Innoviz Technologies .(INVZ) - 2025 Q4 - Earnings Call Transcript

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]