Core Viewpoint - Innoviz is conducting a webinar to discuss its Physical AI technology and its implications for future financial performance [1] Group 1 - The discussion will include forward-looking statements that are subject to risks and uncertainties [1] - Actual results may differ materially from those anticipated in the forward-looking statements [2] - The company has no obligation to publicly update or revise forward-looking statements made during the webinar [2]

Innoviz Technologies Update Summary Company Overview - **Company**: Innoviz Technologies (NasdaqCM: INVZ) - **Industry**: LiDAR technology and Physical AI applications Key Points and Arguments Physical AI and Its Importance - **Definition**: Physical AI differentiates from Digital AI by focusing on real-world data and applications, particularly in autonomous driving, where AI must navigate unstructured environments [9][14] - **Growth Potential**: The desire to apply AI capabilities beyond autonomous driving is evident, with applications in production lines and other industries [13][14] LiDAR Technology - **Role in Physical AI**: LiDAR is considered the "ground truth" for training algorithms in Physical AI, providing accurate 3D data essential for model development [16] - **Innoviz's Position**: Innoviz is positioned as a key player in the LiDAR market, with a focus on developing technology that supports various Physical AI applications beyond just automotive [15][17] Market Dynamics - **Automotive Market Evolution**: The automotive industry has seen a significant reduction in the number of LiDAR companies, with many failing to meet evolving customer requirements [19][21] - **Consolidation Trends**: The market is expected to continue consolidating, with fewer companies able to meet the stringent demands of automotive applications [24][93] Challenges and Opportunities - **Functional Safety**: Innoviz emphasizes the importance of ensuring that LiDAR systems can operate effectively under various conditions, such as adverse weather [34][38] - **Emerging Markets**: Innoviz is exploring opportunities in non-automotive sectors, such as security and smart cities, where LiDAR can replace less effective technologies like radar [91][92] Competitive Landscape - **Technology Differentiation**: Innoviz believes that Time of Flight 905 nm technology is the most suitable for automotive applications, while other emerging technologies may not meet the necessary requirements [72][74] - **Chinese Competition**: The Chinese market has developed rapidly, supported by government funding, but there are concerns about national security regarding the use of foreign LiDAR technologies in the U.S. [78][79] Future Outlook - **Market Size Estimates**: The total addressable market (TAM) for LiDAR in autonomous driving is projected to be around $10 billion over the next decade, with additional growth expected in Physical AI applications [85][86] - **Innoviz's Roadmap**: Innoviz is preparing for the launch of its Innoviz2 and Innoviz3 products, with significant contracts in the pipeline, including collaborations with Volkswagen and Mobileye [100][101] Conclusion - **Long-Term Vision**: Innoviz aims to establish itself as a market leader in both automotive and non-automotive sectors, leveraging its advanced LiDAR technology to meet the growing demands of Physical AI applications [98][99]

Core Insights - Generative AI is viewed as a transformative technology by Amazon's CEO Andy Jassy, indicating its potential to significantly enhance customer experiences [1] - Elon Musk predicts that humanoid robots could create a market worth $250 trillion by 2040, representing a major shift in the global economy driven by AI innovation [2] - Major firms like PwC and McKinsey acknowledge the multi-trillion-dollar potential of AI, suggesting a broad consensus on its economic impact [3] Company and Industry Analysis - A breakthrough in AI technology is redefining work, learning, and creativity, leading to increased interest from hedge funds and top investors [4] - There is speculation about an under-owned company that may play a crucial role in the AI revolution, with its technology posing a threat to competitors [4] - Prominent figures in technology and investment, including Bill Gates and Warren Buffett, recognize AI as a significant advancement with the potential for substantial social benefits [8] Market Trends - The AI ecosystem is expected to reshape business, government, and consumer operations globally, indicating a shift in market dynamics [2] - The investment landscape is becoming increasingly competitive, with major tech companies like Tesla, Nvidia, and Microsoft being closely watched, while a smaller company is suggested to have greater potential [6][7]

Core Viewpoint - Interest in smaller companies is increasing on Wall Street as investors shift focus from mega-cap technology stocks to underfollowed small-cap stocks with strong growth potential [2][3][4] Industry Insights - Institutional investors are recognizing improving fundamentals in the small-cap sector, with expectations for accelerated earnings growth in 2026 [3] - Smaller companies are expected to benefit disproportionately from lower interest rates, making this an opportune time for long-term investments in select small-caps [3] Company Highlights - Prairie Operating Co., LLC (NASDAQ:PROP) reported total proved reserves of approximately 121 million barrels of oil equivalent, with a significant portion classified as proved developed reserves [9] - The company estimated future net cash flows from proved reserves at about $2.41 billion, with a discounted present value of roughly $1.22 billion [10] - Innoviz Technologies Ltd. (NASDAQ:INVZ) announced a strategic collaboration with Dataspeed to integrate its LiDAR sensors into vehicle systems, enhancing performance in challenging environments [13] - Innoviz reported Q4 EPS of (10c) and revenue of $12.67 million, with significant growth in revenue and gross margins in 2025 [14]

