Vuzix — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue decreased 38% year-over-year to $0.7 million for the three months ended September 30, 2026, compared to $1.2 million in the same period in 2025.
• Product sales were $0.5 million, a 45% decrease from $0.9 million in Q3 2025.
• Engineering services and OEM product sales were $0.2 million, a 17% decrease from $0.3 million in Q3 2025.
• Total cost of sales was $1.6 million, resulting in a gross loss of $0.9 million, compared to a gross loss of $0.4 million in Q3 2025.
• Operating expenses totaled $7.6 million, including approximately $1.0 million in non-recurring external consulting costs related to the Vuzix Causeway platform.
• Research and Development expenses increased 13% to $3.3 million from $2.9 million in Q3 2025, driven by external consulting for waveguide-based optical interconnect components.
• Selling and Marketing expenses increased 43% to $1.6 million from $1.1 million in Q3 2025, also due to external consulting for the Causeway platform.
• General and Administrative expenses decreased 3% to $2.5 million from $2.6 million in Q3 2025.
• Net loss attributable to common shareholders was $8.4 million ($0.10 per share), compared to a net loss of $7.4 million ($0.09 per share) in Q3 2025.
• Net cash used in operating activities was $6.7 million, compared to $5.0 million in Q3 2025.
• As of September 30, 2026, the Company held $9.2 million in cash and had no current or long-term debt obligations.

Guidance and Future Outlook:

• Excluding non-recurring Causeway consulting costs, operating expenses for Q3 2026 were approximately $6.6 million, which was about 7% below Q3 2025 levels.
• The Company expects fourth-quarter operating expenses to be in the mid-$6 million range.
• Management anticipates advancing the Causeway platform without a significant increase in development spending by leveraging existing waveguide expertise and manufacturing infrastructure.
• Future priorities include characterizing integrated-link performance for the Causeway platform and converting technical engagements into customer-funded development programs.

Business Segments and Product Lines:

• Defense: Received just under $1.0 million in new OEM defense orders in Q4; the SHRIKE Defense Display Platform is now shipping for customer evaluation; ongoing production and next-generation development work continues with Collins Aerospace.
• Manufacturing: Upgrades to the Rochester waveguide facility are operational; high-index material processing is functional; functional single-plate color waveguides have been delivered for customer evaluation.
• Optical Interconnects: Evaluation samples of the Vuzix Causeway optical interconnect platform have been shipped; a co-development letter of intent was entered into; ongoing engagement with more than 10 companies across the AI optical interconnect ecosystem within 90 days of launch.
• OEM: A global automotive OEM customer has progressed to production-validation systems and procurement contract negotiations; other customers are evaluating Ultralite OEM platform offerings.

Management Commentary and Tone:

• President and CEO Paul Travers stated the company is advancing a transition toward an OEM-focused business built around advanced waveguide technologies and U.S.-based manufacturing.
• Travers noted that while sales of established enterprise smart glasses declined due to discontinued models from the end of 2025, new tangible progress is evident in defense and customer-directed opportunities.
• Management expressed encouragement regarding the breadth and pace of progress across growth initiatives, citing a shift toward customer-driven programs with clearer paths to commercialization.
• The tone emphasized that the progress made is laying the foundation for stronger financial performance and long-term shareholder value.

Other Key Points:

• The Company holds more than 500 patents and patents pending, along with numerous IP licenses covering optics, head-mounted displays, and augmented reality wearables.
• The Vuzix Causeway platform launch included approximately $1.0 million in external market assessment and consulting costs that are not expected to recur.
• The Company maintains operations in Rochester, New York, and Japan.
• A conference call and webcast were scheduled for November 12, 2026, at 4:30 p.m. Eastern Time to discuss the results.