Luminar Technologies(LAZR) - 2025 Q2 - Quarterly Report

FORM 10-Q Filing Information Registrant Information This section provides Luminar's basic identification, securities registration, filing status, and outstanding share details - Luminar Technologies, Inc. is incorporated in Delaware and its Class A common stock (LAZR) is listed on The Nasdaq Stock Market LLC[3] - The registrant is classified as a non-accelerated filer and a smaller reporting company[4] Shares Outstanding | Class of Stock | Shares Outstanding (as of Aug 8, 2025) | | :--------------- | :------------------------------------- | | Class A Common | 63,891,880 | | Class B Common | 4,872,578 | Table of Contents Cautionary Note Regarding Forward-Looking Statements Forward-Looking Statements Disclosure The company outlines forward-looking statements and cautions investors about risks that could cause actual results to differ - Forward-looking statements cover topics such as restructuring plans (2024 and 2025), product plans, future growth, sales estimates, market opportunities, and liquidity[8] - Key risk factors include a history of losses, significant R&D costs, challenges in LiDAR product adoption by OEMs, lengthy implementation periods for commercial wins, and the inability to control input costs or reduce manufacturing expenses[9] - Other risks include general economic conditions (inflation, recession), market competition, ability to manage growth, supply chain disruptions, cybersecurity risks, and the large amount of outstanding indebtedness[9][10] Website and Social Media Disclosure Company Communication Channels Luminar uses its website and social media channels for material information disclosure, which investors should monitor - Luminar uses its website (luminartech.com) and social media (X, YouTube, LinkedIn) for disclosing company and product information[13] - Information posted on these channels may be considered material, and investors should monitor them alongside SEC filings[13] PART I. FINANCIAL INFORMATION Item 1. Financial Statements. The company presents its unaudited condensed consolidated financial statements, reflecting a reduced net loss, lower operating expenses, and changes in liquidity and debt structure Condensed Consolidated Balance Sheets (Unaudited) The company's balance sheet shows decreased total assets and liabilities, driven by lower cash and debt, while the stockholders' deficit increased Condensed Consolidated Balance Sheets (Unaudited) | Metric (in thousands) | Dec 31, 2024 | Jun 30, 2025 | Change | | :-------------------- | :----------- | :----------- | :----- | | Assets | | | | | Cash & Cash Equivalents | $82,840 | $48,166 | $(34,674) | | Marketable Securities | $99,827 | $59,465 | $(40,362) | | Total Current Assets | $245,227 | $167,328 | $(77,899) | | Total Assets | $365,213 | $265,487 | $(99,726) | | Liabilities | | | | | Total Current Liabilities | $60,588 | $69,187 | $8,599 | | Debt | $500,516 | $429,679 | $(70,837) | | Total Liabilities | $586,002 | $513,456 | $(72,546) | | Equity | | | | | Total Stockholders' Deficit | $(220,789) | $(272,179) | $(51,390) | Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) The company reports a significantly improved net loss for the six months ended June 30, 2025, driven by a substantial reduction in operating expenses Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) | Metric (in thousands, except per share) | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue | $15,634 | $16,451 | $34,520 | $37,419 | | Total Cost of Sales | $28,061 | $30,131 | $55,047 | $61,554 | | Gross Loss | $(12,427) | $(13,680) | $(20,527) | $(24,135) | | Research and Development | $39,328 | $65,850 | $77,616 | $133,600 | | Sales and Marketing | $5,297 | $12,140 | $10,201 | $26,655 | | General and Administrative | $(18,753) | $29,790 | $2,163 | $62,839 | | Total Operating Expenses | $27,052 | $114,042 | $91,224 | $229,356 | | Loss from Operations | $(39,479) | $(127,722) | $(111,751) | $(253,491) | | Total Other Income (Expense), net | $16,730 | $(3,451) | $8,458 | $(2,809) | | Net Loss | $(22,899) | $(130,607) | $(103,590) | $(256,321) | | Net Loss per Share (Basic & Diluted) | $(0.62) | $(4.32) | $(2.44) | $(8.76) | Condensed Consolidated Statements of Preferred Stock and Stockholders' Deficit (Unaudited) The company's stockholders' deficit increased, influenced by the net loss and a deemed dividend on new Series A preferred stock Changes in Stockholders' Deficit (in thousands) | Metric | Dec 31, 2024 | Jun 30, 2025 | Change | | :-------------------------------------- | :----------- | :----------- | :----- | | Series A Preferred Stock | $0 | $24,210 | $24,210 | | Additional Paid-in Capital | $2,204,814 | $2,257,171 | $52,357 | | Accumulated Deficit | $(2,112,835) | $(2,216,425) | $(103,590) | | Total Stockholders' Deficit | $(220,789) | $(272,179) | $(51,390) | - Issuance of Series A preferred stock, net of costs and discount, contributed $29.4 million[22][25] - Deemed dividend on Series A preferred stock was $7.6 million for the six months ended June 30, 2025, impacting the calculation of net loss attributable to common stockholders[22][25][159] Condensed Consolidated Statements of Cash Flows (Unaudited) Net cash used in operations decreased significantly, while financing activities included proceeds from preferred stock and equity offerings offset by debt repurchases Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) | Cash Flow Activity | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Net Cash Used in Operating Activities | $(97,954) | $(158,936) | $60,982 | | Net Cash Provided by Investing Activities | $41,417 | $35,511 | $5,906 | | Net Cash Provided by Financing Activities | $22,721 | $36,894 | $(14,173) | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(33,816) | $(86,531) | $52,715 | | Ending Cash, Cash Equivalents and Restricted Cash | $50,906 | $54,093 | $(3,187) | - Cash used in operations decreased due to a lower net loss and non-cash adjustments including a $22.1 million gain on extinguishment of debt and a $5.3 million change in fair value of derivatives[28][309] - Financing activities included $31.4 million from Series A Preferred Stock issuance and $21.5 million from the Equity Financing Program, partially offset by $30.3 million for 2026 Convertible Senior Notes repurchase[28][311] Notes to Condensed Consolidated Financial Statements (Unaudited) The notes provide detailed disclosures on accounting policies, financial statement components, debt, equity, and other material items providing context to the financial statements Note 1. Organization and Description of Business Luminar specializes in LiDAR hardware and software for autonomous vehicles and retroactively adjusted share data for a 1-for-15 reverse stock split - Luminar specializes in advanced Light Detection and Ranging (LiDAR) hardware and software solutions for the world's safest and smartest vehicles[30] - A 1-for-15 reverse stock split was effected in November 2024, with all prior share and per share data retroactively adjusted[31] Note 2. Basis of Presentation and Summary of Significant Accounting Policies The company continues to incur operating losses and relies on financing programs, which are expected to provide sufficient liquidity for at least 12 months - The company has an accumulated deficit of $2.2 billion as of June 30, 2025, and expects to continue incurring operating losses due to investments in product and software development, customer relations, and manufacturing capabilities[34] Liquidity Position (in thousands) | Metric | Jun 30, 2025 | Dec 31, 2024 | | :---------------------- | :----------- | :----------- | | Cash and Cash Equivalents | $48,166 | $82,840 | | Marketable Securities | $59,465 | $99,827 | | Total Liquidity | $107,631 | $182,667 | - The company early adopted ASU 2024-04 as of January 1, 2025, recognizing a $21.5 million gain on extinguishment of debt related to the 2026 Convertible Senior Notes[46] - The company's business is organized into two operating segments: Autonomy Solutions (LiDAR sensors, NRE services, software) and Advanced Technologies and Services (ATS) (photonic components, sub-systems, ASICs, pixel-based sensors)[39][40] Note 3. Business Combinations and Acquisitions The acquisition of EM4 in March 2024 resulted in a gain due to the purchase price being lower than the fair value of net assets acquired - Acquired EM4, a designer and manufacturer of packaged photonic components, on March 18, 2024, for approximately $4.2 million in cash and up to $6.75 million in contingent future payments[50][51] - Recognized a $1.5 million gain from the acquisition of EM4, as the consideration paid was lower than the estimated fair value of net assets acquired due to EM4's historical losses and program cancellations[52] Note 4. Revenue Total revenue decreased for the three and six-month periods, with varied performance between the Autonomy Solutions and ATS segments Revenue Disaggregation (in thousands) | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue | $15,634 | $16,451 | $34,520 | $37,419 | | Autonomy Solutions Revenue | $10,305 | $9,981 | $24,062 | $26,301 | | ATS Revenue | $5,329 | $6,470 | $10,458 | $11,118 | | North America Revenue | $13,612 (87%) | $15,764 (96%) | $28,604 (83%) | $36,101 (97%) | | Recognized at a point in time | $11,967 (77%) | $15,808 (96%) | $24,939 (72%) | $31,112 (83%) | - For the three months ended June 30, 2025, Autonomy Solutions revenue increased by $0.3 million (3%) due to a $4.2 million increase