Aeva (AEVA) Q2 2026 Earnings Call Transcript

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DATE

Wednesday, Aug. 5, 2026 at 5:00 p.m. ET

CALL PARTICIPANTS

• Co-Founder and Chief Executive Officer - Soroush Salehian
• Chief Financial Officer - Saurabh Sinha
• Senior Director of Investor Relations and Corporate Development - Andrew Fung
• Vice President of Photonics - Pradeep Srinivasan

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TAKEAWAYS

• Revenue -- $6.1 million, an increase from $5.5 million in the prior year period driven by strong product shipments and non-recurring engineering contributions.
• Product Revenue -- $2.5 million, representing a decrease from $4.2 million in the second quarter of 2025 due to the timing of specific sensor shipments.
• Professional Service Revenue -- $3.6 million, an increase from $1.3 million last year reflecting milestone achievements with a growing group of customers.
• Non-GAAP Operating Loss -- $26.0 million, reflecting management's target to maintain operating expenses at similar levels to the previous year while scaling operations.
• GAAP Net Loss -- $79.6 million, a decrease from a loss of $192.7 million in the prior year period which included significant non-cash charges.
• GAAP Net Loss Per Share -- $1.23, compared to $3.49 in the second quarter of 2025.
• Non-GAAP Net Loss Per Share -- $0.41, compared to $0.44 in the prior year period.
• Total Available Liquidity -- $302.9 million, consisting of $177.9 million in cash and marketable securities and $125.0 million in an available facility.
• Follow-on Equity Offering -- $115 million in gross proceeds raised in June to strengthen the balance sheet for commercial deployment.
• Optical Connectivity Potential Revenue -- Multiple hundreds of millions of dollars annually, based on the projected scale of deployment at a major hyperscaler.
• Optical Connectivity Annual Units -- Potential to exceed multiple millions of units annually once qualified at the hyperscaler level.
• Optical Commercial Deployment -- Initial volumes are planned for the second half of 2027, with a production ramp targeted for 2028.
• Bendix ADAS Selection -- Bendix selected Aeva's 4D LiDAR for its next-generation series production system to improve collision mitigation and nighttime driving.
• Class 8 Truck Market Volume -- Approximately 300,000 Class 8 trucks are sold annually in North America, representing the target market for the Bendix Fusion system.
• Automated Production Readiness -- Manufacturing has commenced on a fully automated assembly line at Jabil North America to support the Daimler Truck program.
• SICK AG Commercial Launch -- SICK AG launched its first industrial sensor using Aeva's Eve precision sensing system for distance and displacement sensing.
• Smart Infrastructure Deployment -- The city of Fargo, North Dakota, selected CityOS for traffic management following an initial deployment in Atlanta, Georgia.
• Defense Segment Progress -- Forterra is transitioning its autonomous ground vehicles to 4D LiDAR for velocity detection and operation in GPS-denied environments.
• Research and Development Expenses -- $24.9 million, compared to $22.8 million in the prior year period due to ongoing product development.
• General and Administrative Expenses -- $10.2 million, up from $8.0 million in the previous year.
• Weighted Average Shares -- 64.7 million shares outstanding, reflecting the impact of the recent equity offering.

SUMMARY

Aeva Technologies, Inc. (NASDAQ:AEVA) launched its Optical Connectivity business to supply high power optical sources for artificial intelligence data centers. Management announced a joint development agreement with a major optical engine provider to support near-packaged optics for a top-tier hyperscaler. The company reported expansion in the automotive sector through a selection by Bendix for commercial vehicle ADAS systems and began automated production of its Atlas sensors. Management also detailed progress in industrial sensing with SICK AG and smart infrastructure deployments in North Dakota. The quarter concluded with a strengthened balance sheet following an equity offering that secured $302.9 million in available liquidity.

