Aeva Technologies, Inc. (AEVA) Earnings

Management highlights

### New Market Expansion: Optical Connectivity for AI Data Centers - Launched the new Ava Optical Connectivity business, leveraging the company's existing 10-year proprietary high-power optical source and silicon photonics technology originally developed for automotive and industrial sensing to address growing demand for optical connectivity in AI data centers. - Signed a key joint development agreement (JDA) with a leading high-speed optical engine provider to integrate Ava's technology into a near-packaged optical solution for a major top-tier hyperscaler, with planned initial commercial volumes starting in 2027 and ramping up in 2028. The opportunity is projected to reach multiple millions of units annually and multiple hundreds of millions of dollars in annual revenue if fully deployed. - Established a dedicated Optical Connectivity team led by promoted senior VP Pradeep Srinivasan, an expert in Ava's silicon photonics intellectual property. ### Automotive Sensing Progress - Continued scaling production-intent Atlas sensor shipments to DynaTruck for autonomous stack validation ahead of series production, and began manufacturing on the new fully automated assembly line at Jabil in North America, a key milestone for large-scale production readiness. - Progressed development milestones for a top 10 European passenger vehicle OEM program and for NVIDIA's Drive Hyperion platform integration. - Bendex, the leading North American commercial vehicle ADAS provider, selected Ava's 4D LiDAR and perception software to integrate into its next-gen collision mitigation ADAS system for Class A trucks, targeting standard fitment on flagship models from major OEMs including PACCAR and International. This is a significant market validation for LiDAR adoption in cost-sensitive Level 2+ ADAS applications that have historically not used LiDAR. ### Industrial, Defense, and Smart Infrastructure Progress - Global industrial sensor leader SICK-AG commercially launched its first industrial sensor product using Ava's EVE precision sensing system, as part of a long-term strategic collaboration. Additional product development is ongoing for future launches. - Continued supporting Forterra's Autonomous Ground Vehicle programs transitioning to Ava's 4D LiDAR, and progressed new opportunities in aerial autonomy with major defense organizations. - Secured a second large-scale smart infrastructure deployment: the City of Fargo, North Dakota selected Ava's AI-powered CityOS traffic management platform, following the first deployment in Atlanta, Georgia, with additional municipal engagements ongoing. ### Corporate Updates - Completed a $115 million gross proceed follow-on equity offering in June 2026, bringing total available liquidity to over $302.9 million at the end of Q2, strengthening the balance sheet to support commercial growth and new market expansion. - Announced CFO Saurabh Sinha will depart in September 2026 to pursue an external opportunity; VP Corporate Controller Rupesh Maheshwari will serve as interim CFO while a permanent search is conducted.

Guidance

Management reaffirmed the full-year 2026 objectives set at the start of the year, noting strong progress in the first half of 2026 and positioning to meet all stated goals: - Achieve key milestones for all existing customer programs and secure new commercial wins - Scale manufacturing capacity across the supply chain (foundries, contract manufacturing partners, component suppliers) to meet growing demand across all segments - Maintain financial discipline while scaling the business For the new Optical Connectivity segment, management guides that initial volume shipments are targeted to begin in the second half of 2027, with significant ramping expected in 2028, and the long-term opportunity represents multiple millions of units annually and multiple hundreds of millions of dollars in annual revenue. No formal numerical revenue or margin guidance for full year 2026 was provided in the call.

Segment performance

Total company revenue for Q2 2026 was $6.1 million, driven by higher sensor product shipments and non-recurring engineering (NRE) revenue compared to the prior year. Non-GAAP operating loss was $26 million, in line with prior year levels, and Q2 gross cash use (operating cash flow less capital expenditures) was $31.4 million. Specific revenue contribution percentages for individual product segments were not provided in the transcript.

Risks & headwinds

Management referenced general forward-looking statement risk disclosures, noting that all forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, and directed investors to review risk factors included in the company's recent SEC filings (Form 10-K, Form 10-Q). No specific new material operational risks or failures were discussed or disclosed during this earnings call.

Analyst Q&A

• Q: What key technical hurdles must be addressed over the next 12-18 months to reach commercial ramp for the optical connectivity JDA, and how will scaling this volume impact your cost structure for all products?

  A: The core underlying technology is already proven from a decade of development for other end markets. The only remaining work is joint integration of Ava's optical components into the partner's optical engine solution, followed by customer qualification. The company's unique product design enables smaller die sizes, higher yields, and lower inherent costs compared to competing solutions. Existing foundry partners already have significant capacity, and additional capacity has been secured for initial deployment. Economies of scale from higher volume optical connectivity production will drive further cost reductions that also benefit AVA's existing sensing product lines.

• Q: What is the expected revenue model and long-term revenue opportunity for the new optical connectivity business?

  A: The opportunity is very large: the hyperscaler involved has projected demand for millions of units annually, which would translate to multiple hundreds of millions of dollars in annual revenue once ramped. Any volume Ava can produce will be absorbed by the market, with ramping starting in the second half of 2027. The business requires minimal new development investment, as it leverages existing core technology, leading to attractive return on investment for the company.

• Q: Is optical connectivity a major strategic pivot that will require large new R&D investment and divert resources from existing automotive and industrial businesses?

  A: This is an important new market, but not a pivot away from existing core businesses. The new segment leverages almost all existing core technology, manufacturing partnerships, and prior R&D investment, so only modest incremental investment is required. A dedicated separate team is being scaled for optical connectivity, so existing automotive and industrial programs will retain full focus and resource priority.

• Q: What is the medium-term revenue contribution expected from strategic partner SICK-AG, and will there be follow-on product launches?

  A: SICK just launched its first product using Ava's EVE sensor for distance/displacement sensing, and early customer feedback is positive. Additional volume growth is expected over the next 12-18 months, and a follow-on product for velocity measurement to replace traditional encoders is already in development, leveraging the same EVE sensor platform. This first launch positions the segment for broader growth across industrial automation. The company did not provide specific numerical contribution targets.