MVIS

Good afternoon, and welcome to the MicroVision first quarter 2026 financial and operating results conference call. At this time, all participants are placed on a listen-only mode. At the end of management's remarks, there'll be a question-and-answer session. Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen. Analysts who publish research may ask questions on the phone line. For analysts to ask a question on the phone line, please press star one on your phone. 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 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 concerning 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 report 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've 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 are our three 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 standalone sensor, often without fully considering the economics, scalability, or operational realities key to broad deployment. 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. Three, solutions must be easily integrated into their system architectures. Customers want the right performance for the right application. They want solutions they can easily integrate into complete perception and control systems.

They want flexibility through open software architectures, they want products that are designed with cost and scalability in mind from day one. That's what Lidar 2.0 is all about. 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. 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 three 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. 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. 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 roadmaps, 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, and 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 three end markets. For industrial, we've restarted shipments and active programs with customers in mining, off-road 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, we are on schedule for our 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 maps and supporting terrain 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-power MOVIA Air sensors. 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 could not be more excited about the opportunities in this space and working with the Avular team. 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. 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 costs. We recently demonstrated the first integration of HALO with MOVIA S in a full 360 degree perception system at the ACT Expo in Las Vegas. There was strong interest in our Tri-Lidar architecture with planned follow-up with key CV or 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, 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. 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. That's what we're building the new MicroVision to do. Before I turn things over to Steve, I wanna 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. Based on this progress that we made this quarter, we have increased confidence in our outlook for the balance of 2026. 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 three 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 three of our focus sectors, automotive, industrial, and secure 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 a 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 the recent acquisitions of Scantinel and Luminar, with a contributing portion of the increase stemming from non-recurring expenses related to the acquisitions, including legal, accounting, and audit fees. In terms of liquidity, our balance sheet reflected $46.1 million in 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-$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-$70 million, as we are seeing the benefits of our integration activities and synergy cost reduction actions. Finally, we are elevating our gross margin guidance from positive to 35%-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, continue financial discipline in spending cash, and judiciously engage in capital raise activities, we are well-positioned for success in the automotive, industrial, and securing 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 wanna 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 three 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.

Thank you. At this time, we're conducting a question and answer session. Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen. Analysts who publish research may ask a question on the phone line. For analysts to ask a question on the phone line, please press star one. Our first question's coming from the line of Casey Ryan from AmerX. Your line is live.

Glen, Steve, good afternoon. A lot of good news to unpack here in the quarter. This is a great update. Can we start with Steve, just hitting on the gross margins? It sounds like, if I heard this correctly, you're expecting 35%-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?

Yeah. We finished the first quarter at 39%, as I mentioned. We're looking at 35%-40% for the remainder of the year, yes.

Sort of long term, you know, 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, you know, sort of 50%, 50%-60%? Is sort of 40%-50% kind of a ceiling for this type of business? How do you see it long term? I just wanna get a delta from, you know, all the progress that you suddenly jumped to here post-acquisition, to maybe where the ultimate ceiling might be in terms of margins.

Yeah. I think as we progress into the future, we kinda know what our future's all about, is kind of focusing on our three key sectors, automotive, as we see being way out into the end of this decade, as well as early into the next decade. We expect our revenue to continue to grow. We had good margins this quarter. We're expecting, as I mentioned, 35%-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. We wanna make sure that we continue to capitalize on those revenue opportunities that we are expecting as we go throughout these three sectors in the future.

Okay. Thank you. 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 are things being built where they were being built 12 months ago generally in terms of the different, you know, sort of the, like, Luminar pieces and the Scantinel pieces and the core MicroVision products?

Yeah, I can speak to this. Casey, first, great to talk to you again. As of right now, that's all been consolidated into Orlando.

Okay. Wow.

We have capabilities of building MOVIA S there now, IRIS, and then we're building up the ability to build HALO there as well. That's all happening. IRIS and MOVIA S are in place. HALO is coming as we continue that development. That'll suffice, that'll 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'll happen over the course of this year.