• CEO Salehian emphasized the synergy with the company's core technology, stating, "Because our technology is built on the same foundational technology used in the telecom industry, it uniquely positions Aeva to repurpose it."
• Management reported that the new optical connectivity business leverages existing silicon photonics IP and manufacturing foundry supply chains without requiring significant new development.
• CEO Salehian noted the Bendix selection validates the cost effectiveness of 4D LiDAR for Level 2+ applications where the technology has traditionally not penetrated.
• The company established a dedicated team for the new sector, with Pradeep Srinivasan promoted to Senior Vice President of Optical Connectivity.
• Management confirmed that production intent Atlas sensors for Daimler Truck are being produced on the newly commissioned fully automated assembly line at Jabil North America.
• CFO Sinha is scheduled to depart in Sept. 2026, with Vice President Corporate Controller Rupesh Maheshwari serving as interim CFO during the search for a permanent successor.
• In the defense sector, the company is expanding beyond ground vehicles into aerial autonomy opportunities with major defense organizations.

INDUSTRY GLOSSARY

• 4D LiDAR: A sensor technology that measures position (3D) and instantaneous velocity (the fourth dimension) simultaneously using FMCW technology.
• FMCW: Frequency Modulated Continuous Wave, a LiDAR method that provides direct velocity measurement and immunity to ambient light interference.
• NPO: Near-Packaged Optics, an architecture where optical components are placed close to the processor to increase data transfer efficiency in data centers.
• CPO: Co-Packaged Optics, an integration of optical engines directly onto the processor or switch silicon package.
• Silicon Photonics: A technology that uses silicon as an optical medium to integrate laser and communication components onto computer chips.
• NRE: Non-Recurring Engineering, a one-time fee paid by customers for the research and development of specific product features or milestones.
• Atlas: Aeva's automotive-grade 4D LiDAR sensor designed for mass production in passenger and commercial vehicles.
• Eve: Aeva's precision sensing platform tailored for industrial automation and factory applications.
• CityOS: An AI-powered software platform used for intelligent traffic management and roadway safety in smart infrastructure.
• ADAS: Advanced Driver Assistance Systems, electronic systems in vehicles that help the driver with safety and automation functions.

Full Conference Call Transcript

Operator: Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press zero, and a member of our team will be happy to help you. If you need assistance at any time, please press zero, and a member of our team will be happy to help you. Good day. My name is Stephanie, and I will be your conference facilitator. I would like to welcome everyone to today's Aeva Technologies Second Quarter 26 Earnings Conference Call. During the opening remarks, all participants will be in a listen-only mode. Following the opening remarks, we will conduct a question and answer session. As a reminder, today's conference is being recorded and simultaneously webcast.

I would like to now turn the call over to Andrew Fung, Senior Director of Investor Relations and Corporate Development. Andrew, please go ahead.

Andrew Fung: Thank you, and welcome, everyone, to Aeva's second quarter 26 Earnings Conference Call. Joining on the call today are Soroush Salehian, Ava's Co-Founder and CEO and Saurabh Sinha, Ava's CFO. Ahead of this call, we issued our second quarter 26 press release and presentation. Which we will refer to today and can be found on our Investor Relations website at investors.ava.com. Please note that on this call, we will be making forward looking statements. Based on current expectations and assumptions. Which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC including our most recent Form 10 Q and Form 10-K's. In addition, during today's call, we will discuss non GAAP financial measures. Which we believe are useful as supplemental measures of Aeva's performance. These non GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company website under the Investor Relations link.

And with that, let me turn the call over to Soroush.

Soroush Salehian Dardashti: Thanks, Andrew, and good afternoon, everyone. Q2 was another strong quarter at Aeva. We continue to build on our leadership position with more miles milestones delivered to our customers and partners and important expansion into new areas leveraging our same core technology developed over the last 10 years. In particular, we announced today our entrance into a very exciting new market beyond sensing applications that I will talk more about in a bit. Reflecting our commercial momentum, we achieved another strong revenue quarter with continued strong sensor shipments and NRE higher than the previous year. With demand for Aeva's technology continuing to grow, we are progressing on the targets we set this year to scale our manufacturing.

And we are working on ramping across our supply chain from our CM partners to foundries and component suppliers to support higher volumes to meet demand. We also strengthened our balance sheet in June with a follow-on equity offering that brought our total available liquidity to over $300 million. at the end of Q2. We believe this further differentiates and positions Aeva to support our current customers to commercial deployment, and expand our commercial traction across the board. I would now like to highlight recent achievements and business developments. First, we are excited to announce the launch of the Aeva optical connectivity business.

