MicroVision, Inc. Aktie

Welcome to the MicroVision business update and shareholder Q&A. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the call over to [ Jeff Gadway ]. Please go ahead.

Thank you so much. Good afternoon, everyone, and thank you for joining us today. We appreciate you taking the time to be with us and your continued interest in MicroVision. Today's webinar will begin with some opening remarks, then a video from the leadership team, followed by a live Q&A session at the end.

We encourage you to stay through the conclusion as we'll answer as many questions as time permits. Please note that today's webinar is being recorded and will be available for replay on our Investor Relations website following the event. You can submit questions at any time using the Q&A feature in the webinar platform. We'll collect questions throughout the presentation and address as many as possible during the live Q&A session.

For safe harbor disclosure regarding forward-looking statements and risk factors related to MicroVision, please refer to the disclosure on the webcast portal under the Presentations tab and this slide. At this time, I would like to turn the call over to Glen DeVos, Chief Executive Officer of MicroVision. Glen, over to you.

Thank you, Jeff, and good afternoon, everyone, and thank you for joining us. Over the last year, MicroVision has undergone a significant transformation. We've expanded our capabilities, broadened our market focus, strengthened our leadership team and positioned the company to pursue opportunities across multiple industries.

Today, we're not going to walk through a traditional investor presentation or follow the MicroVision fireside chat format that we've used in previous years. Instead, we want to show you that the transformation of MicroVision is real and it's well underway. We'll go into depth on a few exciting customer engagements, share some key metrics around commercial progress and revenue expectations, and we'll address questions related to the upcoming annual meeting.

First, MicroVision exists to profitably bring compelling solutions to the market. So we want to spend some time updating you on our business. We prepared a 25-minute video to share with you that describes how we're attacking each market, what differentiates us and why we believe we have a winning strategy.

After the video, we'll return to our live panel and you'll hear tangible proof points with a focus on our financial performance and capital plans and how this fits into our largest strategy. After the business update, I'll be joined by our Board Chair, Bob Carlile; and Executive Vice Chair, Simon Biddiscombe, and we'll address shareholder questions about MicroVision's business or the proposals for the July 10 Annual Meeting.

We appreciate you spending the time with us. At the end of the session, we hope that you'll share our excitement about the real commercial progress we're making, our aggressive execution of the milestones comprising our strategic plan and the positive impact our products and technologies are having on the future of safety and mobility. So let's jump right in.

Thanks for joining us today. Over the past year, I've spent significant time with our customers and their system developers. And whether they are involved with the industrial, security and defense or the automotive markets, the feedback is very clear. They need the right product with the right performance and at the right price.

This is how MicroVision is unlocking value for our customers and leading the transition to LiDAR 2.0. We've been focused on re-architecting the company to lead this next phase of LiDAR. The new MicroVision is built around a few core principles. First, portfolio breadth. We don't believe one sensor solves every problem. That's why we've expanded our portfolio to include short, long and ultra-long-range sensing, which means we can bring optimal solutions to our customers across industrial, security and defense and the automotive end markets.

Second is a software-enabled architecture. Customers aren't simply buying hardware. They're building systems and want to create differentiated capabilities that create value for their customers. MicroVision's open software framework gives our customers the ability to fully integrate our sensor model and perception software into their system architecture that enables them to further optimize system performance as well as cost.

Third, design to cost engineering. Cost isn't a constraint. It's a requirement. And the facts are that LiDAR has simply been too expensive to achieve mass adoption. Delivering the right performance at the right cost is critical to enabling our customers to create value. Everything we build is designed manufacturing scalability and economics from day 1.

And fourth is disciplined execution. This is where we have been especially focused, rationalizing the cost structure, integrating assets and assembling a world-class team. The fruits of this focus are beginning to pay off. The first half of 2026 has been transformative for MicroVision. Following the acquisition of Scantinel Photonics and Luminar, we have successfully reengaged with Luminar's customer base and resumed shipping IRIS for customers in all 3 end market segments.

We have completed key technology development projects at Scantinel that demonstrate our 1550 FMCW capabilities. And we are engaging customers with MOVIA S and have also demonstrated our first MOVIA Air products for drones. We are executing our strategy and realizing the benefits of our technology portfolio.

Over the next few segments, you'll meet more of the MicroVision team and hear directly from some of the leaders closest to our customers. Martin Krahling, our VP of Software Engineering, will talk about our inroads into industrial markets where autonomous systems are being deployed today in mining, hauling and logistics.

Then David Neal, a lead engineer on our aerial systems and drones team will be joined in a conversation with Nate Adler, one of our Defense Advisory Board members. They'll share how MicroVision is approaching security, defense, drone and aerial applications.

And finally, Greg Scharenbroch, VP of Global Engineering, will talk about how we're approaching the automotive industry with our LiDAR 2.0 strategy. Across these industries, you'll see where MicroVision is already part of the systems operating in the real world, generating revenue and poised to scale over time. Martin, over to you.

Thanks, Glen. Industrial market is really one of the clearest examples of LiDAR 2.0 in action because adoption here is not driven by hype. It's driven by outcomes that are attached to clear metrics: safety, uptime, efficiency and throughput. What customers need now aligns directly with what Glen described, the right performance for the targeted use case and environment, reliability over long duty cycles, integration into broader perception and automation systems and economics that support scaled fleet deployment. That's what LiDAR 2.0 is.

And industrial customers are among the first to demand it. At MicroVision, we've been focused on a set of industrial applications where those requirements are most critical and where LiDAR creates immediate value. Autonomous hauling, mining operations, commercial trucking and logistics and increasingly, warehouse and material handling systems like autonomous forklifts and AGVs.

These are high utilization environments and robust perception systems that provide earlier detection and fewer interventions translate directly into measurable business impact. We've built a portfolio that maps directly to how these systems are actually deployed in the real world. For applications requiring long-range detection, high-speed decision-making and performance in extreme environments, we deploy our IRIS sensor designed for long-range perception and reliable operation under demanding conditions.

And at the short-range end, where gapless coverage in the near field, precision, responsiveness and situational awareness around the vehicle matter most, we deploy our MOVIA platform. This also includes application-specific solutions like LCAS, our LiDAR collision avoidance system built on MOVIA to help customers monitor zone occupation and reduce collision risk on industrial vehicles.

Our MOVIA sensors are built for durability, reliability and detection performance even under vibration, dust and challenging lighting conditions. And just as importantly, they are designed to integrate into real sensor stacks working alongside radar, camera and GPS as part of a complete system design because that's how these systems are actually deployed in a multimodal setup.

Let me give you some concrete examples. We're working with a leading manufacturer of construction equipment on their next generation of autonomous hauling vehicles. These are massive machines operating in active environments, often with limited visibility and constant movement around them. In that setting, perception isn't just about detection. It's about reaction time and enabling appropriate system behavior. Using our IRIS sensor, the system is able to detect obstacles and hazards at extended distances, giving the vehicle more time to respond and operate smoothly, which means fewer abrupt stops, helping to reduce wear, tear and maintenance cost. Fewer emergency interventions and ultimately, more consistent operation and higher uptime and throughput. That's a direct business outcome.

Another example is in mining. We're supporting a global mining equipment provider deploying autonomous haulage systems in active production environments. These are some of the most challenging conditions you can imagine, dust, low visibility, uneven terrain, constant vibration. In this case, our IRIS sensor plays a central role providing long-range, high-resolution 3D perception that allows the system to detect and classify objects at distance, plan safe and efficient paths, navigate reliably across the site, and it's doing it reliably day after day as a part of an operating system that the customer depends on.

A third example is an autonomous trucking. We are working with a leading provider in this space to support long-range perception for highway speed operation. Our IRIS sensor has been incorporated into their sensor suite alongside radar and camera systems to enable detection at a distance beyond 250 meters while maintaining reliability across vibration, weather, lighting conditions. We are seeing similar dynamics emerge in warehouse environments. Think forklifts, autonomous mobile robots, loading areas and facilities where machines operate in close proximity to people, pellets, racks and infrastructure.

In those environments, the challenge isn't long-range detection. It's gapless detection in the near field, reliable and precise detection of obstacles in direct proximity to the vehicle to support collision avoidance in complex environments. That's where our MOVIA platform comes into play, and we are developing application-specific solutions like our new LiDAR-based collision avoidance system, LCAS for short. LCAS allows customers to define sensing zones around a vehicle or within a facility, detect whether those zones are occupied and trigger alerts or system responses when a risk is present. Those zones can be static for monitoring a doorway, aisle, loading area or restricted space or they can be dynamic, adapting based on the speed and motion of the forklift or industrial vehicle.

So instead of constantly alerting on everything nearby, the system can focus on the area that actually matters, where the vehicle is headed. That can support operator warnings, visual alerts, speed reduction or depending on the customer's integration, even the braking response. When you step back, what you see is a consistent pattern, long-range perception with IRIS and short-range perception with MOVIA, working together as a part of a broader system. That's how customers in industrial markets are solving real problems and why they're choosing MicroVision as they move from evaluation to productive deployments.

Next up, I will hand it over to David Neal, our lead engineer on the Aerial Systems team. He will join us for a conversation with Nate Adler from our Defense Advisory Board to take you through what we are seeing in the security and defense where the requirements are different, but the shift to LiDAR 2.0 is just as clear.

I get the sense when I talk to defense companies that LiDAR was something they evaluated a while ago. It was high and heavy for a while. And then for multiple reasons, some related to the size, weight, power cost, lack of ruggedness that they moved away from it and other things. We're really trying to open people's eyes to what MicroVision is doing today with LiDAR to really enable new mission capabilities that I think are at the forefront of people's minds. I mean how do you get that sense in terms of from working with defense customers?

Yes, absolutely. The future of warfare and the future of support to our forces looks like uncrewed systems across domains. And those uncrewed systems have to navigate a complex physical world that is going to need both miniaturized and ruggedized sensor systems.

And I think that the platform that MicroVision has built is immensely useful across a whole -- a wide array of those different use cases.

Yes. No, that makes a lot of sense. And I think about -- as you talk about uncrewed system, when we think about this transition that we're going through from fully crude systems to fully autonomous systems and kind of in the middle, we're in the space of this hybrid systems, right? And this idea where you still have a person in the lie, but you still want to encourage some sense of autonomy, provide some sense of autonomy to a broader fleet.

And for a lot of these applications, they're in denied spaces. And that's a thing that is not really addressed on industrial and on automotive. The fact that you have to operate in these contested denied spaces where it's not always easy to transmit information between various assets.

Sure. I mean you also -- you look at how hard an engineering problem it is to get autonomy to work in the automotive sector, and that's on paved roads that have a lane demarcation and other traffic signs, getting uncrewed ground vehicles to work for inventory support for the Army and navigating the varied terrain that they'll be confronted with on a regular basis.

That requires a sophisticated sensor suite, but it also requires one that's not prohibitively expensive and that's ruggedized and can be bolted on to a range of existing platforms. And I think what MicroVision has built really checks all those boxes.

Yes. It's really interesting you say that. I think we're really honing in on that space. One of the big efforts we've been pushing into the demonstration on demonstration front is having like extended perception. We talked about that a lot for ground vehicles where they're able to actually map out where they're going to go by extending the field of perception from what the operator can see at the ground level to what you would see from a drone flying out ahead.

One of the things that's really interesting that we're doing is it's not just the hardware side, right? A lot of LiDAR companies, they focus on the hardware and they're giving you a point cloud, then the operators on the other side are responsible for like interpreting that point cloud and trying to get actionable useful data out of it.

I think a lot of the work we're doing on the software side is one of the things that's a really key differentiator. So in this example of extended perception, we have software running on the LiDAR that can then tell you kind of the grade of terrain or if there's a ditch here or not and feed that information back to the operator to allow them to do like route planning.

One of the other things you've mentioned to us recently is on surface vehicles and autonomous docking. Let's talk about that a little bit. What some of the things you've seen are the needs for kind of autonomous docking with surface vehicles.

Sure. I mean, like with ground vehicles or with aerial vehicles that need to land in complex environments in the maritime domain, certainly, there are requirements similarly for interacting with the physical world, be they targets, partner vessels or as they come kind of in and out of port.

I think there are clear LiDAR applications in a number of those cases. I also think to the point you made earlier on the software side, for the perception suite, some of the use cases that MicroVision has looked at with pairing ground vehicles that have MicroVision sensors on them with overhead support and having both of those point clouds fueling back or filtering back into the same perception software is hugely empowering to have the overhead visibility paired with what the vehicle is seeing on the ground. That would certainly be true in the maritime domain as well.

Yes. And I think one of the things that's really neat about our software suite is that we can take kind of mixed data. So we have different sensors that operate at different ranges, right? So we can pull data from MOVIA, combine that with data from a halo that might be on a ground vehicle that can carry like a heavier weight or an IRIS where MOVIA might be on an aerial asset, and we can do this combined math from all of that data in real time.

I think that's another thing that's really exciting about what we're doing on the hardware and software side is I think traditionally with LiDAR, when you're using it for mapping, you're sending a vehicle out, you're doing scanning, you're collecting data, then you're retrieving the asset, then you're retrieving the data and then you're processing it in some way. We're really trying to short circuit that process, right, where we can scan the data, process it on board and then send it over low-bandwidth communication channels to get that data immediately to the operator over ATAC interfaces or other interfaces that they're familiar with.

So operators in the field can get the data they need like when they need it, without having to wait on delays or recovering assets. And that opens up new missions, right? Because now instead of commanders having to think about, oh, I have to make sure that I'm running a mission that I can retrieve the asset in order to get the data, that asset could be expendable because we're providing LiDARs at a cost point that they lose the asset, if it's expendable, if it's attributable, that's okay.

And we're able to send the data back in real time. So the folks who need the data have the data, and they're not relying on necessarily getting the asset fax. So I really think that extends some of the capabilities and the efficiencies and what they'll be able to do in the field.

Clearly. I also think that when you look at the customer and the demand signal that's coming out of the Department of War right now, for example, they're really putting their money where their mouth is.

So $54 billion budget request for the DAWG, the Defense Autonomous Warfare Group for next year, that eclipses the budget for the entire U.S. Marine Corps. They clearly see the future of where the department is going as being in uncrewed systems.

And those uncrewed systems are going to need to navigate around the physical world in a way that I just think a LiDAR and particularly the type of LiDAR that MicroVision builds is uniquely well suited for.

Automotive remains an incredibly important market for us, but it's also one where it's important to be clear-eyed about where the market stands today. In LiDAR 2.0, success in automotive isn't defined by having the best performing sensor in isolation. It's defined by the ability to deliver a solution that works within the constraints of how automakers actually build vehicles.

That means cost efficiency at scale, seamless integration into vehicle design. long-term reliability across a 10- to 15-year life cycle and increasingly, software-defined perception that enables OEMs to build new experiences that will allow them to differentiate themselves. Just as importantly, the range of relevant use cases has expanded. We're seeing strong interest across a broader set of applications that include urban driving, where complexity and unpredictability are much higher, low-speed autonomy, including automated parking, tight maneuvering and new architecture approaches like satellite sensor configurations that give OEMs more flexibility on how they design their vehicles.

Each of these use cases has some different requirements, and that's where the traditional single sensor approach starts to break down. And what we believe and what many OEMs are now aligning around is that perception in automotive is an architectural problem, not just a sensor problem. And now that requires long-range awareness for high-speed scenarios, high-resolution, near-field perception for urban and low-speed environments and the ability to fuse that data in a coherent, reliable understanding of the world.

And that's exactly what our portfolio is designed to enable. A great example of this is what we're demonstrating with our Tri-LiDAR architecture. This combines a long-range sensor like HALO, providing forward visibility at distance with multiple near-range sensors like MOVIA S providing high-resolution coverage around the vehicle. And this is particularly important for detecting and understanding vulnerable road users like pedestrians and urban environments.

And it also allows OEMs to combine long-distance awareness with near-field precision, improved detection and classification and built systems that are more robust across a wider range of driving conditions. And importantly, this is not a closed system. It's an open platform architecture, where LiDAR works alongside radar and cameras, giving OEMs flexibility in how they design their perception stack. It's about delivering a complete scalable perception solution that aligns with how automakers operate.

That includes design-to- cost engineering so that these systems can be deployed at volume, a collaborative approach working closely with OEMs and [indiscernible] partners and software-enabled perception, allowing automakers to build differentiated features and IP because at the end of the day, OEMs aren't simply buying sensors. They're building products, and those products need to deliver real value to their customers.

And just as important as the technology is execution. Automotive programs require long development cycles, rigorous validation and the ability to support platforms over many years. And that's why we've been focused on building not just the right portfolio, but the operational discipline and partnerships required to compete in this market over the long term. So while automotive may take longer to fully scale than some of the other markets you've seen today, it remains a significant long-term opportunity.

So Glen, now that we've talked about how the LiDAR 2.0 strategy sets MicroVision up to lead in industrial, security and defense and automotive markets, what does the future hold for MicroVision?

As we conclude today's session and move to our Q&A, I'd like to leave you with a few things I want you to take away. First, we have the right portfolio across industrial, security and defense and automotive. Second, we built the team and the footprint to actually deliver. You're seeing it.

Our drone demos, the Tri-LiDAR system, integrating our Halo and MOVIA S demoed live at ACT Expo in Vegas. These are proof points of integration and execution, not just road map slides. Third, we are firmly in execution mode now. This is about delivery. We're actually working to convert Luminar accounts over to MicroVision. We're building momentum in security and defense. Partnerships like the Avular MOU are just the beginning. We're on track to launch MOVIA S for industrial applications in Q4. So when we talk about progress, this is what we mean, real customers, real integrations, real deployments. And stepping back, this is exactly what we've been building towards. LiDAR 2.0 isn't about proving the tech anymore. It's about performance, scalability and economics. That's where MicroVision is focused, and that's where we win. Thank you for your time and for being with us on this journey. Now let's open it up for Q&A.

So I love the technology and excited to see the progress the team has made, but we want to address some of the questions I know are top of mind first before we open it up to the broader Q&A. And as great as the technology is, what's even more important is how does that translate over to commercial success. Now MicroVision today is really at a transition point.

And the video reflects in those 3 end markets. We've made significant progress over the 9 months, and we're now realizing the benefit. So if you could pull up the chart, Jeff, on revenue. So the chart spells it out. Since 2020, if you look at the graph on the right, since 2020, MicroVision has really only averaged about $3 million of annual revenue, and we've had really limited customer opportunities.

When we sit here today, we have over 100 active customer engagements across automotive, industrial and security and the defense areas. This represents over $500 million of booking opportunities over that '26 to '30 time frame. And what's really exciting is that the level of interest and the qualified new inquiries keep coming in.

So we expect that to continue to grow month by month going forward. A key takeaway is we're not hoping for one massive big win or one big announcement to really define MicroVision. We're building a broad base of customers with diversity that gives us consistent and strong revenue growth year-over-year.

And that is exactly what we're delivering. I'll give you an example. Just this morning, I received another order for 200 MOVIA L120 that we've been shipping to our European unmanned ground vehicle customer. That's building that count into a multimillion euro customer. That customer then plans for more in '27 and going forward. So it's really about strong customer base, diversity of revenue and then strong book of business.

Now let's talk about 2026 revenue and our forecast. Now the guidance that we gave this year is between $10 million and $15 million, with a significant portion of that, about 70% being with the Luminar acquisition. Now that revenue largely loaded in the back end is, there's a range there because it's primarily dependent on how quickly we can fulfill those orders.

And I'll talk a little bit more about exactly that later. But what's really important here on the chart is if you look at it, we're shipping today to over 40 customers. And when we look at those customers and their plans, that gives us confidence, not just in 2026 revenue guidance, but our growth year-over-year as we go into 2027. And if you think about this revenue profile, it's very different to what MicroVision's historic revenue profile has been, where it's been somewhat singular customer peak in revenue, followed by years of much lower revenues.

What we're talking about here is making that transition from kind of an R&D project company to a company that delivers year-over-year top line growth with industry-leading margins. And a key point I want to make is that the transformation, we're not talking about, hey, this is going to happen later this year or maybe it's going to happen next year. It's happening now. Those 40 customers are now. That growth year-over-year is happening now. So that's how you create customer value. And I think probably more importantly for this audience, that's how we create shareholder. Now I'd like to introduce Bob Carlile, our Chair, for his comments.

Thank you, Glen. Before we turn to questions, I want to speak directly to the concern and frustration many shareholders are feeling. The Board understands this. We're frustrated as well. The company's market value has not achieved what we think it can.

We are shareholders too, and we are fully aligned with you and wanting to see the value of MicroVision increase. This is the Board's focus and a key part of our fiduciary role. We also understand the desire to protect existing shareholders. In our view, the best way to protect existing shareholders is not to restrict the company's options at this critical time. It is to give the company the tools to maintain listing compliance, preserve cash, raise capital on the best terms available and execute against the business plan shareholders are invested in.

In many respects, MicroVision was reborn in October 2025 when Glen DeVos became our CEO and began reshaping the company around a clear commercial strategy. His focus has been on making sure we have the right products aimed at the right customer solutions at the right price and is supported by the right management team to execute.

Today, you've heard more about that strategy and have met some of our key leaders responsible for delivering it. But strategy and products are not enough by themselves. The company also needs the right capital structure. That matters to investors, but it also matters to customers, suppliers, partners and employees. When customers evaluate whether to rely on us for important solutions, they look not only at our technology, but also our ability to support them, deliver at scale and remain a strong long-term partner.

We believe MicroVision is at an inflection point. We have the right leadership, the right products and the right strategy, but we also need the capital flexibility to execute. The company has near-term capital needs that are critical to our ability to pursue the opportunities in front of us. Voting against proposals 2 and 3 does not eliminate those needs. It only makes the company's alternatives more limited, more difficult and reality will negatively impact existing shareholders. I also want to address a concern that a reverse stock split is somehow by itself destructive to shareholder value. The experience of other LiDAR companies shows us that is not the way to look at it. Ava completed a 1-for-5 reverse stock split at March 2024.

At that time, its market cap was approximately $207 million. Today, its market cap is approximately $1.3 billion. Ouster completed a 1-for-10 reverse split in April 2023. At that time, its market cap was approximately $324 million. Today, its market cap is approximately $2.7 billion. Those increases in value were driven by business execution and improved market confidence. The reverse splits did not prevent those companies from creating substantial market value after they regained a more appropriate capital structure.

I believe MicroVision can follow a similar path if we give the company the tools it needs to execute. Some shareholders have suggested that a shareholder warrant offering or similar structure should be used instead. We understand the appeal of giving existing shareholders an opportunity to participate in future financing, and that is definitely something the company will evaluate for the future. But it's not a feasible substitute for the company's near-term capital needs. Warrants do not raise capital unless they are exercised. Rights and warrant structure takes time, requires market support and do not provide the certainty of proceeds the company needs now.

The Board's responsibility is to act in the best interest of all shareholders. In our judgment, approving proposals 2 and 3 is clearly in the best interest of shareholders because it preserves the capital's ability to maintain NASDAQ compliance, protect type cash flexibility, pursue capital on better terms and execute the strategy you've heard about today.

For shareholders who believe in MicroVision's technology, commercial opportunities and long-term value creation potential, approval of proposals 2 and 3 is a practical and responsible path. Now I'm going to turn it back to Jeff to coordinate the Q&A.

Thanks, Glen. Thanks, Bob. We're now going to open it up for Q&A with Glen, Bob Carlile, who you just heard from. We're also going to welcome Board member and Executive Vice Chair, Simon Biddiscombe, there he is, to field your questions. So before we move into the live Q&A portion, we see that there have been a number of questions that have been submitted through the Q&A portal here in the webinar.

So we're going to tackle some of those first, but we're going to make sure we save some time for live questions. So if you guys are ready, I'll start with the first question here.

I see a theme of questions around confidence. So I think, Glen, this one is for you. What gives you confidence in the 2026 guidance on revenue, cash flow and gross margin?

Yes. Thanks, Jeff. Yes. So as we look at '26, it's pretty straightforward. It's simply looking at our current backlog of orders and then expected POs as we talk to customers and they let us know, hey, we're going to order this material, we need it in November.

So we put that together. That gives us that range. But as I mentioned earlier, though, one of our biggest customers being is for Luminar product, the IRIS product. And what we're doing in the process now is obtaining all that material, reconstituting those lines so we can deliver that really in the second half of this year.

And so it's just a matter of getting through that process. That's why there's a range of $10 million to $15 million. How much do we get through that here this year. Obviously, from our perspective, we're trying to deliver as much as we can. Now relative to gross margin and the cost side of that, the team has done a great job in terms of negotiating with those outside suppliers for the inventory, for the material, for the equipment.

And we're very confident in terms of what the cost of those goods sold are will be. We've negotiated the pricing for that. So from our perspective, very confident on gross margin. As a result, those sales really bring in positive cash flow. And so again, our motive drive as much revenue as we can. That comes right to the bottom line. It's great from a cash flow position.

Thanks, Glen. Second question here. I think this one is probably best suited for you, Simon. It's tied to capital needs. I see people asking what are the near-term capital needs? And are you open to exploring a variety of different financial structures to meet those needs?

Yes. Thanks, Jeff, and it's clearly a very important question. It goes directly to one of the core responsibilities of the Board and management team, which is making sure the company has the capital needed to execute the strategy while being very thoughtful about minimizing dilution. We've been clear in our public disclosures that the company has near-term needs for additional capital.

At the end of March, we disclosed a cash balance of approximately $46 million. We also disclosed that under the terms of our convertible notes issued earlier this year, we were required to maintain a minimum cash balance equal to the greater of $21 million or 110% of the outstanding notes at that point in time.

In addition, we've discussed an expected cash burn this year of approximately $60 million. So when you put all of those factors together, it's clear that we will need to raise incremental capital in the coming quarters. So the answer is yes. We do expect to need to raise additional capital. We're not going to announce the timing, the size or the structure of any specific financing today, but we are going to continue to be disciplined, thoughtful and focused on what's in the best interest of long-term shareholder value creation.

The Board and management team are aligned with shareholders. We want to fund the company's strategy, protect the opportunity in front of us that Glen has so eloquently laid out in the earlier comments and do so in a way that is thoughtful about the possible dilution that would be experienced.

The choice in front of us, let's be clear, is not about whether we're going to raise capital or not raise capital. We have to raise capital. The choice in front of us is whether we do it from a position of flexibility and strength or from a position where our options are constrained. And that's why it's so important that proposals 2 and 3 are passed as Bob eloquently laid out in his commentary as well.

Thanks, Simon. Bob, I think this next one is for you, given some of the comments you shared on the reverse stock split. What factors will the Board evaluate when deciding whether to do a reverse stock split?

Thanks, Jeff. That is an important question. Approval of Proposal 3 would not mean a reverse stock split is automatic. It will give the Board the authority to act if the Board concludes that is the best course of action given the facts and circumstances at the time.

Several factors will be considered in making that decision. First, we would consider whether the company has the capital structure needed to support execution of the business plan. This is a key consideration for investors, though it is just an important issue for customers, suppliers, partners and employees.

Customers want confidence that we have the financial resources to deliver on our commitments. Suppliers want confidence that we can support production and scale and employees want confidence that the company has a runway and stability to execute. A stronger and more flexible capital structure supports all those relationships.

Second, we would consider our competitive position. The reality is the capital structure matters when customers compare us to other LiDAR companies. Many of our competitors have already taken steps, including reverse stock splits to optimize their capital structures and preserve their NASDAQ listings.

We do not want MicroVision to be at a competitive disadvantage simply because of our capital structure. Third, we will consider whether the company has sufficient available authorized shares to maintain a solid financial footing. At the current stock price, the company's existing available shares may not be sufficient to provide the capital flexibility needed to execute our strategy.

Let me emphasize, we would not issue shares unnecessarily. It means the company needs the ability to raise capital responsibly, conservatively and when needed. Fourth, we will consider NASDAQ compliance. One of the purposes of Proposal 3 is to give the Board the ability, if necessary, to cure the NASDAQ minimum bid price requirement to maintain the company's listing on NASDAQ. Maintaining a NASDAQ listing is important for both shareholders and the company in terms of investment liquidity, investor access and market credibility.

