Earnings call transcript: Innoviz Technologies sees stock drop as revenue misses in Q2 2025

Innoviz Technologies reported its second-quarter earnings for 2025, revealing a revenue shortfall that prompted a significant decline in its stock price. The company’s earnings per share (EPS) matched forecasts at -$0.09, but revenue fell short of expectations, coming in at $9.75 million against a forecast of $10.75 million. This revenue miss led to a 17.58% drop in Innoviz’s stock price during pre-market trading, with shares falling from $1.82 to $1.50. According to InvestingPro data, the company maintains a "Fair" overall financial health score of 2.11 out of 5, with particularly strong momentum in recent months despite its characteristic high price volatility.

Key Takeaways

• Innoviz Technologies’ Q2 2025 revenue increased 46% year-over-year but missed analyst expectations.
• The company’s stock price plunged 17.58% in pre-market trading following the earnings announcement.
• Innoviz launched new products and formed strategic partnerships to expand its market presence.
• Operating expenses were reduced by 20% year-over-year, reflecting operational efficiency improvements.

Company Performance

Innoviz Technologies demonstrated significant year-over-year revenue growth of 46% in Q2 2025, reaching $9.7 million. Despite this growth, the revenue fell short of analyst forecasts, contributing to a sharp decline in the company’s stock price. The company highlighted its ongoing efforts to innovate and expand, including the launch of InnovizSmart for non-automotive applications and the development of Innoviz Three, its next-generation LiDAR. Strategic partnerships with industry leaders such as NVIDIA and Cognitive were also noted as part of its growth strategy.

Financial Highlights

• Revenue: $9.7 million, up 46% year-over-year but below the forecast of $10.75 million.
• Earnings per share: -$0.09, in line with forecasts.
• Cash and Equivalents: $79.4 million.
• Cash Burn: $7.3 million, consistent with guidance.
• Gross Margins: Approximately 16-31%.

Earnings vs. Forecast

Innoviz’s EPS met the forecast at -$0.09, showing no earnings surprise. However, the company missed its revenue forecast by $1 million, a 9.3% shortfall. This revenue miss is significant, as it contrasts with the company’s recent trend of meeting or exceeding market expectations. The magnitude of this miss is notable compared to previous quarters, where Innoviz had shown stronger alignment with forecasts.

Market Reaction

Following the earnings release, Innoviz’s stock experienced a significant drop of 17.58% in pre-market trading, reflecting investor disappointment with the revenue miss. The stock’s pre-market price of $1.50 is a considerable decrease from its previous close of $1.82. Despite this decline, the stock remains above its 52-week low of $0.45. InvestingPro analysis indicates the stock is currently undervalued based on its Fair Value calculation, with impressive returns of 91.93% over the past six months. This movement suggests a cautious market sentiment, possibly influenced by broader market trends and sector performance.

Outlook & Guidance

Innoviz provided a projected full-year revenue range of $50-60 million, indicating potential growth in the latter half of the year. The company is targeting 1-3 new programs in 2025 and has raised its non-recurring engineering (NRE) booking guidance to $30-60 million. Looking forward, Innoviz plans to ramp up production for Volkswagen’s ID.Buzz in 2026 and continue expanding into both automotive and non-automotive markets.

Executive Commentary

Omer Kulaf, CEO of Innoviz Technologies, emphasized the company’s focus on becoming a leader in data solutions for autonomous driving. He noted the renewed interest in autonomous driving, describing it as a "gold rush" and highlighted the higher average selling prices (ASPs) and margins in non-automotive markets.

Risks and Challenges

• Revenue Miss: The Q2 revenue shortfall could impact investor confidence and future stock performance.
• Market Competition: Increasing competition in the LiDAR technology space could pressure Innoviz’s market share.
• Economic Conditions: Macroeconomic factors, such as inflation and supply chain disruptions, could affect operational costs and profitability.
• Execution Risks: The company’s ability to execute its growth strategy and ramp up production as planned remains a critical factor.

Q&A

During the earnings call, analysts inquired about Innoviz’s development program with a top-five automotive OEM and the standard fit LiDAR for initial vehicle lines. The company confirmed higher ASPs in non-automotive markets and outlined its strategy for customer selection and resource allocation, addressing concerns about market positioning and growth potential.