Which is our expansion to a new market that leverages Aeva's high optical power source and silicon photonics technology to enable next generation AI data centers. Aeva has spent the past 10 years developing and proving out our proprietary laser based technology for automotive and industrial applications. Because our technology is built on the same foundational technology used in the telecom industry, it uniquely positions Aeva to repurpose it.

Without significant development to pursue the massive data center market opportunity as the major AI compute companies like NVIDIA, AMD, and hyperscalers such as Amazon, Microsoft, and Google transition to optical connectivity we believe Aeva can provide differentiated solutions to achieve the increasing performance, power efficiency, and scalability requirements for AI data centers. Earlier this year, we published a paper detailing the industry leading performance of Aeva's high power optical source technology. Since then, we have moved quickly to meet growing interest from leaders in AI infrastructure in Aeva's capabilities.

In just a few short months, we have been working with a number of AI chip companies and optical solution providers to hyperscalers to validate some of these capabilities and the results so far have been very encouraging. We have been able to demonstrate how Aeva's technology can deliver across stringent key metrics. The required high optical power, low noise, reliability, and power efficiency in a scalable solution to address the rapidly growing bandwidth and power demands of multiple next generation AI data center architectures. Including near-packaged optics, and co-packaged optics or CPO.

And I am thrilled to share today that we have just signed a key joint development agreement with a leading provider of high speed optical engines integrate Aeva's technology into a near-packaged optic solution for a major hyperscaler with planned commercial deployments as soon as feasible with the potential to start initial volumes in 2027, and ramping in 2028. This is a significant validation of the performance maturity, and scalability of Aeva's technology. And we believe it will advance the business we are launching today including our other ongoing engagements across the industry. The potential scale for this market is large.

And we believe a deployment like this deal, once qualified at the hyperscaler, has the potential to exceed multiple millions of units annually With revenues in the multiple hundreds of millions of dollars per year. To support the significant potential for optical connectivity, we plan to leverage Aeva's existing manufacturing and foundry supply chain for volume production. We have also established a dedicated team with Pradeep Srinivasan, Aeva's VP of Photonics taking an expanded role as senior VP of optical connectivity. Pradeep has been instrumental in developing and industrializing Aeva's silicon photonics IP. And together with the team, will enable Aeva to accelerate the development, deployment, and adoption of optical connectivity.

With our technology team and the growing commercial interest, we are very excited about the future of optical connectivity and plan to share more updates on this as we progress. Now moving to automotive. We also made really good progress across our key automotive programs this past quarter. On Daimler Truck, we continue to scale shipments of production intent Atlas sensors, to the OEM for their AV stack validation ahead of series production. Importantly, we have begun manufacturing at our fully automated assembly line at Jabil North America. A major milestone towards Aeva's readiness and ability to scale up manufacturing for automotive and others. Including Daimler Trucks production program.

In passenger vehicles, we have also progressed on milestones with the delivery of our Atlas Ultra systems and continued integration work for joint stack development with a top 10 European passenger OEM production program. As well as with NVIDIA on the Drive Hyperion platform. Our collaboration with Bendix has also progressed to a critical next stage, Bendix has selected Aeva's 4D LiDAR and perception software and integrate them into its next generation ADAS series production system for key added safety functionality for trucks. Such as collision mitigation across a broader range of scenarios and nighttime driving. Bendix is the leader in commercial vehicle ADAS.

Its current Bendix Fusion, which is a vision and radar based system, is the market leading collision mitigation and active safety solution in North America. It is available on most of the 300 thousand Class 8 trucks that are sold annually North America alone. And with Bendix having the goal to make its next generation ADAS system standard for the flagship models of their major OEMs. Names like PACCAR or International. This selection not only highlights how the industry continues to adopt LiDAR, to improve performance, but it is also a strong validation of the manufacturability and the cost effectiveness of Aeva's solutions for Level 2+ ADAS applications. Where LiDAR has traditionally not penetrated yet.