Core Insights - Innoviz Technologies Ltd. (NASDAQ:INVZ) is recognized as a promising investment in the electric vehicle (EV) sector according to analysts [1] - The company has formed a strategic partnership with Dataspeed Inc. to integrate InnovizSMART LiDAR sensors into Dataspeed's drive-by-wire vehicle platforms, focusing on North America [1][7] Group 1: Partnership and Integration - The collaboration aims to enhance the distribution and technical integration of high-performance sensing solutions in demanding industries such as defense, agriculture, mining, automotive, and off-highway sectors [2] - The integration seeks to address environmental challenges that can impair sensor performance, including mud, dirt, condensation, and airborne debris [2] - InnovizSMART technology is designed to maintain long-range, high-resolution 3D data even when the sensor window is partially obstructed, showcasing its resilience to optical blockages [2] Group 2: Technical Objectives and Applications - By combining Innoviz's hardware with Dataspeed's control architecture, the partnership aims to ensure reliable autonomous perception systems in rugged terrains like forests, open-pit mines, and mountains [3] - The joint effort will lead to the development of purpose-built autonomous vehicles that leverage the integration of Innoviz's resilient sensing technology with Dataspeed's drive-by-wire systems [3] Group 3: Company Overview - Innoviz Technologies Ltd. specializes in manufacturing and selling automotive-grade LiDAR sensors and perception software, which are essential for enabling safe autonomous driving at a mass scale [4]

Financial Position - As of December 31, 2025, the company had approximately $72.1 million in cash and cash equivalents, short-term bank deposits, short-term restricted cash, and marketable securities [325]. - During the year ended December 31, 2025, the company experienced a net decrease in cash, cash equivalents, and restricted cash of approximately $16.7 million [327]. Cash Flow Activities - During the year ended December 31, 2025, the company reported a net cash used in operating activities of approximately $47.9 million, primarily due to a net loss of approximately $67.8 million [328]. - The company generated approximately $51.5 million in cash from financing activities during the year ended December 31, 2025, including approximately $37.3 million from a registered direct offering [332]. - Cash used in investing activities for the year ended December 31, 2025, was approximately $21.4 million, mainly due to investments in bank deposits and marketable securities [330]. Future Outlook - The company expects to continue incurring significant losses in future periods as it invests in research and development and commercialization efforts [337]. - The aggregate amount of the transaction price allocated to remaining performance obligations was approximately $7.6 million, expected to be recognized as revenue within the next 12 months [339]. Research and Development - The research and development team comprised 283 employees as of December 31, 2025, focusing on LiDAR-based technologies [340]. - The company plans to expand production capabilities for its LiDAR solutions and invest in sales and marketing activities to diversify target markets [338]. Inventory Management - The company has sufficient component inventory to meet near-term customer demands and is procuring additional stock to mitigate future supply chain strains [344]. - Inventory is stated at the lower of cost or estimated net realizable value, with write-downs charged to cost of revenue for obsolete inventory [350]. - Losses from firm non-cancellable commitments for future inventory purchases are charged to cost of revenues unless recoverable through sales contracts [351]. Property and Equipment - Property and equipment are stated at cost, net of accumulated depreciation, with useful lives routinely reviewed and adjusted as necessary [352].

Core Insights - Innoviz Technologies has expanded its partnership with Dataspeed Inc. to integrate InnovizSMART LiDAR into Dataspeed's Drive-by-Wire platforms for various industries across North America [1][2] Group 1: Partnership Details - The collaboration aims to enhance the integration of InnovizSMART LiDAR sensors into autonomous vehicle systems for defense, agriculture, mining, automotive, and off-highway applications [1][2] - InnovizSMART is designed to maintain high-resolution, long-range, and reliable 3D data delivery even in challenging environments with potential obstructions like mud and debris [1][2] Group 2: Product Features - InnovizSMART features native resilience to optical blockages, ensuring continuous performance and object detection capabilities despite adverse conditions [1][2] - The integration allows for direct compatibility with Dataspeed's control architecture, enhancing the reliability of sensor data for autonomous vehicle systems [1][2] Group 3: Market Implications - The partnership reflects a commitment to providing robust LiDAR solutions tailored for real-world applications rather than controlled environments, addressing critical performance needs in demanding terrains [1][2] - The collaboration is expected to enable greater confidence in deploying autonomous technologies across various sectors, including research and agriculture, with fewer operational interruptions [1][2]

