AEye — Third Quarter 2026 Earnings Summary

Financial Performance

• Q3 2026 revenue was $506 thousand, representing a 10x year-over-year increase from $50 thousand in Q3 2025 and a 2.5x sequential increase from Q2 2026.
• Revenue for the first nine months of 2026 was $809 thousand, nearly six times higher than the $136 thousand reported in the same period of 2025.
• Gross margin improved to (35)% in Q3 2026 from (80)% in Q2 2026, a 45 percentage point sequential improvement.
• GAAP net loss for Q3 2026 was $(11.2) million, or $(0.24) per share, compared to $(9.3) million, or $(0.30) per share, in Q3 2025.
• Non-GAAP net loss for Q3 2026 was $(7.2) million, or $(0.15) per share, compared to $(5.4) million, or $(0.17) per share, in Q3 2025.
• Cash consumption, net of financing costs, in Q3 2026 was $8.3 million.
• Cash, cash equivalents, and marketable securities totaled $63.1 million as of September 30, 2026.
• Total assets were $70.3 million as of September 30, 2026, down from $90.9 million as of December 31, 2025.
• Total liabilities were $10.3 million as of September 30, 2026, up from $9.6 million as of December 31, 2025.
• The company maintains a virtually debt-free balance sheet.

Guidance and Future Outlook

• Fourth quarter 2026 revenue is expected to approximately double Q3 2026 revenue, reaching approximately $1 million.
• The company expects Q4 2026 to be its first $1 million revenue quarter, establishing a new expected quarterly baseline with significant upside potential in 2027.
• Full-year 2026 cash consumption is expected to be $35 million, inclusive of approximately $5 million in working capital.
• The company aims to reduce 2027 cash consumption by approximately 15% compared to the 2026 expected level.
• Available cash resources are expected to support operations and multi-year commercial programs into 2028.

Business Segments and Product Lines

• The customer base expanded to 32 revenue-generating customers, up 28% from 25 in Q2 2026, with over 200 active technical engagements.
• The lead defense customer placed its fifth order, with defense remaining the most active vertical.
• First STRATOS™ revenue was recorded from an engagement with Swiftstrike AI for counter-UAS systems.
• Revenue began contributing from the Lunar Outpost Program, a binding multi-million-dollar agreement for the Pegasus Lunar Terrain Vehicle using Apollo™.
• A second customer placed an order for Apollo™ for sports analytics, following the initial customer Alive3D.
• Apollo™ is recognized for detecting objects at up to one kilometer, while STRATOS™ detects objects at up to one-and-a-half kilometers.

Market and Competitive Landscape

• The company is leveraging its software-defined architecture to address a wider range of addressable markets without starting over for each application.
• The defense vertical continues to grow quarter-over-quarter, driven by Apollo™ and STRATOS™ suitability for the market.
• The company is expanding into sports analytics and lunar infrastructure development.

Risks and Challenges

• Forward-looking statements include risks that Q4 2026 revenue may not reach $1 million or be driven by Apollo™ commercial programs as anticipated.
• There is a risk that full-year 2026 cash consumption may exceed $35 million due to unanticipated expenses or working capital requirements.
• Risks exist that the Lunar Outpost program may not continue to ramp or contribute revenue as expected.
• There is a risk that STRATOS™ integration with Swiftstrike AI may not result in continued revenue.
• Risks include the possibility that defense orders may not continue or that the sports analytics engagements may not result in commercial deployments.
• Market conditions may delay demand for commercial lidar products, and adoption may occur slower than anticipated.
• Regulatory changes impacting lidar use or economic downturns could affect the business.

Management Commentary and Tone

• CEO Matt Fisch stated that success in leveraging software-defined architecture into new commercial agreements is reflected in accelerating revenue growth.
• Management highlighted that the differentiated architecture allows addressing demanding applications requiring long-range detection and rugged hardware efficiently.
• CFO Conor Tierney noted that gross margin improvement reflects a richer revenue mix, lower product costs, and lower warranty reserves on improved Apollo™ return rates.
• Management expressed confidence in converting a record pipeline into sustained commercial activity and significant revenue growth in 2027.

Other Key Points

• The company has over 200 active technical engagements, each a candidate for a paid proof of concept.
• The Lunar Outpost agreement broadens participation beyond standard product shipments to include design, qualification, and flight hardware delivery.
• The company's operating efficiency is supported by the ability to adapt sensing behavior as customer requirements evolve.
• A conference call and webcast were held on November 5, 2026, featuring CEO Matt Fisch and CFO Conor Tierney.