Now turning to factory automation, we reached an important milestone with another customer launch of Aeva product. our Aeva sensor. This quarter, SICK AG, 1 of the largest industrial sensor providers globally, commercially launched its first industrial sensor using Aeva's Eve precision sensing system. This is part of our long term strategic collaboration with SIC to leverage Aeva's advantages, such as immunity to ambient light and sensor to sensor interference, to deliver more precise and reliable measurements across a broader range of environments at scale. In addition to SICK, we continue to see strong interest for our precision technology from leaders in manufacturing, and factory automation and are working towards converting these engagements to commercial awards in the near term.

Separately, in defense, we continue to support Forterra's autonomous ground vehicle, or AGV, programs as they transition from time of flight to Aeva's 4D LiDAR for long range and velocity detection. As well as for vehicle positioning and stealth operational capability in GPS denied environments. This quarter, we also progressed on other opportunities with major defense companies and organizations, beyond ground applications, including, for example, on aerial autonomy. We look forward to sharing more on these in the coming months. And last but not least, in smart infrastructure, continue to see good traction with the recently introduced Aeva's CityOS, our AI-powered platform for real time intelligent traffic management.

Following our first large scale deployment in the Atlanta, Georgia, area, the city of Fargo in North Dakota selected us to deploy CityOS to improve roadway safety and traffic management, leveraging 4D LiDAR's ability to operate in inclement weather such as snow, fog, and rain, and all lighting conditions. Aeva's ITS team is also active with other DOTs and municipalities. And we believe that our differentiated solution will continue to penetrate for additional deployments. So in summary, we achieved a lot this past quarter. Our differentiated technology and balance sheet positioned us to further solidify a leadership position in the industry as we execute on our commercial momentum.

Now before I turn the call to Saurabh to walk through our Q2 financial results, I wanted to say a few words on the CFO transition we announced today. Saurabh, who joined Aeva 6 years ago as our CFO, will be moving on in September to pursue a new opportunity outside the sensing industry. I want to personally thank him for his many contributions to Aeva, including his role in helping to take the company from early public stage to where we are today. And we wish him all the best on his next role. We have already initiated a search for a permanent successor which will be announced separately once complete.

In the interim, Rupesh Maheshwari, our VP corporate controller, will step in as interim CFO. Rupesh brings more than 20 years of accounting and finance leadership experience at large and growing technology companies. will work alongside Saurabh to ensure a successful and seamless transition. With that, let me now turn the call over to Saurabh.

Saurabh Sinha: Thank you, Suraj, for your kind words and good afternoon, everyone. Now on to Aeva's Q2 results. As demand for our unique technology continues to grow, Aeva's financials also reflect the building momentum of the business. Our expansion to an exciting new market opportunity and the continued financial discipline as we execute on our plan. Revenue was $6.1 million in Q2. Driven by continued strong product shipments and contribution from NRE as we delivered sensors, and achieved milestones with a growing group of customers. Non GAAP operating loss was $26 million this quarter.

Which is close to prior year levels and reflects our target to maintain operating expenses at similar levels to up slightly year over year while continuing to scale the business. Q2 gross cash use, which we define as operating cash flow, less capital expenditure, was $31.4 million. In June, we raised gross proceeds of $115 million in a follow on equity offering. This brought a total available liquidity at the end of Q2 to $302.9 million. With this liquidity position and our differentiated technology, we believe Ewa is uniquely positioned in the industry, to continue building our momentum including into exciting new markets such as optical connectivity, and meet more of the growing demand for Aeva's technology.

And finally, as this will be my last earnings call at Aeva, I wanted to say that it has truly been an honor to serve as Aeva's CFO. Over the past 6 years. I am very proud of what we have built as a team and I look forward to following the growing momentum and continued success of the company. Let me now turn it back to Soroush for his closing remarks.

Soroush Salehian Dardashti: Thank you, Saurabh. In closing, I would like to thank the Aeva team for delivering on our key achievements in Q2. Aeva's unified perception platform continues to gain the trust of a growing list of leaders across multiple markets, And our ability to launch optical connectivity and realize commercial traction so quickly is another indication of the scalability of our technology and the execution of our team. As we continue to expand, we remain laser focused on the objectives we set out at the beginning of this year. Achieve milestones on existing programs while adding new wins, scaling manufacturing to support increasing demand, and maintaining financial discipline as we grow.

We have made strong progress on the first half of the year and are well positioned to deliver on these objectives in 2026. And with that, let's now turn to Q&A.

