Aeva Technologies (AEVA) Q2 2026 earnings call transcript

I would like to now turn the call over to Andrew Fung, Senior Director of Investor Relations and Corporate Development. Andrew, please go ahead.

Thank you, and welcome everyone to Aeva's second quarter 2026 earnings conference call. Joining on the call today are Surush Salahian, Aeva's co-founder and CEO, and Surab Sina, Aeva's CFO. Ahead of this call, we issued our second quarter 2026 press release and presentation, which we will refer to today and can be found on our investor relations website at investors. ava. com.

Please note that on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.

For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our most recent Form 10-Q and Form 10-K. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Aeva's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company website under the Investor Relations link. And with that, let me turn the call over to Sourish.

Thanks, Andrew, and good afternoon, everyone. Q2 was another strong quarter at Aeva. We continue to build on our leadership position with more milestones delivered to our customers and partners, and important expansion into new areas leveraging our same core technology developed in the last decade. In particular, we announced today our entrance into a very exciting new market beyond sensing applications that I will talk more about in a bit.

Reflecting our commercial momentum, we achieved another strong revenue quarter with continued strong sensor shipments and NRE higher than the previous year. With demand for Aeva's technology continuing to grow, we are progressing on the targets we set this year to scale our manufacturing. And we are working on ramping across our supply chain from our CM partners to foundries and component suppliers to support higher volumes to meet demand.

We also strengthened our balance sheet in June with a fall-on equity offering that brought our total available liquidity to over $300 million at the end of Q2. We believe this further differentiates and positions Aeva to support our current customers to commercial deployment and expand our commercial traction across the board. I would now like to highlight recent achievements and business developments.

First, we are excited to announce the launch of the Aeva Optical Connectivity business, which is our expansion to a new market that leverages Aeva's high optical power source and silicon photonics technology to enable next-generation AI data centers. Aeva has spent the past decade developing and proving out our proprietary laser-based technology for the automotive and industrial applications. Because our technology is built on the same foundational technology used in the telecom industry, it uniquely positions Aeva to repurpose it without significant development to pursue the massive data center market opportunity as the major AI compute companies like NVIDIA, AMD, and hyperscalers such as Amazon, Microsoft, Google transition to optical connectivity where we believe Aeva can provide different solutions.

We have a great opportunity to achieve the increasing performance, power efficiency, and scalability requirements for AI data centers. Earlier this year, we published a paper detailing the industry-leading performance of Aeva's high-power optical source technology. Since then, we have moved quickly to meet growing interest from leaders in AI infrastructure in Aeva's capabilities. In just a few short months, we have been working with a number of AI chip companies and optical solution providers to hyperscalers to validate some of those capabilities, and the results so far have been very encouraging. We have been able to demonstrate how Aeva's technology can deliver across stringent key metrics that require high optical power, low noise, reliability, and power efficiency in a scalable solution to address the rapidly growing bandwidth and power demands of multiple next-generation AI data center architectures, including near-packaged optics and co-packaged optics, or CPO.

And I am thrilled to share today that we have just signed a key joint development agreement with a leading provider of high-speed optical engines to integrate Aeva's technology into a near-packaged optic solution for a major hyperscaler with planned commercial deployments as soon as feasible with the potential to start initial volumes in 2027 and ramping in 2028. This is a significant validation of the performance, maturity, and scalability of Aeva's technology, and we believe it will advance the business we are launching today, including our other ongoing engagements across the industry. The potential scale for this market is large, and we believe a deployment like with this deal, once qualified at the hyperscaler, has the potential to exceed multiple millions of units annually, with revenues in the multiple hundreds of millions of dollars per year.