The bottom line is the Board will consider executing the reverse split if we determine that doing so is the best course of action to preserve and enhance the company's ability to execute its strategy and grow market value, which translates to increased value to shareholders. Multiple factors will be part of that determination, including the impact of existing shareholders, the ability to finance the business, compete effectively, support customers and employees and preserve NASDAQ listing compliance.

Thanks, Bob, and thanks for tackling those initial questions. Let's move into the live Q&A portion now. We're going to call the operator back on in a second. If you're called on to ask a question, please try to be concise so that we can get through as many questions as possible in the time remaining. So with that, operator, could you please come back on and introduce the first question from the line?

[Operator Instructions] And our first question is from [indiscernible].

Can you hear me?

Yes, we can hear you.

Well, first of all, thanks, gentlemen, for the presentation and yourselves being available to participate on a call and answer questions. Really appreciate that. So Glen, you took over, as Bob mentioned, and basically a restart, I guess, the way he framed it for the company starting in October of last year.

Can you comment on some of the things that you've done, specifically around the sales process and I guess, the metrics around being able to determine what your revenue guidance is on an ongoing forward basis?

Sure. Yes. Thanks, [indiscernible]. Yes. Think of this as the front end of the business. This is the tip of the spear engaging the customers. And we've done a couple of things. Part of it is organizational, having the leadership in place now and the senior sales directors in place now to go really focus in on automotive and then industrial and security and defense here in North America as well as in Europe.

So that's a big -- having that talent in place, driving it, getting those opportunities and making them available to us is the first step. The next was really getting discipline around the pipeline management process. So putting all of that into Salesforce, using Salesforce to manage those opportunities, reviewing them on a weekly, in some cases, daily basis to really drive activity.

So you convert it from here's an engagement to here's an opportunity. And then now working that funnel down to where we have real opportunities, real RFQs and opportunities for converting into business. And so it's a matter of setting up the resources and the people in place and then wrapping a process around them, that's what's driving that 100 and growing number of opportunities and then having the organization support it.

So really support that. And just this morning, reviewed 4 additional RFQs. So now quoting with customers across industrial, automotive and Security and Defense across all 3 segments, almost $200 million of bookings opportunities this morning. And it's that discipline that then leads the company to being able to succeed converting those over to purchase orders.

Okay. By the way, the charts that you showed earlier, those were very helpful in order to see some of the numbers and...

It really is. And I think the thing I wanted to highlight, [indiscernible], and I appreciate your question because it's a change in how we are operating and building the business.

And you want that diversity of customers, you want those customers that aren't just one and done. They're going to continue to order. You can land with them, expand with them and grow those accounts. And that's exactly what's happening. And that's what you're going to see in that inflection point that's happening in '26.

Okay. Do you expect to continue to share these kinds of metrics that you showed today with the public going forward?

Absolutely. And trust, we want to share as much as we can about what our customers are doing and what we're doing with them. There are some limitations on what we can. But like today's chart, we're going to continue to get more and more visibility to that. Where we're moving to, this year, we gave guidance. We're going to now -- we'll give guidance for longer periods of time. We'll give you more visibility into as we bring these customers on, we'll give all of this community more visibility to that. We're excited about doing that because those are really the proof points of the business growth.

Speaker 1

The next question is from [ Mike Volkin ].

What's the immediately addressable market for our short-range LiDAR? And what "out-of-the-gate sales goals do we have for the MOVIA S launch? Two-part question. Also, Chinese LiDAR being banned in the U.S. and Europe should open up over 80% of the domestic and European markets for us. How will MOVIA S impact those markets?

Yes. So I think there's -- Mike, thanks. I think there's like 3 questions in there. Let me try to knock them down. For industrial, that is a multibillion-dollar market today.

And so if you think about and mostly dominated by electromechanical sensors that have ASPs in the $5,000 to $6,000 range. We're going to be coming into that market with ASPs under $1,000. And that's our competitive advantage. Our solid-state MOVIA product is an incredibly powerful product at a much lower system cost.

So when you think about that market, we're not going to displace that market tomorrow. But our goals are in terms of with the launch this year, we're targeting building somewhere around 1,000 or so of those MOVIA S products. That's the beginning. So not a lot of revenue this year. As we get into next year, that's where we're building that backlog now. I can't give you an exact number Mike, but that's going to be more in the $10,000 to $20,000 range. More to come on that as we get the backlog finalized.

When you think about defense, that's a new market. Today, what we're talking about is kind of making that market. And so much higher ASPs, lower volumes, more in the sub $100,000, but that's a long-term growth market for us, much higher ASPs.

And as we get clarity around that, we'll be sharing more about exactly that. As it relates to your question around the limitations on Chinese LiDAR, that's primarily in defense. Ultimately, we're still competing against the size and the RoboSense when we talk about automotive or industrial, even here in the U.S. I'm competing against them today.

So we don't -- let's put it this way. They set the price. That's the benchmark the purchasing groups at the OEMs use to measure us. But there's a clear preference from a supply chain resilience standpoint to use a domestic supplier like a MicroVision.

So it gives us a bit of an advantage. It doesn't make or break the case for us. We can't charge a big premium, but we're taking advantage of that. And so it helps gets us in the door. But ultimately, we have to compete on price and performance, and that's exactly what we're doing. I think we have a great position in that regard even compared to Hesai or RoboSense.

Great. Thank you for that, Mike. Can we go to the third question here, operator, please?

Next question is from [ Adam Jones ].

I know you got a lot of notes beforehand, and you really did a good job of addressing many of them. So I want to thank you guys for that.

And I got 2 real important questions here. So before you like cut me off after the one, just on saying that upfront to really -- so I want to circle back to defense because you guys -- in that part of the presentation, you talked about it being a $54 billion opportunity.

And this is really a question for both you, Glen and Bob. How are we approaching capturing that market? And with all that funding in play from the government, having LiDAR being such an indispensable element, are we eligible for government funding?

And are we aggressively pursuing that? Because if that's the case, perhaps that enables some of these suggestions regarding -- I think everyone understands rights offerings are a little -- not quite there yet, but this kind of funding would enable some of these things that protect current shareholder value. So I just want to throw that out there first.

Yes. I'll start, Bob, and then you can add in your comments. So for defense, you saw the Nate Adler and David Neal video. And so there's the U.S. compound. And the Defense Advisory Board has been very helpful in terms of guiding us kind of more generally, where should we be focused given our technology and our portfolio.

And that's been a great experience. People like Nate Adler know the defense industry very deeply. They understand procurement, where the money is basically. And so that's been helpful to where we are now and basically developing that market. The next step that we're taking to get closer to those sourcings and those sources of funding is we're engaging with a firm that does exactly that.

And we'll share that here with this group and I think in the coming weeks. But we're engaging with a firm that now is -- will help us engage directly with those sources of funding and those procurement offices. And that's really helpful for us. My background is automotive, more industrial, it's not defense. This fills in that gap for us.

Europe is a bit of a different dynamic right now and partially because of the proximity of the Ukrainian conflict and the big shift in spending there relative to their need to come up to the NATO spending requirements. There's a big pivot occurring in Europe. That's where we're engaged directly with the NATO country government.

So the Ministries of Defense in Sweden, for example, or in Holland through our partner with Avular. Those are different types of engagements where we're looking at, well, what funding opportunities are there.

And the path that's following is more about a, hey, demonstrate the technology, let's then connect you with those partners. A very different sales motion, if you think about those 2 regions but we're very active there, both in terms of MOVIA products, but also in Scantinel products, but also with the Luminar products, but now also with the Scantinel products.

And we haven't talked a lot about that today, but that is a very interesting technology when it comes to defense. With that, I'll turn it over to Bob.

Well, thanks, Glen. Adam, the only thing I can probably add to that is the Board and certainly in cooperation with management, we really push on what are the sources of funding, all sources.

So we ask the same questions you're asking, and we have to be faced sometimes with the reality of what's available at the current time. And we also very much focus on the cash burn. And so I think we have a very disciplined approach to trying to minimize that while still having the infrastructure to really pursue the opportunity. So trust me, we are absolutely trying to think of everything we can to reduce the amount of funding that has to come through sales of equity.

But Jeff, I think, Adam, you had another question.

Right. Yes. We said we weren't going to cut them off.

And this is just one last question that allows Glen to tie it all up because, Glen, you've done this before in the Delphi to Aptiv rebrand. You've been here and Delphi went on an acquisition and partnering spree to kind of become a leader in autonomy to achieve commercialization based on becoming the brains of the vehicle.

So you've done this. And I'm kind of wondering if there's any kind of apples-to-apples comparison of how you accomplished that previously that can sort of put this whole thing in perspective of what you're trying to accomplish now.

Yes. Yes. The thing I would tell you, Adam, that's directly analogous between what I'm doing and what the team is doing here at MicroVision and what I had the opportunity to do at Aptiv is really is understanding the first step is understanding what is the customer pain point.

What problem am I able to solve for the customer that they're willing to pay for. And at Aptiv, it was very much focused around vehicle architecture for the OEMs, lowering the cost of the vehicle and enabling software-defined vehicles, enabling autonomy. At MicroVision, it's really -- it's somewhat of a subset of that in that it's lowering the cost of LiDAR such that our customers, whether it's industrial, automotive or in security and defense, are able then to take that technology, integrate it into their solutions and then really drive value for their customers.

And so from that standpoint, it's directly analogous what I was doing with Aptiv and what we're doing here at MicroVision. The other thing is we always wanted to go faster. I mean, at the end of the day, we're paced by the progress our customers can make. So we push as hard as we can on them. But that ultimately paces it. I had the same feeling when I was at Aptiv. But that's the key.

And it all starts with that customer understanding what's the pain point, how do I solve it better than anybody else can for them. Then it amounts to, okay, now how do I deliver that, but deliver it with a financial profile that creates shareholder value. It's great to satisfy the customer, but we have to do that in a way that satisfies and grows and rewards our shareholders and the people that have invested their money into our company.

And so that was always in front of us when I was at Aptiv. It's always in front of me and the team here now at MicroVision, and that's exactly what we're trying to do. And what's exciting is we're now seeing the results of that focus in the strategy that we've laid out. But great question, Adam.

Thanks, Adam. We're coming up on time here. I know we didn't get to all the questions. But Glen, is there any final thoughts you want to leave folks with today as we wrap up?

Yes. Thanks, Jeff. And thanks to Mike [indiscernible] , Adam, for the questions as well. I'd like to wrap up by saying when you think about LiDAR, it was always initially tied to autonomous driving and autonomy of subsystems.

And that as we've seen, that's taking time. It takes time for those markets to develop. I think we all thought automated driving and robotaxis would be all around us a lot sooner. What that will happen, and we're happy to be part of that and excited about what we're doing there.

But ultimately, our end market diversity strategy going after industrial, building security and defense, that's why that's so important because those markets, particularly industrial, security and defense are going to bring us near-term revenue. That's what's driving, to a large part, driving '26, '27, '28.

That $500 million in bookings, the majority of that is actually in industrial and security and defense, not in automotive. Automotive will come on the horizon, but that's where that booking opportunity really is focused on is on industrial, security and defense. But the good news there is that gives us revenue diversity. It gives us revenue resilience.

It means I'm not dependent on one market or one customer. I have the ability to grow across multiple end markets, many, many customers. And that having those multiple pathways for growth, that is our continued focus. We have momentum. This is the exciting part. It was when I was reviewing the quotes and the opportunities this morning, getting the order in this morning, that momentum is happening. And I hope, as I said earlier you can share that excitement that we feel about the business that MicroVision is building. With that, Jeff, I'll turn it back to you.

Yes. Thanks, Glen. So thanks for joining us. Today's webinar really aimed to provide a high-level look at how MicroVision is creating opportunities across these multiple markets and how the team is executing against that strategy.

So just as a reminder, we only shared some selected highlights from each business. And so for investors who are looking to go deeper into the technologies, the demonstrations, some of the customer applications, the market opportunities that were discussed today, we're going to be making a full-length version of that content available on the Investor Relations section of the website. So we encourage you to spend a little bit of time with that content following today's event. And with that, I'll just say thank you for joining us today and spending some time with the MicroVision team.

All right.

Thanks, everyone.

Thank you. This concludes today's call. All parties may disconnect, and have a great day.

Good afternoon, and welcome to the MicroVision First Quarter 2026 Financial and Operating Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Drew Markham. Please go ahead.

Thank you, Matthew. Good afternoon, everyone. I am here today with our Chief Executive Officer, Glen DeVos; and our Interim Chief Financial Officer, Steve Hrynewich.

Following our prepared remarks, we will open the call to questions. Please note that some of the information you will hear today will include forward-looking statements, including, but not limited to, strategic plans, acquisition benefits and integration synergies, expectations regarding customer engagement and product deliveries, go-to-market strategies, product performance and pricing, market landscape and opportunities, cash flow forecast, liquidity and the impacts of recent financing activities, availability of funds and access to capital, expected revenue, operating expenses and cash balances as well as statements containing words like believe, expect, plan and other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements.

We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update this information.

In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure as well as for all financial data presented on this call, please refer to the information included in our press release and in our Form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website at ir.microvision.com under the SEC Filings tab.

This conference call will be available for audio replay on the Investor Relations section of our website.

Now I would like to turn the call over to Glen DeVos, our CEO. Glen?

Thanks, Drew. Last quarter, we introduced our vision for what we call Lidar 2.0, and we outlined how the new MicroVision was being built to lead this next era of the lidar industry.

Today, I want to provide you with an update. In short, our strategy is working. Over the first quarter, we made significant progress integrating these technologies, teams, operations and customer relationships acquired through Luminar and Scantinel. What we have today is one MicroVision organization.

At the same time, we have successfully restarted key Luminar commercial programs. We resumed shipments across multiple customer engagements, continue receiving repeat orders from existing customers and expanded work with prospective customers across industrial, security and defense and automotive applications, our 3 key end markets. Importantly, this progress gives us increased confidence in both the operational direction of the company and the commercial opportunities that lie ahead of us through the balance of 2026.

First quarter revenue represents the start of commercial traction. We believe that our operational foundation work completed during Q1 now positions MicroVision for accelerating momentum as we move through the year. That is the message I want you to take away from today's call. The new MicroVision is operationally integrated, accelerating our commercial traction and executing against the Lidar 2.0 strategy we laid out last quarter.

Before I go deeper into our progress, I want to briefly touch on why we continue to believe this transition to Lidar 2.0 is so important. As I shared in our last earnings call, Lidar 1.0 was primarily defined by a technology-first mindset. Companies competed to build the most impressive stand-alone sensor often without fully considering the economics, scalability or operational realities key to broad deployment. But increasingly, customers are telling us something very different. Whether we're speaking with mining equipment manufacturers, industrial automation companies, defense integrators or automotive OEMs, the conversation is not centered on sensor performance alone.

But on the criteria that will drive value for their businesses, first, lower cost is central to enabling scaling deployments. Second, they're looking for mature proven solutions they can depend on for reliability and secure production launches. And three, solutions must be easily integrated into their system architectures. Customers want the right performance for the right application. They want solutions that can easily integrate into complete perception and control systems. They want flexibility to open software architectures, and they want products that are designed with cost and scalability in mind from day 1. And that's what Lidar 2.0 is all about. And we believe the industry is now evolving to the areas where MicroVision is strongest.

Portfolio breadth. We now have the broadest technology portfolio in our industry. Designed to cost engineering, it's not complicated, cost drives mass adoption. Open software framework, giving our customers flexibility and control of their software and systems; and finally, disciplined execution across all aspects of the business.

Today, as I stated earlier, the new MicroVision has the most comprehensive product portfolio in our industry, and this enables us to win in our 3 key market segments. Our MOVIA family of products provide compact solid-state short-range sensing for industrial security and defense and automotive applications. IRIS and HALO expand our capability into long-range detection based on real-world production for automotive and industrial programs.

And Scantinel's FMCW platform gives us ultra-long-range sensing capabilities for automotive and security and defense. With our MOSAIK and SENTINEL software platforms, we now offer a complete perception stack and development environment from silicon to point cloud to perception software, all built around MicroVision's open software framework that enables our customers to seamlessly integrate and build differentiated capabilities on top of our platform.

Now just as important as integrating our product portfolio, we now have one unified engineering and product organization, bringing these technologies together. Over the last quarter, we have completed much of the work of integrating the Luminar and Scantinel assets and teams into the new MicroVision. This includes aligning engineering organizations, integrating product road maps, consolidating operation functions and continuing the transition of engineering ops and manufacturing into our Orlando facility.

Today, there is one MicroVision team executing on one unified strategy. The benefits of that integration are now showing up in the business. From a commercial standpoint, one of our highest priorities following the Luminar acquisition was stabilizing existing customer programs and reestablishing commercial continuity. I'm pleased to share that we have made significant progress on that front.

Let me touch on key developments for each of our 3 end markets. For industrial, we've restarted shipments and active programs with customers in mining, offroad logistics and warehouse automation. As I have talked about previously, the industrial market has started a significant transformation from high-cost electromechanical systems to compact and cost-effective solid-state sensors. Our MOVIA sensor product line is leading this transformation. Customer feedback of our MOVIA S has been incredibly positive, and we are on schedule for a planned production launch later this year.

In Security and Defense, we now have active engagements focused on drone-based LiDAR perception, aviation, traffic management and unmanned ground vehicles or UGVs. In March, we shared how our MOVIA air products can extend the perception of surface vehicles with our ability to compute real-time mapping and supporting train analytics for navigability. This real-time processing on the edge or in the drone is an industry first and is only possible with our lightweight compact and low-powered MOVIA air sensors, and it's a major advancement for drone-based ISR capabilities.

Additionally, we have just announced our collaboration with Avular on a fully integrated payload to further expand our capability and access to markets for drones. We cannot be more excited about the opportunities in this space and working with the Avular team.

And finally, for Automotive, we continue to actively engage with the passenger car OEMs as they define their next-gen Level 3 and 4 system architectures. While this is a key market for us, we recognize that this market will take time to develop. And until sensor costs are significantly reduced, we will only see limited deployments and adoption. As such, we remain focused on our Tri-Lidar Architecture as a key enabler of expanding lidar perception performance while significantly reducing total system cost.

We recently demonstrated the first integration of HALO with MOVIA S and a full 360-degree perception system at the ACT Convention in Las Vegas. There was strong interest in our Tri-Lidar architecture with planned follow-up with key CV for commercial vehicle and autonomous trucking companies. I couldn't be more excited about what came out of that.

Additionally, MOVIA S with its wide field of view is a perfect sensor for robotaxi and urban autonomy applications where near-field detection of obstacles and vulnerable road users is so critical. As a compact solid-state sensor, it offers that right performance but at a much lower cost than today's electromechanical lidar.

This is why our portfolio expansion was so important for MicroVision. We have the ability to bring the right solution at the right cost to each of these end markets. These opportunities also benefit from MicroVision's ability to be a one-stop shop for our customers' full lidar perception needs. And it's exciting to see how these conversations are shifting from technology evaluation to operational deployment.

Another important development during the quarter was the continued strengthening of our leadership team. Executives like Julia Imlauer, driving AI strategy; Phil Bellomo, leading product engineering; Helmin Ramovic, leading our program management office; and Fabio Laura leading our operations and manufacturing center in Orlando continue to bring deep operational and execution expertise to our organization. This operational discipline matters because the next chapter of lidar isn't simply about having a great technology. It's about delivering solutions reliably, economically and at scale. And that's what we're building the new MicroVision to do.

Before I turn things over to Steve, I want to briefly touch on our outlook for the balance of 2026. Q1 represents the start of our commercial traction as we focus on integration and operational consolidation, stabilizing those customer programs and transitioning of POs and restarting commercial execution. As we move through the remainder of the year, we expect the operational progress achieved in Q1 to increasingly translate into commercial and financial momentum. And based on this progress that we've made this quarter, we have increased confidence in our outlook for the balance of '26.

I'll now turn the call over to Steve to review our first quarter financial performance. Steve?

Thank you, Glen. Before I dive into the financials for the quarter, I want to highlight some key activities that took place during the quarter. First, we closed on the acquisition of Scantinel Photonics in January that, in addition to time-of-flight technology within our current products, added FMCW technology to our product portfolio.

Second, we closed on our acquisition of the lidar assets of Luminar Technologies in February that complemented our product portfolio with a long-range lidar solution, bringing immediate revenue, commercial opportunities and talent that is developing the next-generation long-range lidar. As Glen mentioned, our integration of the acquired businesses is progressing well and very efficiently.

Third, we closed on a $43 million financing deal in February with a portion of the funds raised used to repay the $19.5 million of outstanding principal balance and interest on a previous note and the remainder to be used for operating activities. The company has the flexibility to pay the new notes in cash or common stock. These 3 accomplishments are key enablers for us to execute our Lidar 2.0 strategy, enhance our commercial engagements and deliver our growth expectations.

Now turning to our financial results. For the first quarter, revenue was $0.9 million, which is a $0.3 million or 50% increase as compared to the same period in 2025. Our first quarter revenue was driven by sales in all 3 of our focus sectors, automotive, industrial and security and defense, and 75% of the revenue was attributed to the sale of sensors that we acquired from Luminar, underscoring the value of the acquisition with the ready inventory of automotive qualified long-range sensors and an acceleration of our commercial strategy. Gross margin for the first quarter was 39%, a significant increase as compared to the 7% gross margin in the same quarter last year.

Turning now to cash burn. Our cash flow from operations plus CapEx for the first quarter was $16.6 million, a $2.4 million increase as compared with the first quarter of last year. The primary driver of this increase includes the operating costs associated with our recent acquisitions of Scantinel and Luminar with a contributing portion of the increase stemming from nonrecurring expenses related to the acquisitions, including legal, accounting and audit fees.

In terms of liquidity, our balance sheet reflected $46.1 million in cash, cash equivalents and investment securities at the end of the first quarter. In addition, we have $42 million available under the current ATM facility.

Now let's talk about our full year 2026 guidance. In terms of revenue, we are maintaining our projection of $10 million to $15 million. And as mentioned on our last call, we expect most of our revenue to come in the second half of the year. We are making great strides in reestablishing trust with our customers post the Luminar acquisition and are seeing commercial traction as a result of those relationships.

Regarding cash burn from operations plus CapEx, we are improving our guidance to approximately $60 million for the year from our previous guidance of $65 million to $70 million as we are seeing the benefits of our integration activities and synergy cost reduction actions. And finally, we are elevating our gross margin guidance from positive to 35% to 40% as we continue to aggressively negotiate our supply agreements and optimize the mix of our sensor sales.

As we execute our Lidar 2.0 strategy, enrich our commercial relationships to propel revenue growth, continued financial discipline in spending cash and judiciously engage in capital raise activities, we are well positioned for success in the automotive, industrial and security and defense verticals. Please check out our investor presentation on our website to gain further insights regarding our way forward.

Let me now pass it back to Glen for closing remarks.

Thank you, Steve. I want to conclude the prepared remarks by reiterating my conviction. Our strategy is working. The new MicroVision has the most comprehensive product portfolio in our industry, which is enabling commercial traction in all 3 of the markets that we serve. Combined with our execution discipline, this will unlock value for our customers and as well will drive significant shareholder value creation.

Thank you. Operator, we are now ready for questions.

[Operator Instructions] Our first question is coming from the line of Casey Ryan from AmerX.

A lot of good news to unpack here in the quarter. This was a great update. Can we start with Steve, just hitting on the gross margins? So it sounds like if I heard this correctly, you're expecting 35% to 40% sort of moving forward, I won't say in perpetuity, but certainly for the rest of this year. Did I hear that correctly? And is that accurate that like we should expect that range kind of moving forward?

Yes. We finished the first quarter at 39%, as I mentioned, and we're looking at 35% to 40% for the remainder of the year, yes.

Sort of long term, sort of the long-term model, 10 years from now when we're a large-scale company. What's the structure of the gross margins? I mean, should this look like a semiconductor business, sort of 50s, 50% to 60%? Or is sort of 40% to 50% kind of a ceiling for this type of business? Or how do you see it long term? I just want to get a delta from all the progress that you suddenly jump to here post acquisitions to maybe where the ultimate ceiling might be in terms of margins?

Yes. I think as we progress into the future, we kind of know what our future is all about is kind of focusing on our 3 key sectors, automotive, as we see being way out into the end of this decade as well as early into the next decade. And we expect our revenue to continue to grow. We had good margins this quarter. We're expecting, as I mentioned, 35% to 40% for the year. And I would expect our margins to grow as we progress into the future. Obviously, we need to continue to manage our overall cost base. That's one of our key pieces of our DNA, so to speak. And then we want to make sure that we continue to capitalize on those revenue opportunities that we are expecting as we go throughout these 3 sectors in the future.

Okay. So then I just want to ask a question and maybe there's a lot of moving parts here, but where is the manufacturing happening now for all the different products? Has there been movement or maybe were things -- are things being built where they were being built 12 months ago generally in terms of the different sort of the like Luminar pieces and the Scantinel pieces and the core MicroVision products?

Yes, I can speak to this. So Casey, first, great to talk to you again. And as of right now, that's all been consolidated into Orlando. So building MOVIA S there now, IRIS, and then we're building up the ability to build HALO there as well. So that's all happening. IRIS and MOVIA S are in place. HALO is coming as we continue that development. And then that will suffice -- that will serve our needs for the near term. Higher volume plans still remain to be working with an outside contractor. Final determination hasn't been made exactly where, but that will happen over the course of this year.

Okay. But like it sounds like -- to support the $10 million to $15 million, certainly, it sounds like Orlando is big enough from a capacity standpoint.

Yes. Yes. That's correct.

Yes, terrific. So Glen, you were talking about in this announcement with the drone partner is actually quite interesting because, I guess, we've been hearing from industry sources that the weight of lidar units just sort of traditionally has been a little heavy for drones. So clearly, you've made a lot of progress. So I'm just fascinated to learn more about how you sort of maybe tackle the sort of weight issue and if you'd offer up sort of a range of how much your unit might weigh if it's not too competitive in terms of grams, if you give us sort of something in terms of progress.

I'm happy to talk about it. Yes, drones are really interesting because from -- if you think about it, what we're talking about is using drones for doing everything from commercial activities to ISR type missions. And the key was -- the key is going to the solid-state technology. So it's a solid-state technology, so you eliminate all the scanning and the moving parts and the motors and all of this to really lightweight that drone.

And then the second phase of that is to -- the second piece of that is to have it integrated with the drone architecture itself, not simply like you see today many times, the whole thing is bolted on to the drone. It's a complete bolt-on type of system. This is looking at optimizing the drone to take advantage of what's already -- or optimizing the payload to take advantage of what's on the drone. So we can lightweight that lidar sensor.

And typically, where we want to be is well -- is below 300 grams, moving as quickly as possible to below 200 grams. And that's still having the ability to do processing and most importantly, to do the map generation, the real-time map generation on the drone and then communicating that over secure networks to the ground station. So whether you're looking at wind turbine blade inspection or inspection of power lines or facilities or looking at terrains and doing ISR missions, getting that weight down, having that solid-state construction is critical and then having the processing capability and software that can create lightweight maps real time on the drone, that's what really opens up that potential for us.

And so I've got to say, I think this is something that the market needs. Are you able to sell that solution now to other drone partners or potential customers? Or are you kind of committed to this first partner to sort of bring it to the market for all potential solutions?

No, it's not an exclusive arrangement. So that's a structure that is nonexclusive. But obviously, Avular has been a great partner to work with. And so we're -- our first step is always looking at how can we work with them on those solutions. And then for us, we can help bring them into the U.S. market as well. So it's a great relationship, but it's not exclusive. So they can look for other solutions as well. But I think with the work we're doing together, it will be very successful.

Yes, this feels like a big leap forward and it feels like you have a real leadership position here with a real pain point in terms of the weight for drones. So that's fantastic. The last question I have, and I appreciate sort of allowing multiple questions. On the FMCW side, I think this is Scantinel primarily. I guess, we're learning more about the ability of that technology to be used in not too much long range, but actually super, super short-range stuff. So semi-cap equipment and sort of like manufacturing things.

I know you have many end markets to be going after, but is that an area of potential application or maybe there is some commercial activity around that. But I'm not sure I appreciate that like FMCW had the sort of good applicability in what we'll call sort of super short-range applications.