in service revenue, offset by a $3.9 million decrease in product revenue[273] - Three customers (customer C, customer B, and customer A) accounted for 34%, 22%, and 10% of the Company's accounts receivable as of June 30, 2025, respectively[42] Note 5. Restructuring The company initiated a new restructuring plan in May 2025, resulting in further workforce reductions and severance costs - The 2025 Restructuring Plan, initiated in May 2025, resulted in the termination of 257 employees by June 30, 2025[62] Restructuring Charges (in thousands) | Metric | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2025 | | :-------------------------------------- | :-------------------------- | :-------------------------- | | Restructuring Costs (P&L) | $1,180 | $1,244 | | Severance Expense (Balance as of Dec 31, 2024) | N/A | $772 | | Restructuring Charges (Balance Sheet) | N/A | $1,244 | | Cash Payments | N/A | $(1,715) | | Balance Payable and Accrued Liabilities (Jun 30, 2025) | N/A | $258 | Note 6. Investments The company's debt securities portfolio decreased significantly, while an impairment charge on an equity investment was followed by a gain on its repurchase Debt Securities (in thousands) | Type | Dec 31, 2024 Fair Value | Jun 30, 2025 Fair Value | Change | | :---------------- | :---------------------- | :---------------------- | :----- | | U.S. Treasury Securities | $10,955 | $15,363 | $4,408 | | Commercial Paper | $19,074 | $9,899 | $(9,175) | | Corporate Bonds | $81,357 | $37,431 | $(43,926) | | Total Debt Securities | $112,947 | $62,693 | $(50,254) | Equity Investments (in thousands) | Type | Dec 31, 2024 | Jun 30, 2025 | | :---------------------------- | :----------- | :----------- | | Money Market Funds | $17,730 | $18,451 | | Marketable Equity Investments | $3,165 | $3,075 | | Investment in Non-Marketable Securities (Forterra) | $10,000 | $10,000 | | Total Equity Investments | $30,895 | $31,526 | - An additional impairment charge of $4.0 million was recorded on the investment in Forterra in Q2 2024, and a $2.9 million gain was recognized from the repurchase of these units in May 2025[70][72] Note 7. Financial Statement Components This note details changes in key balance sheet accounts, including a decrease in cash and equipment, an increase in inventory, and accelerated depreciation charges Key Financial Components (in thousands) | Metric | Dec 31, 2024 | Jun 30, 2025 | Change | | :------------------------------ | :----------- | :----------- | :----- | | Cash and Cash Equivalents | $82,840 | $48,166 | $(34,674) | | Inventory, net | $14,908 | $18,047 | $3,139 | | Property and Equipment, net | $52,281 | $46,643 | $(5,638) | | Intangible Assets, net | $15,556 | $13,493 | $(2,063) | | Accrued and Other Current Liabilities | $31,567 | $31,901 | $334 | - Inventory write-downs were $3.4 million for the six months ended June 30, 2025, primarily due to obsolescence from product design changes and lower of cost or market assessments[74] - Accelerated depreciation charges of $0.3 million for the six months ended June 30, 2025, resulted from a change in sourcing strategy for certain sub-assemblies and components[79] Note 8. Debt Total debt decreased following exchange and repurchase transactions of convertible notes, resulting in a significant gain on debt extinguishment Debt Carrying Amounts (in thousands) | Debt Type | Dec 31, 2024 Net Carrying Amount | Jun 30, 2025 Net Carrying Amount | Change | | :------------------------ | :------------------------------- | :------------------------------- | :----- | | 2026 Convertible Senior Notes | $201,015 | $133,857 | $(67,158) | | Senior Notes | $95,499 | $95,946 | $447 | | 2030 Convertible Notes (Series 1) | $41,445 | $42,369 | $924 | | 2030 Convertible Notes (Series 2) | $153,147 | $153,486 | $339 | | Total Debt | $491,106 | $425,658 | $(65,448) | - For the six months ended June 30, 2025, the company recognized a $21.5 million gain on debt extinguishment from March and May 2025 exchange and repurchase transactions of 2026 Convertible Senior Notes[102] - The 2030 Convertible Notes have conversion options accounted for as bifurcated derivative liabilities, with a fair value of $4.0 million at June 30, 2025, and a $5.3 million decrease in fair value for the six months ended June 30, 2025[120][131][132] - The company has a $50.0 million non-recourse Credit Facility, which was undrawn as of June 30, 2025[133][135] Note 9. Fair Value Measurements The company details the fair value hierarchy for its financial instruments, with derivative liabilities classified as Level 3 and certain notes as Level 2 or 3 Fair Value Measurements (in thousands) | Asset/Liability (Jun 30, 2025) | Level 1 | Level 2 | Level 3 | Total Fair Value | | :----------------------------- | :------ | :------ | :------ | :--------------- | | Cash Equivalents | $19,750 | $5,004 | $0 | $24,754 | | Marketable Investments | $17,139 | $42,326 | $0 | $59,465 | | Derivative Liability | $0 | $0 | $(4,021) | $(4,021) | - The estimated fair value of the 2026 Convertible Senior Notes was $85.1 million (Level 2) at June 30, 2025[146] - The estimated fair value of the Senior Notes was $98.9 million (Level 3) and the 2030 Convertible Notes (excluding bifurcated derivative liabilities) was $106.1 million (Level 3) at June 30, 2025[147] Note 10. Earnings (Loss) Per Share Net loss per share improved significantly compared to the prior year, with the calculation including a deemed dividend on Series A preferred stock Net Loss Per Share Attributable to Common Stockholders | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Loss Attributable to Common Stockholders (in thousands) | $(30,501) | $(130,607) | $(111,192) | $(256,321) | | Weighted Average Shares Outstanding (Basic & Diluted) | 49,087,995 | 30,242,540 | 45,608,362 | 29,274,792 | | Net Loss Per Share (Basic & Diluted) | $(0.62) | $(4.32) | $(2.44) | $(8.76) | - A deemed dividend of $7.6 million on Series A preferred stock reduced earnings available to common stockholders for the six months ended June 30, 2025[150] - As of June 30, 2025, 26.9 million potential common shares were excluded from diluted EPS calculation as their effect would have been antidilutive due to the net loss[152] Note 11. Preferred Stock The company issued Series A Preferred Stock in May 2025, raising capital and resulting in a deemed dividend due to its variable conversion feature - Issued 35,000 shares of newly designated Series A Convertible Preferred Stock in May 2025 for net proceeds of $33.6 million[153] - The Series A Preferred Stock is convertible into Class A common stock at a conversion price equal to the lesser of a fixed price of $4.752 and 95% of the lowest VWAP over five trading days, subject to a floor price of $0.792[159] - Holders converted 12,000 shares of Series A Preferred Stock into 4,087,889 shares of Class A common stock by June 30, 2025[154] Note 12. Stockholders' Equity The company utilized its Equity Financing Program and a Stock-in-lieu of Cash Program to issue additional Class A common shares Common Stock Outstanding (as of June 30, 2025) | Class | Shares Issued | Shares Outstanding | | :---------- | :------------ | :----------------- | | Class A | 54,830,075 | 53,372,512 | | Class B | 4,872,578 | 4,872,578 | - The Equity Financing Program was expanded by an additional $75.0 million in March 2025, with $187.4 million available for sale as of June 30, 2025[179][180] - Issued 6,247,076 shares of Class A common stock under the Equity Financing Program for net proceeds of $21.5 million during the six months ended June 30, 2025[180] - Issued 1,000,000 shares of Class A common stock to TPK Holding Co, Ltd under the Stock-in-lieu of Cash Program during the six months ended June 30, 2025[184] Note 13. Stock-based Compensation Stock-based compensation expense reversed significantly due to the forfeiture of awards related to the termination of the former CEO Stock-based Compensation Expense (in thousands) | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Stock-based Compensation Expense | $(20,657) | $38,491 | $(1,277) | $82,956 | | G&A Stock-based Compensation | $(28,908) | $16,846 | $(18,274) | $38,209 | - A $34.7 million reversal of share-based compensation expense was recorded in general and administrative expenses due to the termination of the former CEO during the six months ended June 30, 2025[197] - 1,922,492 time-based RSUs were granted during the six months ended June 30, 2025[193] Note 14. Income Taxes The company's effective tax rate differs from the statutory rate primarily due to its valuation allowance and taxes on foreign earnings Income Tax Provision (in thousands) | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Provision for (benefit from) Income Taxes | $150 | $(566) | $297 | $21 | | Effective Tax Rate | (0.7)% | 0.4% | (0.3)% | —% | - The effective tax rate differs significantly from the statutory tax rate of 21% primarily due to the company's valuation allowance movement and taxes on foreign earnings[199] Note 15. Leases Operating lease assets and liabilities decreased, with a significant loss recorded from the termination of a lease in Sunnyvale, California Lease Information (in thousands) | Metric | Dec 31, 2024 | Jun 30, 2025 | Change | | :-------------------------------------- | :----------- | :----------- | :----- | | Operating Lease Right-of-Use Assets | $31,479 | $20,127 | $(11,352) | | Operating Lease Liabilities, Current | $10,049 | $7,572 | $(2,477) | | Operating Lease Liabilities, Non-Current | $24,083 | $14,406 | $(9,677) | | Total Operating Lease Liabilities | $34,132 | $21,978 | $(12,154) | - Termination of a non-cancellable operating lease in Sunnyvale, California, in April 2025 resulted in an $8.3 million loss on lease termination[202] - Weighted average remaining lease term is 3.88 years as of June 30, 2025, with a weighted average discount rate of 6.66%[203][204] Note 16. Commitments and Contingencies The company has significant purchase obligations and is involved in several legal proceedings, which it intends to vigorously defend - Purchase obligations totaled $93.7 million as of June 30, 2025, primarily for inventory, R&D, and general and administrative activities[205] - The company is defending against multiple class action and shareholder derivative lawsuits, including Johnson v. Luminar Technologies, Inc., et al. and Yskollari v. Luminar Technologies, Inc., et al., but does not expect a material adverse impact on financial results[207][209][210] Note 17. Segment and Customer Concentration Information Operating losses for both the Autonomy Solutions and ATS segments decreased, while revenue concentration with key customers remains high Segment Operating Loss (in thousands) | Segment | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Autonomy Solutions | $(35,150) | $(118,949) | $(102,630) | $(243,967) | | ATS | $(4,329) | $(8,773) | $(9,121) | $(9,524) | - Autonomy Solutions operating loss decreased significantly due to reductions in personnel-related costs, stock-based compensation expense, purchased materials, and supplies expenses[288] - Two customers, customer A and customer B of the Autonomy Solutions segment, accounted for 38% and 21%, respectively, of the Company's revenue for the six months ended June 30, 2025[229] Note 18. Subsequent Events Subsequent to the quarter end, the company saw further preferred stock conversions and common stock issuances under its financing programs - In July 2025, holders of Series A Preferred Stock converted an additional 16,000 shares into 6,104,645 shares of Class A common stock[233] - In July 2025, the company issued 2,345,520 shares of Class A common stock under the Equity Financing Program for net proceeds of $6.9 million[234] - In July 2025, 1,600,000 shares of Class A common stock were issued to TPK Holding Co, Ltd for services[235] - Preliminary analysis suggests the One, Big, Beautiful, Bill (OBBB) Act's impact on deferred taxes will not be significant due to the company's valuation allowance[230] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Management discusses financial results, strategic updates, liquidity management, and efforts to reduce operating losses while managing debt and securing capital Overview Luminar is a technology company developing advanced LiDAR hardware and software to enable vehicle safety and autonomy - Luminar specializes in advanced LiDAR hardware and software solutions to enable next-generation safety and autonomous capabilities for passenger and commercial vehicles[237] - The product portfolio includes proprietary LiDAR hardware, core semiconductor components, and in-development software capabilities such as perception and high-definition '3D' mapping[238] Industrialization Update The company is executing its industrialization plan, achieving Start of Production for Volvo and optimizing its manufacturing and supply chain processes - Achieved Start of Production (SOP) for Volvo Cars at the manufacturing facility in Mexico in 2024 and began shipping production LiDAR sensors for the Volvo EX90[240] - The transition to new suppliers for certain sub-assemblies and components has essentially been completed, as part of ongoing manufacturing and product design optimization[241] Business Updates The company is winding down non-core businesses, expanding OEM partnerships, and executing restructuring and financing activities to manage liquidity - Initiated the wind-down of data and insurance businesses, expecting a $16.0 million reduction in total revenue and a $23.0 million reduction in operating expenses on a full-year run-rate basis[242][243] - LiDAR technology will be equipped in the new Volvo ES90, marking the second Volvo model to feature Luminar's technology, and a collaboration with Caterpillar Inc. for autonomous solutions was announced[244][245] - Incurred $11.0 million in total charges associated with employee severance and related costs from the 2024 and 2025 restructuring plans[248] - Completed March and May 2025 exchange transactions and a repurchase transaction for 2026 Convertible Senior Notes, issuing Class A common stock and repurchasing notes for cash[249][250] - Closed an initial offering for 35,000 shares of Series A Preferred Stock for $33.6 million net proceeds in May 2025[251] Basis of