Okay. Like, it sounds like to support this $10 million-$15 million, certainly it sounds like Orlando.

Yeah

is big enough from a capacity standpoint.

Yep.

Okay.

That's correct.

Yeah. Terrific. Glenn, you were talking about in this announcement with the drone partner. It's actually quite interesting, because I guess we've been hearing from industry sources that, you know, that the weight of Lidar units just sort of traditionally has been a little heavy for drones. Clearly you've made a lot of progress. So I'm just fascinated to learn more about how you sort of maybe tackled 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, just to give us sort of something amazing in terms of progress?

I'm happy to talk about it. Yeah. If you think about it, what we're talking about is using drones for doing everything from commercial activities to ISR type of missions. The key was, the key is going to a solid-state technology. 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. The second phase of that is 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. We can lightweight that Lidar sensor. Typically where we wanna be is well below 300 g.

Moving as quickly as possible to below 200 g. 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, you know, to the ground, to the ground station. Whether you're looking at, you know, wind turbine blade inspection or inspection of power lines or facilities or, you know, looking at terrain and doing ISR missions, getting that weight down, having that solid-state construction is critical. Having the processing capability and the software that can create lightweight maps real-time on the drone, that's what really opens up that potential for us.

You know, I've gotta 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 this to the market for all potential solutions?

No, it's not an exclusive arrangement.

Okay.

This is structured as a non-exclusive. Obviously, you know, Avular has been a great partner to work with. We're, you know, our first step is always looking at how can we work with them on those solutions. For us, we can help bring them into the U.S. market as well. It's a, it's a great relationship, but it's not exclusive. You know, they can look for other solutions as well. I think with the work we're doing together, it'll be very successful.

Yeah. This feels like a big leap forward and feels like you have a real leadership position here with a real pain point in terms of the weight for drones. 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. You know, I guess we're learning more about the ability of that technology to be used in, not so much long range, but actually super short range stuff. you know, semi-cap equipment.

Yeah

Sort of like, you know, manufacturing things. I know you have many end markets to be going after, but is that an area of potential application? Maybe there is some commercial activity around that, but I'm not sure I appreciated that, like, FMCW had this sort of, you know, good applicability in what we'll call sort of super short-range applications.

Yeah. It's fundamentally an interesting technology because with the approach Scantinel has taken, it's very compelling on long, you know, 1 km and long range or what we call ultra long range applications. The technology is fundamentally applicable to very short range and high accuracy applications, like for robotic end effectors and positioning of, you know, you know, relative motion for robotics. The technology we're developing at Scantinel really can be used for both.

Okay.

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, more suitable for long-range scanning. Ultimately, the technology, you know, in a 2D version applies very nicely to, like you said, you know, ultra short range. We'll be looking at that as well. Initial focus is on ultra long range, where we're seeing some, you know, real demand in not just the commercial vehicle, but also the security markets. In particular around drone detection, you know, aerial detection, you know, aerial survey and, you know, for security systems and defense systems.

Okay, great. Thanks for that explanation. I mean, it sounds like sort of the opportunities for this FMCW sort of tech seem to be getting more expansive all the time, which is really great.

Yep. Yeah.

Thank you. Those are my questions for now, but this is a really, very positive update, and thank you, for all the answers to the questions.

Great. Thanks, Casey.

Thank you. 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?

I'll start, and Steve, I mean, obviously, you can, you can chime in as well. The really critical aspect of our strategy is having that technology portfolio that allows us to then bring the right, and you'll hear me say it over and over, the right solution, the right performance to the end customer for what their needs are. We're not trying to force fit a one size fits all solution onto all of these different applications. We can bring exactly what they need. If the customer needs a, you know, 180 by 135 sensor for a robotaxi application, we can give them exactly that. We're not gonna try to sell them a 360 degrees spinning sensor.