Yes. It's -- fundamentally it's an interesting technology because with the approach Scantinel has taken, it's very compelling on long -- 1 kilometer and long range or what we call ultra-long-range applications. But the technology is fundamentally applicable to very short-range and high accuracy applications like for robotic end effectors and positioning of relative motion for robotics. And so while we've -- and the technology we're developing at Scantinel really can be used for both. So it has the ability to look at both.

The chip scale package we have that we're developing now that we'll have our A samples out beginning of next year will be more of a -- think of it as a 1D edge emission configuration, so more suitable for long-range scanning. But ultimately, the technology in the 2D version applies very nicely to, like you said, ultra short range. And so we'll be looking at that as well. Initial focus is on ultra-long range where we're seeing some real demand in not just the commercial vehicle, but also the security market, in particular, around drone detection, aerial detection, aerial survey and for security systems and defense systems.

Okay. Great. I mean it sounds like sort of the opportunities for this FMCW sort of tech are -- seem to be getting more expansive all the time, which is really correct. Those are my questions for now, but this is a really very positive update.

I'll now turn this call back over to Steve to read questions submitted by the shareholders.

Thank you, operator. Okay. Our first question, in the Lidar 2.0 strategy, how does your product portfolio set you up to win in the automotive, industrial and security and defense sectors that you are targeting?

Yes. The -- so I'll start and Steve, I mean, obviously, you can chime in as well. The key -- the really critical aspect of our strategy is having that technology portfolio that allows us to then bring the right -- and you heard me say it over and over, the right solution, the right performance to the end customer for what their needs are. So we're not trying to force fit a one-size-fits-all solution on to all of these different applications. We can bring exactly what they need.

If the customer needs a 180x135 sensor for robotaxi application, we can give them exactly that. We're not going to try to sell them a 360-degree spinning sensor. We're not going to try to sell them a different -- a long-range sensor for a near-field application and adapt it to that. We're going to deliver to them the right performance for that use case. And in doing so, cost optimize that. So we can come and give them exactly what's needed at the right cost. And you'll hear me say this over and over again, it's all about cost delivers adoption and delivers volume. So being able to provide the right solution for that application at the right cost is a critical aspect to it.

The other thing, and this is more from a business standpoint, is the ability to serve those 3 end markets that we always talk about, industrial, security and defense and automotive. What that means is we don't have an overdependency on one particular market or one revenue stream that automotive goes through its cycles. I lived through those in my career with Aptiv and Delphi. You have these ups and these downs. And you want countercyclical revenue streams because security and defense does not cycle the same way that automotive does. Industrial, same thing. They're on different -- they're basically in different cycles. That gives you revenue resilience. And so you're not overly dependent on one revenue stream, which means that revenue is very fragile depending on what happens in that end market.

And then the third piece really is all about the discipline. It's all about financial discipline, discipline and execution and really being able to deliver on your commitments to those customers in those end markets. And when I think about how MicroVision is positioned for Lidar 2.0, it's exactly those 3 dimensions.

Okay. Thank you, Glen. I was going to touch on the cost piece, but you beat me to it.

No, I beat you to it.

Why do you think software is a key enabler in the 2.0 strategy?

Software will play 2 really important roles for Lidar 2.0. The first is on the product cost. And what I mean by that is software isn't just an important part of the product. It's how you use the software in the product to drive the cost of the hardware down. So wherever possible, we solve the technical challenge in software, not in hardware. And what that does -- and this is the same thing we did with radar. It's the same thing we've done with cameras. You're continually driving the advancements in performance and the sensing capabilities into the software where you develop it once and you get the benefit essentially for free across all of those products. It may require more processing. But at the end of the day, processing costs are always coming down.

And so software is critical from the standpoint of as a strategy, using software to reduce the cost and the complexity of the hardware. And what we see in the market today, quite frankly, are a lot of lidar companies talking about how great their hardware is. And look at the hardware and look at what the hardware can do. What we want to talk about is look what the product can do and the product can do it because it's software enabled.

The second reason software is so critical, and this is more on the customer-facing part and the open software framework that we talk about is because when you're integrating a sensor, sensors don't operate in a stand-alone manner. They operate as part of a system that has to be integrated with controls, with other sensors, with other software. It's very complex.

One of the frustrations and limitations of doing those types of systems integrations is not having the ability to work closely or even collaboratively with the software in those modules, in the sensor. And that's what's different about how MicroVision approaches this. We want to make it easy, seamless for our customers to integrate our products into their architectures. So it isn't just a black box sitting as part of the architecture that whenever they want to make a change, they've got a -- it's a big pain point for them.

It's part of their software. It's literally inherent and integral to their software architecture. So they can optimize their system with our product. They can integrate it. They can control the releases. They can update the systems. It gives them that flexibility, the control. And ultimately, and this is the key, it lowers development and system costs. And so having done large-scale software integration for decades, I know the pain, and I know this is exactly how you address that for our customers.

All right, Glen. Next question. In comparison to your competition, how do you see yourselves as differentiated?

I think there's a couple of really key things. One is the portfolio. I'll just start with that. We're not single threaded on our technology or our portfolio. I think that's super critical is that we have, like we talked, the broadest technology portfolio, 1550, 905 or 940-nanometer, time of flight, FMCW, solid-state mechanical or electromechanical scanning, MEMS or mirror, polygon mirrors or we have that broad technology portfolio that we can basically, like I said, bring the right solution to the customer, the right combination of technical elements to solve their problems and not being single threaded or trying to make a one-size-fits-all kind of solution. So that gives us a tremendous capability there.

The second is with regard to the open software framework that we just talked about. You don't hear other people talking about that. And I think that's a critical part of how we can be competitive. Like I said, it helps the customer do their job better. It addresses their pain points, but it makes us a sticky partner and really a close partner for them, which is exactly what you want.

The other piece of it is in our -- just our focus on cost and being able to scale the product and to be able to scale it at the right cost level for our customers, ultimately enabling them to create value when they offer their solution that is using our product. And that's a critical part. We provide a sensor into a system. We're not successful if that our customers' sales of that system isn't successful. And so for us, it's critical that that's why that cost discipline is so important because you don't get to mass adoption until you get to a cost level that enables our customers to be successful for the end consumer, whether that's an industrial customer or a person buying a car or a security and defense customer until they see the value in acquiring that system or that product from our customers. And so I think that's a critical element of it.

And then for security and defense, we're a U.S. and German company. And so when you look at our footprint, how we design, how we build, how we develop our software, that's in the U.S. and Germany, which is really, really critical for security and defense applications. We're the only true solid-state flash lidar non-Chinese supplier. And so that gives us certain advantages that at the end of the day, for those markets, it's an important characteristic.

Okay. Thanks, Glen. Can you provide more insight into your commercial activities within the 3 sectors you are focused on? And what are your plans to showcase your products to demonstrate your technology specific to these 3 sectors?

Yes. I'll start with industrial, and I'll group industrial into kind of broadly 2 categories, and it's because the go-to-market there is very different for those -- the commercial sales motion is very different. And those are -- the industrial customers, which for us is off-road construction, off-road autonomy, those kind of -- those mining, those kind of vehicles and as well as industrial automation, so the warehouse environment and all of that.

So when you talk about industrial, kind of the off-road piece of construction equipment, off-road hauling, that kind of thing, our approach there is working directly with those customers. And that's where Luminar had done a really nice job with a number of those customers that we're using them for mining, using them for off-road, off-road hauling. 1550 Time-of-Flight is a great technology operating within dust for longer range. And so really it was reestablishing those relationships, rebuilding those and then resuming shipments to them while they do their development with launch timing in later next year.

The -- in that market, you're doing -- you're just -- you're working directly with the OEMs typically. When you talk about industrial automation, warehouse automation, this is AGVs, AMRs, automated forklifts and all robots, that's a very different market. And that served either for a few of those OEMs, you work directly with them because they have the capability to do that complete system definition, that system integration, that whole -- the engineering associated with that.

Not every company in that market has the ability to do that. And then you typically are working through resellers or distributors. And we definitely want to and are engaging with resellers to discuss with them how they can sell MOVIA S or how they can sell MOVIA L or those products because it's primarily a short-range game, how they can sell those in addition to providing value-added services. So we're going to leverage those distributors and those value-add resellers for that broader adoption.

Now in terms of what are we doing in those markets, well, what you're seeing is -- as we continue to develop our lidar collision avoidance systems, we're showcasing that in trade shows. We're doing that in -- on the website and LinkedIn, you name it. And we're getting a lot of interest there because we can offer a low-cost, basically collision avoidance system for everything from forklifts, human-operated forklifts to scissor lifters to you name it. And so a lot of interest there, which is why our launch of MOVIA S with LCAS inside is so critical for the later this year. But you're going to see us continue to make progress in that market throughout the course of the year. And that will be mostly through what we showcase.

For security and defense, it's -- that's a little bit of -- that's a very different market in that you're really talking about defense industry, so working with primes and then also talking about working with companies that are involved with security around installations or traffic kind of municipality security or traffic management, these types of things. And in that case, it's working more directly with those companies.

But what we'll showcase we'll either announce -- and that's -- I mentioned we're engaged with traffic management. That's using IRIS to do vehicle and speed detection for vehicles on highways, looking at stop sign detection as well. And so a host of traffic management-related applications where we're working directly with those OEMs and they integrate our solution into theirs. And that you'll hear about as we announce more and more of those deals.

With regard to defense, though, what we're doing there is like we did with the AUVSI webinar, we're showcasing here's how our perception on a drone can extend the perception of an autonomous ground-based vehicle. It's very targeted towards drone and UAV-related activities for the defense sector. That, in turn, gets us connected with companies that are interested in those technologies, either drone companies or complete application companies, primes or people that just want to payload.

And so like the Avular announcement, as those engagements continue or expand, we'll be talking about them. Defense, obviously, a little bit differently than we would talk about commercial applications. But it's really -- in that market, it's about demonstrating the capability, showing what the capability can do and then working towards deployment. And that's why that Avular deal and what we're doing, I mentioned some other aspects why those are so important because that's that step towards mass deployment.

And then finally, for automotive, as I mentioned, the OEMs, passenger car OEMs, I would just characterize the whole first generation, the Level 3 as really being a learning phase, let me put it that way. This is learning about the technology for the OEMs and the supply base, was learning what does the consumer want. And the big takeaway was Level 3 offerings by the OEMs at the price point they were coming at USD 8,000, USD 9,000, it just wasn't compelling enough. You can get a complete ADAS solution with a bunch of really valuable features like adaptive cruise control, backup cameras, blind spot detection, you can automatic lane changing for several thousand dollars. You're not going to pay $8,000, $9,000 for incremental benefit, that's not that significant.

And so I think it was an important phase in the last 3, 4 years of learning for the OEMs as they're kind of reformulating their strategies around Level 3 and what do they really want to be able to offer that consumer, we're showing them what we can do. And that's where Tri-Lidar, I think, is important because it's a way of increasing lidar perception but at a lower system cost. You simplify the individual sensors to where you can bring their cost down and lower the total system cost. And I think we've talked about $200 for short-range sensor, less than $300 for long range. It has to go for mass adoption, it has to go well below that as well. So it's -- there's a lot of work to be done there. We're working with the OEMs on that.

In the meantime, robotaxi and commercial vehicle, ADAS, those are real opportunities. And you're seeing that scale. MOVIA S is a great product for those, HALO is a good product for those applications. So we're focusing on that. And that's why the ACT in Las Vegas was so good. It showed us integrating HALO, long-range 1550 Time-of-Flight sensor with -- I think it was 4 MOVIA Ss. So you had Tri-Lidar, there were more sensors than 3. But it showed a full 360 perception system and point cloud around that. So 940 flash lidar with 1550 Time-of-Flight, long-range scanning lidar, all integrated into a unified perception system for that vehicle, which is a very powerful demonstration, giving them very good coverage.

And so those types of demonstrations can continue to show, hey, MicroVision's value prop for those markets. Same with robotaxis, where that's moving forward. It's not at the same scale as pass cars would normally be, but it's still meaningful volume that we want to be a part of. And MOVIA S and HALO are great products for that. There you go. Long answer, Steve, sorry.

I just want to add to that. Just one thing with regard to those commercial activities, with our recent acquisition of Luminar, we've dramatically increased our customer base. As of right now, our pipeline is up across these 3 verticals. We have more than 100-plus customers and prospects that we are working with. This is clearly a sign for us that's going to help us grow our revenue this year and obviously grow our revenue as we progress into the future.

Yes. One of the things that -- just not to drag this out, but one of the great parts about those commercial activities is we're now able to bring -- it wasn't just about normalizing, hey, here's IRIS, here's HALO. The Luminar products, it was also our ability to bring the MicroVision portfolio to our systems, our short-range sensors, the software that we already had as well as Scantinel. So you now -- I mean -- so it was exposing our complete portfolio to those customers, which has been really interesting because that's broadened the discussion meaningfully than just those accounts as they were prior to the acquisition.

Okay. Next question. What specific milestones should investors watch for over the next 12 to 18 months that would signal transition from development stage engagements to recurring commercial revenue?

I think there's 3 things to look at. I mean -- and the first is obviously us announcing those things. And this is always an interesting one because not all customers, and this is a long tradition within certainly auto and other developed markets is not all customers want suppliers to announce that customer. But we'll be talking about those wins in general terms to show that. So as those wins come in or are solidified and those contracts get in, we'll talk about that.

The second is the milestones that we want to showcase. And I would say the ACT Tri-Lidar demonstration, the AUVSI webinar on MOVIA Air, a drone-based MOVIA Air real-time mapping. We'll have another webinar coming up later that talks about -- that will talk about why lidar is part of that perception system. So there will be these milestones that we'll promote and that we'll talk about. We'll have a multi-drone milestone, I think, coming up in this summer where we'll show multiple drones working with the ground vehicle and a handheld basically tablet doing real-time mapping.

So these are these events and milestones. We'll be at the Hannover conference in September. So that will show what we're doing with commercial vehicles. And so you'll see those types of milestones and those announcements throughout the balance of the year as we make progress with our development.

And then the third, and ultimately, this is what translates to is the guidance we give and the confidence we express in that guidance and discussions like today. So those are the 3 things that over the course of the year, we'll be engaged with and promoting.

Good. Okay. Are there opportunities for NRE revenue this year?

Yes, there are. I would say -- and that's always an interesting one because we want to make sure that with NRE, you're not just in a science project, you're spending your engineering resources and to move towards commercial success. So in that regard, I would say the bigger opportunities are really in security and defense, where they're looking at -- I mean, just there's a massive amount of capital moving into that space now in particular, around drones and autonomous ground vehicles and autonomous naval vessels.

So you have -- there's just -- and so to the extent that our technology can be adapted or can be applied in that area, which it can, there's many, many very good applications. There's funding in NRE available to help us develop that. And so we'll take advantage of that when it lines up with our product plans and when there's commercial success as the outcome. So there's definitely NRE opportunities there.

And then as you get into automotive, whether it's CV and the automotive, that typically you see that in predevelopment contracts, which can be interesting, but we've seen a lot of predevelopment contracts in automotive turn into science projects and really not translate into high-volume applications. And so again, we'll be very careful and thoughtful about where we spend our engineering in those areas because we want to make sure that, again, as we put our -- as we invest our time and energy into a customer and on to a customer development activity that we're confident at the end of that development activity, there's volume and that there's real revenue. It's not -- NRE is not just -- we're not an engineering services company. We want to develop products and sell products and manufacture those products.

Industrial, not as much. I would say, industrial, generally speaking, tends to be lower for warehouse and industrial warehouse automation and all of that, that tends to not be an NRE-rich environment. Industrial off-road in that area, there's definitely NRE development dollars there. So as we look across those 3 end markets, there's meaningful NRE opportunities there, but those opportunities consume resources. So it's just so critical for us that we agree to do something and get paid to do it, there's a commercial outcome at the end of it that we want.

Okay. And finally, how is the integration of the recent acquired companies going? And have you seen the synergies that you were expecting?

Yes. The -- first of all, the integration is going exactly on plan with what we expected. And there's a lot to that. There's all of the kind of the plumbing and wiring, the infrastructure piece of it. How do you get everybody onto the same systems? How do you get people working that have different IT structures and different tool chains and everything else. How do you get that all aligned? And that's gone very well in terms of in general, just ensuring that there's no disruptions to our workday.

Now it takes a little longer. It tends to be the engineering tools and the technology portfolio. And in this case, we're not talking -- from a hardware standpoint, you're not trying to combine a VCSEL SPAD 905-nanometer technology with a 1550 Time-of-Flight scanning architecture. So those are complementary. So there's not -- you're not trying to integrate those.

You are on the software side, though. We're trying to have a common software architecture that underpins all of these products. So the sensor models, the point cloud and the perception models. All of these things, it's a common architecture so that as we develop different hardware variants, you're not rearchitecting the software completely. That's -- there's a ton of money spent there if you have to maintain all different software architectures. And so that's the piece that we're working through now.

The good news is, for me, was the software architectures from Luminar and MicroVision were actually very similar. SENTINEL from Luminar, MOSAIK from MicroVision, perception stats had a lot of commonality. And so we're not having to fight through a bunch of issues associated with very dissimilar architectures. It's actually quite the opposite. So now it's a matter of, okay, what works best for what we're trying to do. And the teams have been -- Greg and the whole team has been very -- has been really good with that.

In terms of organization, that's all done. How the organization is structured, the team structures, that's behind us. And so now it's just about getting to work. But when you do these integrations, you can always find really hard pain points in terms of the integrations. We've been fortunate that, that has not been the case. And so that allows us to focus on customers and focus on kind of the commercial side of it as opposed to having to sort out internal issues, which has been great.

Yes. The only thing to add to that is just with regards to the synergies, as I mentioned in my prepared remarks, we originally guided on $65 million to $70 million with regards to cash used in operations plus CapEx. With all the synergies that we're finding just through the integration process that we're doing, we improved that, I should say, going down to $60 million, approximately $60 million for the year. So we are seeing those synergies impact us on a full year basis.

Yes. That's exactly right.

Okay. So this concludes our Q&A session. I just want to thank everybody for participating today and your continued support of MicroVision. Thank you very much.

Thank you. This concludes today's conference call. All parties may disconnect, and have a great day.

Good afternoon, and welcome to the MicroVision Fourth Quarter and Full Year 2025 Financial and Operating Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Drew Markham. Please go ahead.

Thank you, Paul. Good afternoon. I'm here today with our Chief Executive Officer, Glen DeVos; and our Interim Chief Financial Officer, Steve Hrynewich. Following their prepared remarks, we will open the call to questions. .

Please note that some of the information you will hear in today's discussion will include forward-looking statements, including, but not limited to, strategic plans, acquisition benefits and risks expectations regarding customer engagement and product deliveries, go-to-market strategies, product performance and pricing, market landscape and opportunities cash flow forecasts, liquidity and the impacts of recent financing activities, availability of funds and access to capital, expected revenue, operating expenses and cash balances, as well as statements containing words like believe, expect, plan and other similar expressions. These statements are not guarantees of future performance. Actual results could materially differ from the future results implied or expressed in the forward-looking statements.

We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update this information.

In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website at ir.microvision.com under the SEC Filings tab. This conference call will be available for audio replay on the Investor Relations section of our website at www.microvision.com.

Now I would like to turn the call over to Glen DeVos, our Chief Executive Officer. Glen?

Thanks, Drew. We have a lot to cover, and I want to start today's call by sharing our view of the significant changes we see happening in the broader LiDAR market, what we call LiDAR 2.0 and how we are building MicroVision to lead in this new era. When I reflect on the last 10 years or so in our industry, what we refer to as LiDAR 1.0, it was clearly a technology race. Companies operated with a Silicon Valley mindset putting hardware first chasing best-in-class specs. The prevailing thought was that the best technology but wins and that the volume would drive down costs, which would in turn lead to mass adoption.

The challenge with this start of mentality is that it was at odds with the realities of how the industry operates. Long predevelopment and sourcing cycles followed by uncertain volumes, a recipe for fragile revenue, heavy burn rates and has led to consolidation in the space. What MicroVision defines as LiDAR 2.0 isn't driven by technology, but rather by providing value to our OEM customers. It's not about winning with the single most impressive sensor, but rather it's about achieving scalable deployments across real-world platforms that drive long-term growth and margins. The transition from LIDAR 1.0 to LiDAR 2.0 now is now underway.

Looking across our industry, incumbents will face significant challenges in navigating this shift, for example, Hardware-centric players have impressive technology but the wrong economics, embracing a mindset of volume will fix price, while also failing to leverage the value that software can deliver. Automotive only players have deep focus, but the single-threaded revenue creates risk when faced with program delays, low option take rates or tightening budgets. Industrial players have revenue prospects in the short term, but the current electromechanical sensor architectures with their associated high cost structures are vulnerable to the emerging high-performance solid-state sensors with their significant lower cost basis. These challenges require a fundamentally different approach and success in LiDAR 2.0 will come to companies that can excel in 4 key areas: these include: first, having a scalable product portfolio that enables participation in diversified end markets, enabling robust revenue streams and achieving scale across the business, taking an open approach to software that both drive down hardware costs while also enabling our customers to more effectively manage their applications and systems.

Hitting the right price point with a hyper-focused design-to-cost approach that enables our OEM customers to unlock value in their end markets and embracing automotive-grade execution coupled with fiscal discipline. The new MicroVision has been built to lead in this LiDAR 2.0 era. So why are we feeling so confident certainly because we have the following capabilities. First, we have the right portfolio through the acquisition of Luminar and Scantinel, MicroVision now has the most complete and robust LiDAR technology portfolio.

MicroVision's MOVIA L sensors offer compact, cost-effective short-range dollar stage sensing with applications in all of our end markets. We are now seeing the anticipated interest in MOVIA S following its launch at IAA last September with multiple customer trials for industrial and automotive applications. Our Iris and halo sensors acquired from Luminar offer long-range sensing for high-speed use, and it's a perfect fit for automotive and security and defense. Our [ 15 50 ] nanometer FMCW sensor acquired from Scantinel provides ultra long-range sensing with initial applications in automotive and security and defense.

The combined software products, Mosaic and Sentinel now provide a complete end-to-end capability from silicon to point cloud to perception with advanced AI-based features, which can easily be integrated and configured by our customers, leveraging our open software framework. With this product portfolio, MicroVision is now equipped with the solutions to serve the automotive, the industrial and the security and defense markets with a scalable set of hardware and software solutions.

I want to take a moment though to highlight the emerging needs in the security and defense sector that are of increasing importance to MicroVision. We completed our proof-of-concept phase for our drone and ground-based autonomy platforms in Q4 of last year, and we are now working closely with our defense advisory board members as part of our business development and customer engagement phase. With our drone-based MOVIA Air and our newly acquired Iris and Halo products, we have the right products at the right time to enable real-time drone-based mapping and perception as well as ground-based autonomy. The ongoing shipments of MOVIA L to a European customer was an important start for us in this space and validates the need for these applications to use robust solid-state solutions. We will be publicly showcasing our capabilities over the course of the next months as we ramp up our efforts in this important market.

Our production technology, our U.S. and German footprint as well as our U.S. manufacturing capability position MicroVision to be a leader in the security and defense space. Now in addition to our portfolio, MicroVision's use of software is a clear differentiator. The new MicroVision shifts our center of gravity from hardware bragging rights to software that lowers cost and expands capability. Our focus on advanced software-centric signal processing the full stack continues to enable MicroVision to drive down the cost of the sensor hardware. This strategy follows a very similar blueprint to what we did in vision and radar for the move to software-defined sensors was a key step in achieving cost levels that drove mass adoption and achieving scale for these technologies. We will follow the same path, but we are making it happen much faster.

Additionally, our open software framework completely changes how our customers can utilize and leverage the capability of our sensors. It gives them full control of their system development and integration opening up new value creation opportunities for them. And finally, we're accelerating revenue. The new MicroVision is inverting existing commercial demand and customer relationships and to shift product and revenue. And this is happening now. Following the Luminar acquisition. Our top priority has been to restart those commercial relationships and contracts were meeting personally with our Iris and Halo customers. In the first month since the acquisition, we've already shipped Iris units as we transfer contracts and POs and reestablish commercial relationships and the production schedules.

The customer feedback has been very positive, with strong interest in MicroVision's most acquisition combined product road map where we can be a total solution provider to them. Luminar acquisition also significantly expands our market access by bringing approximately 30 new customer relationships and many more incremental prospects to MicroVision. It also enables us to offer new sensor solutions to existing MicroVision customers. This cross-pollination is further accelerating our commercial traction. Additionally, we began shipments of MOVIA L in December to an EU security and defense OEM with repeat orders continuing in 2026. As I talked about earlier, we are very pleased with the momentum in this segment where we see opportunities to expand near-term revenue. And then finally, as I mean, MOVIA S continues to gain interest and traction with multiple customer engagements and we remain on track for our Q4 MOVIA S industrial launch. We did not be more excited about MOVIA S as it is truly the product at the right price and at the right time.

We are also confident that our operations can support this accelerated revenue, but we know that the proof is in the execution. The new MicroVision is guided by experienced leaders, proven reputations in the automotive industry. with automotive-grade DNA and a collaborative approach to partnering with customers, the company is poised to meet commitments, milestones and deliveries. Now to reiterate my remarks from last week's fireside chat, I want to be very clear by thinking regarding our recent Luminar and Scantinel acquisitions and the critical role they play in enabling MicroVision to lead the LiDAR 2.0 era. First, they round out our strategy of offering the right product at the right price. By integrating these audits with MicroVision, we now offer the most comprehensive and robust live portfolio in the industry. We expanded our ability to serve different industries, use cases and price points. Not only will this open up immediate revenue streams in automotive, industrial and security and defense that will also make our business more resilient and diversified.

Second, the acquisitions accelerate revenue. In particular, the Luminar acquisition brought active commercial programs and established customer relationships that pull forward our time line to scale. We've made significant projects in resetting these commercial relationships. And as I mentioned earlier, are now shifting products to multiple customers. This approach accelerates MicroVision's path to revenue compared to achieving this organically which would have taken much longer. And third, these acquisitions have added depth to the talented MicroVision team with expertise in hardware, software and advanced perception, all with proven experience in navigating automotive requirements and manufacturing at scale.

This has enabled us to make the recently announced decision to consolidate our Redmond engineering, manufacturing and supply chain management operations into our Orlando site. This marks a key step in realizing the synergies we identified as part of the acquisitions as well as improving our overall operating efficiency. Orlando will be our U.S.-based manufacturing site for our full line of products, which is serving the security and defense sector and will be critical for that sector. It will also complement our ongoing high-volume contract manufacturing strategy. In summary, we didn't acquire Luminar for Scantinel to simply grow bigger. We acquired them to move faster. We have also continued building out our executive leadership team with proven credibility across the markets we serve, including automotive.

Executives like Fabio Laura, who's leading our operations, supply chain management and quality as well as Greg Scharenbroch, who will join -- who joined us in November as our Vice President of Global Engineering. What I've shared with you today serves as the basis for the new MicroVision strategy and how we will lead in the area of LiDAR 2.0. It's a strong and clear blueprint to guide the company and these steps are already well underway.

I would now like to invite Steve to review our GAAP fourth quarter and full year financial performance.

Thank you, Glen. For fourth quarter revenue, we reported $0.2 million primarily driven by hardware sales in the industrial sector. This compares to $1.7 million of revenue during the same period in 2024. On a full year basis, we reported $1.2 million of revenue in 2025 as compared to $4.7 million in 2024. The decline from both 2024 periods is a result of a last time buy on a contract with an agricultural equipment customer to deliver legacy Ibeo sensors.

Total operating expenses for the fourth quarter of 2025 to $25.3 million. This includes noncash charges of $13.4 million related to asset impairment, and $1.5 million of depreciation and amortization and offset by a net credit of $1.5 million of share-based compensation, primarily due to the forfeiture of PSUs from an executive departure in December. Adjusting for these noncash items, our cash-based operating expenses totaled [ $11.9 million ]. Compared to the previous quarter, including a onetime $1.2 million cash severance payment in the third quarter. Our operating expenses were $0.9 million higher than Q3 and in line with our expectations. The increase is primarily related to the addition of our Aerial Systems team to bolster our competitiveness in the security and defense sector as we announced in November.