Full transcript - Innoviz Technologies (INVZ) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by, and welcome to Innovus’ Second Quarter twenty twenty five Earnings Call. Our presentation today will be followed by a Q and A session. Q I must advise you that this call is being recorded today. I’d now like to hand over the call to our first speaker today, Ada Menaker, Head of Investor Relations.

Please go ahead.

Ada Menaker, Head of Investor Relations, Innovus Technologies: Good morning. I would like to welcome you to the Innovus Technologies second quarter twenty twenty five earnings conference call. Joining us today are Omer Kulaf, Chief Executive Officer and Eldar Segla, Chief Financial Officer. I would like to remind everyone that this call is being recorded and will be available on the Investor Relations section of our website at ir.inovus.tech. Before we begin, I would like to remind you that our discussion today will include forward looking statements that are subject to risks and uncertainties relating to future events and the future financial performance of Innovitz.

Actual results could differ materially from those anticipated in the forward looking statements. Forward looking statements made today speak only to our expectations as of today and we undertake no obligation to publicly update or revise them. For a discussion of some important risk factors that could cause actual results to differ materially from any forward looking statements, please see the risk factors section of our Form 20 f filed with the SEC on 03/12/2025. Omer, please go ahead.

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Thank you, Ada, and good morning to everyone joining us on today’s call. At the beginning of the year, we set a series of ambitious financial and business targets for 2025. And today, I’m happy to tell you that we are on track to meeting them. On the financial side, our revenue for the quarter was $9,700,000, bringing the first half of the year to $27,100,000. This was more than our revenue for all of 2024.

We are confident that we will meet our target of 50,000,000 to $60,000,000 for the full year. Cash burn in the quarter was $7,300,000 consistent with our guidance for single digit cash burn and with our intention to dramatically reduce cash burn this year as we continue to strengthen our financial position. Moving on to the business side. We recently announced a statement of development agreement with a top five passenger automotive OEM as we work towards a potential nomination. The agreement is for the developing modifications to our Innovus two LiDAR for the OEM’s level three global production passenger vehicle program slated for SOP in 2027.

This OEM is a new geography for us, and we think this could unlock further opportunities for us in the region. We we continue to make progress with our existing l three and l four programs. As we look forward to customer SOPs, we are tremendously pleased with our partnership with Mobilin, Volkswagen, and others on their accelerating robotaxi plans. As these programs start to deploy, we believe that LiDAR technology is increasingly becoming recognized as a necessity for automotive safety and autonomous driving. In the second quarter, we launched InnovizSmart, which brings our auto grade LIDAR to industrial and other nonautomotive applications.

Just a few weeks after the launch, we announced collaborations with companies such as Cognitive, Spausch, CCTV, and CronAI for security and safety projects. We are working with many others as we demonstrate and test the solution. Additionally, we established InnoviSmart’s compatibility with NVIDIA Jetson, AGX, or In platform. In all, Innovus Smart is off to an amazing start. On the production side, to support growing demand from customers across l three, l four, and nonautomotive applications, we’ve begun shipping units from Fabunet’s high volume production line.

It is a significant achievement for us that demonstrates that we are well positioned to ramp Innovus two and scale our operations to meet growing demand and cross customer SOPs in ’26 and 2027. Last quarter, we told you that we are at the start of the next chapter of the Innoviz story, becoming the world’s premier large scale supplier of best in class ladder solutions for autonomous driving and beyond. In the second quarter, we demonstrated that our journey is underway, and we are delivering on our mission as we ramp production and continue to win new customers. With that, let’s jump into the details. Let me begin by telling you more about our Q2 and first half financial results.

In the quarter, we reported revenues of $9,700,000 as we generated more revenues in just the 2025 than in all of 2024. The revenues were driven by a combination of LiDAR unit sales and NREs. We are shipping units to our existing and potential customers. And as of July, we’re shipping from Frabinet as well as from our headquarters. These units are going to various mob Mobileye drive customers to the new top five OEM we announced and to VW to support the ramp of the autonomous VW ID bus shuttle that’s been in the news.

We ended the quarter with $79,400,000 in cash and cash equivalents. We started the year with $80,000,000 in NRE payment plans. We grew the plan to approximately $95,000,000 in q one. In Q2, we further expanded the payment plans beyond the $95,000,000 with the addition of the new top five OEM that we mentioned earlier. At the beginning of the year, we guided for 20,000,000 to $50,000,000 in NRE bookings.