To support the significant potential for optical connectivity, we plan to leverage Aeva's existing manufacturing and foundry supply chain for volume production. We have also established a dedicated team with Pradeep Srinivasan, Aeva's VP of Photonics, taking an expanded role as Senior VP of Optical Connectivity. Pradeep has been instrumental in developing and industrializing Aeva's Silicon Photonics IP, and together with the team, we'll enable Aeva to accelerate the development, deployment, and adoption of optical connectivity. With our technology team and the growing commercial interest, we are very excited about the future of optical connectivity and plan to share more updates on this as we progress.

Now moving to automotive. We also made really good progress across our key automotive programs this past quarter. On DymaTruck, we continue to scale shipments of production intent at the sensors to the OEM for their AV stack validation ahead of series production. Importantly, we've begun manufacturing at our fully automated assembly line at Jabil in North America, a major milestone towards Aeva's readiness and ability to scale manufacturing for automotive and others, including DymaTruck's production program. In passenger vehicles, we've also progressed on milestones with the delivery of our Atlas Ultra systems and continued integration work for joint stack development with the top 10 European passenger OEM production program, as well as with NVIDIA on the Drive Hyperion platform.

Our collaboration with Bendex has also progressed to a critical next stage. Bendex has selected to use Aeva's 4D LiDAR and perception software and integrate them into its next-generation ADAS series production system for key added safety functionality for trucks, such as collision mitigation across a broader range of scenarios and nighttime driving. Bendex is the leader in commercial vehicle ADAS. Its current Bendex Fusion, which is a vision and radar-based system, is the market-leading collision mitigation and active safety solution in North America. It is available on most of the 300,000 Class A trucks that are sold annually in North America alone. And with Bendix having the goal to make its next-generation ADAS system standard future for the flagship models of their major OEMs, names like PACCAR or International, this selection not only highlights how the industry continues to adopt LiDAR to improve performance, but is also a strong validation of the manufacturability and the cost-effectiveness of Aeva solutions in Level 2 Plus ADAS applications, where LiDAR has traditionally not penetrated yet Now turning to factory automation we reached an important milestone with another customer launch of Aeva product our EVE sensor This quarter SICK AG one of the largest industrial sensor providers globally commercially launched its first industrial sensor using Aeva EVE precision sensing system This is part of our long-term strategic collaboration with SICK to leverage Aeva's advantages, such as immunity to ambient light and sensor-to-sensor interference, to deliver more precise and reliable measurements across a broader range of environments at scale.

In addition to SIC, we continue to see strong interest for our precision technology from leaders in manufacturing and factory automation, and are working towards converting these engagements to commercial awards in the near term. Separately, in defense, we continue to support Fortera's Autonomous Ground Vehicle, or AGB, programs, as they transition from time of flight to Aeva's 40 LiDAR for long-range and velocity detection, as well as for vehicle positioning and self-operational capability in GPS-denied environments.

This quarter, we also progressed on other opportunities with major defense companies and organizations beyond ground applications, including, for example, on aerial autonomy. We look forward to sharing more on these in the coming months. And last but not least, in smart infrastructure, we continue to seek good traction with the recently introduced Aeva CityOS, our AI-powered platform for real-time intelligence traffic management.

Following our first large-scale deployment in the Atlanta, Georgia area, the City of Fargo in North Dakota selected us to deploy CityOS to improve roadway safety and traffic management, leveraging 40 LIDAR's ability to operate in inclement weather, such as snow, fog, and rain, and all lighting conditions.

Aeva's ITS team is also active with other DOTs and municipalities, and we believe that our differentiated solution will continue to penetrate for additional deployments. So, in summary, we achieved a lot this past quarter, and our differentiated technology and balance sheet positioned us to further solidify a leadership position in the industry as we execute on our commercial momentum. Now, before I turn the call to Saurabh to walk through our Q2 financial results, I wanted to say a few words on the CFO transition we announced today. Saurabh, who joined Aeva six years ago as our CFO, will be moving on in September to pursue a new opportunity outside the sensing industry.