On a full year basis for 2025, our total operating expenses were $65.5 million, which includes noncash charges of $13.4 million related to asset impairment, $5.8 million of depreciation and amortization, and $0.7 million of share-based compensation. Adjusting for these noncash items, our cash-based operating expenses were $45.5 million. As compared to full year 2024, our operating expenses declined $14.4 million or 24%, primarily driven by reduced purchase services and actions taken in 2024 to reduce head count and rightsize our business. This year-over-year decline in operating expense is a demonstration of our account management focus and cash-conscious mindset.

Cash used in operations for the fourth quarter was $15.4 million. This compared to $15.1 million in the fourth quarter of 2024. On a full year basis, cash used in operations for 2025 was $58.7 million as compared with 2024 at $68.5 million. The year-over-year decrease of $9.8 million or 14% was primarily driven by our intentional reduction of operating expenses. Capital expenditures for the fourth quarter were in line with expectations at $0.2 million. This compares to $0.1 million during the same period in 2024. On a full year basis, capital expenditures were $0.7 million in 2025 and $0.4 million in 2024.

For both periods, the year-over-year increase is primarily attributed to purchases of tooling equipment needed for the production of MOVIA S sensors scheduled to start in early Q4 of this year. In the fourth quarter, we incurred $29.4 million of noncash asset impairment and adverse purchase commitment charges, of which $16 million is accounted for as cost of revenue because it relates to inventory and commitments of our short-range MOVIA L sensor. The remainder of $13.4 million is accounted for as operating expense, primarily attributed to perception software and equipment for our long-range Maven sensor.

The write-down of MOVIA L, Maven and Perception software results from a multi-factored analysis, including the progress of our next-generation short-range solution and the market readiness of the long-range solution that we recently acquired. With the recent announcement of our consolidation of operations from Redmond into our new Orlando facility, we are currently evaluating the impact to the 2026 financial statements and anticipate asset impairment charges of $8 million to $12 million related to our Redmond office and operating lease as well as people-related restructuring charges of $1 million to $2 million.

On our balance sheet, at the end of the fourth quarter, we finished with $74.8 million in cash, cash equivalents and investment securities. We all have $43 million available under the current ATM facility. Subsequent to the end of 2025, we issued 2 new senior secured convertible notes in the aggregate principal amount of $43 million. The new notes will be used to repay the current outstanding principal balance and interest of $19.5 million on a current note with the remaining available for general operations. The new notes are redeemable in cash, or shares of the company's common stock.

With our strong leadership, depth and breadth of our product portfolio, financial discipline through operational cost management and capital raise activities we are well situated to deliver our cost-efficient products that meet performance standards to our customers and capitalize on the significant revenue opportunities that the automotive, industrial and security and defense sectors have to offer. With our recent acquisitions, the lighter history is consolidating into a handful of key players. MicroVision is well positioned to lead the light industry in these 3 verticals and offers a significant opportunity for shareholder value creation.

I would now like to pass it back to Glen for closing remarks.

Thanks, Steve. This is a transformational time for MicroVision. Today, we've talked about the vision for a new MicroVision, a company built to lead in the new era of LiDAR 2.0. We shared how our strategy allows us to create value for customers in new markets and the steps we're taking to deliver the right portfolio with the right performance at the right price. We've also begun to demonstrate concrete steps as a testament to our focus on execution, shipping products against existing orders and prudent financial management.

Turning now to guidance for calendar year 2026. We expect revenue to be in the range of $10 million to $15 million. This is based on our analysis completed to date of both prior MicroVision outlook going into 2026 as well as the now continuing Luminar revenue streams. This is a positive reflection of our ability to retain and convert iron Luminar contracts to ongoing Microvision revenue. We expect cash use in operations plus CapEx to be in the range of $65 million to $70 million for the full year, which reflects a modest increase over 2025 due primarily to the acquisitions of Scantinel, Luminar as well as the addition of our Virginia-based aerial systems team. These additions have dramatically expanded our market access but with thoughtful and disciplined management of our cash burn.

In summary, as we move into LiDAR 2.0, and I'm very confident that our provision is positioned to lead this transition. We have the right portfolio and products to access multiple end markets. We are delivering the right performance at the right price -- we have the management and engineering teams to deliver at automotive grade, and we have the financial discipline to ensure that we will continue to have access to capital and financing to achieve our growth plans. Our mission is clear. Our team is aligned, and we're focused on creating value for customers and shareholders. I'm excited about the path lies ahead for the new MicroVision and LiDAR 2.0.

Thank you, and we will now open the call for questions.

[Operator Instructions] And the first question is coming from Jason Kolbert from Boral Capital.

Thanks for the guidance, $10 million to $15 million, that's for this year. How does that break between the automotive and industrial segment? And what kind of margins are we talking about on that revenue?

Steve, you want to take that one?

So the breakdown of our revenue is mostly in the industrial space with the balance being in the automotive side. That's kind of where our key customers are that we brought over from the Luminar side, and that's the key customers that we're currently working with right now, developing those relationships, which is going to help us achieve our guidance in terms of our revenue situation.

From a margin perspective, our margins definitely should be positive. We're still working on what that cost is going to be just based on the cost that we're going to be getting as we're getting that cost evaluated as we're doing the PPA right now, but we do definitely see our margins to be positive this year.

And going forward beyond 2026. So what I'm trying to understand is how these 2 segments grow and what's the market potential in automotive, what's the market potential and everything else, the industrial.

I think what we're seeing as we move forward into the future as we get towards the end of the decade, we definitely see our growing in the automotive space, most likely that won't be till towards the end of the decade '28, '29, and that's where all of the automotive companies are developing their LiDAR strategies, their ADAS strategies, and they will implement LiDAR into their platforms. So we are in process of a number of RFQs as we speak right now to support those activities. So we see the automotive kind of towards the end of the decade and that's going to form a big portion of our business.

Our bridge between now and then is primarily going to be in the industrial base, as Glen talked about in his pre remarks, we have a number of customers that were being worth right now. The other piece is going to be on the defense and security side. So we've got some products that we're going to have readily available mid this year for salable units to those potential customers. As Glen mentioned, we do see some growth in that area. We see that kind of moving forward into the future, that's going to kind of again -- but the industrial and the defense side is going to be a bridge as we progress into the automotive side, which will begin towards the end of the decade.

Yes. Just to add some content to that. For auto, as Steve said, that's going to be later in the decade, the RFIs and the RFQs that we're talking about now are targeted for the '29, '30 start of ramping. So if you think about auto, that's where you start seeing volumes and really more meaningfully in the '31 time frame. Now that has scale. So that's the big fan. We have basically a multibillion dollar TAM and significant opportunities. Industrial for us, we'll see some sales this year really movies is our big industrial products. So as we launched in October, back half of the year or the back quarter of the year, we expect MOVIA S sales to start driving and then strong growth through 2027. So as those orders come in or -- and preorders come in over the course of this year, we'll be able to give an accurate projection of what that growth looks like in '27.

And then security and defense, this is an area that is still -- it's still very nascent, but we actually are very optimistic about it. There's a lot of focus now drones and what can be done with drones in terms of autonomy, providing basically mapping real-time mapping in conflicted areas and also extending perception for ground-based vehicles as we look at ground-based vehicle autonomy. And that's one where we'll be sizing those markets for us. but we're confident that's very interesting to us for 2 reasons. One, we think it has significant sustainable growth, but it's also -- it has higher ASPs and sale prices than, say, industrial and certainly auto. So it's a great opportunity for us to commercialize and monetize the IP we have there, whether it's Iris and halo or it's MOVIA S, monetize that in that market at very attractive ASPs.

And just my last question is on the sales and marketing line. It just seems like of the line, right? You're spending a lot of money there. What is that money actually being spent on? .

So sales and marketing line -- sorry, go ahead.

No. Well, why don't you complete your thoughts, Steve, and then I'll end my part.

Yes. I think most of our sales and marketing line as of right now, we're kind of building our team up. We now have a team that's on a global basis with bringing over the Luminar team. So we've got a strong team that's going to help us drive forward this revenue opportunity. And we have an office in a couple of different locations that we're trying to continue with that team moving forward. And Glen, do you want to pass it on?

Yes. The -- joining MicroVision, this is -- it's almost been a year now. One of the things that I've been prioritizing and certainly since taking over as CEO is having just a very strong sales and marketing capability. We have great technology. But if you're going to compete in automotive, if you indicate industrial and then security and defense, you have to have the right people in the commercial organization that understand the sales motion, and the respect to customers and can really deliver that. And so we've been growing that organically prior to the Luminar acquisition and -- and part of that was what we did with the Defense Advisory Board to help us understand and develop our strategy for security and defense. Part of it was bringing on some additional talent over the course of the year.

And then hear more recently expanding that team with the -- with onboarding of the Luminar sales team, and it's really -- we're now -- we now have just a very capable sales and marketing team that can take the portfolio we have and really bring that to market. So I could be happier with the team that we have. It's an investment that we needed to make if we were going to grow the business and accelerate the business growth. And -- but that's the reason why it is what it is.

And the next question will be from Casey Ryan from WestPark Capital.

Glen, Steve, great update. So my first question is, I guess, this is sort of related to the Scantinel acquisition and the FMCW technology. Is that technology getting a lot of interest from defense. It sounds like maybe that's kind of the key thing with its range? I know it's historically been targeted trucking, but is that helping you sort of think defense is a bigger opportunity for you in particular, using FMCW, versus some of the other product lines? Or is it all the product lines are being considered for multiple because I know there are so many applications in that defense space?

Yes, great question. Scantinel, there is a significantly increased pull from the defense sector for the technology. really for 2 reasons. One is [ 15 50 ], which is you don't -- it's basically not visible with night vision goggles or night vision capabilities. So it's essentially invisible. So from a standing and perception standpoint for night ops, it seems very, very attractive. And then the FMCW, and that architecture gives it all for long-range capability. And where we're seeing interest is on drone detection, long range from detection as well as other tech navigation and mapping. So when we acquired Scantinel, of course, the focus of the team really had been in the commercial vehicle market that has been the primary focus. What we're seeing now is a much -- an equally strong pull from the defense side. So still has interest in application in CV, mainly commercial vehicles. much stronger interest from defense, no question about it.

Kind of related to the second part of your question, we also have interest in the other products, and particularly with for security and defense and particularly, if you think about short-range LiDAR like a MOVIA S, where you can or even now doing MOVIA L with our MOVIA Air products. Those are [ 9 40 ] and [ 9 05 ], but they're very good for terrestrial land. So you're not as worried about being visible because it's a very low-cost drone that's flying around mapping away from personnel and providing real-time perception and extending that perception from those ground-based vehicles and personnel. And so we're seeing interest there relative to model products and MOVIA S products for mapping.

And then as well, Iris and Halo for basically on vehicle perception. So if you think about vehicle autonomy where vehicles want to operate at night, you want to have a [ 15 50 ] solution that you can offer again, so that vehicle isn't visible as is sending and if sensors are working. So really across all of those products, we're seeing significant interest there, both in ground-based autonomy, but also with regard to drone applications.

Okay. Terrific. So then I was curious about sort of as you acquire all the Luminar assets. And I think Orlando was kind of their headquarters. And this is just asking about how much effort to sort of complete the acquisition. Are there additional locations that you inherited with your purchase that you're sort of responsible for closing down and consolidating? Or was the Orlando kind of the only thing that was on your plate around physical locations? Because I know Luminar had lots of offices and spots around the world?

Yes. We really only acquired 2 locations, one of, as you said, the Orlando office, and they were believe their headquarters and where their engineering tech center was. And then the other is in Colorado, which was the Black Horse engineering team for their ASIC design. So those are the 2 offices and sites that we're maintaining we did bring over people from some of the other offices. If you think about Japan, if you think about Sweden and Germany, but we did not assume responsibility for those facilities. So we're not having to deal with closing down legal entities or closing down offices around the world. And so Orlando, Colorado, those are offices that we have and we're going to keep. And then as we mentioned earlier, we'll consolidate operations in Orlando.

Yes. Okay. Terrific. That's great color. And then last question, I think, for me. And maybe this is all too many new products and too many opportunities at one time. But I think we're seeing some I don't know if it's a desire or sort of a road map of combining centers, right, cameras with LiDAR and maybe radar, some of these new radar applications. But does that change the way you go to market at all? Do you want to partner with somebody? Or is that all kind of too far in the future to worry about today? How do you see sort of all those sensors coming together at some point in some applications?

Yes. To your point, it really depends on the application. It's interesting in automotive. We went through a period where we thought, hey, combining sensor modalities would be really a great way to package sensors in the car, and then we immediately brought them all back apart because it gave us more flexibility in where you can mount the sensors and how you mount them and then actually sourcing those sensors, you combine sensors, you end up actually restricting that. So there are some applications where combine sensor like LiDAR and camera.

For instance, that's what we do with our MOVIA Air products where we have LiDAR as well as a resolution camera that we then use that in the sensors. So when we provide the map data coming out of the drone, it has fused vision as well as better. But right now, that tends to be more of how the OEM wants to package those sensors on their platforms. And we can do it as a stand-alone sensor. We're happy to work with others in a combined sensor configuration. We just recently had some discussions around those lines this week as well. But as of right now, our feeling is we'll develop a great LiDAR sensor that can be flexible in terms of how it's integrated how it's mounted, whether that's in a combined fashion or as a stand-alone LiDAR sense?

Terrific. That's actually a great perspective. It's a great update, and it looks like it's going to be an exciting 2026.

I will now turn this call back over to Steve Hrynewich to read questions submitted through the webcast or in advance of the call. Steve?

Thank you, operator. Okay. Our first question is -- with regards to your revenue guidance of $10 million to $15 million, how confident are you in achieving this?

Yes. Let me take that, Steve, and then I'd ask you to add any further comments from year-end. So that revenue is a combination of sales of our long-range and our short range products, and it's really across all 3 end markets. We've already been shipping into critical customers that came with that Luminar acquisition, and we really expect that to continue. In addition, the commercial uptake of the short-range MOVIA S is actually ahead of our expectations. We believe that was going to be a great product the interest and the pull we're seeing on that validates that. And now it's up to us to launch that on time and at volume. We believe we have, however, a clear line of sight to other opportunities and that combination of what we know today, what we're seeing, that gives us a great deal of confidence with that guidance.

Now as we continue to work through what were the Luminar customer engagements and those contracts and production schedules, we believe there are additional opportunities there that we can include. But we still have to work through that process. We were basically what about 5, 6 weeks into it. And so through a lot of it, but not through all of it yet. And we believe that there will be additional opportunities for us.

I think just to add to that, as Glen mentioned, we're looking at production of our MOVIA S short range center in quarter 4 of this year. We have lots of customer traction, lots of interest from our customers. So we are definitely expecting to see revenue with that product coming in the fourth quarter this year.

Yes.

Okay. Second question, how many customers are you engaging with, including your recent acquisitions?

With the addition of Luminar's customer base, that has been a significant increase to our opportunity pipeline and really across all 3 verticals. And they've basically brought in incremental about 30 new customers for us to be working with. And within that customer group, many more opportunities and prospects. And as I mentioned earlier, with the onboarding of the Luminar sales and their commercial team, that was just a tremendous benefit of the acquisition because -- not only do they bring those contracts, they bring relationships and they bring knowledge of those end markets, knowledge of those customers.

So it isn't just a matter of the formality of acquiring a contractor, taking over a PO, we also now have the individuals with MicroVision who understand and have a history with those contracts, the history with those customers and a deep understanding of those customers' needs and how we can then basically bring our solutions to them. So that's why that's been such a benefit.

Along with same lines, another question, what is the state of the Luminar customer relationships of Volvo, Nissan, Caterpillar, have you delivered to any of these brands yet? Are these critical to achieving your 2026 guidance?

Yes, it's a great question, actually. And well, it's not appropriate to comment on individual customers, it is fair to say that every Luminar customer is engaged with us. And I mentioned, this is in part due to the fact that we have a sales team that knows them, that's maintain contact and that we're continuing those dialogues. By normalizing and restarting those past relationships, as you can imagine, when you go -- when a supplier goes into bankruptcy, that generally speaking, puts a pause on the relationship, it's disruptive. Well, we're now normalizing those relationships and having discussions, not just around the active POs or the near-term needs but also discussions regarding ongoing development. we're not going to comment on how individual customers drive guidance. Subsequent to closing, we have shipped to the largest customers in automotive and commercial vehicles. So that product and that associated revenue is flowing as we speak.

Okay? Next question is, how did Luminar impact MicroVision's path to revenue and commercialization?

So to put a very concisely, Luminar accelerates our revenue it brings with it. That acquisition brings with it active commercial programs, establish customer relationships that really pull forward our path to scale significantly. So we are actively engaged with the Luminar customer base and normalizing and starting those relationships. And as I mentioned earlier, converting those paused POs and contracts over to active shipments as well as the discussions regarding ongoing development. Now one of the other benefits, though, is we've been able to take -- with the Luminar customer base, we've been able to bring their products into aluminum products into our existing MicroVision customer base as well as the MicroVision products into that existing Luminar customer base.

So that cross-pollination we talked about in the earlier in the meeting, that really helps us accelerate that traction because it means that MicroVision can be a single one-stop shop provider for their LiDAR production needs. We provide short-range, long-range, wide field of view, narrow field review, we can provide the complete LiDAR solutions to them, which it's important from a purchasing standpoint. It's also important from a technology standpoint, because that means harmonizing and integrating all of those sensors becomes much similar. They don't have to try to integrate short-range sensor from one supplier with a long-range sensor from another they -- we can do all of that for them. So it's really an exciting development that we're able to cross-pollinate across the different customer bases.

And I think just to add to that, one of the key parts of the acquisition is, again, bringing that revenue ahead early. So the Halo product going out into the future is going to bring it as a quicker time for us from a long-range perspective. So that track now is getting very close to sales that we can be providing to customers. The team is working on that as we speak. And this is going to, again, ready our revenue in terms of the long-range solution quicker. Okay.

Yes, great point, Steve.

Next question is, what happened to the multiple RFQs that you previously announced?

Yes, that's another great question. We continue to actively engage with those customers. And what's interesting is that -- I mean, this has been going on for some period of time, and we now have a more diversified product portfolio to offer, especially with our recent acquisitions. So different product offerings for them. But we're seeing an interesting behavior with regard to those RFQs and those RFIs, I mean, normally, when you talk about the automotive passenger car market, an ROI is followed by an RFQ, the RFI is used to kind of understand the market, understand the supply base, selected technologies, the RFU comes kind of narrow that down with pricing and the specifics and then a production award typically would follow that. And that's usually management in a short period of time, not 2 plus or 3 years.

So what we're seeing right now in that automotive, in particular, the North America and European passenger car market, the OEMs are clearly reformulating their level free value proppant offerings. And this is doing no small part to the cost systems and really the limited initial value that the features offer to their end customers. At the end of the day, the end customer is simply not willing to pay [ 6,000 ] to [ 9,000 ] more for an L3 and certainly not the L3 that they're currently offering. So we've seen some program cancellations or those offerings being suspended.

And I think what it highlights to me is why our focus on cost is so important because we need to be able to drive the cost of short-range and long-range LiDAR sensors down to the point where the OEMs can afford the [indiscernible] cars, it can enable Level 2+ or Level 3 features that the OEMs can then offer at a price point that their consumers find attracted but they still have healthy margins. So it's -- we're still involved in those RFPs and RFQs. In some cases, the discussions now are in year 3. But I think, again, it just reflect and emphasizes the fact we have to be driving the cost of these sensors down to where the OEMs and really, really be able to put it on the vehicle and drive value both for them and the end consumer.

Okay. With the current technology you have plus with the acquired technology, what makes your overall portfolio, your technology different?

Well, I think a couple of things to that. First, we have a, as I mentioned, a really broad portfolio. We have [ 9 05 ] [ 15 50 ]. We have short range and long range [indiscernible], FMCW, solid-state scanning with polygons on MEMS. What that means and why that's important is we can bring the right solution for any given application in any of the end markets that we're serving. And additionally, our approach combines that strong hardware performance with an open software framework. And so instead of offering a closed system, we enable the OEMs and the partners to integrate faster, customize, functionality and basically identify new ways of monetizing advanced features on our sensors, and that openness and that open supper framework reduces the integration complexity shortening their development time lines and reducing costs, helping customers work on concept to deployment faster. And then finally, as a U.S. and German-based company with U.S.-based manufacturing, we can bring that complete product portfolio to the security and defense market, which is a significant differentiator for us.

Okay. Good. How do you create value for customers and specifically to the automotive sector?

Well, I can tell you, it's not to vendor with the most impressive demo that will create that value. It's the supplier that enables new use cases across the vertical -- across the verticals. And for industrial, that's the ability to enable autonomy at affordable prices as well as advanced safety systems and security and defense. We talked about it, it's applications. such as unmanned ground vehicle autonomy as well as drone-based real-time mapping and reconnisants.

Now for automotive, this includes enabling level-3 features and like we talk, making them affordable for the OEM and end consumer. And ultimately, Level 3 systems have just simply been too expensive and especially when you consider Level 2+ systems now coming in well below $2,000 on cost to the vehicle. So for us, it's a matter of how do we enable the OEM to successfully offer these types of products and services to their customers, but most critically to be able to do it in a way where they make and they unlock value for themselves. And so our ability to enable our customers on like value is how we will create value for them.

Okay. Good. Okay. Next question here is what is the future for Maven in the MEMS technology?

So when you think about Maven, really the key there is the MEMS scanning technology. That's part of Maven. And that technology is still a very important part of our total portfolio. So now with MEMS, it has some very good applications. It's great for scanning when you think about a fixed-wing drone, intertrial mapping, MEMS is a really, really excellent scanning mechanism for that later. And so great for scanning on drones. It's also very good for narrower field of new scanning. So if you think about automotive, when you get down to about 60 degrees of horizontal view -- field of view scanning, MEMS is a great option for doing that. And as a result, as we think about LiDAR, that's where you can get the field of view for long-range LiDAR down to around 60 degrees NIM now comes into play. So for us, MEMS, it remains a really important part of our scanning technology portfolio, and we continue to look at applications for it.

Okay. Next question is, what's the status of the CFO hire?

So the CFO hire, this is ongoing. If you think about that role it's really critical that our CFO has that our new CFO would have the skill set and be able to really accelerate our success in the vision that we have laid out today. So we have to have the breadth and depth to the CFO skills along with the relevant industry experience. Now we're in a very, very favorable position in that our Executive Vice Chair, who is part of our leadership team have been a CFO for 4 public technology companies and that gives us tremendous capability along with what I would say is just an outstanding financial team that is just gives us a really solid basis from a financial and accounting foundation.

And so when you combine those, that means we can take the time we need to take to find exactly the right person for that role. So we're continuing with that. We would expect that sometime here in the second quarter. but we're not in a situation where we have to reach that, which is a great place to be.

Okay. All right. Let's go for -- we've got 4 minutes left, maybe one more question here. Now with the recent -- again, the recent acquisitions, obviously, the company has changed. How are you different now? And what is your competitive advantage in the marketplace?

Well, I mean, the first and foremost difference is the breadth of the portfolio. So we've significantly augmented the portfolio compared to where we were pre acquisition, in particular if we had cantonal and Luminar. So first question is portfolio. Second question is time and to revenue, as we mentioned, the, in particular, Luminar acquisition dramatically accelerated that time line to revenue and versus doing that organically as we were pre-acquisition, that under revenue and the broadening of the customer base is that we now have access to with our portfolio, that's a huge difference.

And then finally, just deep on the whole, the entire team and the capabilities we have. So if you look at the depth of our knowledge, whether it's the Scantinel team and all the MicroVision team in Hamburg, it's the combined team now in Orlando with the Black force engineering team now in Colorado. When you look at that depth of engineering talent, it's just a name we have the talent to support that portfolio, to develop those trucks and to deliver on that. So it truly is, as we said at the beginning of today's call, a transformative time for MicroVision. And that's what gives me confidence that we will be very well positioned to lead in what we call LiDAR 2.0.

Okay. Thank you Glen. Okay. That brings us to the end of our call today. I just want to thank you, everybody, for participating on our call today and your continued support of MicroVision. We will now close the call.

Thank you. This concludes today's conference. All parties may disconnect. Have a great day.

Good morning, and thank you for joining today's webinar featuring Hans Werner-Kaas and Glen DeVos. We're especially honored to have Hans Werner-Kaas serve as our fireside host today. Hans Werner is a McKinsey & Company senior partner, Emeritus, where he was the Co-Founder of the Automotive and Assembly practice for the Americas. Today, Hans Werner is joined by Glen DeVos, CEO of MicroVision. Glen is leading MicroVision's evolution from advanced R&D to scaled commercialization in lidar, autonomy and intelligent mobility.

With his wealth of experience and global leadership roles in automotive technology, perception systems and advanced electronics, Glen brings a rare combination of technical depth, operational rigor and strategic vision as the industry moves into lidar 2.0 and MicroVision's next phase of growth. Following their remarks, we will be opening the call to some questions. But before we get started, I want to make a couple of quick housekeeping remarks. Please note that some of the information you'll hear in today's discussion will include forward-looking statements, including, but not limited to, expectations regarding business, product and go-to-market strategies, products and solutions and market needs and timing.

Status of commercial engagement and future demand, level of customer and partner engagement, market landscape and opportunities, acquisition benefits and risks, projections of future operations and cash flow, cash, liquidity and the impacts of recent financing activities, availability of funds and conditions for raising capital as well as statements containing words like believes, expects, plans and other similar expressions.

These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements. We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update this information. With that out of the way, now I'd like to hand it over to our host, Hans Werner-Kaas.

Thank you, Jeff, for the introductory comments, very important. And first of all, a very warm welcome to the entire audience. I know we will have a great mix of attendees, automotive enthusiasts, nonautomotive enthusiasts, technologists, et cetera, business partners, investors. So thank you for joining us today. And we are very excited for a great discussion on the evolution of the lidar industry. The path, if I may frame it that way, from innovation to scalable deployment and frankly, also to successful [ commercialization ] and what it really takes to execute in [Technical Difficulty].

I'm a little behind. I just have this up right now so you can get [Technical Difficulty] another town hall that I wasn't supposed to this morning.

Excuse me, whoever might be talking technicalities in the background. If you could please silence your voice or mute yourself. Thank you.

So just a warm welcome in case some of you may have missed it. Warm welcome. I know we have a great mix of attendees today, automotive enthusiasts, technology enthusiasts, et cetera, investors, business partners. You're all very much welcome. And if I may, Glen, also welcome to have you here with us today representing not only MicroVision, but sharing key insights in the evolution of the lidar industry. And if it's okay with you, Glen, I think let's jump right into it.

Yes. Thanks, Hans, and great to be with you today. Let's get started.

Super. Glen, you have been with MicroVision now for nearly a year. But obviously, you're a well-known entity in the automotive industry and the technology industry. You have been many years with Aptiv and before that, obviously, with Delphi. How would you describe the current state of the lidar industry?

Yes. Yes, I was thinking about that. It will be a year in April, and a lot has changed and it continues to change. And if you think about the lidar industry kind of broadly, it's really entering a new era. The first chapter of the lidar industry was kind of built on Silicon Valley disruption, hardware first, best-in-class, expensive, kind of financed on the assumption that automotive revenues would be coming sooner than later.

And then that volume with automotive would drive costs down. And the result of that was a lot of kind of flashy wins. There was a lot of excitement about lidar and automotive. But the revenue is very fragile. There's revenue in automotive is always uncertain. There was very heavy burn rates for the supply base. And as a result, a number of kind of washouts as that reality set in, long time to revenue, slow growth market. And while automotive remains a really important market for us, that reality colliding with that kind of start-up behavior was pretty tough on this industry.

And so when I look at it now, we're really transitioning to the next chapter, one that we call lidar 2.0. And the important characteristic of that is it's all about providing value. It isn't about providing the most impressive sensor. It's about getting lidar deployed at scale across real-world applications and platforms. And it takes a different mindset and a different set of capabilities. And what we're doing in MicroVision, and that's what we're talking about today is really building MicroVision to lead that new chapter to lead lidar 2.0. And really, that involves combining what we would say, 4 critical capabilities. The first is the right portfolio and the right performance. And that means you have to have a portfolio that's able to span across multiple applications, short range, long range and able to serve multiple markets.