So far this year, we’ve already booked more than $20,000,000 in NREs. And given our outlook, we are increasing our NRE booking guidance for $20.25 to $30,000,000 to $60,000,000 As we recognize revenues for these NREs, we are continuing to execute on our commitments, meet customer milestones, and pursue opportunities with new customers. Cash burn in the quarter was $77,300,000 in line with our guidance for a single digit burn in the second quarter versus $20,700,000 in the first quarter. Supported by our balance sheet and NRE payments plan, we are well positioned to deliver on the product ramps that we expect over the next two years. Turning now to our recent business accomplishments.

In June, we signed SOW agreement with a top five passenger automotive OEM for a development project for level three global production passenger vehicle program. This is a new program for us from a customer with whom we’ve been in discussion for quite some time. Beginning in q two, we have been developing hardware and software modifications for the Innovus two to ensure seamless integration into the OEM’s vehicle system, and we’ve already begun shipping units to the customer. We expect to ship hundreds of units in the coming months. This will facilitate a smooth ramp towards the planned data collection campaigned as our companies work towards the Sears production agreement.

Start of production is slated for 2027. This SOW is a great milestone for Innoviz, not just because of the size of the customer, the volumes the program can generate, and the timeline, but because we believe other companies in this geography may follow suit. We’ve also started discussion with the customer to expand the collaboration to short range Lidr, which could be used in different programs at the OEM. This potential expand extension of our engagement demonstrates the benefit of having multiple solutions on one platform. As we’ve seen in previous programs with other customers, an SOW allows us to conduct development work on a program which will allow us to meet SOP timelines while the commercial discussions for Sears production are progressing.

With two out of five top global OEMs now working with Innoviz, our position in the lighter space is stronger than ever. Over the past few months, we’ve seen tremendous acceleration of plans to deploy level four robotaxis around the world. This truly feels like an inflection point for autonomous driving. To enable this trend, we are deeply engaged with our level four partners, VW and Mobilite, and their customers, Moya, Holland, Vernee, and others. We are very pleased with the ramp in our collaboration with Volkswagen in support of Moya and Uber’s planned rollout of the ID bus in multiple European and US cities starting in 2026.

Ahead of the fleet launch, hundreds of ID bus shutters will be equipped with a suite of Innoviz LiDARs in twenty twenty five. Recall that the ID bus, which is based on the Mobileye drive platform, has nine Innoviz II LiDARs per vehicle, three long range and six short to mid range. We are also encouraged by the recent announcement from Lyft on the upcoming deployment of mobile based autonomous vehicles by Holland and Brand on the Lyft platform. Critically, with this interest and acceleration deployments plans, there seems to be a growing understanding that LIDAR is a must have for true, safe, autonomous driving. Innoviz offers a mature, scalable, cost effective LIDAR solution, and our relationships with industry leaders supports this vision.

The team and I will be demonstrating our automotive products at the IAA Mobility Conference in Munich in September. In addition to our automotive advances, we recently launched the Innovis Smart, our automotive grade glider now available for applications such as security, mobility, aerial robotics, and traffic management. Development to meet customer demand, Innoviz Smart is a rugged, reliable sensor. It features low power consumption, a wide field of view, and a uniform high resolution three d point cloud that enables accurate object detection at distances of now up to 450 meters even in harsh outdoor conditions like dust, sunlight, and rain. Shortly after unveiling the Innovi Smart, we announced that we are partnering with Cognitive Team to create a turnkey solution for a wide range of safety and security applications.

We also announced that we are working with Spouse CCTV and Cron AI to offer an integrated LIDAR camera vision perception platform. The platform is purpose built for large scale deployment across transport, perimeter, security, railways, and critical infrastructure. Additionally, Innovus Smart is now part of the NVIDIA Jetson Orin AGX reference design. This will allow more developers to benefit from NVIDIA advanced AI processing capabilities in applications such as smart cities and traffic management, security, robotics, and more. There are many RFQs for nonautomotive programs where the prospective customers see the advantages of using a LIDAR.

These projects have significantly shorter design cycles with much higher ASPs compared to automotive. In some potential projects, we’ve been able to demonstrate that a single Innovus LiDAR can fulfill the application requirements as opposed to a multiple from another LiDAR company. We are engaging with over a dozen companies that are exploring our solution for a variety of projects. We believe our lighter is very well suited to win in the market, offering better value and better technology to customers. We will be demonstrating the Innovus Smart at the ITS, Intelligent Transport Systems, World Congress in Atlanta later this month.