Operator: Thank you. To leave the queue at any time, you may press 2. In the interest of time, we do ask that you please limit yourself to 1 question. We will take our first question from Colin Rusch with Oppenheimer and Company. Your line is open. Please go ahead.

Colin Rusch: Thanks so much, guys. And, Saurabh, congratulations on the transition. Guys, can you talk about with this development agreement what the key technical hurdles are that you are going to be addressing here over the next 12 to 18 months to really get ready for commercial ramp.

Soroush Salehian Dardashti: Yeah, Colin. This is Soroush. Happy to answer that. So, obviously, this is you know, I would say, a major customer win for us here, and you know, rapid progress, I would call it lightning speed in the past few months for us to get to here. So I think the key focus has been for us, first, showing that we have the capability and working and validating that with the actual end customers, including the chip companies as well as the hyperscalers that I mentioned on the call. And we have been engaged with, you know, the key players in this period as well.

So key for us is we see a massive opportunity using the same core technology in terms of what we call high power optical sources, using our laser based solutions as well as our silicon photonics technology. So we have spent the past 10 years, past 10 years developing and really proving it out. Automotive, industrial, and those applications. So now we are leveraging this to launch this new business off to connectivity for a integration of the solution into the hyperscaler and data center environment. And key focus for us is you know, we have seen the feedback really very encouraging because the validation is there. We have a ton of data on reliability in field testing.

And importantly, we have a different approach and I can get into this a little bit more later. But the approach allows us to effectively provide and meet the very strict requirements: providing high optical power, low noise, reliability, power efficiency, and importantly, scalability to really meet what needs to be done. So the key focus, what I am trying to get to is the technology is proven. Obviously, we have to do some development to make sure, for example, with this-- with this joint development, That the solution and our high power sources and photonic solution integrate properly. So, you know, some joint development integration work together. On that.

And we are doing that as fast as possible because the hyperscaler wants to deploy this immediately. Right? And with that, we go into the qualification. And once qualified, then this is going to go into scale. And the timing here, I mean, I mentioned on the call briefly, is in the next number of months. Next few months here. We are doing these activities, the joint integration. Then we will do the qualification. Put the goal and what the hyperscaler wants. To do is as early as, you know, second half next year, 2027, to start the initial deployments, and then from there, scale up into production around 2028. So that is that is kind of the short answer.

And the potential, obviously, here is massive because this is a very, you know, top 3 or 4 hyperscaler with millions and millions of units. That they are deploying. And can I just pick up on that last comment there? Certainly, that volume of units is substantially more than you would have been able to produce in your other end markets. I am just curious about potential impact on cost structure for you guys in terms of being able to reduce cost and pass that on or drive market share and some of your other applications and the capacity of your partners to help you scale up to those volumes? Yeah, absolutely. I think this is a crucial point. Right?

Because what we have done with product here is focused on solutions at the chip level, that are very cost effective. As a matter of fact, when you look at kinda what is out there, a lot of the focus has so far been on using and investing heavily in the laser sources. To achieve high power. And without gonna do too much of the technical details, to do that, there are certain trade offs you have to make. The size of the die gets bigger, you align multiple of these to get a number of wavelengths or a lot of power out. If, these things get larger, more alignment is needed.

All this impact at the end of the day, the yields, which has the cost and as well as the repeatable scalability of the solution. Our approach is quite different. That allows us in a way to have smaller size dyes and ability to actually provide the high power optical way without having to have as many let's say, chips for the solution. And we see that allows for much higher yield, much higher repeatability, and reliability as well. So that is that is, I think, 1 of the key differentiations for us. Obviously, as we go into millions, the cost structure already set. You know, we have existing foundries. that is where our focus is next.

Is on the foundries, on manufacturing partners. To scale the volume. And these foundries already are very capable, and, we have secured some of the capacity we already need to deploy in the market and are working to increase that given this massive pull in potential with this new deal that we have. So that is gonna be kinda gonna be the focus. And it absolutely, you know, costs are already at a very competitive way given what I mentioned. But we are, of course, gonna be using that economies of scale to also drive down the cost and really help with the next generation of sensing side as well for all of our other products. As well.