Financial Data and Key Metrics Changes - In 2025, the company achieved record revenues of $55.1 million, more than doubling the previous year's revenue [7][22][25] - Gross margin improved to approximately 23% from about -5% in 2024 [7][23] - Operating expenses decreased by approximately 20% to $80.6 million from $100.8 million in 2024 [7][23] - Cash used in operations and capital expenditures for the year was approximately $49.3 million, with a single-digit burn of $7.3 million in the last quarter [22][23] Business Line Data and Key Metrics Changes - The InnovizSMART product for non-automotive applications is seeing excellent traction, with deployments in critical infrastructure [6][19] - The InnovizThree, a new LiDAR product, is more affordable and designed for behind-the-windshield integration, which is expected to increase its total addressable market (TAM) [5][6][17] - The company expects LiDAR sales to grow significantly, with non-automotive applications projected to increase from approximately 1% to up to 10% of annual revenues in 2026 [8][20] Market Data and Key Metrics Changes - The company has ramped up production capacity at Fabrinet, expecting production to be three to four times higher than last year [7][20] - The partnership with Daimler Truck for Level 4 autonomous trucks positions the company favorably in the trucking market [12][15] - The company is also seeing increased interest in Level 3 applications, with multiple requests for quotes (RFQs) targeting 2028 and beyond [15][61] Company Strategy and Development Direction - The company aims to become the world's premier large-scale supplier of LiDAR solutions, focusing on both automotive and non-automotive markets [11][20] - The transition to Physical AI is a key focus, with LiDAR technology seen as critical for creating accurate, real-time world models [9][10][26] - The company plans to introduce new NRE payment plans and expects to sign additional agreements in 2026 [8][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong position for 2026 and beyond, highlighting the importance of LiDAR in the rise of Physical AI [9][26] - The company anticipates significant growth in LiDAR revenue as it expands its market presence and secures new programs [8][20] - Management noted that the automotive market is moving towards higher volumes and reduced friction in LiDAR integration due to advancements in technology [61] Other Important Information - The company has no long-term debt and ended the year with approximately $72.1 million in cash equivalents [22][23] - The InnovizSMARTer, a new product integrating LiDAR with edge computing capabilities, is expected to enhance deployment in bandwidth-constrained environments [6][19] Q&A Session Summary Question: Guidance for 2-3 new wins in 2026 - Management indicated that several Level 4 and Level 3 programs are in progress, with good cadence and progress expected [28][30] Question: Status on converting SOW with a top five auto OEM - The SOW has been completed, and discussions with the OEM about next steps are ongoing [32] Question: Coverage of non-auto market revenue guidance - Part of the revenue is booked through ongoing efforts in the security market, with high demand noted [33][34] Question: Insights on the selection process for Daimler Truck - The relationship with Daimler is strong, and discussions for further expansions are ongoing [43][44] Question: Demand for functional safety and sensor fusion capabilities - Current requirements align well with what has been achieved for the automotive market, with a focus on resilience and performance [50][51] Question: Customer engagement and sampling activity - The company has seen significant growth in customer engagement, particularly in the non-automotive sector [54][55] Question: Impact of drivetrain on automotive and trucking opportunities - There is no correlation between EV or ICE vehicles and LiDAR technology; autonomous driving can be implemented on any vehicle type [75] Question: Expectations for operating expenses in 2026 - The company plans to maintain its efficient operational approach, with no dramatic changes expected [71]

Financial Data and Key Metrics Changes - In 2025, Innoviz achieved revenues of $55.1 million, more than double the previous year's revenue [7][22] - Gross margin improved to 23% from approximately -5% in 2024 [7][23] - Operating expenses decreased by 20% to $80.6 million from $100.8 million in 2024 [7][23] - Cash used in operations and capital expenditures for the year was approximately $49.3 million, with a single-digit burn of $7.3 million in the last quarter [22][23] Business Line Data and Key Metrics Changes - The InnovizThree, a new LiDAR product, is more affordable and has a smaller form factor, increasing its total addressable market (TAM) [5][6] - InnovizSMART, introduced for non-automotive applications, is seeing excellent traction in the security market [6][19] - The company expects LiDAR revenue to grow significantly, with non-automotive applications projected to increase from approximately 1% to up to 10% of annual revenues in 2026 [8][20] Market Data and Key Metrics Changes - Innoviz has ramped up production capacity at Fabrinet, expecting production to be three to four times higher than last year [7][21] - The company is experiencing strong interest in Level 4 applications, with significant engagements from automotive OEMs [12][15] - The market for Physical AI is expanding, with Innoviz positioned to benefit from the increasing demand for reliable LiDAR solutions [9][10] Company Strategy and Development Direction - Innoviz aims to become the world's premier large-scale supplier of LiDAR solutions, focusing on both automotive and non-automotive applications [11][18] - The company is actively pursuing new NRE payment plans and expects to sign additional agreements in 2026 [8][20] - Innoviz is preparing for the transition to Physical AI, emphasizing the importance of perception in creating accurate world models [9][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong position for 2026, anticipating significant growth in LiDAR revenue and continued interest in Level 3 and Level 4 applications [9][25] - The transition to Physical AI is seen as a major opportunity, with LiDAR technology playing a critical role in this evolution [10][26] - Management highlighted the importance of meeting customer requirements for behind-the-windshield solutions, which is a key focus for Innoviz [11][63] Other Important Information - Innoviz has no long-term debt and ended the year with approximately $72.1 million in cash equivalents [22][23] - The company is actively engaged in discussions with multiple automotive OEMs regarding new programs and production timelines [31][82] Q&A Session Summary Question: Can you provide more color on the guidance for two to three new wins in 2026? - Management indicated that several Level 4 and Level 3 programs are in progress, with good cadence and progress expected [28][31] Question: Where does Innoviz stand on converting the SOW with a top five auto OEM? - The SOW has been completed, and discussions with the OEM about next steps are ongoing [32] Question: How well covered is the guidance for 10% of revenue from the non-auto market? - Part of the revenue is booked through ongoing efforts in the security market, with high demand noted [33][34] Question: What is the demand for functional safety in the Physical AI space? - Requirements for functional safety are aligned with what has been achieved for the automotive market, with a focus on sensor resilience [50] Question: Can you elaborate on the customer engagement scope and scale? - Engagements have significantly increased, particularly in the non-automotive sector, with numerous leads generated from recent conferences [54][55]