The growing interest in Innovus Smart validates the path we took to the nonautomotive space. By first focusing on developing and bringing up to production an automotive grade device for a higher volume application, we can now offer nonautomotive customers an easy to integrate, reliable solution. In the next few years, we believe that the Innoviz Smart could drive significant incremental revenue for Innoviz with limited incremental spending. We are making great progress in this space and are very optimistic about our opportunities for growth in this segment given the strength of our solution. Let me now update you on our production capabilities.

At the beginning of the year, we said that we would ship an order of magnitude more units in ’25 than in 2024. We are seeing growing demand for lighter units from existing customers and from companies whom we are engaging on new programs. To meet their needs, we are on track to ship 10 times more units in the third quarter versus the second quarter and last month. We announced that we are we are starting to ship units from Fabrinet’s high volume production line. This marks a major milestone in our journey to mass producing our Innovus two LiDAR platform.

The ramp up at Fabrinet’s facility follows months of collaboration and extensive training, ensuring that all production procedures meet Innoviz’s rigorous quality standards. With these initial shipments, Innoviz moves closer to meeting the growing demand for scalable autonomous vehicle solutions for automotive OEMs and mobility companies worldwide. Now let’s move on to our outlook, driven by the NRE payments that we expect in 2025. Combined with sales of lighter units, we continue to expect a more than a twofold increase in our revenues year over year for 2025 at 50,000,000 to $60,000,000 As you saw in the first half, our cash burn has continued to decline, thanks to our tightly managed expenses as well as the actions we took in the first quarter. On the operational front, in 2025, we continue to target one to three new programs.

We expect one to two in addition to the SOW that we already signed. Given that we’ve already booked more than $20,000,000 in NREs this year, we are raising our guidance for NRE bookings in ’25 to 30 to $60,000,000 from 20 to $50,000,000. All in all, our year is progressing very nicely. And with that, I’ll turn it over to Ladau to talk about our financials.

Eldar Segla, Chief Financial Officer, Innovus Technologies: Thank you, Omar, and good morning, everybody. In the 2025, our company continued to make strong financial and operational progress. Revenues in the quarter were $9,700,000, bringing the first half to $27,100,000. As Omar said, we generated more revenues in the first half of the year than in all of 2024. We ended q two with approximately $79,400,000 in cash, cash equivalents, short term deposit, and marketable securities on the balance sheet.

We decreased cash used in operations and capital expenditure in the second quarter to just $7,300,000 in line with our guidance for a single digit cash burn. This was due to strong cash inflows from NRE payments and the realization of the benefits of our operational realignment earlier in the year. Gross margins in the quarter was approximately 1631% for the first half of the year. Going forward, we expect margins will continue to vary. This is due to the product ramp timing and the NRE payment fluctuation based on our customers’ milestone.

Looking into the remainder of 2025 and beyond, we remain confident in our ability to manage our expense effectively and keep our cash burn rate down on an annualized basis. Our NRE payment plans are a key part of our financial model, and as demonstrated over the last several quarters, they helped us offset our spending significantly. With every development milestone that we meet on customers’ program, we unlock a portion of the NRE payments associated with that program. As we work to expand our NRE payment plan and get closer to our 2026 production ramp, we are launching an at the market or ATM program in the amount of $75,000,000. We intend to use the net proceeds from the ATM for general business purposes, including activities such as r and d operations and supporting our production efforts.

We may also use proceeds to buffer the lumpiness of the NRE payment plan and to be able to maintain sufficient level of liquidity on our balance sheet. As a tier one automotive supplier, it is important that we are able to demonstrate financial strengths to our customers. Having the ATM program signals to our customers the strength and stability of our company and the continued capacity to serve our customers. Now turning to the income statement. Our q two revenues of $9,700,000 was up 46% year over year supported by NREs as well as sales of LiDAR units.