I want to personally thank him for his many contributions to Aeva, including his role in and helping to take the company from early public stage to where we are today. And we wish him all the best on his next role. We have already initiated a search for a permanent successor, which will be announced separately once complete. In the interim, Rupesh Masheri, our VP corporate controller, will step in as interim CFO.

Rupesh brings more than 20 years of accounting and finance leadership experience at large and growing technology companies, And we'll work alongside Sarabh to ensure a successful and seamless transition.

With that, let me now turn the call over to Sarabh.

Thank you, Sourouj, for your kind words, and good afternoon, everyone. Now on to Aeva's Q2 results. As demand for our unique technology continues to grow, Aeva's financials also reflect the building momentum of the business. Our expansion to an exciting new market opportunity and the continued financial discipline as we execute on our plan.

Revenue was $6.1 million in Q2, driven by continued strong product shipments and contributions from NRE as we delivered sensors and achieved milestones with a growing group of customers. Non-GAAP operating loss was $26 million this quarter, which is close to prior year levels and reflects our target to maintain operating expenses at similar levels to up slightly year-over-year while continuing to scale the business.

Due to gross cash use, which we define as operating cash flow less capital expenditure, was $31.4 million. In June, we raised gross proceeds of $115 million in a follow-on equity offering. This brought a total available liquidity at the end of Q2 to $302.9 million. With this liquidity position and our differentiated technology, we believe Aeva is uniquely positioned in the industry to continue building our momentum, including into exciting new markets such as optical connectivity, and meet more of the growing demand for Aeva's technology. And finally, as this will be my last earnings call at Aeva, I wanted to say that it has truly been an honor to serve as Aeva CFO over the past six years.

I am very proud of what we have built as a team, and I look forward to following the growing momentum and continued success of the company. Let me now turn it back to Sourouj for his closing remarks.

Thank you, Saurabh. In closing, I'd like to thank the Aeva team for delivering on our key achievements in Q2. Aeva's unified perception platform continues to gain the trust of a growing list of leaders across multiple markets. And our ability to launch optical connectivity and realize commercial traction so quickly is another indication of the scalability of our technology and the execution of our team. As we continue to expand, we remain laser-focused on the objectives we set out at the beginning of this year. Achieve milestones on existing programs while adding new wins, scaling manufacturing to support increasing demand, and maintaining financial discipline as we grow. We have made strong progress on the first half of the year and are well positioned to deliver on these objectives in 2026.

And with that, let's now turn to Q&A.

Yeah, Colin, this is Suresh. Happy to answer that. So obviously, this is, you know, I would say a major customer win for us here, and, you know, rapid progress, I would call it lightning speed in the past few months for us to get to here. So I think the key focus has been for us first showing that we have the capability and working and validating that with the actual end customers, including the chip companies, as well as the hyperscalers that I mentioned in the fall. And we have been engaged with, you know, the key players in this period as well. So key for us is we see a massive opportunity using the same core technology in terms of what we call, you know, high power optical sources, using our laser-based solutions, as well as our silicon petonics technology.

So we have spent the past 10 years, past decade developing and really proving it out for automotive, industrial and those applications. So now we're leveraging this to launch this new business, Authio Connectivity, for an integration of the solution into the hyperscaler and data center environment. And key focus for us is, you know, we've seen the feedback really very encouraging because the validation is there. We have a ton of data on reliability and field testing. And importantly, we have a different approach. And I can get into this a little bit more later, but the approach allows us to effectively provide and meet the very strict requirements, providing high optical power, low noise, reliability, power efficiency, and importantly, scalability to really meet what needs to be done.

So the key focus, what I'm trying to get to is the technology is proven. Obviously, we have to do some development to make sure, for example, with this customer and this joint development that the solution and our high-power sources and photonic solutions integrate properly. So, you know, some joint development integration work together on that. And we're doing that as fast as possible because the Hypersclave wants to deploy this immediately. And with that, we go into the qualification, and once qualified, then this is going to go into scale. And the timing here, I mean, I mentioned on the call briefly, is in the next number of months, next few months here, we're doing these activities, this joint integration.