So much, guys.

Operator: Thank you. And as a quick reminder, if you like to ask a question, please press 1. Our next question will come from Matthew Paciulli Canaccord Genuity. Please go ahead. Your line is open.

Matthew Paciulli: Hi, guys. Congrats again on a great quarter, and best of luck, Saurabh. Maybe just to continue on to Collin's question. Could you just give us a little detail around, you know, what you expect the revenue model to be for the Optical Connectivity business? How should we think about it from an ASP perspective? And, you know, some details around that would be appreciated.

Soroush Salehian Dardashti: Yeah. I am happy to answer that. So at a high level, I would say I mentioned on the call, obviously, we just signed this deal, and we are very excited about it. And the key focus here is we see the potential for ramp up starting in 2027 you know, the back half, second half of 27, and then ramping into 2028. So I mentioned a little bit on the call, but at a high level, the way we see this, the volume forecast from the hyperscaler is quite massive. Right? And you know, in a short answer, I think whatever supply that we can provide we have opportunity to sell that. that is what I would say.

But what that means is the expectation is this wrapping, you know, from the start into 2028, with minimum of millions of units, that, you know, go in production, and we are talking about multiple millions of units. And that, you know, would translate into multiple hundreds of millions of dollars of revenue both of these figures are multiple monthly units annually, and multiple hundreds of millions of dollars annually. Revenue wise, opportunity wise for us. So that is why it is a massive opportunity.

I think the key for us is being able to do that without a ton of significant developments or reconfiguration is where we see the ROI as being quite interesting for the company and why we are launching this new business. So that also should give you a rough sense, obviously, on the ASPs, but that is where I would stop in terms of the numbers. Great. Thank you. And then maybe just to switch gears, you know, you have made a lot of progress with Bendix.

If you could just give us a little more color around, you know, what that program will look like, the content per vehicle what the ASPs are, to the extent that you can share, I would appreciate that. Yeah. Sure. So you are right. I mean, I think the team has been firing on multiple cylinders. I think you know, automotive is progressing really well as well. Not only are we executing on existing programs, with Daimler Truck, the top 10 European passenger, but also we are making additional traction with a new opportunity. So Bendix is the market leader for commercial vehicle ADAS technology. Right? And we have been working with it for some time.

We have now advanced into a critical next phase. Effectively, they have selected us for leveraging our 40 LiDAR to provide new functionality for Level 2+ ADAS. On commercial vehicles. These functionalities will specifically are aimed to enable new types of emergency braking, passenger or braking or nighttime driving and so on. So just better functionality for the end customer. And Bendix is part of a large tier 1, and it is a market leader in North America for ADAS solutions. there is about 300 thousand Class 8 trucks. And with their Bendix Fusion system, which today so far has been vision and radar based. They have a majority market share on that.

And a lot of their customers already use their product on their flagship vehicle models as standard. Any other customers are the likes of PACCAR, Navistar, International, and all that. They are shipping in volume already. For many, many years. So there, I think the opportunities for us is a significant 1. It uses the same exact sensing product Atlas, our sensor intended for trucking with Daimler. We are gonna be using the same exact automated line at Jabil and just using that capacity and economies of scale to then ship that product in there.

And from a you know, obviously, content per vehicle, You know, I would say this is think of it as it is somewhere similar between it is a ADAS product between a passenger to a commercial vehicle. Product. So it is not gonna be thousands of dollars, but it is also not very, very small. So a part of that is because we are helping to augment the system And with the AIM to actually replace not just you know, add a new sensor, but also replace other modalities between radar and camera. So that is that is kinda what we see. And I think Bendix, just so you know, also is targeting to make this as a standard.

Feature for the faction OEMs in terms of the ADAS functionality for the next solution. Thank you.

Operator: We will take our next question from Joe Moore with Morgan Stanley. Please go ahead. Your line is open.

Joseph Moore: Yes. Thank you. Kind of wondering on this optical connectivity, you know, when and you talk about starting a group around optical connectivity. Like, how much resource you wanna put into this? Is this a, you know, a major pivot for the company? Do you think I know you are gonna continue to invest in your automotive and industrial businesses, but just you know, do you need to scale up R&D around this opportunity given the size of it?