Our operating expenses for q two were approximately $18,500,000, a decrease of 20% from $23,300,000 in q two twenty twenty four. This quarter’s operating expenses included $2,300,000 of share based compensation compared to $3,800,000 in q two twenty twenty four. Research and development expenses for q two were $13,200,000, a decrease from $16,800,000 in q two twenty twenty four. The decrease in pre the decrease is primarily related to the allocation of costs related to sales of NRE and to the operational realignment in Q1. The quarter’s R and D expenses included $1,400,000 of share based compensation compared to $2,600,000 in q two twenty twenty four.

To conclude, q two represented a robust quarter for both a revenue, margin, and cash flow perspective. Looking into q three and the rest of the year, we are focusing on future ramping the Innovus two, developing the next generation Innovus three, and securing additional design wins in the automotive and nonautomotive segments as we continue to focus on tightly managing cash burn and maintaining a strong balance sheet. With that, I’ll turn the call back to Omar for a few closing remarks.

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Thank you, Eldar. Before I wrap up the call and open for q and a, I wanted to recap some of our recent developments. We reported record first half revenues with improved cash burn. We announced an SOW agreement with the top five global automotive OEM to develop certain modifications to our Innovus two Lider for the OEM’s level three global production passenger vehicle platform targeting 2027 SOP. With line of sight and expansion opportunity at the OEMs, other programs with our short range product.

We are proud of the fact that we are working with two out of two two out of five auto OEMs that together have close to one fifth of global auto auto market share while continuing to pursue other top automakers. The adoption of robotaxis, many of which will be powered by Innovus technologies, is accelerating around the world. The deployment of LIDAR powered shuttle fleets highlights the fact that LIDAR technology is critical to autonomous driving, and this is increasingly recognized by the industry. For non automotive applications, we launched Innovus Smart, and we are already establishing partnerships with companies like NVIDIA, Cognitive Spausch, and CronAI. We’re seeing a number of parallel RFIs and RFQs for the InnoviSmart.

The ASPs are higher. The design phases in this segment are shorter than in automotive, making it very attractive market. Our pipeline of RFIs and RFQs both in auto and auto is a testament to both the maturity of our technology and its critical role in the future of driving safety, security, and other end markets. With the company well on track to meeting the goals we set out for ourselves at the start of the year, we are laser focused on becoming the world’s premier large scale provider of best in class data solutions for autonomous driving and beyond. With that, operator, let’s open it up for q and a.

Thank you.

Conference Operator: Our first you. Question is from Mark Delaney with Goldman Sachs. Mark, please go ahead.

Mark Delaney, Analyst, Goldman Sachs: Yes. Thank you very much for taking the questions. First question is in regards to the development program with the top five auto OEM. What do you think it would take for that development program to become a series production win? And when do you expect to know if the development program is going to become a series production award?

Omer Kulaf, Chief Executive Officer, Innovus Technologies: So basically, as we said, the SOP is in ’27. So we have already started to work on the program, towards, the SOP. Otherwise, the long lead items that are required are not going to be met. Meanwhile, we are working on the contract and basically the different, I would say, final details, and we hope that we’ll be able to converge it as as soon as possible.

Mark Delaney, Analyst, Goldman Sachs: Okay. Thanks for that. And if the development program does become a series production award, do you have any clarity on what that program may look like in terms of annual volumes when fully ramped and if your LIDAR is going to be standard fit or optional on vehicles?

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Sure. We’ll, of course, we’ll be happy to share more information, once we’ll be able to announce the customer. It’s a it’s a very big, OEM, having its fifth, you know, one of the five, top five OEMs. Obviously, the volume, of this OEM are are high, and we are already starting to talk about potentially expanding to, using also the short range for other programs. But it’s not a single vehicle line.

It there’s there are several lines. And, of course, we’ll be happy to share more as we go. But, at least the the first line, I as far as I know, it’s a it’s a standard. It’s a standard fit.

Mark Delaney, Analyst, Goldman Sachs: Got it. One more from me, if I could, please, I’ll pass it along. You spoke about filing for the ATM. Can can you help investors better understand how quickly the company plans to use the $75,000,000 ATM that you announced this morning? And any guidance on how much you may look to raise this year?

Sure.

Omer Kulaf, Chief Executive Officer, Innovus Technologies: So as you know, the company was already taking several steps to minimize our cash burn and reduce it as much as possible. In today’s report, we talked about $7,300,000 that’s away from being even with the quarter. So we’ll continue to to close this gap with, winning more programs, getting more NREs. And and we said that we are also expecting a growth in the sales of LiDARs. And, we intake we we intend to look on the ATM opportunistically and with consideration for our liquidity at any given time.