We're not gonna try to sell them a different, you know, a long-range sensor for a near field application and adapt it to that. We're gonna deliver to them the right performance for that use case. In doing so, cost optimize that. We can come and give them exactly what's needed at the right cost. You'll hear me say this over and over again. It's all about, you know, cost delivers adoption and delivers volume. You know, 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 three 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, you know, automotive goes through its cycles. I lived through those in my career with Aptiv and Delphi. You know, you have these ups and these downs. You know, you want countercyclical revenue streams because security and defense does not cycle the same way that automotive does. Industrial, same thing. They're on basically different cycles. That gives you revenue resilience, 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. The third piece really is all about, you know, the discipline. It's all about financial discipline and execution, and really being able to deliver on your commitments to those customers in those end markets.

You know, when I think about how MicroVision is positioned for Lidar 2.0, it's exactly those three dimensions.

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

No, I beat you to it.

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

Software will play two really important roles for Lidar 2.0. The first is on the product cost. What I mean by that is software isn't just a, you know, important part of the product. It's how you use the software in the product to drive the cost of the hardware down. Wherever possible, we solve the technical challenge in software, not in hardware. 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 know, you get the benefit, you know, essentially for free across all of those products. It may require more processing, at the end of the day, processing costs are always coming down.

Software is critical from the standpoint of as a strategy using software to reduce the cost and the complexity of the hardware. 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 wanna 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, 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, you know, sensors don't operate in a standalone 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, you know, 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. That's what's different about how MicroVision approaches this. We wanna make it easy, seamless for our customers to integrate our products into their architectures. It isn't just a black box sitting as part of the architecture that whenever they wanna make a change, they gotta, you know, it's a big pain point for them. It's literally inherent and integral to their software architecture, so they can optimize their system, you know, 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, this is the key, it lowers development and system costs. 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.

Good. All right, Glenn. 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 nm, 905 nm or 940 nm, Time-of-Flight, FMCW, solid state, mechanical or electromechanical scanning, MEMS or mirror, polygon mirrors or, you know. We have that broad technology portfolio that we can basically, like I said, bring the right solution to the customer, the right, 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. That gives us a tremendous capability there. The second is with regard to the open software framework that we just talked about.

I, you know, you don't hear other people talking about that. I think that's a critical part of how we can be competitive. It, like I said, it helps the customer do their job better. It addresses their pain points, plus 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 our focus on cost and being able to scale the product and being 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. That's a critical part. We provide a sensor into a system. We're not successful if our customers fails or that system isn't successful.

For us, it's critical 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. 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. I think that's a critical element of it. For security and defense, we're a U.S. and German company. From 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, you know, solid-state flash Lidar non-Chinese supplier. That gives us certain advantages that, you know, at the end of the day, you know, for those markets, it's an important characteristic.

Okay, thanks, Glenn. Can you provide more insight into your commercial activities within the three sectors you are focused on? What are your plans to showcase your products to demonstrate your technology specific to these three sectors?

I'll start with industrial, and I'll group industrial into kind of broadly two categories. It's because the go-to-market there is very different for those, you know, the commercial sales motion is very different. Those are the industrial customers, which for us is, you know, off-road construction, you know, off-road autonomy, those kind of, you know, mining, those kind of vehicles and as well as industrial automation. The warehouse environment and all of that. When you talk about industrial, you know, kind of the off-road piece, construction equipment, off-road hauling, that kind of thing, our approach there is working directly with those customers.

That's where Luminar had done a really nice job with a number of those customers that were 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. Really was reestablishing those relationships, rebuilding those, and then resuming shipments to them, while they do their development with launch timing in later next year. In that market, you're working directly with the OEMs, typically. When you talk about industrial automation, warehouse automation, this is AGVs, AMRs, automated forklifts, and all of, you know, the robots.

You know, that's a very different market, that serves either, you know, 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, you know, that whole, the engineering associated with that. Not every company in that market has the ability to do that. Then you typically are working through resellers or distributors. 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. We're gonna leverage those distributors and those value-add resellers for that broader adoption.