Soroush Salehian Dardashti: Hey, Joe. Yeah. This is Soroush. Happy to answer that. I think, obviously, this is an important launch and investment for us. But I think the key here is we are really reusing, as I mentioned, all the core components we had already developed in the silicon photonics and the high power sources. And also our manufacturing partners and capabilities we have already established. With our foundries, with our CMs, folks that are actually do the module assembly. So we are going to be leveraging a lot of the work that is already been done and all the investments that have already been done. So that means we do not need to invest a ton of capital.

And, also importantly, a lot of development resources and time go and make something complete from scratch. that is why I think we are able to move very quickly. Right? So that is that is number 1. Number 2, I think from a resource standpoint, investment standpoint, of course, you know, we are serious about this. We are gonna be investing some and we are hiring in this area. I think, obviously, with Mina's leadership, as well as with Pradeep now being promoted, I have full confidence in the team to now go and execute on this and scale up this business. And we are gonna be making sure that we help that.

And with this team, we are gonna have resources that are dedicated so we also make sure that we have both keep focus and priority on the existing programs in automotive, with the top 10 passenger OEM with Daimler, but also have you know, separate basic resources that can work on the optical connectivity so that we do not distract or lose focus on the other side. So short answer, yes. We will invest. It will not be massive amounts, but also it is not, you know, we are going to take it seriously. Great. Thank you. And is there a difference in content between NPO and as you migrate the technologies? Yeah. that is a good question, Joe.

I think so the way we think about this is we are forming this team and this group to generate product and solutions for optical connectivity in general. Right? So and this is gonna be combination of you know, optical sources, including you know, optical laser sources, on chip integrated sources, as well as over time looking at additional capabilities with what is called ELSFPs, external laser, small form factor pluggables. I think that those have always the massive opportunities, different levels of ASPs, and we are very excited about that.

So I think, this is an area where both of these for near package optics and co-packaged optics actually use the exact same core tech and source that we have developed in. Some of the silicon photonics with, you know, some additional integration that we need to do on the back end of it. So that is why we are able to use the same. And with this deal that we have, obviously, intention initially in your package optics, but also working on other things for co packaged and others as well. Thank you.

Operator: We will take our next question from Richard Shannon with Craig-Hallum.

Analyst: Hi, gentlemen. First time for me, but very exciting series of updates. Can I just ask you in the defense space, do you see that as being a market for just new and newly developed platforms, or do you see some sort of larger you know, retrofit and current you know, weapons platforms or vehicle platforms?

Soroush Salehian Dardashti: that could all be enabled with Self driving features. Yeah. Happy to answer that. I think we see actually across the board both. You know, we are working already with companies like Forterra. That have ground vehicles on the ground. Some of those are retrofits, right, which is basically taking a vehicle and retrofit them with a autonomy kit. That autonomy kit includes 3 or 4 Aeva LiDARs for 360-degree coverage. I think there, we are making a lot of good progress. Very excited about that. The, you know, Vehicles are already being deployed to the military.

They are already being starting to be commissioned and used, which is, I think, pretty fast for the defense space given we just announced this beginning of the year. And you know, that has resulted because of some of the advantages that we have for we talked about this, besides velocity sensing, long range, but also ability to see, operate you know, in GPS-denied environment. Also not have any issues with night vision goggles. So no interference with that. Compared to what they have been using so far or prior to us. We are seeing some additional traction in others.

And I think both on the ground, but also specific some of the in the aerial space that the team is working on. And I think I am also excited about that, which I think could result into more meaningful opportunities to piggyback on this. So it is not gonna be a 1 off thing. So we are seeing the demand from defense to also grow. So and as we are you know, locking those down, we will also be sharing that in the coming months. Okay. Yeah. Terrific. that is helpful color on that space.

And I just wanted to ask, like, I understand that class 8 for trucking is where probably the biggest CapEx dollars are and the most road miles are spent. But I am just wondering, you know, we are seeing some autonomy and progress in sort of Class 6 and 7 and sort of lower classes. Do you think Aeva has a place in those markets as well? I assume the answer is yes, but I would be curious if that sort of looks different than what class 8 offers. As an opportunity. Yeah. I think we have obviously, we are engaged in multiple programs and opportunities, not specific only to class a, different kinds of vehicles and different classes.