It can't be just a single threaded portfolio that serves one market. You have to be able to serve automotive, industrial, security and defense markets and really with products and solutions that are developed for deployment, not just simply demos, built in the U.S. and built in Europe, MicroVision has a really strong position to do just that. So the right portfolio with the right performance. The second is, and I've talked about this since joining MicroVision, it's the right price. It's about cost and price enables volume, not the other way around. We've embraced at MicroVision that design-to-cost philosophy really driven by solid-state solutions and really with the knowledge that economics are a primary concern, not a secondary concern.

The technology is important, but economics are just as important. The solution has to be economically viable. And then the third key element is using software as leverage. And really, MicroVision is investing in what drives scale adoption, and we're shifting our center of gravity away from really hardware bragging rights to software that lowers cost, increases flexibility and really strengthens the system capability, which is so critical for our customers. And that's what's really critical about using software as a leverage to help drive cost down. It's what we did with camera-based systems. It's what we did with radar systems. It's what we're doing now with lidar. And then the fourth, when we talk about product and technology, I can talk about that all day long. One of the things that you don't always talk about is capital discipline and execution.

And it's being very disciplined about how we deploy our capital, how we engage with customers, how we pick which customers to really engage with and where we basically place our investments. Delivering on time, on to budget with those automotive grade solutions, but being very disciplined about our capital management and our financial management. And so as you think about that kind of shift to lidar 2.0, those are really the 4 pillars that MicroVision is building.

Yes. And thank you for framing it that clearly. And indeed, it's not only about the right product line, the right performance of different product offerings. I'm very glad to hear. It is about product cost, that means enabling the right price because both MicroVision as the provider needs to make, call it, a sustainable margin and sustainable cash flows to sustain the business. And obviously, the price needs to be also attractive, be it for the OEM and ultimately for the end consumer, depending on the positioning or packaging, be it as an option or as an offering. Very glad to hear that.

Now let us dive in a little bit more in the changing customer expectation. If you look on the one hand, lidar 1.0. Now lidar 2.0, what do customers really want other than obviously an affordable price, no question about it. What you're seeing in the use cases like we have seen in the early 2000s. Remember, adaptive cruise control was enabled by Radar and suddenly, every end consumer said, that's really value added for me. I probably should order it if it's not part of the initial base offering.

Yes. I think for each market, it's a little different. I'll kind of focus in on automotive for right now, though. There was a lot of excitement about the technology and the potential that the technology could bring in terms of useful features to the end consumer. That's what drove a lot of the real excitement.

It was partially driven by Level 4 automated driving, but then also, hey, Level 3 hands-off driving. And there was a lot of excitement about, well, what is that -- what can that bring to the end consumer and what kind of value can that unlock? And as you think about customers now in lidar 2.0, it's not just about the tech. It is about what value they're bringing to their end consumers, which means what value can they create. And so as you think about that and we kind of look at the different markets for automotive, it really includes how can lidar enable Level 3 features but make them affordable for the OEM and ultimately, the end consumer.

So it's a compelling value prop for the end consumer. There's features there, like you mentioned, adaptive cruise control, blind spot detection or other features like we see on ADAS platforms. Once you have them, you will never buy a car that doesn't have them. You won't take that step back. They're incredibly sticky and customers will expect that in their next vehicle [indiscernible] customer pull. But it has to be affordable. And that's really where the auto industry has struggled. I mean even this week, we're seeing more OEMs kind of pulling back on their Level 3 offerings. And the issue is the end customer is not seeing the benefit for the on cost of the vehicle. When they go buy a vehicle and the on cost is $6,000, $9,000, that's a lot. And there's got to be a lot of value there, and they're not seeing -- just not seeing the value and the benefit whereas ADAS systems are less than 2,000 or 3,000 maybe tremendous value. And so customers, as we think about lidar 2.0, we have to enable compelling features that are affordable to the end market where consumers pull them through and the OEM can create value from that.

In industrial applications, it's a little bit different. lidar has been there for a long time. And now what we're doing is we're expanding the product offerings. There's automation, so enabling autonomy for forklifts and all sorts of industrial automation and robotics within the factories and within the distribution centers. But there's also really expanding the safety systems that are on human operating vehicles like forklifts like tuggers, like other equipment that's still manually operated in the plants and in the distribution centers where we can provide very cost-effective and very, very effective safety systems for those.

And then in security and defense, this is really -- this area is moving very quickly. And especially in the area of unmanned ground vehicles, so UGVs, which need to have very capable perception systems onboard the vehicle, but also in terms of drones and what we're seeing with drones and the drone's ability to extend that vehicle's perception system, so lighter on the drone doing mapping and communicating with the ground vehicles, but also just terrestrial mapping, ISR missions, these types of things.

And so you really -- when you think about that question, what is the customer expecting, it's value, and it's really unlocking new features and compelling use cases that for their applications or for their customers, they see a very strong pull. And what's exciting for us is our technology portfolio, the same core technologies support all 3 end markets. So that is incredibly important because I can basically repackage but reuse the same technology, the same software across all of those end markets. And that gives a tremendous benefit for us.

Yes. One follow-up question, as you talked about different end markets, automotive, industrial, but also obviously, aerospace, defense, security and using the same core technology is it even mutually beneficial for a player like MicroVision? And I know there are obviously others as well to actually play both in auto, non-auto, knowing that the automotive adoption path needs still a little bit of time.

Yes. Yes, that -- it's important for a couple of reasons. One, and to have multiple end markets where you can basically commercialize your technology. The first is that they tend to have different sales cycles, different times and paths to revenue. And so what we're seeing is while auto develops, we still believe that's the biggest TAM, that's the biggest market. While that develops, we're able to capitalize and monetize basically in near-term markets like industrial, like security and defense.

So that brings revenue streams in now while auto develops and which is great for the business. The other thing it does is longer term, as auto is there, as industrial is there as security and defense is there, you get more -- you get really revenue resilience, revenue diversity. So when an auto cycle occurs, auto is a very cyclical business. When that occurs, well, industrial is on a different cycle. It's on a different time horizon. Security and defense is on a different cycle. So you don't get -- you don't have that effect of, oh, my entire market, my entire revenue stream is now going through a down cycle.

You have revenue diversity, which gives you a lot more resilience. We talked about revenue fragility earlier on. I mentioned that. That's exactly -- this gives you the opposite of that. It gives you a robust revenue stream that's less sensitive to down cycles. And that's incredibly important for companies like ours.

Yes. No, thank you for highlighting, frankly, multiple dimensions and nuances of the economic benefits of developing and deploying the technology, both in automotive and nonautomotive. Let us shift gears slightly to the lidar industry itself. There has been over the last, frankly, few years and not only recently, quite a bit going on in terms of consolidation of the industry and in the lidar space, as we know.

And obviously, when you look at other, call it, automotive supply or nonautomotive supply segments, the structure of an industry segment and how players behave plays a very important role. Where do you see MicroVision's role in this changing and new landscape, evolving landscape, probably the best way to say it. And what steps are you actively taking?

Yes. Well, near term, we've been actively acquiring. So we've been a force of consolidation. As you're indicating, lidar was a new market, an uncertain market, but a new market, a lot of technology entrants coming into it. Revenue is playing out slower than what was anticipated. And so that gave us the opportunity to identify and then be able to capitalize on consolidation or acquisition of companies where we felt their assets really were beneficial for us.

And Ibeo approximately 3 years ago, Scantinel earlier this year and now most recently, Luminar. And in every case, when we looked at it, we said, hey, it's a technology that is interesting for us in terms of our portfolio. It's talent that we think is really important for a technology and an engineered product. And then in the case of Luminar, it's also -- it's both of those things plus commercial. so existing commercial relationships. So it really brought all 3 elements forward. And so we see our role not simply as an aggregator, but being able to essentially help the industry consolidate, bring together the right pieces and parts so that we can have that as part of a really a coherent portfolio and then put ourselves in the best position to -- on the path to commercialization across all 3 end markets.

And so I think it's -- I think we'll still see more of this occurring in our space. But for MicroVision, we're focused on how do we build a company that as we think about lidar 2.0, we're positioned to lead in that chapter and not simply chase it, but lead it.

Yes. No. Well said, Glen, you just mentioned Luminar and obviously, it's on everybody's mind given the most recent acquisition by MicroVision. Can you dive a little bit deeper into the role that Luminar plays for, I call it now the combined entity, the combined offering of MicroVision and Luminar. And how does Luminar align with your lidar 2.0 vision and pathway as you just talked about?

Yes. Great question because obviously, that was a major development for us here just recently. And I would say there's 2 things that -- as I mentioned, there's 2 really critical things that Luminar brought. And the one was from a portfolio standpoint. And their long-range lidar, which is available already now [indiscernible] In production, Halo in development, but essentially [ BSage ] that accelerates our portfolio, our ability to offer a 1550 solution now. What's also important is that's the product.

Behind that product, there are a tremendous amount of technology assets. So there's technology building blocks. There's technology, both in hardware and software that we can apply more broadly as well. So we had an immediate benefit of a long-range scanning solution today. It has a broader benefit of their technology applies across a lot more areas of the portfolio than just that. So it was a great technology portfolio fit. The other thing we talk about is their customer relationships and the contracts that they have. And that accelerates our path to revenue, just to be very -- put it very simply.

So those engagements, which -- and to the credit to the Luminar team in terms of developing that, booking those business, getting those engagements started, those engagements are incredibly valuable. And we understand them. We understand the applications. We understand those customers. Many of these are customers I've dealt with for many, many years. And so that's the other piece that it brings. Underpinning all of that is talent. The third thing is really talent. And so for us, the way I look at it is that when you think about the Luminar acquisition, it wasn't about, hey, MicroVision is acquiring Luminar to grow bigger, to be a bigger lidar company to basically increase our size, it was acquired for us to move faster and move faster both on the technology development front, but also moving faster on the path to commercialization and revenue. And so that was a unique opportunity for us. Team worked really, really well to be able to make that happen. And now we're focused on bringing it all together and execution.

Yes. No, thank you, Glen. And let us quickly stay with one theme you've mentioned as the 2, 3 key strategic rationales why you acquired Luminar, talked about the technology assets, the portfolio, the talent, but also commercial relationships and customer access. Let's stay with that for a moment. Can you talk a bit more about revenue and commercialization? Because I know we have a very well-informed audience here. Some of them would like to see automotive customers on a faster and more scalable pathway to adoption, but that has different reasons. Obviously, we have camera radar-based solutions in the ADAS stack, but also there's the cost and price argument. How does that pathway look like? I know you need to look at both auto, non-auto as you just outlined.

Yes. Yes, that's a really important question [indiscernible]. Let me start by saying there's a customer set that Luminar that they were engaged with. And I can tell you, when you're working with a supplier, -- and you've invested, in some cases, years of efforts and development work with that supplier. And then that supplier has financial difficulties or goes into a bankruptcy. That's incredibly concerning as a customer to that supplier, you have a big investment there.

And now you have to look at, hey, do I throw away everything I've invested in that? Do I have to find a different partner to work with? Do I have to basically start over and lose all that time? And it's incredibly disruptive for those customers. And that -- I understand that situation very, very well. So one of our first priorities was reaching out to our customers, engaging with them and basically repairing those relationships, restarting those relationships. And what's been great is we're able to -- one, we're a team that has a tremendous amount of automotive experience, industrial experience. So we understand what they're doing and what their needs are. And then for us to come in and say, look, we'll support you on Iris, we'll support you on Halo, we'll support your near-term supply needs as well as your developmental needs has been really well received.

We have a company that's -- they have a company that's acquired Luminar that can be a good partner. Now that's where we now have to prove that from kind of normalizing the relationship to demonstrating we're the right long-term partner. But I believe we have -- we're in a very good position to do that. We have the right portfolio. We have the right, I think, design-to- cost mindset and ability to execute. So I think we have a great story and a value prop for those customers -- and what I can tell you today is that's been a very positive process. And to be honest, that's one of the best parts of my job is to be able to talk to customers and understand how I can solve their pain points.

And so that's repairing the existing commercial relationships that Luminar had, and it's going very well. The other aspect of this, there's 2 other things that are happening as well. The one is I can now bring in MicroVision's portfolio to those Luminar customers. So I can show that here's what we're doing with short-range sensing -- here's what we're doing in these other technologies. And so it's a more comprehensive road map. It's not just about what am I doing with Halo, for example, It's, hey, I have MOVIA L, I have [ software ]. I have all these different capabilities that I can now bring to bear. The other thing is I can now bring in Luminar's technology into my MicroVision.

And so where I was really focused in the near term on short range, I now have the ability to bring a long-range 15, 15 time-of-flight sensor. It's really synergistic in terms of how, one, we rebuild the existing customer relationships, but then we augment them and expand them with additional portfolio offerings. And it's been, to date, great progress. We have to execute. We have to demonstrate, we have to prove, and I know we can do that. But I'm really happy with the progress that we've made so far.

Yes. Thank you, Glen. And thank you for being so transparent also what it takes to call it, improve, reignite. You used the word repair customer relationships. I think folks in the audience here really, really appreciate that. So thank you. Let us because you already touched on it, talk a bit more about execution. You mentioned it already. At the end of the day, you can make a lot of statements. You can show great, call it, pilots or prototypes in certain settings. But ultimately, it has to go in higher volume scalable deployment, we call it a bit earlier.

And lidar 1.0 transition to lidar 2.0, as you framed it, is indeed very critical. The first stage was much more proving technology, innovation, et cetera, where is the space or call it the justification to be to exist for lidar in addition to or augmenting camera and radar. Now it is about delivery. And that is not only operational delivery, because you are obligated to "to deliver returns to your shareholders." So delivery also means commercially successful. If you wouldn't mind, can you elaborate a little bit and why you are so confident that, that is the pathway to go?

Yes. Yes, you're exactly right. And I've lived through this in decades in the automotive world where the kind of the fun and quite honestly, the easier part is demonstrating a technology that gets the market's interest. And while that's great, execution is what drives the outcomes. I mean that's you have to deliver.

You have to go from delivering prototypes for small volumes to being able to deliver hundreds of thousands and millions at the right price, at the right reliability and at the right performance over the full lifetime of that product. That's what we kind of call automotive grade. Industrial and security and defense, they have the same expectations. So it's no different in those other markets. You can't -- you don't get to get a pass on performance, reliability in the other markets either. So it's that automotive-grade mentality. And what we're doing with the team and what we're building with our team and in particular, our leadership team and then the key talent that we have in the organization is just that, experienced leaders that understand how to deliver into the automotive market and how to support customers all the way through development through launch into production over the full life cycle of that product, which when you add up -- add the whole thing up, it's like 20 years of support on these programs in the automotive space. It's not -- I mean it's a long-term commitment.

And so we have that leadership team. We have -- with the combined organization now, we have just an outstanding talent in our engineering and our commercial team. So these are individuals that really know how to serve the market, understand the expectations of the customer. That gives me the confidence we can execute on our plan. And so as we sit here today, what we're doing right now is we're reenergizing the near-term activities with our customers. We're delivering product. We're shipping against the POs that we transferred from Luminar to MicroVision. So we make [indiscernible] started this week.

So we're beginning that process. Customers have a right to be skeptical and critical. They should be. We have to demonstrate and prove that we can deliver. I'm confident with the team that we have, we can do that. And that's -- that's been a big part of that year we talked about since I've been here, that's been a huge part of my focus is putting the team together that is able to really understand the customer needs and execute to them. And it's exciting to be in that process now. And that's -- like I said earlier, it's the best part of my job to be with the customer and delivering to them.

Yes. At the end of the day, the existence of any company is that you solve the customer's problem. Sometimes the customer is aware of the problem, you can describe what state you [indiscernible] Sometimes not. And that's also your job to actually lay out the opportunity of additional customer benefit. When you talked quite a bit about the blueprint for the future MicroVision strategy in auto, non-auto near-term opportunities in non-auto markets, obviously, larger volume, total addressable market coming, but also needs a convincing obviously of automotive OEMs and frankly, the end consumer. Let me stay for a moment with the element and the importance of talent. How do you integrate the best of best, Luminar brought great leaders, engineers, MicroVision has great leaders and engineers and different footprints in Europe here in the U.S. How do you bring the 2 teams together to be one joint, call it, uniform team?

Yes. That's a really important question because I've been through a lot of acquisitions and integration activities in my career. I mean that's been -- and there's -- when you acquire a company or you bring in a new group, that integration is really critical. And you have to manage it carefully. And what I would tell you is there's a couple of things we do. And the first, and I think this is the most important thing, is to align on a strategy, both from a technology standpoint, where are we going from a technology standpoint and a product standpoint.

So everybody understands and has a common vision for what the business is doing on the product side. And that -- for engineers, in particular, it's incredibly important that the engineering community understands what we're trying to do from a technology and a product development standpoint. So aligning on that strategy, critical step. The other step, and this is more on the soft side is spending time with the teams and I mean, every level. And that is communication, whether it's all-hands meetings, skip-level meetings. It's just the blocking and tackling of good management, if you will, where you engage with the team and you have real-time feedback on the concerns and the needs of the organization. As you're bringing 2 organizations together, you're talking about different cultures coming together, different ideas coming together, different philosophies.

Sometimes these philosophies can be very orthogonal to each other, and you have to unify them. And you do that with time spent with the team, with really explaining and communicating why we're doing what we're doing. So you have the product strategy, you need to explain why you're doing what you're doing. And then the final piece is really kind of wraps around culture. And it's important to make sure that as people are joining, that -- everybody understands what's important from a cultural standpoint. What is the culture of our organization and what are the guiding principles and how we do our business for everybody in the organization, every role, every person in the organization.

For me, those are the 3 critical things at this stage where it's very new, it's very fresh. And you have to make sure you have your finger on the pulse of how the organization is feeling about things. You are providing direction and then you're providing constant reinforcement of those things, including the culture and how you want your organization to behave, that mindset. And so for us, what I would tell you is the -- being these 2 organizations being in automotive, being in lidar, there's a lot that fully aligns already and is complementary.

So it's really focusing now on making sure we have our hand on the pulse of how people are feeling, how the work is going and then really driving the expectations and the cultural elements.

Thank you. Thank you, Glen. I'm glad you -- that was also the reason why I asked the question you're pointing out the importance of developing a joint culture and culture ultimately is defined first by mindsets and then how we behave based on these mindsets and convictions and beliefs each single individual holds. So thank you for emphasizing that importance of culture, bringing 2 organizations together.

I think with that segue, I think we can transition to the open Q&A session. I know we have quite a few folks who have submitted questions or real-time submitting questions. And Jeff, if you wouldn't mind to guide us a little bit what's on the audience's mind and how can we help?

Sure. Yes. Thanks for the discussion, gentlemen. We've been monitoring the questions throughout the conversation and also took a lot of questions over the last 24 hours. So we'll try to get to as many as we can here. I think the first one that people seem to be really interested in is just a really succinct distillation, Glen, around what you believe the real differentiators are for this new MicroVision and this new landscape. How would you sort of boil that down to the key points of differentiation that set MicroVision up to kind of lead this renaissance in lidar and be more successful.

Yes. Great question. I think there's -- I would highlight a couple of really important factors. One is I would start with portfolio. And we have now with Scantinel with Luminar, with what we've done with what MicroVision has developed, we have the broadest portfolio in the industry, in my opinion.

We can cover all the different use cases in terms of short range, long range. We have solid state. We have polygon scanning. We have MEMS scanning. We have all the different building blocks that allow us to really go after those end markets, the 3 end markets that we talked about, automotive, industrial, security and defense. And so that broad portfolio is, I think, a critical differentiator for us. The second is I think we have -- if you think about our U.S. and our Germany-based team, we have some of the very best talent in this space, bar none.

And the fact is, as a U.S. and a Germany-based company, we have an advantage as we think about some of the markets we serve. So there's a fundamental advantage there. The third thing I would say is our approach around software is, I think, unique in the industry in that we've talked about our open software framework, and it's really about opening and integrating our software with our customers' system architecture and their software architecture. So giving full access and visibility to the software that's in our sensor to our customers to make their system integration. We're a sensor company, which means we integrate with a perception system and a control system that's on the customer's platform.

As such, we want to make that integration as easy as possible. So the software strategy is, I think, unique as well. And then the final thing I would say is our maniacal focus on cost. And the design-to-cost mentality that we have. And the way we look at these markets is the first thing we look at is what makes sense for this market from an economics and a pricing standpoint. How do we enable that? And so that design-to-cost mentality, that relentless focus on how do we enable our customers to create value for themselves and for their end consumer, I think, is also really an important differentiator for us. It's just not -- it just hasn't been part of the landscape in lidar 1.0 that we see as critical to lidar 2.0.

Yes. Jeff, I just add or reinforce maybe 2 points what Glen mentioned. Let me start quickly with the cost point. Always in the past, the long-held believers indeed wait for volume, you divide all your investments, be it R&D and CapEx to a bigger denominator, we call it scale and bring cost per unit down. I think what Glen mentioned around the design to cost mentality and approach and that relates to product architecture, where you're going to transition to solid-state scanning, how do you really change the product nature in terms of the pathway of the light and then you need to collect the light back.

We don't want to get too technical here today. But there is quite some space in optimizing product architecture and taking bill of material costs down. And that indeed helps to bring prices down. But to actually sustain and also defend and earn viable margins for any player. And in that case, obviously, also MicroVision. And the point around open software capability to integrate in the ADAS stack of the OEM is very critical. Most OEMs, if not all, they do want to have a proprietary ADAS, advanced driver assistance systems.

And that has different layers and different notions, et cetera. But you need to provide an output of the lidar system, which is easier to integrate and makes the ADAS offering just more viable, more safe for the end consumer, et cetera, and affordable. So that's only 2 points I would just highlight in addition.

No, great point, Hans.

Yes. I think the second question here I'm seeing come up, it sort of rooted in some of your comments, Glen, around the transition from lidar 1.0 to lidar 2.0 and going from proving the technology to proving the value. And I see people asking what are the real customer problems that MicroVision can solve that they can help create value for customers around.

And maybe that's something you can both speak to when you look at the landscape, what are the problems that need to get solved and what are the problems that MicroVision is uniquely positioned to solve and create value around?

Yes. It's -- ultimately, that gets to the core of what we are trying to do as a business is how do we solve those customer problems. It's a little different for each of the end markets that I talked about. In automotive, it's -- when you think about providing lighter end of the automotive, it's all in the safety domain. That's the whole point of the perception system is really around safety, safety and convenience functions, kind of what we put under the ADAS umbrella. To that point, there's -- there's 3 things that the OEMs, I think, are really trying to provide to their customers.

One is just safety. They want the vehicle to be as safe as possible. So providing the most reliable, the most robust safety system, whether that's Level 1, 2 or 3, is critical. And so providing them with a perception system, which determines the efficacy of the ADAS system, providing them with a really robust perception system makes their job of ensuring that they have a safe vehicle that much -- just that much easier and that much better.

The second is they have a regulatory pressure and the regulatory requirement, whether it's FMVSS regulations or it's the NCAP type of the insurance industry or the NCAPs that are demanding, hey, your vehicles need to have certain capabilities, automated emergency braking, backup cameras, whatever it might be, vulnerable road user detection. So we're helping them achieve those requirements, but at -- and achieve them robustly, but at an affordable on cost of the vehicle.

And then the third is really differentiation. So one of the areas you can still differentiate, and this is why Level 3 is still really interesting for the OEMs is that's an area for differentiation. It's an area where they can establish unique functions to draw -- that make people want to buy their car. And so that they're drawn to, hey, I'm going to buy this brand versus the other brand because this thing has -- this car, this OEM has these features. And so those -- when you think about it, we're helping them solve for each of those and to do it in a financially viable manner so that for them, it's a good value prop. It solves the 3 aspects that they're trying to do for their brand, the regulators and for market differentiation, but it does it at an economically viable and sustainable level.

And so that's automotive. For industrial, it's a little different. It's really -- there, you're not talking about so much brand differentiation or convenience functions. You're talking about economics. How do I make the cost of moving goods, materials in a warehouse lower. It's about efficiency. It's about a cost and economic value prop. And so lidar is a key part of automation for warehouses and factories. It's the lower cost that I can provide to the forklift or the robot or whatever, the stronger their value prop is, the greater the rate of adoption.

And so there, it's -- you're solving for an economic model that lowers total operating costs for basically the warehouse of the plant. And then when you talk about security and defense, those are, again, very different. You're really solving the question around autonomy. And so that you can deliver logistics, you can provide material out into the field. You can do things without putting your personnel at risk. It's a very different model, but it demands a really capable solution. And that's -- and so it's -- like I said, those 3 end markets, very diverse and different in terms of what you're solving. But ultimately, it's the same underlying technology. And that's what gets us really excited about being able to -- to be able to pursue and commercialize in those 3 spaces.

Anything you want to add there, Hans Werner?

Yes. You know what I think Glen laid out and glad you framed it so well across those different verticals or we call them end markets. That notion of solving a customer's problem or customer benefit, it should not be underestimated. Sometimes we all take it a little bit lightly, but articulating that very crisply together with the customer, like in the case of providing a lidar system as input or part of an old ADAS stack or software platform, software/hardware platform to be more precise, is critical because when you're driving at a higher speed, 60, 70 miles per hour on a highway and you have an obstacle in darkness, a small obstacle, frankly, there are very specific even test cases defined by some OEMs on that, that can indeed help to actually avoid significant or severe accidents.

And that makes you as a customer really, really safer and you as an end consumer and articulating that to the OEM, OEM to end consumer is so important. So I just picked one of the end markets, what Glen highlighted.

That's great. I mean the next question I see here is kind of rooted in what you talked about there, Glen, around economics and cost. I think people are reacting well to the notion that cost drives volume, not the other way around. You've said it a couple of times. The question I'm seeing come up is what is your expectation for pricing in the market moving forward? What does that look like?

Yes. I think the key is, as we think about this next cycle, and I'll talk about automotive, I'll focus on that for this discussion. As you think about it, automotive is kind of in this period where there of reformulation. They're looking at going forward. Lidar is still viewed as an essential part of Level 3, Level 4. So a lot of activities on that front.

The general expectation is to be able to get into a Level 3 type of activity, driver out of the loop, you got to be somewhere between -- below the $500 per unit for the long-range component and below -- at or below about $200 per unit for the short-range component. So as you think about that system. Now that gets you to Level 3 and Level 3 is still an expensive option. So that's great. That's a good step.

But the reality is for mass adoption, you need to get to -- into the Level 2 vehicles. You need to get further down into the ADAS applications where we know the pricing is incredibly sensitive. If you think about it, just to put some numbers around it, if you think about a car you buy today, maybe it's $60,000, $70,000 purchase price for the vehicle to bring on or the sticker price for all of the advanced driver assistance features, Level 2 features typically somewhere around USD 2,000, which is when you look at the benefit and to the cost for the end consumer, that's a great value. That's why virtually all the cars have it now.

When you look at Level 3, it's a significant step more than that, and that's been the problem basically is, how much more value do I get for that, and that's been the struggle. And so as we think about now I got to fit lidar into an on cost to the end consumer of $2,000 that is -- that requires aggressive price reductions on the lidar sensors. And that means that's a completely different way of thinking about it and a way of penetrating. And that's what -- that's what we're focused on where you're well below $100 for a short-range sensor. You're well below $250 for the long-range kind of play.

Even at that, I mean, it's -- that's still a lot. It's a lot to fit into that price point on that car. Average car this year in the U.S. exceeded $50,000 for the first time, right? I think it's $50,300. That's close to the average annual household income. It really is a challenge. So affordability of that vehicle, that cost sensitive, that's why we're so focused on cost and how do we rethink kind of the cost of lidar for lidar 2.0. So we'll be talking a lot about that this year as we get into '26. That will be a big focus for us. We'll share a lot more on that.

But we think we have a pathway to get there. And so it's -- and again, I'll kind of come back to that's the engineering talent that we brought in. That's the direction we're driving, and that's the -- that is that maniacal focus on system costs and our end customer value that we have.

Yes. And there's something, Jeff, even though lidar is obviously a different technology compared with camera or radar -- but in the early days of camera and radar adoption in the early years of 2000, you know it from the Delphi and certainly in the Aptiv days, we talked also about much, much bigger numbers today, camera, radar, obviously, short-range, long-range, mid-range radar.

But we are well below the $50 area. So just keep in mind how the evolution -- by the way, as you should all be aware of, we should not take 15 or 20 years to get to the price numbers, which Glen just stated, that has to go faster to make a difference with OEMs and customers, auto, non-auto, but also for the end consumer.