In terms of what we're 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, you know, on the website and LinkedIn, you name it. We're getting a lot of interest there because we can offer a low cost, you know, basically collision avoidance system for everything from forklifts, you know, human-operated forklifts to scissor lifters to you name it. A lot of interest there, which is why our launch of MOVIA S with L-CAS inside is so critical for the later this year. You're gonna see us continue to make progress in that market throughout the course of the year. You know, that'll be mostly through, you know, what we showcase.

For security and defense, that's a very different market in that you're really talking about, well, defense industry, so working with primes, then also talking about, working with companies that are involved with, you know, security around installations or traffic, you know, kind of municipality security or traffic management, you know, these types of things. In that case, it's working more directly with those companies. What we'll showcase, we'll either announce, you know, that's, I mentioned we're engaged with traffic management. That's using IRIS to do, you know, vehicle and speed detection, you know, for vehicles on highways, looking at stop sign detection as well. So a host of traffic management-related applications where we're working directly with those OEMs, they integrate our solution into theirs.

That you'll hear about as we announce more and more of those deals. With regards 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. You know, it's very targeted towards drone and UAV-related activities for the defense sector. You know, that in turn gets us connected with companies that are interested in those technologies, either drone companies or complete application companies, you know, primes, or people that just want the payload. You know, like the Avular announcement, as those engagements continue or expand, we'll be talking about them, defense obviously a little bit, you know, differently than we would talk about commercial applications.

It's really in that market, it's about demonstrating the capability, showing what the capability can do, and then, you know, working towards deployment. 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, you know, mass deployment. Then finally, for automotive, as I mentioned, the OEMs, you know, past our OEMs, I would just characterize the whole first generation of Level 3 as really, you know, being a learning phase. Let me put it that way. You know, this is learning about the technology for the OEMs and the supply base. It was learning what does the consumer want. The big takeaway was Level 3 offerings by the OEMs, you know, at the price point they were coming at, $8,000-$9,000 US, it just wasn't compelling enough.

You know, you can get a complete ADAS solution with a bunch of really valuable features like adaptive cruise control, backup cameras, blind spot detection. You know, you can automatic lane changing for several thousand dollars. You know, you're not gonna pay $8,000, $9,000 for some, you know, incremental benefit that's not that significant. I think it was an important phase the last, you know, three, four years of learning for the OEMs as they're kind of reformulating their strategies around Level 3 and what, you know, what do they really want to be able to offer that consumer. You know, we're showing them what we can do. That's where Tri-Lidar, I think, is important because it's a way of including 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. I think, you know, we've talked about $200 for a short-range sensor, less than, you know, $300 for long range. It has to go, for mass adoption, it has to go well below that as well. 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. 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. That's why the ACT event in Las Vegas was so good.

It showed us integrating HALO, long-range 1550 Time-of-Flight sensor with, I think it was, four MOVIA S's. You know, it wasn't technically Tri-Lidar. There were more sensors than three. It showed us full 360 perception system and point cloud around that. 940 flash Lidar with 1550, you know, Time-of-Flight long-range scanning Lidar all integrated into a unified perception system for, you know, for that vehicle, which is, you know, a very powerful demonstration, giving them very good coverage. You know, those types of demonstrations can continue to show, hey, MicroVision's value prop for those markets. Same with robotaxis, where, you know, that's moving forward. It's not at the same scale as passenger cars would normally be, but it's still meaningful volume that we wanna be a part of MOVIA S and HALO are great products for that. There you go. Long answers, Steve. Sorry.

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

Yeah, it's.

Okay.

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

Okay, good. 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?

You know, I think there's three things to look at. I mean, you know, the first is obviously us announcing those things. This is always an interesting one because not all customers, you know, and this is a long tradition within certainly auto and other developed markets, is, you know, not all customers want suppliers to announce that customer. We'll be talking about those wins in, you know, general terms to share that. As those wins come in or are solidified and those contracts get, you know, inked, we'll talk about that. You know, the second is the milestones that we wanna showcase. I would say, you know, the ACT Tri-Lidar demonstration, the AUVSI webinar on MOVIA Air, you know, a drone-based MOVIA Air real-time mapping.