Then we'll do the qualification. But the goal and what the Hyberscaler wants to do is as early as you know second half next year 27 to start you know the initial deployments and then from there scale up into production for 28 So that kind of the short answer And the potential obviously here is massive because this is a very top three or four hyperscaler with millions and millions of units that they employing And can I just pick up on that last comment there?

Yeah, absolutely. I think this is a crucial point, right, because what we have done with the product here is focus on solutions at the chip level that are very cost effective. As a matter of fact, when you look at kind of what's out there, a lot of the focus has so far been on using and investing heavily in the laser sources to achieve high power. And without going to do too much of the technical details, to do that, there are certain tradeoffs you have to make. The size of the dyes get bigger. We need a line multiple of these to get a number of wavelengths or a lot of power out. These things get larger, more alignment is needed.

All this impacts at the end of the day, the yields, which hits the cost, as well as the reputable scalability of the solution. Our approach is quite different. That allows us, in a way, to have smaller size dyes and ability to actually provide high-power optical way without having to have as many, let's say, chips for the solution.

And we see that that allows for much higher yield, much higher repeatability and reliability as well. So that's, I think, one of the key definitions for us. Obviously, as we go into millions, the cost structure already set. We have existing foundries. That's where our focus is next, is on the foundries, on the manufacturing partners to scale the volume. And these foundries already are very capable, and we have secured some of the capacity we already need to deploy in the market and are working to increase that, given this massive pull-in potential with this new deal that we have. So that's going to be the focus, and absolutely, you know, costs already are, you know, at a very competitive way, given what I mentioned.

But we, of course, are going to be using that economy to scale to also then drive down the cost and really help with the next generation of sensing side as well for all of our other products.

Maybe just to continue on to Colin's question, could you just give us a little detail around, you know, what you expect the revenue model to be for the optical connectivity business? You know, how should we think about it from an ASP perspective? And, you know, some details around that would be appreciated. Yeah, I'm happy to answer that. So at a high level, I would say I mentioned on the call, obviously, we just signed this deal, and we were very excited about it. And the key focus here is we see the potential for ramp up starting in 27, you know, the back half, second half of 27, and then wrapping into 28. So I mentioned a little bit on the call, but at a high level, the way we see this, the volume forecast from the hyperscaler is quite massive, right?

And, you know, in a short answer, I think whatever supply that we can provide, I think we have opportunity to sell that. That's what I would say. But what that means is the expectation is this wrapping, you know, from the start into 28 with minimum of millions of units that, you know, go in production. And we're talking about multiple millions of units. And that would result, translate into multiple hundreds of millions of dollars of revenue. Both of these figures are annually. So multiple millions of units annually and multiple hundreds of millions of dollars annually revenue-wise, opportunity-wise. So that's why it's a massive opportunity. I think the key for us is being able to do that without a ton of significant development or reconfiguration is where we see the ROI as being quite interesting for the company and why we're launching this new business.

So that also should give you a rough sense, obviously, on the ASPs, but that's where I would stop in terms of developers.

And then maybe just to switch gears, you've made a lot of progress with Bendix. If you could just give us a little more color around, you know, what that program will look like, the content per vehicle, what the ASPs are, to the extent that you can share, I would appreciate that.

Yeah, sure. So, you're right. I mean, you know, I think the team has been firing on multiple cylinders. I think, you know, automotive is progressing really well as well. Not only are we executing our existing programs, trucking, down the truck, top 10 European passenger region, but also we are making additional traction with new opportunities. So Bendex is the market leader for commercial vehicle ADAS technology, right? And we have been working together for some time. We have now advanced into a critical next phase, which effectively they have selected us for leveraging our 40 LiDAR to provide new functionality for level two plus ADAS on commercial vehicles. These functionalities will specifically aim to enable new types of emergency braking, like passenger braking or nighttime driving and such, so just better functionality for the end customer.

