MicroVision Business Update Conference Call - MICROVISION INC

Explicit Guidance:

• Full-year 2026 revenue guidance maintained in the range of $10–$15 million; confidence expressed in meeting this target as Q3 earnings approach.
• 2027 Revenue Outlook: Expectation for revenue to double in 2027 compared to 2026 levels, supported by existing inventory and a strong commercial pipeline.
• Cash Flow/OpEx: Anticipation of a significant reduction in cash burn in 2027 compared to 2026 results, driven by operational consolidation and cost reductions.
• Capital Expenditures: Projected to achieve 2027 revenue goals with minimal new capex required, leveraging consolidated US manufacturing in Orlando and existing inventory.

Business-Segment Outlook:

• Geographic/Product Mix: Strategic pivot toward non-automotive end markets (industrial, security, defense) which offer shorter deployment cycles and near-term revenue generation compared to automotive programs.
• Product Portfolio Inflection:
  • Muvia S: Launched for short-range perception in robotics/industrial; designed for compact, solid-state, cost-efficient deployment.
  • Halo: Next-generation long-range sensing product in development; aims for smaller, lighter form factor with low product cost.
  • Movia Air & Air Plus: Expanding reach into aerial systems and ground-based applications; Air Plus includes onboard compute for broader perception.
  • Iris: 1550nm wavelength sensor winning adoption in industrial off-road and defense; expected to continue generating revenue as a pathway to next-gen products.
• Data Center/Photonics: Anticipated expansion into AI data center connectivity via Scantonell photonics technology, addressing photonic interconnect needs.
• Backlog/Pipeline: Secured multiple long-term agreements in the US and Europe; visibility into demand improved, enabling better supply chain planning and capacity preparation.

Market and Competitive Outlook:

• Regulatory Tailwinds: Recent FCC updates affecting foreign-produced advanced robotic components expected to increase demand for Made-in-USA sensors (e.g., Movia series).
• Market Shifts: Recognition that non-automotive sectors (industrial, security, defense) provide more resilient, diversified revenue streams compared to the longer, cyclical automotive buying cycles.
• Customer Lifecycle: Transitioning from POCs and evaluations to commercial programs with signed agreements and purchase orders to ensure repeatable revenue.

Macro / Industry Outlook:

• Economic/Operational Focus: No specific macroeconomic commentary (rates, inflation) provided; focus remains on internal structural transformation, cost reduction, and capital efficiency.
• Industry Trends: Shift in the LiDAR industry toward mass adoption driven by cost reduction and portfolio expansion; recognition that automotive adoption "will take time," necessitating reliance on faster-moving verticals for liquidity.

Strategic Initiatives:

• Organizational Consolidation: Completion of integrating Luminar assets by moving from West Coast to consolidated Orlando manufacturing; entering a second phase of consolidation to streamline operations and reduce OPEX.
• Capital Discipline: Implementing rigorous capital allocation where spending is strictly measured and mapped to top-line demand; distinguishing between spend that advances commercialization versus non-core spend.
• Balance Sheet Optimization: Intent to clean up the balance sheet by monetizing non-core assets, restructuring debt, and addressing lease obligations.
• Leadership & Execution: Focus on building a unified leadership team to accelerate decision-making, optimize OPEX, and drive the business from "planning" to "execution" mode.

Risks and Headwinds to Outlook:

• Execution Risk: Reliance on consistent quarter-over-quarter delivery of quality sensors; success depends on converting pipeline into shipments and revenue.
• Automotive Timing: Continued reliance on non-automotive segments highlights the risk of prolonged timelines for full-scale automotive mass adoption.
• Unspecified Variables: General forward-looking statements caveat that actual results may differ; specific risks regarding supply chain or component availability not detailed beyond the need for "clear focus" based on orders.

Management Tone on the Future:

• Confidence Level: High confidence in meeting 2026 guidance and doubling revenue in 2027; described as a "night and day difference" from the planning phase a year ago.
• Shift in Narrative: Management tone has shifted from strategic planning to execution and commercial traction, citing tangible shipping activity and customer wins (e.g., Robinson, Iris deployments).
• Strategic Clarity: Expresses optimism about the "LiDAR 2.0" transformation, emphasizing a resilient, multi-solution business model with diversified revenue streams and a clear path to profitability.

Miscellaneous:

• Event Timing: Q3 earnings call scheduled for next month to provide more detailed financial results and context on the guidance.
• Collaboration: Announced collaboration with Robinson Unmanned; plans to showcase Movia Air capabilities at AUSA in Washington, DC.