Yes. And I got to say, Hans, that is -- your point is spot on. It took us 15, 20 years for ADAS to go from the very first introductions of adaptive cruise control and radar back in 2000 to where we are today. I mean we don't -- we can accelerate that.

We can take the lessons we learned from that whole experience. We apply it to lidar, we accelerate. We're talking a much shorter time horizon. Ultimately, it delivers more value to our customers and the end consumer. It delivers greater levels of safety, which is one of the best parts of being in this space, you get to work in great technology, but also technology that brings a societal benefit, safety, saving lives, avoiding pedestrian fatalities. This is -- that's what gets our engineers passionate about what they do.

And so -- but it has to happen much faster. It can't be 15 years. That's a fact.

We got a few minutes left, and there's a couple of important questions I want to make sure we hit on. You mentioned customers. What's the state of the Luminar customer relationships, Volvo, Nissan, Caterpillar? Have you delivered to any of these brands yet?

Yes. Yes. I won't go into specific customers, but I would tell you, we've reached out and we're engaging with, I think, now all of the customers. We've had those engagements. And I've been meeting personally with them. And just to -- I mean, they have all the questions that you can imagine. Hey, what about MicroVision? Tell us about what are you doing? And what's the next steps? And so one of the first priorities, of course, was, hey, they have POs in the system.

They need product. They have to continue to do their work. And so to that -- to the question, we began shipping product this week to a European customer. So that is now happening. And what's exciting about that for me is, hey, that's how you drive revenue. You're shipping product, you're delivering, not just discussing, you're delivering, you're executing. And so this is the beginning of where MicroVision can demonstrate to those customers, we've got you back. We have you covered. We're going to provide the support you need, both from a product standpoint, from a development standpoint and then from a long-term commercial partner standpoint.

And then last quick question here. You've talked about kind of filling out the leadership team with the right skill sets, right expertise. A number of folks asking what's the status on the CFO hire?

Yes. The CFO hire is in process. And so we really -- our plan is really as we come into Q2 to kind of finalize that. I would also say, though, and this is really a credit to the finance and the finance team and the legal team here at MicroVision. We have -- with Steve, we have a great leader in place with Simon Biddiscombe, who is our Executive Vice Chair, tremendous experience as CEO, CFO.

We have a great team. And why that's important is it allows us to execute on our near-term activities as we need to both from a financial discipline standpoint and compliance standpoint, but also from a fundraising standpoint as we saw here recently, we announced yesterday. But it also means we can take the time for what is, in our opinion, a really critical hire. All hires are critical. This one for MicroVision. We want to get it right. We want to take the time. And we're fortunate to be in a position with the team that we have to be able to do that. But we're still looking at the Q2 time frame to get that wrapped up.

Great. I know time is running out here. There's still a ton of questions that we'd love to answer. We'll try to get to all those questions through the Investor Relations team and the MicroVision blog and social handles over the coming days. But since we're tight on time, I'm going to turn it back over to you, Hans Werner, to wrap things up.

Thank you, Jeff. First of all, a big thank you to Glen for sharing your insights, frankly, at a very important inflection point for MicroVision and also for Luminar, obviously. But also thank you for all the participants. I know we could -- and we hope we could touch on the key questions. We also know, as Jeff mentioned, we could not answer given the constraint of time we have all the questions, but there are different forums in the future to address that. I really would like to thank you. And with that said, I would like to wrap it up. There will also be a short video coming now. So please do not sign off yet. That will provide potentially a few more highlights. And I can assure you it's insightful to watch. And with that said, the video will be coming. And again, to everybody, thank you, Glen. Thank you to entire combined MicroVision Luminar teams behind you and with you. It was a pleasure to have you.

Very good. Thank you, Hans Werner.

Thank you.

Good afternoon. Welcome to the MicroVision Third Quarter 2025 Financial and Operating Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Drew Markham. Please go ahead.

Thank you, and good afternoon, everyone. I'm here today with our CEO, Glen DeVos; and our CFO, Anubhav Verma. Following their prepared remarks, we will open the call to questions.

Please note that some of the information you will hear in today's discussion will include forward-looking statements, including, but not limited to, expectations regarding business product and go-to-market strategies, products and solutions and market needs and timing, status of commercial engagement and future demand, level of customer and partner engagement, market landscape and opportunities, acquisition benefits and risks and collaborations, projections of future operations and cash flow, cash, liquidity and the impacts of recent financing activities, availability of funds and conditions for raising capital as well as statements containing words like believe, expect, plan and other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements.

We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update this information.

In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website at ir.microvision.com under the SEC Filings tab.

This conference call will be available for audio replay on the Investor Relations section of our website.

Now, I would like to turn the call over to Glen DeVos, our Chief Executive Officer. Glen?

Thank you, Drew, and it's great to be with all of you today. I'd like to start today's call by answering a question I've been asked quite a bit over the past few months, which is why did you joined MicroVision? The reason I joined first as CTO back in April and now as CEO is that MicroVision has a unique opportunity to transform the lidar industry. I've been directly involved with this industry for more than 10 years from the first CES automated car demonstrations in 2015, the autonomous cross-country drive, our robotaxi fleet deployments in Singapore and Vegas and the very first Level 3 OEM system deployments. These were truly exciting times for lidar.

But as of today, the adoption rate of lidar sensors has been very limited, and we remain a niche product. The reason for this is simple. It's cost. Lidar sensors are too expensive, and this has limited our market penetration. There are 3 developments that are required to bring costs down to the levels required for mass adoption. The first is the move from electromechanical systems to solid state. The cost floor for electromechanical systems is significantly higher than that of solid state. As a result, lidar is only used when it is not possible to do the job with cameras or other lower-cost alternatives.

For example, while automotive Level 2+ systems would benefit greatly from the use of lidar, they are typically deployed with only vision and radar. We must move from -- we must move to wafer-level processes that have a much lower cost structure than current electromechanical systems can ever achieve. Roughly 25 years ago, radar started as large, complex and expensive assemblies with very limited adoption. So where are we now? In 2024, over 140 million were produced for the automotive market alone. Lidar can follow a very similar path.

The second development is related to system architecture and the move to satellite sensors. We started this in automotive roughly 15 years ago with the introduction of satellite radar and camera sensors, working with the central ADAS domain controller. This approach breaks down the perception challenge and simplifies the individual sensors, delivering the highest level of performance at the lowest total system cost.

The third is to further simplify and reduce the cost of the hardware through software. We'll talk more about this in future calls, but solving the perception and the processing challenges in software enables the further optimization of the hardware, again, resulting in lower total cost. These are the steps to mass adoption. And if they sound familiar, it is because this is exactly what has been done for vision, radar and other sensing modalities. And this is exactly what we're doing at MicroVision, and it is the reason why I am so excited to be part of the MicroVision team.

So let's talk about Q3 and how it relates to the key issues we just covered. I'll start with our recent announcements at IAA in Munich in September, where we introduced both MOVIA S and our Tri-Lidar architecture. MOVIA S is an industry-leading ultra-wide field of view solid-state sensor. The MOVIA S 180-degree field of view sensor we demonstrated at IAA is the first of a full family of short-range sensors for the automotive, industrial and defense sectors. It is easily configurable and can deliver full perception and advanced lidar-based driver assistance features such as MicroVision's localization and collision avoidance functions or simply provide a clean point cloud. It is the right product at the right time, delivering performance at a breakthrough cost level enabled by its solid-state design and MicroVision's proprietary image and signal processing software. This is that first step to achieving mass adoption, dramatically lowering the cost of lidar perception for our customers.

MOVIA S is an amazing stand-alone product, but it also enables the implementation of the satellite architecture I referred to earlier, what we call Tri-Lidar for automotive applications. Low-cost, compact, high-performance sensors are the key to unlocking satellite architectures, and it is exactly what vision and radar have accomplished. It's why in most cars today, they have between 3 to 5 radar and 6 to 9 cameras. Lidar can and will follow the same path, not just for fully autonomous systems such as Level 3 or 4 cars or AGVs and AMRs, but for driver and operated assistance systems as well. The industry refers to this as the democratization of safety, and that's what MicroVision's products are enabling. MOVIA S is currently being demonstrated with numerous customers and its production launch is planned for Q4 of 2026.

Additionally, we announced the asset purchase agreement of Scantinel Photonics. This is a key move for MicroVision as it gives us access to 1550 nanometer FMCW ultra-long-range lidar technology. Scantinel's ultra-long-range capability perfectly complements our current 905 and 940-nanometer time-of-flight portfolio of MOVIA and MAVIN products. MicroVision will be unique in its ability to offer our customers a complete range of solutions for their perception challenges across all end market sectors. We will share more details of our ultra-long-range product plans and timing at the upcoming CES.

Regarding our defense-related activity, I'm excited to share a few more details about our recently announced Aerial Systems team, which is responsible for our drone-based lidar developments. The addition of this team dramatically accelerates our work in the space of drone-based real-time mapping, ISR and denied environment navigation. We are on track to complete the initial proof-of-concept phase for both fixed wing and rotor drones by the end of the year, and the aerial systems team is now up and operational at our airstrip and office in Virginia. We've also been working closely with our Defense Advisory Board and have started initial customer engagements this month. We'll share more details about next steps and about the technology at CES in January.

Now let me shift to our commercial engagements. In the Q2 earnings call, we talked about the number of ongoing industrial and automotive RFQs and RFIs. These remain active, and we continue to be engaged with our customers as they work through their sourcing processes. What has changed significantly are the post-IAA engagements where we have experienced strong interest in both MOVIA S and our Tri-Lidar Architecture offerings. We are currently demonstrating MOVIA S to a number of automotive OEM, industrial and autonomous vehicle customers.

Another key differentiator for MOVIA S beyond price point, compact size and its ultra-wide field of view is its open software framework, which enables our customers to embed their software on the MicroVision sensor. This dramatically changes how perception systems are developed. MicroVision's open software framework gives our customers the ability to develop, optimize and validate their systems with the most advanced and most efficient software DevOps model. This is another example of how MicroVision is leading the industry and how we are helping our customers solve their perception system development and their deployment challenges.

We also see tremendous interest in our MOVIA lidar collision avoidance system, what we call LCAS. These are for applications where the customer wants to have a solution that is ready to go out of the box, easily installed with preprogrammed and configurable LCAS feature libraries that they can set up and operate on their own. We are currently demonstrating our LCAS system with several customers and plan to launch in Q2 of 2026 with our MOVIA L platform.

Finally, let me bring you up to speed on several developments as we strengthen our leadership team. Fraser McMahon has joined MicroVision as our Vice President of Global Sales. Fraser brings decades of sales and commercial experience in the automotive and adjacent markets. Fraser will be expanding our commercial team, and I'm looking forward to working closely with him as we accelerate our customer acquisition plans.

Also, [ Greg Scharnbrock ] has joined as our Vice President of Global Engineering. With his experience with Toyota, Delphi as well as Intel, Greg brings proven technology leadership and management capability for our global engineering organization. These are key additions to ensure that MicroVision has the leadership capabilities as well as the experience to execute and deliver our growth plans across the automotive, industrial and defense markets. We have the opportunity to transform the lidar industry, and MicroVision is making that happen. As I said at the beginning, that is why I'm here with you today.

With that, thank you for your attention, and I'll turn it over to Anubhav for his remarks.

Thanks, Glen. I want to start by welcoming our new CEO, Glen, and marking a new era for MicroVision. The progress we've made under his leadership in just a few short months has been phenomenal. The lidar industry is ready for a revolution, much like the one we saw with radar. Glen was a key architect of that evolution, and he's now bringing his 30 years of automotive experience to do the same for lidar.

I'm excited about the MicroVision's game-changing strategy. Number one, the simplified sensor architecture, our Tri-Lidar system transforms the traditional single sensor model into a cost-effective trial of sensors, 2 short range and one long range. And the second is economic disruption. We're setting a new industry standard with solid-state products priced at $200 for short-range and $300 for long-range sensors. This strategy addresses OEM demands and positions MicroVision to accelerate lidar adoption while securing a competitive edge.

To accelerate our long-term vision, I am excited to announce our strategic investment in Scantinel, a leader in 1550-nanometer FMCW lidar technology based in Bavaria, Germany. This partnership secures our leadership in next-generation ultra-long-range lidar. Just as FMCW revolutionized radar with superior performance and interference resistance, it is ideal for long-range sensing in lidar. This move positions MicroVision as one of the few companies offering both FMCW and time-of-flight technologies, enabling us to deliver a comprehensive product suite that meets the diverse and evolving needs of OEMs.

After the success related to the MOVIA S launch, we are very energized by it and are now driving momentum in the industrial AGV, AMR market to drive near-term revenue opportunities, leveraging our perception software and MOVIA hardware to solve complex business problems. Since MOVIA S has a significantly lower price point than MOVIA L, most of our customers are looking to migrate from MOVIA L to MOVIA S. We believe this will be a transformational for the industrial and warehouse automation markets.

Our prior visibility of $30 million to $50 million over the next 12 to 18 months was primarily driven by the MOVIA L product. However, with our new strategy to transition customers to MOVIA S and ongoing delays on part of our customers, we anticipate that this revenue pipeline will take longer to realize. Given that we're moving away from MOVIA L, we're actively managing our production commitments with ZF as we plan to bring up manufacturing capabilities for MOVIA S next year. We plan to provide an update as part of the Q4 earnings and full year 2025 results early next year.

Moving on, we continue to press ahead with our pursuit of revenue opportunities in the defense vertical. We recently added a small team in Virginia in the Greater D.C. Metro area with deep experience in aeronautical engineering and avionics. We will be demonstrating a complete solution with multimodal sensors and our full stack software capable of enabling unmanned drones to complete specific missions in first half of 2026. I'm also excited about the addition of key executives with rich backgrounds from Intel and Visteon to join us and build the engineering and go-to-market functions of MicroVision.

Now let's review our third quarter financial performance. For the third quarter, we reported revenues of $0.2 million. This quarter's revenue was driven by our sales in industrial and automotive verticals. From a cash burn standpoint, in the third quarter of 2025, our R&D and SG&A expenses totaled $12 million. This includes $1.2 million of severance payments related to CEO transition, $1.6 million of noncash income related to a stock-based compensation expense reversal resulting from the forfeiture of executive PRSUs from former CEO's departure as well as $1.4 million in noncash charges related to D&A. Excluding these items, our core R&D and SG&A expenses were approximately $11 million for the quarter, flat with respect to the second quarter, in line with our expectations.

The cash burn for the quarter was $16.5 million. That includes a onetime $3.2 million payments related to the inventory buildup of MOVIA L. Q4 CapEx was $0.1 million, in line with our expectations. Now looking ahead, we anticipate an increase in current spending levels to support several strategic initiatives. These include the onboarding of the aerial systems team and related costs for our new  D.C. office, several senior hires aimed at strengthening our engineering and go-to-market functions.

Additionally, we will incur expenses related to the Scantinel acquisition in Bavaria, Germany. We plan to provide further updates on this transaction and associated funding during our next call once the closing occurs later this year. We anticipate that these new initiatives will lead to an increase in our annual spending by approximately $1.5 million to $2 million per quarter.

To summarize, we're modestly ramping up our expenses from Q4 onwards to invest in 3 key areas: number one, accelerate product readiness; number two, invest in industrializing our products; and number three, accelerate time to revenue by investing in go-to-market and sales organization for building a solid pipeline for the products. We look forward to sharing more updates and providing full year cash burn guidance for 2026 in conjunction with our 2025 year-end earnings.

Now let's talk about our balance sheet. We finished this quarter with $99.5 million in cash and cash equivalents. In addition, the company has availability of an additional $46.2 million under our current ATM facility and $30 million of undrawn capital under the convertible note facility as of Q3. As of today, approximately $18 million in principal is outstanding on the convertible note. That converts at a fixed price of $1.60. With $99.5 million cash at hand at the end of third quarter, we are adequately capitalized to make these debt payments in cash or through stock if the holders choose to exercise their option due to favorable market conditions. The $30 million second tranche remains undrawn.

As previously highlighted, MicroVision's average trading volumes have experienced a substantial increase since last year, driven in part by committed investments exceeding $90 million from a single investor. This investment has also enabled the company to raise approximately $30 million in net proceeds during the third quarter through its ATM program, strengthening our balance sheet. While we will continue to pursue opportunistic capital raising strategies as appropriate, the combination of recent funding activities and our operational cost management has extended our financial runway into 2027.

The lidar industry is evolving with the one's biggest lidar company by market cap, which is now facing significant financial challenges. In contrast, MicroVision stands out due to its strong capital structure, financial discipline, corporate governance and superior product portfolio. Our approach remains centered on diversifying revenue streams through targeted disciplined investments. This long-term outlook makes MicroVision an attractive investment for large-scale institutional investors and has notably increased this visibility within the institutional investment community. We're confident that our new leadership team is well positioned to successfully execute our current business strategy to be the frontrunners of the autonomy enablers for the 3 end markets with significant TAMs.

Operator, I would now like to open the call for questions.

[Operator Instructions] Your first question is coming from Casey Ryan from WestPark Capital.

Sorry, I was on mute. A lot to discuss today. Thank you for the update. So the acquisition in Germany of FMCW technology is really interesting in light of your comments about driving the cost point down. In general, I guess, my view has been that's been an even costlier product, but do you think you can get it down to the targets that you talked about for your core products in terms of lidar and the ASP being consumable, because I guess a lot of the FMCW, I think, has been concentrated in long-haul trucking and sort of higher kind of ASP end markets previously.

Yes. Maybe, Anubhav, I'll take this. Casey, yes, the key here is where FMCW is today, and you're spot on, historically, it has been a higher cost alternative in terms of material cost. But ultimately, the technology gets you to essentially wafer level and chip scale packaging or really where all the high-value silicon is. And that -- basically that evolution of going from discrete components into highly integrated chip scale packages is where you drive the cost down. And then as well, longer term, it's fundamental advantages that it has relative to eye safety, the ability for getting real-time relative velocity measurements as well and overall range capability, that brings that total system cost.

So as we road map it, we do see this being able to hit the kind of cost targets that we think are required to be able to initially be attractive for commercial vehicle. That's where the initial market looks most advantageous as well as ultimately for pass car. It also has another advantage of it's -- when you operate it behind the windscreen, it just has less losses associated with transmission through the windshield of the vehicle. And again, that's another way that fundamentally, you're not having to compensate for that, and so you can deliver a lower cost system. But right now, that's the whole plan that we have with Scantinel is to accelerate that road map.

Okay. Terrific. So you're raising one other thing that I'll try to be quick about, which is the importance of putting a lidar sensor behind the windscreen versus a bubble or some other part of the car. Are you hearing from customers that that's a really important component for solutions to be able to operate behind the windscreen and operate effectively?

Yes. In general, it's just an ideal location. If you think about in the vehicle, the rearview mirror for a passenger car and that area in front of it, that's where typically your cameras are mounted today. It has the advantage of the cleaning system of the windshield, basically the windshield wiper and the frost functions on the windshield. So heating and cleaning are basically already in place. It has a disadvantage of having to basically transmit through the windshield itself. So that's where transmission losses become concerning. But that -- we're seeing that emerge as both from a vehicle packaging standpoint. So you don't have that bump in the top of the car when you put it on above the roof line.

So from a vehicle packaging standpoint and then from an inherent cleaning and heating standpoint, and then finally, from a point of view standpoint, what I mean by that is the long-range lidar being mounted there gives it the best viewpoint in terms of its field of view, looking down the front of the car and looking down the road. So when you think about all 3 of those factors, it's a very attractive location for it. That said, it's a crowded space up there. You've got cameras, you've got the roof module controls, ultrasonic glass breakage detectors, switches. There's a lot out there. And so that's why miniaturizing that sensor to the greatest extent possible becomes so important.

Okay. Yes. That's helpful and actually quite exciting. Quickly, another quick detail, I guess, should we expect Scantinel whenever it's closed and sort of fully integrated, does that business already have revenues is my question? Will we see some revenue show up from that? Or is it sort of a low for sort of de minimis revenue type business today?

No, in the immediate -- go ahead. I'm going to...

No, go ahead, Glen.

No, no. I was going to just say, at this point, no, there's -- it's pre-revenue. And really, what we'll be doing right now, and this is what I'll talk about here and as we come into CES and end of the year is we're putting that plan together to take that technology and industrialize it into an automotive-grade sensor. So where MicroVision can basically wrap around Scantinel's technology, all the supportive processing, packaging, hardware, software, integrating their 1550 FMCW imaging capability. That's how the 2 really combine effectively. We'll put that plan together now, and then we'll be sharing specific dates and expectations on timing of product and revenue here later this year.

Yes. And if I can just add, Casey, that's why we don't anticipate this acquisition to add a lot of cost into the system because as I mentioned in my remarks, we're really only getting about 20-odd engineers adding them to the workforce because we would be utilizing some of the talent that we have at MicroVision as well to develop some of the packaging capabilities, et cetera. So all in all, I think the cost that we're adding to the system is not going to be more than $2 million a quarter from that perspective.

All right. Okay. And then correct me if I'm misstating, but I believe you all have an office in Germany. And will the offices be combined or are they near each other? Or does that not matter?

No, they're not near each other because the other office we have is in Hamburg, while the Scantinel office is in Bavaria, South of Germany in a city called Ulm, so near Munich and Stuttgart.

Okay. All right. One last big area that was exciting on the call was, I think, Anubhav, you started laying this out, sort of talking about a target ASP of $200 for short-range and $300 for long-range. Did I hear that right, first of all?

Yes.

And did you put a target date? I mean, even if it's aspirational, I wasn't sure if I heard that or if that was just a long-term goal.

No. I think our goal is to get that product for MOVIA S out in next year. So we will be providing more exact dates probably as part of our next earnings call because that's sort of what we are accelerating right now in the product readiness to get from MOVIA L to MOVIA S, and obviously setting up the manufacturing capabilities, et cetera, to be able to fulfill customer demands starting next year.

Because those price points are extremely competitive with radar in particular, right, and then functionality versus cameras and would certainly put you well ahead of, as far as I know, any competitors in the lidar space from like an ASP perspective. Does that track with what you guys are thinking?

I think that’s why...

Yes. No, that's exactly right. And that gets us -- I think that's the price point that really gets Level 3 or maybe even Level 2+ systems essentially a great value for the OEMs where they can sell those systems at a very high -- at the right price for their end customers and still have a really high margin with that. Long term to get into ADAS, you have to drive it further down.

Really. Okay. And tell me if you think -- is it right to be comparing it against camera and radar ASPs? And is that relevant? I mean, yes, it's relevant in some sense, but is it more just about the overall sensor cost is maybe a concern or an issue for some concepts for cars and maybe some categories of cars, mid-tier cars and low-end cars and things like that?

Yes. If you think about radar and cameras, which are now fully commoditized, cameras as a passive sensor, which frequently kind of hit somewhere between the $50 to $100 range. Radar for short-range below $50, between $50 and $100 for long-range. When you think about those price points, lidar, as it achieves, I mentioned the $140 million a year for radar, When you get into those kind of numbers and you really standardized across an industry, yes, we would expect to be sub-$100 in that range as an active sensor with lens and lens assemblies and everything else. So it's going to be in that neighborhood, $100 or less. Now that's a ways off, obviously, but you got to get there stepwise. And the first big step we want to take is with MOVIA as a short-range sensor getting down to $200, unlocking the satellite sensor architectures for lidar. And then as volume comes and you continue to standardize, continue to drive that cost down.

And then the second piece of my question was, it feels like that would put you in a fairly dramatic leadership position from an ASP standpoint against potentially all the, let's call them, Western lidar competitors. I don't know what they're seeing out of China. But does that sound accurate to you that like the gap between what I'm hearing from other Western vendors is significantly higher when we talk about ASPs?

Yes, that's exactly right. And we think that's where you have to be in this market to drive volume. And we're very mindful -- we're very mindful of where the price points in China are, and we know we have to be competitive with those as well. And so at the end of the day, this is where you got to get to. And so the team has done a great job really designing the cost and coming up with a product that gets us on that path.

Yes. Okay. Last question, I promise. With defense and the opportunities with defense, it feels like there's a significant push to sort of enable new platforms and new form factors. And do you find that price is a key consideration? Or is it more just about functionality and maybe availability of product are sort of more important in those markets today?

Price is still -- cost is still a factor. I mean it -- if you think about drones in particular, sometimes you can describe them as attritable assets. And with an attritable asset, cost is a factor. Now the reality is ASPs in those applications are significantly higher than what we've been talking about with regard to automotive or industrial. But it's still a factor. And that's where our sensors with the scale and the design approach that we've taken because we can use exactly the same sensor that we're developing in automotive that we're developing in industrial. We can use that for what we're doing with drones and defense. And ultimately, that makes it very attractive, both from the functionality it brings, but also from the fact that it is a very cost-effective solution. It's just a different price point -- a very different price point.

Right. Okay. Terrific. Thank you for the feedback and the answers to these questions. It's a very exciting update, Glen, for your first call, and we look forward to the next one for sure.

I will now turn this call back over to Anubhav Verma to read questions submitted through the webcast. Thank you.

Thank you, Matt. All right. So the question is, what is the status of the RFQs? Are there any updates on the timing? Are we stuck? What more do OEMs want? And how can we compete against the Chinese lidar makers?

So the RFQs, and I mentioned this in my remarks, the RFQs that we talked about last quarter, they're still ongoing. And it's not question being stuck. It's more that we're following the pace of the OEMs. Let me talk to automotive first, and then I'll pivot over to industrial. For automotive, I mean, we've seen it in the news, the amount of churn that the OEMs are going through on their platform definitions, ICE platforms versus electrification, how they're managing costs. It's -- there's a lot happening there. And as a result, the sourcing process for the -- basically the safety systems that go in those vehicles is also taking quite a bit of time. And that's not unusual, especially for new type of features that lidar enables. But we're continuing to process through that.

What typically happens is we -- the OEMs go through a broad round with the supply base. They get a lot of feedback and a lot of different proposals. They analyze those and then the next wave comes out, reflecting what they've learned, the OEM has learned through that initial wave of responses. And that's the process that we're in now. So in terms of what more they want, they're going to want more updates and more Q&A sessions as they go. But that's just going to take the time it takes. And so we're still engaged with those and following them.

Relative to industrial, not very similar to that. In terms of the kind of the bigger engineered solution activities that we're involved with, those are still proceeding through their evaluation phases. So that's continuing on, and we're supporting those customers as they do their evaluations. So nothing new to announce this call. But again, we continue to stay engaged with those and driving those to a successful outcome.

But that's -- and then the last comment regarding -- or question regarding Chinese lidar, I think you kind of picked a little bit up on that in the last questions that we had. Ultimately, and I've been doing this myself for 25 years now competing with Chinese suppliers across all areas of -- certainly the automotive space. And how do you compete with them is you can't just simply compete on price and hardware. That's very difficult. You have to compete through other innovation channels. And one of those is like I talked about, the open software framework where we can provide a sensor that is highly flexible and fully transparent to what the perception system integrator or developer wants to do. They can put their software on it. We can provide greater levels of innovation through how we use our software.

So there are levers that we have that we can use to position our product to be competitive with the Chinese, either adding more value or more price competitive. And that's just the reality of the automotive market and the industrial market today is you got to be -- if you're not competitive, you're not going to win the business. We feel that with our approach, we have a competitive offering against really all of the participants in this space.

Thank you, Glen. Next question. We're concerned that the $200 price tag could be unprofitable and/or unsustainable customer deals, the type of deals that led to Luminar losing money on every unit being sold to Volvo. How are we going to be different?

Yes. That's a great question. You can't get yourself into a position where volume production is upside down on margins. That's just simply not an acceptable outcome. You do all that work to develop -- win a business, develop a product. And then every product is costing you money to ship it. And we're not in a position to do that, and we don't have to. Relative to that $200 price point, the reason we're confident in stating that is because that was based on a detailed buildup of costs from the ground up and looking at what is it going to cost us to produce the product that can provide that kind of performance and looking through all of those cost elements and as well as manufacturing and the capital it takes to support production.

So we're confident in the cost model associated with that. That is what then guides our design and development direction for that part. And then I can tell you, and this is just my experience, certainly with automotive over these years, you just have to be maniacal about those costs. You can never -- you have to watch them at every step, constantly be working them down. And I'm confident that our team can do that. So for me, it's the $200. It's a great number to have and to start with. But our goal, just to be clear, is to drive the cost well below that.