And Bendix is part of a large tier one, and it's a market leader in North America for ADAS solutions. There's about 300,000 Class A trucks, and with their Bendex Fusion system, which today so far has been vision and radar-based, they have a majority market share on that. And a lot of their customers already use their product on their flagship vehicle models as standard. Any other customers are the likes of PACCAR, Navistar, International, and all of that, where they are shipping in volume already for many, many years. So there, I think the opportunity for us is a significant one. It's used as the same exact sensing product, Atlas, or intended for trucking with Daimler. We're going to be using the same exact automated line in Jabil, and just using that capacity and economy scale to then ship that product in there.

And from a, you know, obviously content per vehicle, you know, I would say this is, think of it as it's somewhere similar between, it has product between a passenger to a commercial vehicle product. So it's not going to be thousands of dollars, but it's also not very, very small. So, and part of that is because we're helping to augment the system and with the aim to actually replace not just, you know, add a new sensor, but also replace other modalities between radar and camera. So, that's kind of what we see. And I think Bendix, just so you know, also is targeting to make this as a standard feature for the faction OEMs in terms of the ADAS functionality for the next solution.

Hey, Joe. Yeah, this is Rish. Happy to answer that. I think obviously this is an important launch and investment for us, but I think the key here is we're really reusing, as I mentioned, all the core components we have already developed in the silicon photonics and the high-power sources, And also our manufacturing partners and capabilities we have already established with our foundries, with our CMs, folks that actually do the module assembly.

So we're going to be leveraging a lot of the work that's already been done and all the investments that have already been done. So that means we don't need to invest a ton of capital. And also importantly, a lot of development resources and time to go and make something complete from scratch. And that's why I think we are able to move very quickly. So that's number one. Number two, I think from a resource standpoint, investment standpoint, of course, we are serious about this. We are going to be investing some, and we are hiring in this area. I think, obviously, with MENA's leadership, as well as with Pradeep now being promoted, I have full confidence in the team to now go and execute on this and scale up this business, and we're going to be making sure that we help that.

And with this team we going to have resources that are dedicated so we also make sure that we have both keep the focus and priority on the existing programs and automotive with the top 10 passenger OEM with Daimler but also have you know separate basically resources that can work on this option of connectivity so that we don distract or lose focus on the other side So short answer yes we will invest It won be massive amounts but also it not you know we going to take it seriously Great, thank you.

Yeah, that's a good question, Joe. I think, so the way we think about this is we're forming this team and this group to generate products and solutions for off-field connectivity in general. And this is going to be a combination of optical sources, including optical laser sources, on-chip integrated sources, as well as over time looking at additional capabilities with what's called ELSFPs, external laser small form factor cardinals. And I think that those have obviously massive opportunities, different levels of ASPs, and we're very excited about that. So I think this is an area where both of these, for near-package optics and co-package optics, actually use the exact same core tech and source that we have developed and some of the silicon photonics with some additional integration that we need to do on the back end of it.

So that's why we're able to use the same. And with this deal that we have, obviously intention initially is near-package optics, but also working on other things for co-package and others as well.

Yeah, happy to answer that. I think we see actually across the board both. You know, we are working already with companies like Fortera that have ground vehicles on the ground. Some of those are retrofits, right, which is basically taking a vehicle and retrofit them with an autonomy kit. That autonomy kit includes three or four Aeva LIDARs for 360 degree coverage. I think there we're making a lot of good progress. Very excited about that. Vehicles are already being deployed to the military. They're already starting to be commissioned and used, which is, I think, pretty fast for the defense space, given we just announced this beginning of the year. And, you know, that has resulted, because of some advantages we have, for example, we talked about this, besides velocity sensing, long range, but also ability to see, operate, you know, in GPS environments, but also not have any issues with night vision goggles, so no interference with that, compared to what they've been using so far, or prior to us, we are seeing some additional traction in others.