The structure of the ATM program really all help us to buffer some of the lumpiness related to, NRE payments and timing variabilities, so we’ll, work with it along the way. And that’s, I think there is a there is a nice fit between the a ATM, structure with the NRE payment plan that that we have. And, again, we are as you see, we are working to close the gap as much as possible.

Mark Delaney, Analyst, Goldman Sachs: Thank you.

Conference Operator: Our next question from Josh Patel from JPMorgan. Josh, please go ahead. Josh, your line is open. Okay. We will move on to Kevin Kerrigan from Rosenblatt.

Kevin, please go ahead.

Kevin Kerrigan, Analyst, Rosenblatt: Yes. Hey, Omar. Hey, Eldar. Thanks for taking my questions and congrats on the progress. Going off of Mark’s question on the the statement of development work agreement, can you just tell us, you know, what’s different with this agreement, if there if any, in terms of process or timeline?

I think the the typical process is the RFI and RFQ timelines, then design win, sign, then development on the platform. But you’re already working with the OEM. So can you just tell us what the changes with this agreement are?

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Sure. This is actually beyond the process of the RFI and RFQ that are behind us. Only that, the OEM has experienced needs to make modifications to the, requirements. And and therefore, you know, it required us to start working on some of the design changes while working with us on concluding the some of the contract details. The so it’s not very different other than the fact that since the RFQ process took longer than the OEM has expected, it required us to start working on the program, you know, meanwhile trying to converge on the on the on the on the contract.

We had a similar situation in the past with Volkswagen. If you might you might recall, you know, we made an announcement about, winning a program, pending commercial agreement with a customer. We haven’t announced who it is. And later, we, you know, we announced it’s it’s the IDBuzz. Similar background, similar reasons.

Sometimes there are, you know, some delays in the in the process, but the o the OEM wants to start working on the program because the SOP timeline doesn’t change. So it’s it’s a very similar, situation, to what we had at the time.

Colin Rusch, Analyst, Oppenheimer: Got it.

Kevin Kerrigan, Analyst, Rosenblatt: Okay. That makes sense. And then just just looking at the overall autonomous vehicle market, does the the acceleration of robotaxi deployments, does that accelerate timelines or benefit l three at all, or are they kind of on two different spectrums?

Omer Kulaf, Chief Executive Officer, Innovus Technologies: I think that, it’s it’s a good question. I think that right now, the programs are I don’t know if there are I see a correlation between the sense of urgency between one and the other. I think the autonomy is is a a is a topic that is now, picked up again, and and carmakers are interested to look on their, next platform, and autonomy is is an important element in it. I think that the the split between level three and level four is is somehow different. So you have level three, which comes from large OEMs, the traditional OEMs, and then you have the the level four, which are more, like, based on, I would say, commercial commercial vehicles, trucks, etcetera.

This is something that we also experience, a pickup right now. We are we are also competing on programs that are related to trucks that are also targeting to SOP in ’27. So in a whole, I think the the whole topic of autonomous driving is, going through a gold rush once again. It’s hard for me to say if, the the two are, you know because every customer is either going on level three or level four, so it’s it’s hard to connect between the two.

Kevin Kerrigan, Analyst, Rosenblatt: Yep. Okay. That makes sense. Okay. Perfect.

Thanks, guys.

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Sure.

Colin Rusch, Analyst, Oppenheimer: Hey, guys.

Conference Operator: Sorry. Our next question from Colin Rusch from Oppenheimer. Colin, please go ahead.

Colin Rusch, Analyst, Oppenheimer: Thanks so much, guys. You know, can you talk about your ability to tune the LiDAR for industrial applications? Or do you feel like you’re gonna end up having to, you know, start building multiple SKUs as you see some of the, the proliferation into some of these incremental end markets?

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Sure. I’m happy to talk about it. So, basically, the Innovus Smart is the same LiDAR that we are selling to automotive. If you see the image of the Innovus Smart, you can actually see that, it’s based on two parts. There is the LiDAR, and there is an add on, to the back of the LiDAR that we, connect to it, which is used as kind of a conversion of some of the interfaces and easier, connectivity to some of the applications that are currently used.