Thanks, Glen. Glen, you indicated in public comments at IAA in Munich that MicroVision has been working with a couple of customers on what I would call predevelopment contracts to validate our system. We expect those products to be sold very quickly. Can you clarify those comments as a predevelopment because a predevelopment would indicate that we are in early stages of engagement, but prior comments by management indicated that the company was much further along in testing and validation with those customers. And where do we stand with these customers today and the timing for sales?

Yes. Great question. And so for me, predevelopment is that whole phase before really launching the production platform. And so when I was talking about predevelopment here, what I'm referring to is where we have sensors where we're still -- the customers are still evaluating and looking at the -- how that feature would work on their system. An example of that is the bolt-on LCAS system that we talked about based on the MOVIA L, where they're just doing exploratory work and looking at, "Okay, how does -- how do we feel about this? How does this work? How would we integrate it?" So the customer really hasn't kicked off a formal development activity on that.

We're also doing, as you just mentioned, we're also in what you would call qualification phases where the customer has our product on their vehicle or on their robot and is actively qualifying or validating the technology to make sure it can hit the KPIs they think they need to hit to move forward with a lidar solution and MicroVision as the provider of that lidar. So we're doing both.

And really, the feedback we're getting has been very positive. Ultimately, we have to get it over the line to a commercial contract. But both activities are occurring. A lot of uptick in that predevelopment area with interest in LCAS as well as in MOVIA S. And my expectation is that will move fairly quickly. But ultimately, we work at the pace of our customers. But based on kind of how they're looking at it, how they've -- the feedback we're getting on it, I'm excited about it. I think my belief is that we'll be successful there.

Thanks, Glen. Next question. How does the recent upheaval at Luminar affect our opportunity to make inroads at Volvo Automotive and Volvo Trucks?

Yes. I maybe not speak to the specifics involved in the whole situation. But I would tell you, historically, when -- if there's a supplier that has issues providing or with an OEM, whatever those might be. And typically, that provides the opportunity for those programs to be reopened and for those OEMs to look at alternate sources. And so we need to be mindful of that and take advantage of those opportunities as they develop. That's just a -- this certainly wouldn't be the first time that this kind of thing has happened in the industry and the OEMs, they're very active in terms of their risk management and we will look for alternate sources or how to protect their vehicle builds.

That said, it also just puts that much more importance on your credibility as a supplier that you have a product that's mature, that's proven, you have a product that you can produce at volume, you have supply security and resilience that you're going to be there for the long haul and essentially that you don't pose a risk to them and you don't -- you will never jeopardize their production.

And so it just is another point to emphasize that as a supplier to the OEMs, you have to have that credibility. You have to have those pieces put together, which I'm confident the MicroVision team has. But again, those are opportunities that we'll watch very carefully and see what kind of opportunity that truly present for us.

Thanks, Glen. Next question. Are the industrial deals still in play? How should investors think about the timing when the efforts in the industrial sector start to show revenue? And perhaps the same question for defense and automotive.

Yes. So for the first point, yes, industrials are still in play with MOVIA L and we're now expanding those with MOVIA S. We would expect revenue really in 2026, more on the MOVIA L platform with MOVIA S launching in fourth quarter of 2026, maybe a little bit of revenue in the tail end of the year from that platform. '27 will really be about MOVIA S for industrial and either as a stand-alone product or integrated as part of an LCAS solution.

For auto, the timelines we're talking about with auto, whether it's robotaxis or it's traditional pass car tend to be, in my opinion, in the '29 time frame. Some still show a '28. We're going to be here in '26 in 2 months that would be highly aggressive. I think '28 could be some, but I think it would be fairly minor. '29 really strikes me as more of a viable launch year for automotive revenue, again, starting and then building out more in '30 and '31.

As it relates to defense, a little bit too early to predict at this time. I think you can see there's a lot of activity there over the course of the next year or 2, as we come into it, I think our timing is very good to catch that wave. We'll be able to demonstrate and go public essentially with our product offerings here going into next year. And I think at that time, we'll generate a lot of interest, and we'll be able to give a much better feeling for what we think the revenue projections and when that market would develop for us. Near term, it will probably be more on the kind of the nonrecurring engineering piece of it, the development costs getting paid to develop. But obviously, longer term, we want it to be more on the product sales side.

And with defense, given what drone technology is now in terms of the platform itself is fairly ubiquitous. commoditized, you've got what we're developing is going to be very mature coming into next year. This could have a shorter time to market, if you will, than auto. So kind of fits in between industrial and auto.

The other comment I would make about this question, I think it highlights something important is we do get the question about why the 3 markets. And I just want to point out, for all 3 of these markets, it's the same core technology that we're providing in terms of the imaging hardware, the sensor itself, the image processing software and then the perception, whether it's mapping, localization, navigation or it's LCAS. It's all -- all of it is the same technology that underlines each of those end markets. So that means we have really nice revenue diversity across our business. So these aren't all -- these markets don't move in the same cycle that auto or industrial does. So it's a nice revenue diversity, which is very, very attractive for a business to have in terms of top line resilience. So I would, again, put defense kind of in between auto and industrial. We'll know more about that coming into next year.

And actually, perhaps a related question for me. This question is MicroVision had $6.1 million inventory on 6/30, and this number has gone up on the 9/30 balance sheet. Where are these sensors? What happened to them? And what's the plan? And why is the stockpile without sales?

So let me answer that question because I think this just adds context to what you just described. We have built this inventory for MOVIA L from the ZF automotive-grade quality product line in France. And I think this was in anticipation of the demand from the industrial customers, which was ultimately fueling our visibility of the $30 million to $50 million pipeline. We still think that while there are some delays, but as the opportunities open up for LCAS and some of the attractive price points, because I think the single most important price point that I think we're very excited about at the price at which you can sell the sensors to the customers because we are significantly lower than the nearest competitor.

And I think as we sort of build up our commercial organization and bring on quality people and build out the sales team, we do expect to see traction on the revenue side from this inventory that's being built up to translate into revenue next year just from MOVIA L. And obviously, MOVIA S is expected to be started up next year, but this is in anticipation of the sales that we can get to next year from the commercial traction that we have gotten since Glen has come on board.

Next question. Does the Scantinel acquisition replace MAVIN? Or is it complementary? And is FMCW technology better than TOF? How does the Scantinel product compare with Aeva, which is the nearest FMCW product in the market?

So 3 questions. So it doesn't replace MAVIN. Those are complementary, not in conflict. And where MAVIN really shines is kind of that 50 to 200-meter range, where Scantinel's tech shines is really more than 50 to up to 1 kilometer. And so -- but for commercial vehicle applications, we really look more at 400 meters and those kind of numbers. So they're very complementary technologies, not just a replacement or overlapping.

In terms of FMCW and kind of what -- you have to think not so much where it's better than time-of-flight or one is better than the other. It's more about what is each one really good at. And time-of-flight has certainly some advantages for our shorter-range detection, works very well. We can use, in many cases, off-the-shelf components, and so we get to a lower cost point sooner.

FMCW, on the other hand, has, as we talked earlier tonight, has some really attractive performance with eye safety, inclement weather, range, as well as transmission through the glass and then the inherent measurement of velocity with the waveform. So at the end of the day, they offer different pros and cons, but that's why having all 3, MAVIN -- MOVIA MAVIN and now Scantinel is really an advantage for us. And then ultimately, our goal has to be how do we then bring down that cost of the FMCW technology so that it can ultimately get on to pass cars and not just on CV or higher cost applications.

In terms of how it compares with Aeva, I'm going to hold off on that, particularly for the short term as we kind of finish our plans. We'll come out later this year with a much more detailed description of what our Scantinel, what the MicroVision, Scantinel product will look like, how it performs and be able to compare it head-to-head. But I can say that the thing that impressed me about what the Scantinel team had done was the work they had done to get it into a single -- basically a single photonic IC and again, getting the wafer level packaging for really the whole imaging head unit or the imaging part of the system. So I think that's the part that's exciting. We'll talk a lot more about that in the future, but that's the work the team is doing right now, pulling those plans together.

Thanks, Glen. Next question, it's about the AR vertical. Does the company have any plans to update investors on the status of the vertical? And is the technology being actively marketed to potential customers? And there has been talks of HoloLens 3 launching in 2026. Is MicroVision tech in HoloLens 3?

Yes. I'll maybe start with the last question first, not to our knowledge. So -- and that's consistent with the fact that we're really not actively pursuing AR-related markets at this time. We have the IP, we have capability. We'll kind of monitor those. But right now, if you think about our resources and where we're allocating our capital, it's really in the 3 verticals that we've talked about with industrial, defense and automotive. And AR is always an interesting topic. At this point, we're just watching to see does that -- can that be interesting for us. But there's no active development or pursuits in that space as of today.

Thanks, Glen. Next question. Each MicroVision CEO can be seen as failing. The promise of the MicroVision technology was not realized by any CEO. Will Glen carry us to the promise land and how? How does Glen propose to succeed where all others have failed? And by what measure should you be held accountable and within what time frame?

Yes. So great question. I would kind of put this in the context, not necessarily just MicroVision. I would kind of broaden the context to the whole industry. You look across the industry and it has -- if you think back to that exciting time that I talked about in 2015, '16, '17, kind of the late teens, where there was a lot of optimism and very great expectations around where lidar would go. And the reality is we haven't realized those expectations so far.

And as I mentioned in my remarks, the issue has been cost. It's just an expensive system. And at the end of the day, if you can't afford to put it on your product, you figure some other way to do it, like I said, vision or radar, ultrasonics or something else. But I am confident, and again, this is why taking on the role of CEO of MicroVision was so interesting for me.

I am confident that when I look at what we did with radar and I look at what we do with vision systems and early ADAS systems, we can do the same thing with lidar. There's really no reason not to. Lidar is a brilliant sensor technology. And it works just perfectly with radar and vision. It's that trimodal package gives you the highest performing perception system.

Now it's up to us, though, to drive the cost down such that it can fit into the budget of the vehicles or the platforms that want to use it. And that's what we're doing. Now we're not going to take 25 years to do it like radar did. Radar -- first radar I was involved was back in 2000. And 25 years later, $140 million. Well, we're not going to take that long. We need to do it now and really achieve that market penetration, maybe not to $140 million by 2033 or '34, but really get on that growth curve where we're accelerating the adoption and we're on the path to mass adoption -- on the path to mass adoption for the technology.

And as I look at the team we have with MicroVision and the IP and the technologies we have, I'm very confident this team can deliver that. And so what measures are there for me as CEO? Well, it starts with, are we hitting the product milestones that we talked about. We talked about the launch of MOVIA S in Q4. We talked about LCAS in Q2 with MOVIA L. We've talked the Scantinel plans, and we have to deliver on those. We have to hit those dates with the right content, with the right product and the right technologies at the right cost to be able to move the market.

The other part is we have to be able to convert from showing great technology to commercial contracts. And that's why we're strengthening the commercial team with Fraser and his guys, and he'll be adding to his team to make sure we have the right sales motion to be able to convert to contract. And that has to be reflecting in backlog bookings over the course of next year and into '27 and a robust and a really resilient backlog, volume that doesn't go away.

And so that's what my Board, all my bosses will be looking at. Ultimately, our goal is always, hey, we have to be able to drive shareholder value by delivering and driving customer value. And I'm convinced we have the team to do it. We have the dates in place when we got to do what, and now it's a matter of execution. And so that's as CEO, that's what I have to focus on and then share progress with this group, the shareholders and the analysts along the way to give you confidence that we're on track. So I think we have a good plan and we have a good team. Now it's about executing.

Thanks, Glen. We are over time, but maybe I'll take one last question, and it's a tough one, so maybe that's why I won't answer this question. Why did the company sell so many shares and caused dilution in the last 6 months? And how do we plan to sustain the company?

The reason why I call this a tough question is because I do get a lot of e-mails and concerning e-mails from investors. And while I realize that because I myself am a shareholder in the company. But I think what I would like to take the credit on behalf of MicroVision management and the Board is the reason why we are here talking to you guys, and you have seen the others, the mighty have fallen. It just sort of represents the ethos of what this company has been all about.

We have been very disciplined. We have been able to fund the company, and we have been fortunate enough to attract people like Glen. I mean, having somebody like Glen and the senior executives he's bringing to the table, it kind of never happened in this company's history. And to have people like Glen leading us through this time is sort of a statement which I think I can be -- we can, as a company, be proud of because no other company has an experienced professional or a resume and experience like Glen. And that's why I'm very confident more than ever of what the future looks like because we have the priorities right to not make the best product, but to make the most efficient product for customers at the price point that will drive the volumes.

And part of -- the tough part is you have to incur dilution in the initial phases to have that runway, to have that stability to attract talent. And also keep in mind, this is a game about customer stability because I have been here 4 years. And in my 4 years, the number of lidar companies, which are now I can call competitors, I can literally count them on my single hand before I joined 4 years ago, there were so many companies. And I think this will continue to change. And I think the -- I continue to iterate, this is a game of the survival of the fitness and the guy who will survive this game. And I think our financial position puts us in a very good position of standing and also our continued partners who -- the High Trail guys who have continue to help us as well to get to this point. So I am very confident, and you can perhaps see the increasing positions in our institutional investor holdings, which is also a representation of the fact that we are here to stay. We are here for the long run, which is why I'm very excited.

And maybe last comment I will make is the recent financing for Aeva, the debt funding actually is a very positive sign for the entire industry. That actually tells you that the quality of credit investors and the quality of credit is actually increasing with more significantly large institutions coming to play in the lidar sector, which just means that the business and the sector itself is gradually becoming or moving up the chain from equity financing of convertible to someday in future debt flow finance, and we would be having revenue growth and cash flow. So all in all, while dilution is painful, but I think it is the necessary tool to put us in a spot where we can compete and have a future, which is truly, truly bright.

With that, I would like to thank everybody. I know we went over the hour mark, but we look forward to chatting with you at our year-end call early next year. Thank you, everybody.

Thank you. This concludes today's conference. All parties may disconnect, and have a great day.

Good afternoon, and welcome to the MicroVision Second Quarter 2025 Financial and Operating Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Drew Markham. Please go ahead.

Thank you, Paul. Good afternoon.

I'm here today with our Chief Executive Officer, Sumit Sharma; and our Chief Financial Officer, Anubhav Verma. Following their prepared remarks, our Chief Technology Officer, Glen DeVos, will join us, and we will open the call to questions.

Please note that some of the information you'll hear in today's discussion will include forward-looking statements, including, but not limited to, statements regarding status of commercial engagements, business, product and go-to-market strategies, level of customer and partner engagement, cash, liquidity and the impacts of recent financing activities, market landscape and opportunities, program volumes and timing, development projects, performance of our products and solutions, product sales and future demand, projections of future operations and cash flow, availability of funds and conditions for capital raising as well as statements containing words like believe, expect, plan and other similar expressions. These statements are not guarantees of future performance.

Actual results could differ materially from the future results implied or expressed in the forward-looking statements. We encourage you to review our SEC filings, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update this information.

In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC's Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website under the SEC Filings tab.

This conference call will be available for audio replay on the Investor Relations section of our website at www.microvision.com.

Now I would like to turn the call over to Sumit Sharma, our Chief Executive Officer. Sumit?

Thank you, Drew, and hello, everyone. Welcome to our second quarter 2025 results review.

I'll start by updating you on our progress with commercial agreements in the automotive and industrial markets, followed by what we expect from our military engagements and finally, refreshing everyone with our vision and mission. Since our last update, our level of engagement with automotive OEMs has increased with multiple reformulated RFQs. A new architecture, which Glen will introduce at IAA in September in Munich is instrumental to this. It provides OEMs with a wider operational design domain while making solutions cost competitive for larger volume adoption. For the past 5 years, lidar companies have proposed solutions with no mass market adoption by OEMs and limited revenues. The new RFQs target form factors that can be integrated into automotive design with low power and competitive technology cost for economy of scale.

Our new MOVIA S and MAVIN offer, the widest field of view, delivering what we believe is the most cost competitive performance for dynamic view lidar. Key features include small object detection at range, the widest system field of view, the lowest system power and cost competitiveness with scaled silicon technologies. To succeed in this space, our go-to-market strategy remains steadfast. We are focusing on OEMs with mass market product plans. Even with production targeted for 2028 and beyond, it is crucial for us to win in this segment with a scalable product. Cost competitive and scalable lidar products developed for automotive will also empower us in industrial and defense segment with higher sensor fusion and perception software sales. We plan to elaborate on this further in September at IAA in Munich.

In our industrial vertical, we are in the final stages of several engagements with ongoing evaluations. This segment is also very important to us. The proposed solutions include our lidar hardware integrated with advanced software features like the lidar collision avoidance system, LCAS, directly from the lidar sensor. We have multiple opportunities with these products and with industrial customers. To advance our sales opportunities in the automated guided machines, autonomous mobile robot segment, we also introduced an aftermarket product with our lidar and LCAS software that can be retrofitted into existing forklift fleets. This product makes adoption of our lidar and software far more frictionless for our potential customers. I've been on the road with our sales team for this product and have been pleased by the reception. The mass market product for this segment will be a MOVIA S safety sensor, which we plan to introduce in the coming years.

In industrial space, 2D mechanical lidars that are safety qualified currently hold the highest volume and revenue opportunity. The perception software developed with these sensors is extremely limited. To dominate this segment, we expect to forge future partnerships with AGV/AMR companies looking to evolve past 2D lidar safety sensors to our 3D safety sensor with onboard perception. We are targeting our solid-state MOVIA S lidar for this product line. With resolutions more than 2.5x higher than current products, a smaller form factor and integrated LCAS and safety sensor options, I believe this will be a very successful product line and will allow us to establish reliable annual recurring revenues in this vertical. Our current focus is on finalizing commercial partnerships in this segment.

The defense vertical presents a significant opportunity for us to collaborate with existing prime contractors and to serve as a primary technology provider for a comprehensive hardware and sensor fusion product. The defense market demands dual-use technologies and cost-effective systems for land-based, aerial and maritime autonomous platforms. Each of these platforms requires high performance, highly reliable lidar, seamlessly sensor fusion software and a perception software layer that extracts insights from the localization and mapping to enable full autonomy. These systems must be capable of operating in GPS-denied environments without extensive AI training data. This is the forefront of autonomy and our products and technologies can significantly impact this segment.

Developing and demonstrating our technology in the military space will further create opportunities in the future for us in automotive and industrial to bring advanced technologies built on top of our lidar for years to come. In the first half of next year, we plan to publicly demonstrate an autonomous swarming drone system. This system will be capable of creating detailed maps of regions and communicating these maps in real time, allowing other autonomous drones to execute a wide range of missions. The core sensor fusion and autonomy software we are developing will facilitate partnerships in aerial, maritime and terrestrial domains. This drone technology demonstrator will be crucial in advancing our collaborations.

Our go-to-market strategy for the defense sector will center on developing advanced lidar sensors and sensor fusion technology that delivers the highest level of actionable perception software. We target partnering with established prime defense contractors, and these partnerships may lead to further opportunities for joint ventures that can accelerate our revenue growth.

Our company's vision is to accelerate the global adoption of autonomous technologies across all segments. Our mission is to partner and develop the most advanced lidar sensors integrated with edge perception software for the automotive segment, enable the industrial segment with advanced robotic software and our lidars and empower the military segment with autonomous software with multimode sensor integration.

I will keep my remarks brief today to allow time for questions from our shareholders, which I would like to prioritize. I'd like to turn the call over to Anubhav now. Anubhav?

Thanks, Sumit.

From a financial perspective, the first half of this year, especially the second quarter, witnessed increased trading activity and institutional trading, not just in MicroVision, but across the board in our peers as well. This sustained momentum and elevated interest in lidar and auto-tech names pedals an exciting time for us. A lot of blue-chip institutions also seem to be turning their focus back on to auto-tech, especially lidar sector, primarily due to 2 factors: number one, the progress that's being made towards commercialization across automotive and robotics and defense tech; number two, a global portfolio rebalancing that seems to be at play for large financial institutions as a result of which small- to mid-cap companies are expected to continue to benefit from this trend.

Expanding on Sumit's comments, we made significant progress with NVIDIA by achieving full integration with their DRIVE AGX platform. This is a big step forward for us to become a fully qualified solution provider, particularly as we engage in several RFQs with automotive OEMs for our integrated long-range and short-range lidar solution. We're looking forward to IAA in Munich next month to demonstrate our new integrated solution for the OEMs. We believe that price will continue to be the single most important fact for OEM decisions to drive higher lidar adoption.

The automotive vertical will always be the primary driver for high-volume recurring business that gets us to scale. We're driving momentum in the industrial AGV/AMR market to drive near-term revenue opportunities, leveraging our perception software and MOVIA hardware to solve complex business problems for our customers at attractive price points that lower their system costs and increase their internal productivity and efficiency. We believe that our production commitment with ZF in France drives our ability to meet the anticipated high-volume demand from customers in this space for our MOVIA L product.

We believe the ability to mass produce automotive-grade products ensures continuous and uninterrupted supply at a pricing advantage to our customers given our minimal exposure to China-based manufacturing. While the situation continues to be dynamic and evolving regarding global tariffs, we believe MicroVision remains well positioned with our manufacturing partner in France. We continue to press ahead with our pursuit of revenue opportunities in the defense vertical. We recently added Scott Goldstein to our Advisory Board to help find near-term partnerships.

Our go-to-market strategy in the sector will be focused on mission-specific projects in 3 key areas: maritime, airborne and terrestrial. In short order, we plan to demonstrate a complete solution with multimodal sensors and our full stack software capable of enabling unmanned drones to complete specific missions. We recently bolstered our sales and business development teams by attracting experienced, talented individuals from some of our key competitors. MicroVision remains well positioned in the marketplace with diversified near-term revenue opportunities in the industrial and defense sectors. The expanded TAMs, streamlined cost structure and recent financings have solidified our position.

Now let's review our second quarter financial results. Revenue. For the second quarter, we reported revenues of $0.15 million. This quarter's revenue was driven by our sales in the industrial verticals. Expenses. Our second quarter 2025 R&D and SG&A expenses were $14.1 million, including $1.9 million of noncash charges related to stock-based compensation and $1.5 million noncash charges related to D&A. Backing out these noncash charges, our R&D and SG&A cash expenses were only $11 million in the quarter. On a year-over-year basis, we have reduced our expenses by 44%. We expect the current spending level to be sustained through the rest of the year. We believe our existing workforce and level of expenses allow us to execute on the current business strategy. We believe our current engineering teams can support continued engagement with automotive OEMs and simultaneously scale faster with industrial and defense opportunities in the near term. [ Q4 ] CapEx was $0.2 million, in line with our expectations.

Now let's talk about our balance sheet. We finished this quarter with $91.4 million in cash and cash equivalents. In addition, the company has availability of $76.5 million under our current ATM facility and $30 million of undrawn capital under the convertible note facility. As I mentioned earlier, the lidar sector and broadly the auto sector saw elevated trading volumes in the first half of 2025 due to increased interest from institutions trading in these securities. Given the favorable market volumes, we raised about $35 million net from the ATM during the second quarter and bolstered our balance sheet.

While we will continue to be opportunistic in raising capital, we believe that with the recent raises and our current ongoing operating cost structure, we have extended our runway into 2027. The extended runway makes MicroVision an attractive investment opportunity for new large financial institutions. On the convertible note, we have approximately $33 million outstanding that converts at a fixed price of $1.60. With $91.4 million cash at hand, we're now adequately capitalized to make these debt payments starting September 1 in cash with the cash on hand or through stock if the holders choose to exercise their option due to favorable market conditions. The $30 million second tranche remains undrawn and available for future drawdowns.

We're pleased to have found a strategic financial partner whose confidence in MicroVision's future has motivated an alignment of economic interest in step with our management team, employees and other shareholders. MicroVision's average trading volumes have significantly increased, which in part is due to the investment commitment of over $90 million from one single investor. As I have noted before, this is the first in company's history, and I am quite pleased with the recent uptick in our trading activity. Our average daily trading volume has more than doubled. Over 5.2 million shares traded on an average on a daily basis during the entire second quarter in 2025. The equivalent number was 2.6 million in the corresponding period in 2024.

While a solid foundational retail base is very core to MicroVision, we are pleased to report that the recent $90 million investment commitment has unlocked a sharp increase in trading and inbound interest from several large financial institutions. This has significantly elevated visibility of the company across the broader institutional investor universe. We remain relentlessly focused on our execution and continue to have excellent engagement with industrial customers on their technology road maps.

To summarize, we're really excited about positioning MicroVision as one of the frontrunners of the autonomy enablers for the 3 end markets. We continue to drive forward with significantly higher TAMs, including defense and industrial, expansive and broadening solution advancements, a solid balance sheet with superior trading metrics and a well-experienced team to execute the strategy.

Operator, I would now like to open the line for questions.

[Operator Instructions] And our first question comes from Jesse Sobelson of D. Boral Capital.

It really sounds like there's a lot of exciting developments, both on the military side here with the autonomous drones you mentioned in these remarks as well as just across the board with some other end markets that we've discussed previously. I wanted to ask just on the industrial pipeline visibility. You mentioned growing momentum in the industrial verticals. Can you expand on specific use cases or customer types showing any traction? And when do you expect this to materially impact revenue?

Yes. I think we updated this at the Investor Day. I think everything we said publicly so far stays in play. In the industrial space, primarily AGV/AMRs is the target. Imagine in the logistics space, there's a bunch of requirements for autonomy that people think about, but there's a bigger unmet need of higher levels of safety. Our product with our current MOVIA L integrated with an LCAS system with a display sort of equivalent to a retrofittable like a bolt-on solution that goes on all existing installs. So you're not waiting for a forklift OEM to integrate into their next-generation product, which their cycles are longer and slower.

We are in some of those RFQs, right? And I think we're planning to successfully close on some of them. But I think the bigger opportunity is the installed base that already exist. And there is quite a lot of sales organizations out there that retrofit that have access to these customers that have huge installed bases, and they're looking for a plug-in ADAS solution, more like a warning system to get it going faster than the forklift OEMs would. So from that standpoint, there's a market for that, certainly higher ASPs there. They get -- time to market is faster because we give a fully integrated product.

Beyond that, there's also other opportunities where a lidar with customized software with multiple customers can be integrated to enable their LCAS system or other kinds of automation, and our team is working actively on that. Our engineering teams and our sales team are working actively on that.

And Jesse, from a timing standpoint, we expect these revenues in the second half of this year and then continue in 2026, as we mentioned before.

That's wonderful to hear. I really appreciate the detail there. Then just to quick touch upon the defense sector, and then I'll let the line open up for some other questions. But the drone -- the autonomous drone solutions that you guys are discussing sound very intriguing. Are there any specific programs or agencies that you're aiming to engage with in this defense vertical? And are there any prototype -- what would be the timing of expecting any prototypes to be announced or any potential pilots beginning with these targeted agencies?

We're working actively in this space, right? I think as partnerships happen, we will announce them. I think in this case, something we have certain blocks of technology that were already built out, specifically the sensor fusion, the perception in our lidar products. Beyond that, we are integrating other sensors into it.

So again, as Anubhav mentioned, very mission specific, so we're not making a general product. But instead of waiting for a partnership to be announced and then start working on the development, we've seen enough interest in it that it was easy to demonstrate something by the early first half of next year with the drone technology, which is completely -- puts us in a completely different category than any other lidar company. So if you think about this thing, it's a demonstrator, a public demonstrator. We're funding it based on input that we've received from a lot of different places of something that -- what are the crucial blocks that we should be demonstrating for partners to evaluate our level expertise.

Glen, perhaps you want to give some color?

Yes, that's exactly right, Sumit. As you mentioned, we really have a multiple phase project launched for airborne drones where we can show not just -- here's how a lidar sensor works, but rather here's how lidar, vision, ultimately radar all work together to provide a couple of different things. One is pure autonomous navigation for that drone. So in RF and GPS-denied environments, very common and particularly in areas of conflict, you are able to navigate that drone with precision without having to rely on any external communications. We can also create the maps real-time and then share those maps with other drones, Sumit mentioned, swarming and multiple drone operations.