And I think both on the ground, but also specifically some of the applications in the aerial space that the team is working on, and I think I'm also excited about that, which I think could result into more meaningful opportunities to piggyback on this, so it's not going to be a one-off thing. So we are seeing the demand from defense to also grow. And as we are locking those down, we'll also be sharing that in the coming months.

And I just wanted to ask, like, I understand that Class 8 for trucking is where probably the biggest CapEx dollars are and the most road miles are spent. But I'm just wondering, you know, we are seeing some autonomy and progress in sort of Class 6 and 7 and sort of lower classes. Do you think Aeva has a place in those markets as well? I assume the answer is yes, but I'd be curious if that sort of looks different than what Class 8 offers. Yeah, I think we have, obviously we're engaged in multiple programs and opportunities, not specific only to Class A, different kinds of vehicles and different classes.

And the way that, you know, I would think about it is it's a common platform. It's being used for whatever you need to do autonomy, and if you need to do autonomy in a bigger vehicle versus smaller vehicle, once, you know, you have something that's qualified, But especially with like large players that kind of set the industry standard like Daimler Truck or others, I think that allows us to also get these other programs. So the team is working with others. Some of them include for things around, you know, on-road but also off-road or yard sale or things like that, yard environments. So those not all have the same class of vehicles. So that's the way I would look at it.

Obviously, when we first got into autonomy, it was initially about long-range sensing and velocity, but it's, you know, for us, as we have gone, you know, the automotive capability and proven technology and product out, we're seeing more demand from others as well, which I think is just going to be tucked into the programs.

And then also following on one of the questions I did here, is this solution expected to be an ELSFP format or something more component in nature?

Yeah, Richard, happy to answer that. We talked a little bit about it, but I can expand a little bit on it. So, you know, with the solution we have with optoconnectivity and this deal is obviously a massive deal and opportunity for us. We're very excited about it. We've moved that lightning speed here. I think the key effort here really is we're going to be working together on integrating our core optical technology, including hyperoptical sources and platonic technology, into this optical engine that's going to be going to the hyperscaler.

And the capabilities really is around, obviously, you know, data transfer, optical data transfer, specifically for near package optics. So that's kind of the first application where we see there's a lot of volume that's being allocated, and I think that's why we see also near-term opportunity being quite interesting. The hyperscaler wants to go as fast as possible, so the effort here is working together with the chips and the integrated solution and the optical engine, qualifying that with the hyperscaler in the next number of months with the goal that by second half of next year, we have initial We will be able to release and initial volumes going into 2028 for production ramp. So that's kind of what we are pushing for now, and the team is already keeping the efforts up.

And I think importantly, we're going to be using the core technology and the chips that we have without making a ton of changes, and that's something that's important and crucial in our ability to move fast here. That's part of the JDA is integrating business in that way to make that happen.

Yeah, happy to answer that. So SIG obviously has been a strategic partner of ours in collaboration in the past number of years, and we're very pleased to see that this is resulting into actual product launches and portfolios. You know, SICK is already releasing the first product using our EVE sensors with the 1D, which is basically distance sensing, displacement sensing.

And the feedback so far has been very promising from the end customers, and we do expect that over time to scale in the next 12 to 18 months, both additional volumes. But also, as you mentioned, we have been working on other products together, which will help to replace some of the other things, like things that measure speed, for example.

Encoders, different types of speed measurement devices, and there are actually portfolio products that SIG has that we are also working to use, leveraging the same exact sensor, EVE Suite, but in a different configuration, what we call 1V, which is measuring velocity. So that's also the other piece that we're working together on, and we hope that that's going to be maybe one of the follow-ons as we are wrapping up and wanting to look out for. Separately from that, we are engaged also with others in the space that have shown a lot of interest, and I think that is going to help to create, I think, a nice segment for us. So as we were able to talk more about that, we will do so in the near term as well.