So it’s it’s really is the same LiDAR. We’re coming off from the same production line and same tester, etcetera. So from that perspective, it’s the same. I would also want to add, there’s something interesting that we are, currently seeing in in some applications. Look.

When when you talk about nonautomotive, in in some of these cases, we’re still talking about, you know, a moving object. It could be a robot. It could be an AGV, and these require also, functional safety. Any vehicle with above a certain mass that moves around people requires a sensor that meets functional safety, and there is actually not sufficient, and I I’m not I’m not familiar with any, good LiDAR out there in the automotive in the nonautomotive sector that meets a functional safety. I mean, there there are, but there are really, really low one d or two d LiDAR, sensors.

And and that’s kind of a gap where we see in in these markets. Our LiDAR comes from, automotive, which means it meets the ISO two six two six two and covers and overlaps probably all, if not most, of the other requirements for functional safety in other industries. And this is something that we see as a as a huge opportunity for us to to step in. So, you know, today, you see these nonautomotive applications run with, experimental sensors for development. But once they need to be operating in areas where you have people, they need to have functional safety used even if it’s not automotive application or fraud activity.

So this is something that we identified recently with some customers that were looking on our on our LiDAR. And and, you know, other than that, what what is interesting is that we are currently going into an established market. It’s not like two years ago where we had to educate many people on what is a LiDAR and what and why you might want to use a LiDAR. There are many, customers already using LiDARs in different applications, and they are much more educated also about the gaps for of the LiDARs that they are using today. And for us, it’s pretty easy to demonstrate the advantages related to using Innovus LiDAR with significantly higher performance, robustness, ruggedness, and and functional safety.

So, it’s very, I would say it’s very exciting, to see, you know, the reaction of several customers when they see the LiDAR in action. I was participating in a lecture about homeland security a few weeks back. I felt that when I demonstrated the LiDAR, the people looked at me as if I came, from a from a spaceship, landed from the, from another star, showing them technology they’ve never ever, really experienced. There are many markets, that haven’t yet really, used lighters at the this performance, and they can disrupt. So it’s it’s pretty exciting, and I I look forward to see where our lighters are going to be used, and we’ll share with it with you guys, over the time.

Colin Rusch, Analyst, Oppenheimer: That’s super helpful. And then, you know, with the proliferation of customers and potential customers, you know, we’re seeing just so much activity. And and I think the gold rush that you’ve mentioned is an apt analogy here. You know, can you talk about your strategy for selecting customers and where you’re putting energy? Obviously, you know, NRE is is one indication of of a deeper relationship.

But yet, can you talk to us around how you’re managing your engineering resources to help help your customers on a downstream basis?

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Sure. So today, our portfolio is based on Innovus two long range and and short to mid range. And our our main focus, probably 95% of it, is still in the auto space since there are RFQs that are converging, and we have this customer that we are working towards this kickoff of the program. And and also since the fact that we also we always see the automotive as the, you know, winner takes most kind of market, which which eventually would be only limited to maybe two suppliers. So that’s still very key for us to to be a leader in this in this activity and, book all of these, wins ahead of, ahead of those launches.

Meanwhile, we are using the excess capacity of our production, which we are ramping up now in order to start penetrating nonautomotive customers. The sales cycles in these markets are shorter than automotive, and therefore, we expect that, this this is the right time for us to, start working in this environment. We benefit by working with different integrators that are already, deep in the, I would say, the, the circles that are, talking with the different customers and building the application layer. So we are providing them a platform. Many of them are relying on the NVIDIA, Jetson, environment.

And the fact that we’ve integrated, the Innovus Smart into the Jetson platform helps them to do a more seamless integration. So maybe to summarize, 95% still on automotive trying to capture our position, be a winner take most, in this sector, using now the Innovis two, c sample, which is beyond the design freeze and ramp up of volume to penetrate into the nonautomotive market. We continue to develop new technologies, Innoviz three. Probably, we’ll talk about it on our next earning, and, we expect to show it end of the year. A very exciting product.

It’s a new step, in our development for cost, for size, and for performance. We look on second generations for, the different long range and short range. So, you know, there’s a there’s a lot to do yet, but we are in a very, I I would say, a very interesting time, because we we see the level of engagement we get from customer customers, you know, when we are showing them our our product. So, we feel that we’re on the right track, to be where we are aiming.

Colin Rusch, Analyst, Oppenheimer: Thanks so much, guys.