Well, you can enable that through that communication of real-time maps from one drone to another. And so we'll be showcasing how that actually works and how our technology develops that. And the great thing is we don't -- if you think about the drone somewhat agnostically, it's a vehicle platform that we will control. MicroVision has all of the constituent technologies required to make that happen. We have the sensors. We have the ability to process and fuse the different sensing modalities. We have the map making and the -- basically the perception software, so we can build the environmental model for the vehicle or for the drone. And then we have the actual autonomous stack that sits on top. This is back from the IP that we acquired with Ibeo.

So we're able to integrate those existing assets into this new package. And that's why, for us, it's important to be able to just showcase that, use that as a platform to attract and work with and identify and work with the right partners in that space. And the initial focus is on defense. But when you think about what we just talked about, it really applies very broadly to commercial markets, logistics and many other different markets. So that technology can easily be transferred over to other end markets, but the initial focus is really what we can do in defense.

And our next question comes from Casey Ryan of WestPark Capital.

Talking about end markets and TAM, do we need to break industrial down to be broader than what we've talked about historically, just that distribution and warehousing is one, but are we starting to see a more expansive definition of industrial or sort of nonautomotive? It'd be great to hear about that.

Yes. Can you go on mute so we can answer. Let me just give some context on that. So think about the industrial, I think the way to approach the problem is what are the channels that you have to go in that you have to develop to get your product into the market. Actually, we know how to make product. We know how to solve problems. But I think it's really come from you got this awesome technology that you're sitting with, but how are you going to actually develop a channel to dominate.

So if you can take the industrial space, the way to break it down is geofence, mixed-use, ADAS, but also there are certain parts that are kind of automated in the sense that if somebody needs a safety sensor right now, they know exactly who the 3 to 4 suppliers are. They know who's #1 that's got more than 80% market share in there. They go get a quote and they just keep replacing or the new equipment keep adding. So over a long period of time, there is a recurring revenue in that space that is agnostic of the 3 segments that I described. When they develop any kind of AGV/AMRs, they need the safety sensor, they always go to a standard product.

So if you think about the channel, that's a creative channel for that market where we are a standardized safety sensor product, then you need a higher workforce, of course, when that moment comes in because the way you would actually go to sales is different than the small thing we have right now that goes after individual high-volume projects, you have to really be a mass market product and deploy across different distribution channels.

So the real answer is that how do you segment this market? Well, there's multiple ways. Right now, given how we're targeting, we have to pick the cherry products that have high volume. Recently, we were discussing with somebody in an RFQ and the volume was only 1,500. And they're like, oh, we're only 1,500 units. And I met them. And I said, no, no, that's pretty good for us, right? Because that's how the momentum starts. Of course, we'll build trust from there, and we'll go and take years to build it into their pipeline.

So I don't think you have to dissect the segment more, but dominantly, factory automation and warehouse. This is the 2 big places where this sensor and any sensor that we come up with safety sensor is going to be dominant. So I think we can keep it at those segments. It's how we attack those segments and how we go after and developing those channels is probably a better way to discuss because, of course, future expense will be related to that.

Right now, what we can do with our current workforce, our sales team is focus on some things. And once we get the real understanding of how those channels are developing, we can invest heavier to go higher. But when we go to the safety sensor, you definitely going to need a bigger sales team to go global across multiple distribution channels.

Mr. Ryan, did you have a follow-up?

Okay. Let's move to the next then.

I will now turn this call back over to Mr. Verma to read questions submitted through the webcast. Thank you.

Thank you, Paul. Right. So first question, what is the status of the industrial OEM evaluating our technology? Can you explain what is causing the order delay? What is the status of other industrial companies evaluating our technology?

Yes, I'll take this. I don't think there is any delay in making a decision. I think we have a sensor. We provide software. They have their own software to integrate into their AGV/AMRs. Like some of the ones that we visited are as few as 1,500 units. Some of them are higher than that. I think they're all in different levels of evaluation of how they will integrate into their system. Of course, we sell a solution. But the bigger thing that every partner has to figure out is if they are making a new product, how is that going to plug into their supply chain, has to go to their factory, get installed, the integration part of it.

If you have a customer that's potentially looking at to go more aggressively and retrofit it, they have to figure all those things out, like once the product gets installed, how would you upgrade firmware bugs that could be found. So there's lots of steps involved to get that integration part done. So I would just qualify it as more that it is in deep evaluation. I think in all cases, we have not really submitted any big changes. I think we're done. We just support them in the various things that all these customers are finding just to upgrade our offering.

But our input at this point is minimal, and we are actively supporting their integration efforts to make sure everything is exactly the way they would want. These customers are different than automotive customers. Automotive customers have multiple years to figure this out. Industrial customers, on the other hand, they take as little as 12 months, as much as 24 months. So typically, like they want to make sure whatever they're buying is going to smoothly integrate. So that's where we are in these engagements.

Anubhav, I think you're mute.

Next question. Recently, most of the other lidar companies have announced sensors for the industrial sectors. How do you plan to compete with them, especially existing players like Ouster and SICK that have a stronger revenue and a customer base?

Glen, do you want to tackle this?

Yes. I think really on a couple of different levels, especially when we look at the existing -- when we kind of look at the existing portfolios of those parts, they're largely electromechanical, electromechanical assemblies, quite large, large towers. So really, there's a few dimensions that we compete on. The first is really on technology. And what I mean by that is when you look at the products we're offering for industrial, which are all silicon-based, so their flash lidar, all silicon-based, they just have a fundamental cost advantage for the technology itself in terms of how you assemble the sensor, how you operate the sensor and the benefit that scale brings in terms of the production of that sensor. So there's a significant cost floor advantage for us.

The second is, as we package ours, it's for harsh environments. And so whether you're spraying it with a wand to clean the vehicle, or it's wiping it down with an older cloth. Our lenses are Gorilla Glass. The product is field, has high integrity sealing so that it's very, very compatible with harsh environment, not just shock and vibe, but really the elements that you see when you -- in these industrial environments.

And then the third is just size and power. They're more compact. They consume less power, which is very critical for battery-operated AGVs and AMRs. The next dimension really that we think where we have a competitive advantage is in that we're not just providing a catalog sensor that can deliver a point crop. We have, in fact, that full software stack that goes with that sensor. So we can provide perception, we can provide driver assistance or LCAS features on top of that perception. We can deliver a wide range of functional content in that sensor. So we can really tailor that to the particular OEM's needs.

And I think it's really critical that we're not just -- it's not a one-size-fits-all type of solution or a catalog sale. It really is where these OEMs that we're working with, we can tailor the solution to their vehicles, their needs in terms of their end-use applications. And that -- what we're seeing with customers is that's a significant difference maker for that customer. They're not trying to -- they don't have to adapt their system to our sensor. We can integrate it with their architecture.

And then finally, I would highlight, as Sumit mentioned earlier, the whole idea of the bolt-on system because we have that complete offering, hardware, software, perception, features on top, LCAS functionality, we're able to actually offer those customers a bolt-on system for existing vehicles and for existing fleets or for fleets that are just going out that don't have any driver assistance or safety-related features with them. And as a result, we're able to basically just power that up, easily added to the system, provide that vehicle with an additional level of safety performance very quickly. We offer the entire software stack that enables that.

And so that's -- as Sumit has mentioned earlier, we're seeing a really strong pull for that because there's -- there really aren't driver assistance systems like that or safety systems out there today. This enables our customers to be able to adopt, deploy very rapidly and that start getting the benefits, both in terms of safety as well as increased productivity from the adoption of those systems. So it's really on a couple of different dimensions that we think we're in a very good competitive position to really kind of disrupt the status quo of electromechanical kind of old school style sensors and really bring in much more modern, much more cost-effective and much higher performing systems.

Thank you, Glen. Next question. MicroVision is entering the military tech space. Today, you mentioned drones, aerial and marine applications in the defense tech space. Are we pivoting away from lidar because we have limited success? Or do we have something valuable to offer? And how much dilution should shareholders expect from this?

I'll take that. I think I'll answer the first half of it, and then Anubhav probably can come and help with the dilution part of it. All right. So let's -- first of all, I think like we're expanding what we have. So as I think Anubhav has already mentioned, right, we don't expect big increases in our OpEx. And we're still promising that in the first half of next year, we're going to have this very sophisticated drone demonstrator. So I think like I want all of us to think about -- all of the shareholders to think about it as we're doing more with the same set of resources, but we're optimizing what the market needs. So lidar still is a foundational sensor. It is why we're going to keep having advantage.

So let me give an example, right? And I've been thinking about this over the weekend. So far, we do with lidar, and you always think about autonomous vehicles on roads. We mentioned drones, and we'll talk about why we have avenging drones. But we also mentioned maritime. So we're going where the market is going in the military tech space, if there is huge investments to automate watercrafts in maritime. Of course, we have to see do we fit and do we offer anything new.

So if you think about like any of us, let's say, we had enough experience on our team that says, you know what, enough maybe X maybe seals that would say, you know what, let's make this product. They would always start. They would need what. They would need some sort of like GNSS. I think about like some GPS, there could be IMU, they could be -- they need like vehicle automation systems, camera sensors, radar sensors, lidar sensors, microphones, that will have maps for like inland maps, right, that they have to navigate around and all sorts of data archives. So these are the fundamental building blocks that any company in that space, providing a prime, providing an autonomous boat to a DoD contract would need. All of them would take those inputs and put it into, let's say, call it, a black box like a sensor fusion black box, which is what we have.

We provide the lidar that accelerates our path to take that construct and create a seamless database for them where our perception very quickly identifies key topics or key items in the field of view, which could be -- obviously, in this case, it could be all the way around the boat under the water as well, all combined and allows them to have faster insights. So the same fundamentals we've been talking about that enable ADAS and autonomy with different sensors can be deployed in a completely different area. But the fundamental building blocks the company has, but there are other fundamental building blocks, like for example, we've never integrated anything with a sonar or like a microphone, right, or any kind of other -- those kind of sensors. So we could build that. So we want to go find partnerships to demonstrate with our drone technology, what we have demonstrated and say like our construct, our real product is the software and hardware package that accelerates your adoption path.

I can bring autonomy to you faster. And so you having to invent all of this, I have blocks already built out. So I would say that we're expanding with the bits that we have. We don't see the OpEx going up, and we're going to demonstrate it publicly. So I would not say it's pivoting, it's expanding the product lines that we have in the military tech. But what we have applies to all 3 areas. Of course, terrestrial, everybody on this call knows a lot about it. We've been talking a lot about it. Drone is something that's interesting. The nice thing about drones are they are up in the air, but there's not that much traffic, but there's also not that much -- that many roads. So the rules are different. So you can apply autonomy at a faster pace and demonstrate something.

And the thing that Glen has talked about in developing these real-time maps, this is actually a really important thing. Remember, if any of us were dropped into some place we don't know, the first thing you need is a map and your map would be old because things could have changed after rainstorm or something. But being able to, in a very cheap manner, create your own high-resolution map is the very first step before any mission can be deployed. So that's what we're going to demonstrate in multiple drones working together and of course, expand it further to maritime.

But Anubhav, do you want to handle the dilution question?

Yes. No, I think that's right, Sumit. So I think in terms of dilution, I think I want to make sure our shareholders understand the model here. I don't think the model is to become a full solution provider where you're trying to become the Auroras or a fully autonomous systems provider. What we are -- essentially, I've heard the word partnerships here, right? We are partnering with the right company for the right mission. And I think that's what the key to this message is because what we're trying to come up with the right pieces that they are missing because we have already built them out as individual blocks and how do we collaborate/partner with them to deliver these specific missions.

As an example, we're not looking to become a drone company, but we're looking to partner with a drone company where we can enable the drones for a specific mission like mapping. And that, from an expenses standpoint, yes, it will add a few millions of dollars of expenses. But again, this is not pivoting away to become and own a full autonomous solution that we'll have to develop from scratch. I think that's not the business model that we're going into because that model, while it is actually very juicy, but as you can imagine, it requires billions of dollars of capital and really a lot of patience, which we have seen in some of the big companies, which are chasing this dream. So I think that's why I want to be very clear that here, we're trying to partner with some of the other companies where we can provide a solution that together becomes a comprehensive package for delivering a particular mission.

All right. Next question. What's happened to the 7 RFQs? The number was taken away from the Q2 press release. What is going on with these RFQs?

Yes. Let me start off with that, and maybe, Glen, you can come back and add some more. Think about the RFQs as OEMs reformulating, which is they do quite often every so often where they reformulate what their really needs are. So I think like we've been at MAVIN for a long period of time. And as we've always said, our go-to-market strategy is to really focus on not just making announcements, increasing our OpEx and not revenues coming in, is to go work with target OEMs that actually have a real product plan where we can connect.

As you can imagine, as Anubhav said, I've said, Glen has said, for OEMs, automotive OEMs, cost is always going to be #1. They want the highest technology, but cost is equally or even higher in the priority list. So they want to get it at the right level. So for the longest term, I would say, MAVIN, is some of the choices that have always been made of what's required for a long-range lidar, you want wide field of view, but you also want length, you want low power. It's just over constrained problem. So yes, if you develop something, you provide it there, the cost is extremely high. The power is extremely high. The form factor is pretty high because the optical choices you have to make.

So I would say these new RFQs, I think they're going to keep evolving, but I think they are starting to realize that there are other alternative ways to think about the problem that can be much more cost competitive and meet and exceed the requirements. So to perhaps to deliver dynamic with lidar, imposing all those requirements for one sensor and then expecting to be super cheap is a fool's errand, because every OEM and every award that they've done so far, that has never worked out.

So I think I'll let Glen talk about it, but I think since he has so much experience from Tier 1s and OEMs, he sort of guided us toward what's the right product. And maybe we can introduce it now, Glen, before we give all the details, like a little teaser, so in IAA, we can give them first of all, perhaps you can join.

Yes. Just to touch on the whole OEM quoting process and status. As we talked about in Investor Day as well as the prior earnings call, the auto OEMs in general, broadly speaking, we're kind of reformulating their strategies around Level 3, the adoption and the use of lidar for Level 3 and how that would look. And that was -- that's been an ongoing process. It continues. And I think what we're seeing now really 2 things. One is more of a rational approach around this in terms of which platforms are they really going to deploy Level 3 on, how they're going to do it, the timing associated with that.

So the quality of the RFQ has improved as well as, I think, from my perspective, our confidence at the RFQ that there's real volume at the other end of that process. So that's -- for me, that's a good thing. Lidar is not at the maturity level or at the commodity level as a brake controller or radio and where the purchasing process for those types of components is very predictable. I mean it's just a very well tried and true process and the outcomes are pretty predictable and the timing of that is predictable.

Lidar with a Level 3 functionality is still very much an engineered product and a tech product that -- where the OEMs still kind of feeling their way through that, but they're making progress. The RFQs that we're involved in now, like I said, have higher quality, we're more confident in the ability for those things to really turn into real programs and revenue. So that's the exciting part of it.

Now Sumit touched on something that is very near and dear to my heart because with my history with radar, with vision systems and other safety-related systems or just new technology in general, ultimately, for broad adoption, the costs have to come down. We've heard a lot of discussion around, well, costs will come down when lidar volumes go up. Well, those volumes won't go up until costs come down. It's actually the other way around. And that was very true with vision systems. It's very true with radar systems when we first introduced those.

In automotive 20-plus years ago, it took a long time for those cost curves to come down. But when the product cost comes down, that's when volumes come. You enable that through lower-cost solutions. And so for us and what our focus has been on since certainly over the past year and really intensified since I joined in April has been on for auto, what's the right strategy there to drive cost down, but not to sacrifice the performance and really looking at it from a vehicle or a system architecture level, not thinking just as, hey, we provide a sensor, but we provide a system architecture, a system solution.

And we break the problem down into not just one super sensor, but rather how do you break that down into smaller elements. And this is what we did with radar. It's what we've done in vision, where we have a different architecture and maybe not just one super sensor, but rather multiple sensors. And that's what we're going to talk about in the upcoming ERR, where we believe we have a much more efficient system architecture that delivers better performance, smaller packaging, lower power consumption and ultimately will enable the OEMs to offer these features at lower total system cost of the vehicle.

So really excited about what we can do there, the technologies we have that enable this. And then as well, unveiling that really at ERR or IAA in early September. So a lot more to come here. But this is -- we're literally redefining lidar for automotive. It what's been there, the approach that's been taken prior to this, I think, has led to very low adoption rates, very low penetration. We're redefining it. We're going to enable it to be much more broadly applied ultimately down to Level 2 and standard ADAS systems. That's what we're trying to do.

All right. Sumit, I'll turn it over to you and Anubhav.

No. Thanks, Glen. This was very helpful. I guess there is a follow-up question here is, do you anticipate any high-volume automotive production RFQs to be awarded in 2025? Or are the time lines being pushed to at least 2026?

No, I think here's how I would answer that because predicting OEM sourcing timing can always be tricky because that's not in our control and other factors that the OEM may influence that. We're actively engaged in quotes now that could very well be completed yet well before the end of the year. That certainly would be our hope. And so that's how we're behaving.

What I would tell you, though, is that quote timing may shift around a little bit. It may slide out to '26 as they finalize their plans. But ultimately, it's not shifting out the launch dates of the introductory dates. And depending on the OEM, that's still as early as '28, small volumes coming in more into '29, higher volumes. So we aren't really seeing the launch timing move, the sourcing timing may shift around. But like we talked about at Investor Day and earlier, really that next generation of platforms we see still happening in that maybe as early as '28, '29 time frame for sure and then '30 really hitting higher volumes.

Thanks, Glen. Next question. MicroVision has not won any deals and other companies have since made changes to their products. Are we at risk of having outdated or inferior technology? What are we doing to remain best-in-class?

All right. Let me start with this. So I think if you think about industrial, our MOVIA L with our software is a refreshed product at a very competitive price with integrated software. I think that's our path to revenue immediately. I think this is a very fair question. I think the way you think about it, it's actually working really perfectly. But if you think about like some of the other lidar companies what they're saying and what you're hearing from our call is there's nuance, but it is clear how we're thinking about our strategy.

I think as Glen described, that there will be -- instead of thinking about a complicated set of requirements and shoving it into one single box, it's not the right strategy. It makes sense to have multiple sensors, software architecture. Think about the entire car, how can be simplified and their overall cost will come down. In that sense, we are evolving our product with MOVIA S, with MAVIN to give them the right tool for the right problem, okay? So think about that as more of an evolution instead of like other of our competition there that completely stopped the development and gone to a completely different product, right?

We're still MEMS-based technology. We're still using 905 laser. We're still time of flight. So all that construct is the same. But instead of a dynamic new lidar being shoved into a single sensor with a wide field of view, think about it being broken down into some different sensors that cover it, but still bringing cost down, not going up. That's the interesting part that we'll talk about and demonstrate at IAA.

When you think about other awards that have happened, right, I just want to give context, right? I congratulate them. It's great. We choose not to do those because it increases the OpEx, but there is no guarantee you're going to have any follow-on volume, right? We certainly want to get some validation, but we have products that we can show that should be able to get deals done. You hear other things like people are working on economy of scale. They're going to put everything on a single chip, a laser on chip and so on. So all these words are thrown out there. But none of them are amounting to guaranteed revenues from OEMs because the OEM products are far away and most of them are really just making NRE.

So I think like I totally appreciate your question about someone has won deal, they have evolved their product. Do we have to evolve the product? I think we are -- they're not evolving products. They just went to a next generation. I would say we are evolving the product by breaking the problem down, keeping cost in mind, integration in mind.

Glen, did I miss anything? Do you want to add more?

Yes. The thing I would add is a lot of times, you'll hear people talk about technology. And generally speaking, they're talking about the hardware component. And as Sumit mentioned, we have a very robust road map and have had a road map and have been looking at that for those 3 markets that we talked about, industrial, automotive and defense. And so we have a very robust hardware road map that I think puts us into an industry-leading position.

But along with that, and this is really critical, we have a very good software road map and including how do we incorporate the very latest software capabilities using machine learning, using AI, using GenAI for not just the end product functionality, but also for how we develop that product. And so -- and all of this to deliver best performance but at lower total system cost. And so I always enjoy -- personally, I always keep an eye very much on the competitive landscape and like to see how lidar is progressing more broadly speaking. But I feel we're -- I feel very good about the direction we're heading, the speed at which we're heading in that direction and then the approach that we're taking and the road map that we have to support that.

Thanks, Glen. Next question. From this earnings call, I gather that MicroVision is transforming from just a lidar company into an autonomous systems company. How does the future look for lidar companies moving up the chain?

Let me take that question because I think this is related to the dilution question earlier. Like I mentioned in my previous remarks, I don't think this requires huge amounts of investments or significantly improving or adding to the cost structure of the company because like I mentioned, the word -- you are hearing the word partnerships. And again, the idea here is the blocks that we already have, how do we fit them in the puzzle, which other providers are looking for and then present a complete package to the other parties to the end customers. And that's why I mentioned that, again, we're not looking to compete with the Auroras or full autonomous systems company where they are providing the system solution end-to-end because that's a very expensive and a very long process. We're not looking to become that.

What we're looking to become is a company that enables some of these smaller players to deliver autonomy to the industrial customers as well as defense tech customers from the end market standpoint. And I think the future for lidar companies moving up the chain, what we're simply working on right now is integrating multimodal solutions. So lidar becomes one of the components of the sensor suite that we're going to be offering along with our full stack software. And then it could be combined with, as Glen mentioned, radar or cameras. And then you present that solution with that software that needs to be integrated at the customer's end.

That's the future that we're shooting for. And this would not require huge upsizing of the cost structure that we have right now. It will require some investment. I think, again, we want to be -- we have been very clear in our communication that, again, it will require some investment because as Sumit and Glen mentioned, this does include or require some of our engineers to spend time customizing the solution for some of these applications. But again, it doesn't mean that the OpEx is going to go to 3x or 4x. So that's not what we're looking to do. We're looking to keep the OpEx where it is relatively at the same levels, maybe add a few expenses here and there. But that's the vision or that's the vision the company is shooting for and executing on.

Next question. Has MicroVision recently issued more shares? Management said that they will not need to issue shares in the near term. And maybe the next related question is what is the plan for making payments in September for our debt with High Trail Capital? Do you anticipate any near-term needed for additional financing or dilution?

So again, I think I want to clarify. I don't think any company -- any lidar company which says that they're not going to issue shares or raise more capital. I think it's very evident that, that statement just cannot be true because at the end of the day, all lidar companies are going through this evolution where they are -- they have to be cost structure efficient while choosing the path that will get them to the ultimate destination where they want to be one of the last men -- last few companies standing and have moved up, graduated to the value chain, having software as a very important component of their offerings. So that's that.

So obviously, we did sell some shares because I think one of the main reasons why what I mentioned in my call as well that we have become an attractive investment for several large financial institutions as well because of the stability and the longer run rate has -- the company has because, again, you can imagine any big investor would really want to feel safe about their investment when they know the company has resources to execute the business strategy.

Now I think where the skill of the management teams at each of these companies will be judged by, how do they raise capital and how do they navigate these capital markets to make or execute the most efficient capital strategy to get to the end point here. And I think as we have demonstrated in the past history of the company that we have been very prudent and very opportunistic in raising capital. And again, I continue to extend that strategy and vision to make sure that MicroVision is fully capitalized at all times to execute its business vision, while at the same time being pragmatic and practical of the dilution for the shareholders as well.

The plan for making the payments in September. So like I said, we have adequate amounts of cash to start -- so our first payment is going to be due on the 1st of September, and we expect to make that payment in cash. And if the stock price and the market conditions are favorable, and if the holder, High Trail elects because they have the option to elect to take it in stock, if that happens, then obviously, we will have to put those shares. But like I said, we'll be looking to optimize the way we are putting cash on the company's balance sheet for us to be able to execute the vision. Because like I said, the skill of this game is to how do you sort of navigate these markets by being -- by choosing the most effective -- cost-effective path to raise capital until you get to the point where only a handful of players are there and the revenues have scaled and there's cash flow breakevens.

Next question. What military revenue opportunities are you targeting? How should shareholders think about the revenue from this industry in 2025 and 2026? And what could be the expected impact on the expenses of the company?

Sumit, maybe you want to talk about this?

Yes. I think as you think about the military revenue opportunities, think about partnerships. Partnerships mean that you have to demonstrate your technology. So there's some sort of co-development. Everybody has their architecture they're dealing with right now. They have fielded products. They have contracts within the military right now with the DoD. And we are targeting specifically people that need an upgrade on their solution. And not just that we sell them a lidar, we try to give them a more holistic product.

Certainly, with products that are off-road vehicles that are doing some sort of logistics or all sorts of other things in terrestrial space, that's something that we can demonstrate or find the right partner that is willing to work with us to not just buy the lidar, but also work with us to see what the advantage of our sensor fusion technology is. When it comes to drones and when it comes to maritime products, I think we may have a better opportunity there to showcase our technology and then expand from there.

But in all cases, you start with the partnership. And then after you've proven yourself and you can be a trusted partner to them, that is got components that are not susceptible to or they're not sensitive to anything from China, which we are successfully, we could demonstrate that. We have a robust lidar product line. That will enable us to think about other next steps beyond that. I think that's the best way to think about it from a recurring revenue when their products go into market.

Glen and Anubhav, if you guys want to add something to this?

Maybe -- go for it.

This is Glen. Sorry, Anubhav. Yes. Just to maybe add a little bit to what you said, Sumit, because you covered it very nicely. I think ultimately, as we've talked to, in particular, terrestrial, the MAV market, they're looking for much more robust systems that are easier to package on the vehicle, that are incredibly robust, not just dust resistant or currently a light spray of water resistant, but rather really, really aggressive and robust systems that can withstand high-pressure wash, can withstand all environmental conditions, can be sprayed and cleaned off and will work reliably. And that's exactly what we do. And so it's been really -- it's been fun to talk to some of these OEMs about how our solution can really help them and make their solution more robust and more effective in the field. So it's a great opportunity for us in addition to what we've talked about with drones and everything around enabling autonomy.

Thanks, Glen. And let me add a few things here. So I think I want our shareholders to think about it in 2 steps. Step one is maybe sort of have a broader view on the defense tech industry, right? Because, again, clearly, if you guys follow or if you start following this defense tech space, this defense tech space is having it, what I call as the auto-tech moment 4 years ago. What I mean by that is, 4 years ago, if you recall, auto-tech companies were really flying high because the demand and the strategic importance of these companies to the future of our economy and our progress was very important and very critical.

And I think that's why if you look at the same moment is now being experienced in the defense tech industry, especially in some of these opportunities, this maritime and this airborne area that we mentioned, where there's a lot of investment going into. Why? Because it's of strategic importance. And I think in terms of revenue, while the revenue may not be big in 2025, the strategic importance of that collaboration is going to be far more bigger than the revenue quantum. And what I mean by that is because as the geopolitical world or plays out on the international stage, it becomes even more important for our economy and our military might to increase significantly and protect us from any -- and building our defense capabilities. And that's sort of what you're seeing in this market.

And hence, what some of the projects that we have described is -- are some of projects with very high strategic value where you become a very critical player in the ecosystem, delivering that capability. And that's why the value of being a very important player in that ecosystem is far more important than just a revenue quantum. So that's how I want our investors to think about the strategic play. And remember, here, the volumes are never going to be millions of units as in the automotive. But like I mentioned, it's going to be fewer units, but the ability to deliver a full software solution, which, for example, the OEMs, as we mentioned, OEMs are not looking for a full software solution, while here, we are enabling to deliver our full software stack for the mission-specific applications.

The second part is, again, the expected impact of the expenses of the company. Like I mentioned, we're not looking to double or triple our expenses. We're simply looking to maybe add some more expenses, but these expenses would be to prove out the value of our solutions, our lidar and multimodal solutions, sensor suite with our software stack to the specific providers, the primes or the subprimes who are looking to deliver these mission-specific applications to the military for the country. So that's sort of how I want our shareholders to think about both the top line and the strategic importance and the expense profile of the company going forward.

I think we have gone 10 minutes over board. So again, I again would like to thank everybody, our shareholders, for jumping on this call, and we are looking forward to share with you the next update very soon, and we look forward to sharing more progress at the IAA in Munich next month. Thank you again for joining us on our second quarter call.

Thank you. This concludes today's conference. All parties may disconnect, and have a great day.