Financial Data and Key Metrics Changes - In 2025, the company achieved record revenues of $55.1 million, more than double the previous year's revenue [6][21][25] - Gross margin improved to approximately 23%, a significant increase from about -5% in 2024 [6][22] - Operating expenses decreased by approximately 20% to $80.6 million from $100.8 million in 2024 [6][23] - Cash used in operations and capital expenditures for the year was approximately $49.3 million, with a single-digit cash burn of $7.3 million in the last quarter [21][22] Business Line Data and Key Metrics Changes - The InnovizThree, a new LiDAR product, was introduced, offering a smaller form factor and lower power consumption, which is expected to increase the total addressable market (TAM) [4][5] - The InnovizSMART product for non-automotive applications is seeing excellent traction, particularly in the security market [5][18] - The company expects LiDAR sales in non-automotive applications to grow from approximately 1% to up to 10% of annual revenues in 2026 [8][19] Market Data and Key Metrics Changes - The company has ramped up production capacity at Fabrinet, expecting production to be three to four times higher than last year [6][21] - The partnership with Daimler Truck for Level 4 autonomous trucks positions the company strongly in the trucking market [12][14] - There is increasing interest in Level 3 and Level 4 applications among automotive OEMs, with multiple RFQs expected for 2028 and beyond [14][63] Company Strategy and Development Direction - The company aims to become the world's premier large-scale supplier of LiDAR solutions, focusing on both automotive and non-automotive applications [11][26] - The transition to Physical AI is seen as a significant opportunity, with LiDAR technology being critical for creating accurate world models [10][26] - The company is exploring additional opportunities with Daimler and other OEMs as it rolls out new technologies [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong position for 2026 and beyond, anticipating significant growth in LiDAR revenue [9][19] - The company is well-prepared to meet the evolving requirements of automotive OEMs for behind-the-windshield solutions [11][63] - Management highlighted the importance of LiDAR in the context of AI advancements and the need for reliable data in safety-critical environments [39][42] Other Important Information - The company has approximately $72.1 million in cash equivalents and no long-term debt, providing a strong financial foundation [21][22] - The company expects to recognize almost all existing NREs in 2026 and 2027, with additional NRE payment plans anticipated [7][19] Q&A Session Summary Question: Can you provide more color on the guidance for 2-3 new wins in 2026? - The company is actively working on several Level 4 and Level 3 programs, with good progress expected [28][29] Question: Where does Innoviz stand on converting the SOW with a top five auto OEM? - The SOW has been completed, and discussions with the OEM about next steps are ongoing [32] Question: How well covered is the guidance for 10% of revenue from the non-auto market? - Part of the revenue is booked through ongoing efforts in the security market, with high demand noted [33][34] Question: Can you discuss the technology landscape and how LiDAR might benefit from AI advancements? - LiDAR is seen as critical for connecting world models to real-time data, enhancing AI capabilities [38][39] Question: Why was Innoviz selected as the preferred short-range solution for Daimler Truck? - The relationship with Daimler is strong, and discussions for further expansions are ongoing [44][45] Question: What are the requirements for functional safety and sensor fusion capabilities? - The company is aligned with automotive market requirements and is developing tools for integration with cloud platforms [50][52] Question: Can you provide insights on customer engagement and sampling activity? - The company has seen significant growth in customer engagement, particularly in the non-automotive sector [55][56]