in defense/security, global automotive markets remain open to international competition.
• Customer Announcements: Revenue visibility depends on customer program maturity; many customers restrict partner naming until production phases, limiting public validation of pipeline strength.
• Execution Risk: Transitioning from development to mass production for new products like Movia Pro and HALO requires successful scaling of operations and supply chain management.

Q: Why has Microvision named only a few customers despite having a strong pipeline? Is the lack of names due to absence of contracts?

A: CEO Glen DeVos explained that customer brand management and program confidentiality restrict early naming. Most engagements are in pre-production stages where customers control the narrative around their end-platform announcements. However, he confirmed that POs are real and customer names (e.g., Robinson, Overland, Avular) will be disclosed as programs mature and receive explicit permission. More names are expected in Q4 and 2027.

Q: Which product applications and markets are expected to drive revenue growth in 2026 and 2027?

A: CFO Christine Chambers noted that $10M in POs support 2026 guidance, while committed pipelines for IRIS account for roughly half of projected 2027 revenue. CEO DeVos added that Industrial markets vary from long-lived off-road autonomy programs to short-cycle spot buys. Security/Defense offers predictable, multi-year revenue streams. The central value proposition relies on delivering the right product (e.g., IRIS for long-range, Movia for short-range) to these specific market needs.

Q: Does the FCC action on foreign robotic components create a measurable tailwind, and how does Microvision differentiate from Chinese competitors?

A: DeVos confirmed that FCC actions and NDAA requirements create significant tailwinds, making Microvision a 'safe bet' for US-developed systems. Differentiation lies in 1550nm technology (invisible to night vision), US manufacturing, and an open software framework that reduces customer integration costs. While automotive is global, defense and robo-taxi sectors show high sensitivity to Chinese suppliers, favoring domestic providers.

Q: Are there concerns about production readiness for 2026/2027, particularly regarding supply chain risks?

A: DeVos expressed confidence in operational readiness, citing the acquired Luminar facility’s capabilities and consolidated equipment. However, he identified the supply chain as the primary risk, specifically constraints on circuit boards, FPGAs, and memory chips due to data center demand. The company mitigated this through pre-buys earlier in the year but remains focused on strengthening supply chain resilience against material cost pressures and tariffs.

Q: How is the perception software stack monetized for non-automotive customers, and what role does it play in margins?

A: Software plays a critical role in enabling advanced features like real-time mapping for defense (Movia Air) and traffic analytics for ITS. The Open Software Framework reduces system development costs for customers, thereby improving adoption. By lowering customer integration barriers and adding value through software-defined features, Microvision aims to expand gross margins beyond hardware-only sales models.