And the way that, you know, I would think about it is it is a common platform. it is being used for whatever you need to do autonomy. And if you need to do autonomy in a bigger vehicle over a smaller vehicle, Once, you know, you have something that is qualified, especially with, like, large players, that kinda set the industry standard like Daimler Truck or others, I think that is allows us to also get these other program. So the team is working with others. Some of them, in for things around you know, on road, but also off road or yard or things like in-yard environments. So those not all have the same class of vehicles.

So that is the way I would look at it. Obviously, when we first got into economy, it was initially about long-range sensing and velocity and but it is you know, for us, as we have gone, you know, the automotive capability and proven technology and product out, you are seeing more demand from others as well, which I think is just going to be plugged into the programs. Thank you.

Operator: We will take our next question from Richard Shannon with Craig Hallum. Please go ahead. Your line is open.

Richard Shannon: Great, guys. Thanks for letting me ask a couple of questions. And first off, just love to say, Saurabh, congratulations on your new job. We are gonna miss you. it is been good working with you for the last 5 years. I jumped on the call late here, so apologies if I am completely repeating a prior question here, but the JDA you signed with in optical connectivity is very interesting to me. And I guess I would love to understand since you phrased this as a JDA, what needs to happen here in order to you know, be fully qualified and to hit the time frames by which you are expecting to deploy in the second half of 27?

And then also, following on 1 of the questions I did hear is this solution expected to be an ELSFP format or something more component in nature?

Soroush Salehian Dardashti: Yeah. Richard, happy to answer that. We talked a little bit about it, but I can I can expand a little bit on it? So, you know, with the solution we have with the optical connectivity and this deal is obviously a massive deal, of opportunity for us. We are very excited about it. We have moved that lightning speed here. I think the key effort here really is gonna be working together on integrating our core optical technology, including high power optical sources and photonics technology into this optical engine, that is gonna be going to the hyperscaler. And capabilities really is around obviously, you know, data transfer, up to a data transfer. Specifically for near package optics.

So that is kind of the first applications where we see a lot of volume that is being allocated. I think that is why we see also near term opportunity being quite interesting. and wants to go as fast as possible, so the effort here is working together with the chips and the integrated solution and the optical engine. Qualifying that with the hyperscaler in the next few months, with the goal that by second half of next year, have initial release and initial volumes going into 28. For production ramp. So that is kind of what we are pushing for now. And, you know, the team is already kicking the efforts up.

And I think importantly, we are gonna be using the core technology and the chips that we have without making a ton of changes, and that is something that is important. And crucial in our ability to move fast here. So that is part of the JDA is integrating that in that way to make that happen. Okay. Fair enough. Hey. A follow on question on the topic of SICK. Sounds like they had a first product launch here. Would love to get a sense of the overall contribution that you expect with them over time. I would assume that we are gonna see more product launches from them in the future.

If you could just characterize how we should kinda look for them over the medium to long term. Thank you. Yeah. Happy to answer that. So SICK, obviously, is an administered strategic partner of ours in collaboration. In the past number of years. And, you know, we are very pleased to see that, you know, this is resulting into actual product launches and portfolios. SICK has already releasing the first product using our Eve sensors with 1D, Which is basically for distance sensing, displacement sensing. And the feedback so far has been very promising from the end customers. And we do expect that over time to scale in the next 12 to 18 months. Both additional volumes.

But also, as you mentioned, we have been working on other products together, which will help to replace some of the other things, like, you know, things that measure speed, for example. Encoders, different types of speed measurement devices, and there are actually portfolio products that SIG has that we are also working to use leveraging the same exact sensor, Eve, in a different configuration, what we call 1V, which is measuring velocity. that is also the other piece that we are working together on, and we hope that is gonna be maybe 1 of the follow ons as we are ramping on the 1D to look out for.

Separately from that, we are engaged also with others in the space that have shown a lot of interest. And I think that is gonna help to create, I think, a nice segment for us. So as we are able to talk more about that, we will do so in the near term as well. Thank you.

Operator: This concludes our question and answer session in today's meeting. We appreciate your time in participation. You may now disconnect.

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