We'll have another webinar coming up later that talks about, you know, that'll talk about why Lidar as part of that perception system. There'll be these milestones that, you know, that we'll promote and that we'll talk about. We'll have a multi-drone milestone, I think, coming up in, you know, this summer where we'll show, we'll show multiple drones working with a ground vehicle and a handheld, you know, basically tablet doing real-time mapping. These are these events and milestones. We'll be at the Hannover conference, you know, in September. That we'll show what we're doing with commercial vehicles. You'll see those types of milestones and those announcements throughout the balance of the year as we make progress with our development.

The third, and ultimately this is what translates to, is the guidance we give and the confidence we express in that guidance and, you know, discussions like today. You know, those are the three things that over the course of the year, we'll be, you know, engaged with and promoting.

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

Yeah, there are. I would say, that's always an interesting one because we wanna make sure that, you know, with NRE, you're not just, you know, in a science project. You're spending your engineering resources and, you know, to move towards commercial success. In that regard, I would say that the bigger opportunities are really in security and defense, you know, 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. You have, you know, there's just To the extent that our technology can be adapted or it can be applied in that area, which it can, there's a many very good applications.

You know, there's funding in NRE available to help us develop that. We'll take advantage of that when it lines up, you know, with our product plans and when, you know, there's commercial success as the outcome. There's definitely, you know, NRE opportunities there. As you get into automotive, whether it's, you know, CV and the automotive, that typically you see that in pre-development contracts, which can be interesting, but we've seen a lot of pre-development contracts in automotive turn into science projects and really not translate into high volume, you know, high volume applications.

Again, we'll be very careful and thoughtful about where we spend our engineering in those areas because we wanna make sure that, again, as we invest our time and energy into a customer and onto a customer development activity, that we're confident that at the end of that development activity, there's volume and that there's real revenue. It's not, you know, NRE is not just. We're not an engineering services company. We wanna 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.

As we look across those three end markets, you know, there's meaningful NRE opportunities there. You know, those opportunities consume resources. It's just so critical for us that we agree to do something to get, and get paid to do it, there's a commercial outcome at the end of it that we want.

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

The first of all, their integration's going exactly on plan with what we expected. 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? That's gone very well in terms of the in general just ensuring that there's no disruptions to our workday. What takes a little longer, it tends to be the engineering tools and the technology portfolio.

You know, in this case, we're not talking, you know, from a hardware standpoint, you're not trying to combine a VCSEL SPAD 905 nm, you know, technology with a 1550 Time-of-Flight, you know, architecture. Those are complementary, so, you know, 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, you know, it's a common architecture. As we develop different hardware variants, you're not re-architecting the software completely. That's there's a ton of money spent there if you have to maintain all different software architectures. 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, Mosaic from MicroVision, the perception stacks had a lot of commonality. We're not having to fight through a bunch of issues associated with very dissimilar architectures. It's actually quite the opposite. Now it's a matter of, okay, what works best for what we're trying to do? The teams have been, Greg and the whole team has been really good with that. In terms of organization, that's all done. The, how the organization is structured, the team structures, that's behind us. Now it's just about getting to work.

You know, when you do these integrations, you can always, you know, you can always find really hard, you know, pain points in terms of the integrations. We've been fortunate that that has not been the case. That allows us to focus on customers and focus on, you know, kind of the commercial side of it as opposed to having to sort out internal issues, which has been great.

Yeah. The only thing to add to that is just with regards to the synergies, as I mentioned in my prepared remarks.

Yeah

We originally guided on $65 million-$70 million with regards to cash usedoperations 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 approximately $60 million for the year. We are seeing those synergies impact us on a full year basis.

Yep, that's exactly right.

Okay. This concludes our Q&A session. Just wanna 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.