Conference Operator: Our next question is from Casey Ryan with Westpark. Casey, please go ahead.

Casey Ryan, Analyst, Westpark: Good morning, gentlemen. Very exciting update. Terrific news. One thing I’m curious about is you mentioned commercial revenues in the quarter were good. Would you qualitatively say this has been one of your highest commercial revenue contributions?

And then it sounds like you’re saying it’s going to be 10x in Q3, so Q3 might be your highest commercial revenue shipments splitting that out from NREs.

Omer Kulaf, Chief Executive Officer, Innovus Technologies: So as we said on the call that we are ramping up our production line and the revenues coming from units probably would be, as you said, our peak, to date. And this is, you know, we’re only starting. Right? So, this is, we see also the maturity in our lines, in our headquarters also coming from Fabrinet. Next year, we are doing an SOP with Volkswagen, middle of the year or q three.

So we we need to ship two products. It’s the long range and short range. Both of them are going to go through production validation at Fabrinet prior to the SOP. Meanwhile, we are working to book new businesses. I think Mobileye being on the Mobileye platform obviously contributes, and we are, looking to hear about new opportunities that might come in other than the ones that are already booked.

And we have, the NVIDIA Hyperion platform, which NVIDIA is offering to different customers, based on the the Innovis two, short long range so far. So, yeah, I think, you know, we we talked about the fact that our, you know, strategy right now is in in our vision is in becoming one of the largest suppliers of lighters around the world, and we we intend to be them.

Casey Ryan, Analyst, Westpark: And and so sort of in this vein of commercial revenues, you know, taking the ID Buzz as an example, if Uber will be deploying those vehicles, say, Q1 or ’6, at what point would VW actually be pulling units from you? How many quarters in advance? I guess I’m trying to figure out what the timing would look like if it would be twelve months in advance or six months in advance or something like that. Because you guys would be somewhat of a leading indicator if if you know, assuming we could see all the information, you would obviously need to send LiDARs to VW before the vehicles could be made and deployed into an Uber network. Right?

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Sure. Maybe, Eldar, if you want to take this one.

Eldar Segla, Chief Financial Officer, Innovus Technologies: Sure. Of course. Usually, the the industry is working in just in time methodology. Usually, we should expect to see it a quarter before they deploy their vehicles to the market, so something like that.

Casey Ryan, Analyst, Westpark: Okay. So so if it’s q one, then late q three, q four, something like that for for Innoviz, basically.

Omer Kulaf, Chief Executive Officer, Innovus Technologies: The SOP is currently, targeted for q three. Mhmm. And but other than that, we, you know, we are expecting to continue to ship units to support the the the ramp up and testing, not only to Volkswagen, but also other, Mobileye customers such as Holland. There was also an announcement related to Lyft and partnering with Holland Mhmm. Which is based on the Mobileye platform, which obviously is also based on on our LiDARs.

So there is it’s going to be a mix of LiDARs shipped as samples for testing, data collection, SOP SOPs, and, probably additional NREs coming from new programs and existing ones.

Casey Ryan, Analyst, Westpark: Yeah. Well, I I mean, this is all very positive, I think. And, you know, potentially, we will see the early stages of the sort of robotaxi wave through your results as you move forward. Very quickly on the nonautomotive opportunities, do you expect any change in sort of pricing and margin profile? Or will those be pretty consistent with your automotive sales if and when those move into commercial developments?

Omer Kulaf, Chief Executive Officer, Innovus Technologies: No. No. The the ASPs for, nonautomotive are significantly higher, and the margins are significantly higher. And we are talking about, in the order of several thousands compared to the several hundreds. So definitely, the nonautomotive is a very rewarding market for us to operate in.

And, you know, we we work against the benchmark of very expensive other lighters. So we and we provide a better product, so no no no need to discount.

Casey Ryan, Analyst, Westpark: It feels like a very compelling sales pitch. Listen. Tremendous progress. It sounds like a very exciting back half of the year is coming, so thank you for taking my questions.

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Absolutely. Thank you.

Conference Operator: There are no further questions. I’m handing the call over to Omar for closing remarks. Thank you.

Omer Kulaf, Chief Executive Officer, Innovus Technologies: Okay. Thank you very much, for attending our q two twenty twenty five earnings. We look forward to continue update you with our progress, and thank you very much. Bye bye.

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