Presentation The condensed consolidated financial statements include Luminar and its wholly-owned subsidiaries, with intercompany transactions eliminated - The condensed consolidated financial statements include the accounts of Luminar and its wholly-owned subsidiaries, with intercompany accounts and transactions eliminated[254] Components of Results of Operations The company's operations are divided into Autonomy Solutions and ATS segments, with significant ongoing investment in R&D for product and software development - The Autonomy Solutions segment designs, manufactures, and sells LiDAR sensors and provides non-recurring engineering (NRE) services and data licensing[256] - The ATS segment provides advanced semiconductors, components, and design/testing services to both Autonomy Solutions and third-party customers, including government agencies[257] - R&D costs are expensed as incurred and are expected to remain elevated due to continued investment in product roadmap and integrated software solutions[263][265] - Gross loss is expected to temporarily increase as the company transitions from prototype to series production, with lower average selling prices, until cost reduction and efficiency measures are realized[262] Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024 The company's loss from operations improved significantly, driven by a 60% reduction in operating expenses due to lower R&D, S&M, and G&A costs Key Financial Performance (in thousands) | Metric | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Total Revenue | $34,520 | $37,419 | $(2,899) | (8)% | | Gross Loss | $(20,527) | $(24,135) | $3,608 | (15)% | | Research and Development | $77,616 | $133,600 | $(55,984) | (42)% | | Sales and Marketing | $10,201 | $26,655 | $(16,454) | (62)% | | General and Administrative | $2,163 | $62,839 | $(60,676) | (97)% | | Total Operating Expenses | $91,224 | $229,356 | $(138,132) | (60)% | | Loss from Operations | $(111,751) | $(253,491) | $141,740 | (56)% | | Net Loss | $(103,590) | $(256,321) | $152,731 | (60)% | - Autonomy Solutions revenue decreased by $2.2 million (9%) for the six months ended June 30, 2025, primarily due to an $8.2 million decrease in product revenue, partially offset by a $6.0 million increase in service revenue[274] - Cost of sales decreased by $6.5 million (11%) for the six months ended June 30, 2025, due to cost reduction initiatives and decreased costs associated with a terminated Iris+ development contract[276] - General and administrative expenses decreased by $60.7 million (97%) for the six months ended June 30, 2025, largely due to a $34.7 million stock-based compensation expense reversal from the former CEO's termination and headcount reduction[283] Liquidity and Capital Resources The company relies on debt and equity financing to fund its operations and believes existing liquidity sources are sufficient for at least the next 12 months Liquidity Position (in thousands) | Metric | Jun 30, 2025 | | :---------------------- | :----------- | | Cash and Cash Equivalents | $48,166 | | Marketable Securities | $59,465 | | Total Liquidity | $107,631 | - Net cash used in operating activities was $98.0 million for the six months ended June 30, 2025[305] - The company relies on proceeds from debt and equity issuances, including the Equity Financing Program (with $187.4 million available as of June 30, 2025) and Series A Preferred Stock Financing, to fund operations and strategic initiatives[295][297][306] - Management believes existing liquidity sources will be sufficient for at least 12 months, contingent on continued access to the Equity Financing Program and Series A Preferred Stock Financing Program[306] Cash Flow Summary Cash used in operations decreased due to a lower net loss, while investing activities provided cash from marketable securities and financing activities provided cash from equity issuances Cash Flow Summary (in thousands) | Cash Flow Activity | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------- | :-------------------------- | :-------------------------- | | Operating Activities | $(97,954) | $(158,936) | | Investing Activities | $41,417 | $35,511 | | Financing Activities | $22,721 | $36,894 | - Net cash used in operating activities decreased by $60.9 million, primarily due to a lower net loss and non-cash adjustments like debt extinguishment gains and derivative fair value changes[309] - Investing activities were primarily driven by $80.8 million of proceeds from maturities of marketable securities and $14.5 million from sales and redemptions of marketable securities[310] - Financing activities included $31.4 million from Series A Preferred Stock issuance and $21.5 million from the Equity Financing Program, partially offset by $30.3 million