AEye — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue was $506,000, representing a 10x increase year-over-year compared to $50,000 in Q3 2025 and a 2.5x increase sequentially from Q2 2026.
• Revenue for the first nine months of 2026 totaled $809,000, nearly six times higher than the $136,000 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.
• Non-GAAP net loss for Q3 2026 was $(7.2) million, or $(0.15) per share.
• Cash consumption, net of financing costs, in Q3 2026 was $8.3 million.
• Cash, cash equivalents, and marketable securities were $63.1 million as of September 30, 2026.
• 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 to approximately $1 million, marking the company's first million-dollar revenue quarter.
• The Q4 2026 revenue is expected to be driven mainly by Apollo™ commercial programs and establish a new expected quarterly baseline.
• 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.
• Under the current operating plan, available cash resources are expected to support operations and multi-year commercial programs into 2028.
• Management anticipates significant revenue growth and upside potential in 2027.

Business Segments and Product Lines:

• The customer base with revenue-generating shipments expanded to 32, up 28% from 25 in Q2 2026.
• Active technical engagements exceeded 200, each representing a candidate for a paid proof of concept.
• The lead defense customer placed its fifth order, indicating a pattern of repeat purchasing in the defense vertical.
• First revenue was recorded from STRATOS™ resulting 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 applications, following an initial order from Alive3D.

Market and Competitive Landscape:

• Defense remains the company's most active vertical, growing quarter-over-quarter with Apollo™ and STRATOS™ well-suited for the market.
• The company is expanding into new commercial markets including lunar infrastructure, sports analytics, and counter-UAS systems.
• Management highlights a growing number of qualified leads entering the pipeline and a record number of customers integrating the software-defined architecture.

Risks and Challenges:

• Forward-looking statements note risks that Q4 2026 revenue may not reach $1 million or be driven by Apollo™ commercial programs as anticipated.
• Risks exist that full-year 2026 cash consumption may exceed $35 million due to unanticipated expenses or working capital requirements.
• There is a risk that available cash resources may not support operations into 2028 if revenue is lower than expected or expenses are higher.
• Potential risks include delays in the Lunar Outpost program ramp, failure of STRATOS™ to achieve commercialization beyond initial revenue, and failure of defense or sports analytics orders to continue.
• Risks include the possibility that gross margin improvements may not be sustained if revenue mix, product costs, or warranty reserves do not improve as expected.
• Market conditions, regulatory changes, and competitive factors could delay lidar adoption or demand.

Management Commentary and Tone:

• CEO Matt Fisch stated that success in leveraging the software-defined architecture is reflected in accelerating revenue growth across a wider range of addressable markets.
• 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 the record pipeline into sustained commercial activity and significant revenue growth in 2027.
• The tone indicates confidence in the company's capacity to support customer programs through the ramp with its current cash position.

Other Key Points:

• The Lunar Outpost agreement engages AEye from design and qualification through delivery of flight hardware, broadening participation beyond standard product shipments.
• The company's software-defined architecture allows addressing different markets without starting over for each application, improving efficiency and reducing capital requirements.
• AEye's flagship Apollo™ detects objects at up to one kilometer, while STRATOS™ detects objects at up to one-and-a-half kilometers.
• The OPTIS™ platform provides a full-stack solution for real-time 3D image capture, interpretation, and action.