paid for the repurchase of 2026 Convertible Senior Notes[311] Critical Accounting Policies and Estimates The company's critical accounting policies and estimates remained unchanged during the period - No significant changes to critical accounting policies and estimates occurred during the three and six months ended June 30, 2025[314] Smaller Reporting Company Status Luminar qualifies as a smaller reporting company and utilizes reduced disclosure requirements - Luminar is a smaller reporting company and takes advantage of certain reduced disclosure requirements[315] Recent Accounting Pronouncements Details on recent accounting pronouncements are available in Note 2 of the financial statements - Information on recent accounting pronouncements is provided in Note 2 of the notes to condensed consolidated financial statements[316] Item 3. Quantitative and Qualitative Disclosures About Market Risk. As a smaller reporting company, Luminar is not required to provide these disclosures - As a smaller reporting company, Luminar is not required to provide quantitative and qualitative disclosures about market risk[317] Item 4. Controls and Procedures. Management evaluated and concluded that the company's disclosure controls and procedures were effective as of the end of the quarter - The effectiveness of disclosure controls and procedures was evaluated and concluded to be effective as of June 30, 2025[319] - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[320] PART II. OTHER INFORMATION Item 1. Legal Proceedings. Information regarding legal proceedings is provided in Note 16 of the financial statements - Information regarding legal proceedings is incorporated by reference from Note 16 to the condensed consolidated financial statements[323] Item 1A. Risk Factors. The company updates its risk factors, emphasizing dependence on external capital, potential for stockholder dilution, and the influence of its largest stockholder Risk Factor Summary The company's ability to access capital is a key risk, as unfavorable terms or substantial dilution to stockholders could result - A key risk factor is the company's ability to access sources of capital to pay indebtedness and finance operations and growth, which may not be available on favorable terms or without substantial dilution to stockholders[325] Risks Related to Ownership of Our Class A Shares Luminar's dependency on financing, potential for dilution from future issuances, and the significant voting power of its largest stockholder pose risks to shareholders - The company is dependent on proceeds from its Equity Financing Program, Series A Preferred Stock Financing, and debt financing to meet financial obligations and fund operations[326] - Any future equity securities or convertible/exchangeable securities issued may have rights, preferences, and privileges more favorable than Class A common stock and would further dilute existing stockholders[328] - Austin Russell, through his ownership of Class B common stock, controls approximately 47.7% of the voting power, giving him significant influence over corporate actions[329] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company issued Class A common stock in exchange for convertible notes in an unregistered transaction - On May 22, 2025, the company issued 3,050,750 shares of Class A common stock in exchange for $6.2 million aggregate principal amount of 2026 Convertible Senior Notes[330] - These exchange transactions were conducted pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act[331] Item 3. Defaults Upon Senior Securities. No defaults upon senior securities occurred during the reported period - There were no defaults upon senior securities[332] Item 4. Mine Safety Disclosures. This item is not applicable to the company - Mine Safety Disclosures are not applicable[333] Item 5. Other Information. No officers or directors adopted or terminated Rule 10b5-1 trading arrangements during the quarter - None of the company's Section 16 officers or directors adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the fiscal quarter ended June 30, 2025[334] Item 6. Exhibits. This section lists the various exhibits filed with the Form 10-Q, including corporate governance documents and key agreements - The section lists various exhibits filed, including corporate governance documents (e.g., Certificate of Designations of Series A Preferred Stock), key agreements (e.g., Securities Purchase Agreement), and certifications[335][337] Signatures Report Signatures The report was duly signed by the Chief Executive Officer and Chief Financial Officer on behalf of the company - The report was signed on August 13, 2025, by Paul Ricci, Chief Executive Officer, and Thomas J. Fennimore, Chief Financial Officer[340]