indie Semiconductor, Inc. (INDI) Earnings

Management highlights

### Market Environment - The global automotive semiconductor market is recovering steadily, driven by rising vehicle production and sustained electric vehicle demand - China remains Indy's strongest end market, followed by the U.S. and Europe; Chinese vehicle brands are growing their global presence - The emergence of physical AI and robotics is creating expanded market opportunities for Indy's high-performance system-on-chips (SoCs), which meet demand for high processing power, environmental sensing, and real-time intelligence ### Radar Segment Progress - Indy's 77 GHz radar chipset solution gained significant traction via its Tier 1 partner's Gen 8 radar product, with a public design win supporting Volvo and additional new wins expected with leading North American and Chinese OEMs - The 77 GHz product has an initial $25 million production order; radar is a foundational automotive sensor with 4-5 radars per vehicle on average, projected to grow at an 18% CAGR through 2032 - As the sole supplier of 120 GHz frequency band radar chips, Indy's 120 GHz solution enables higher resolution, more precise sensing, and lower cost via integrated packaging; it has completed successful evaluations for industrial, robotic, and smart infrastructure physical AI applications ### Photonics Segment Progress - The photonics business is accelerating and becoming a core portfolio pillar, with growing revenue and a record quarter for quantum photonics bookings - Indy received recurring orders for its LXM lasers used in quantum key distribution, and secured multiple customer-funded development programs (including a engagement with a leading quantum customer and two Japanese companies) - Demand for optical fiber components is rising, driven by AI and security solution adoption that increases demand for secure enterprise data infrastructure ### Vision Segment Progress - The new IND881 Edge AI SoC, an update to the flagship IND880, adds a powerful heterogeneous AI engine for automotive, industrial, and consumer physical AI applications (including AMRs, humanoids, and high-speed industrial cameras) - The IND881-powered integrated DMS-OMS eMirror solution is an industry-first that has generated strong customer interest, with multiple design engagements underway with leading OEMs and Tier 1s; Indy is an established leader in eMirror vision solutions - The DRAMless IND880 architecture reduces customer exposure to DRAM price increases and supply constraints, helping alleviate production line-down issues; it secured new design wins with leading Chinese OEMs and Cadillac, covering multiple vehicle classes - The Emotion3D acquisition has delivered a recurring royalty revenue stream; the combined hardware-software in-cabin sensing platform won a Supplier Excellence Award from Mahindra for its XEV9S program ### Corporate Strategy Updates - The pending acquisition of AMS Osram's CMOS image sensor group remains under regulatory review, with closing expected before the end of 2026; this acquisition will strengthen Indy's position to serve growing physical AI demand - The planned divestiture of Indy's equity interest in Wuxi Indy Micro is progressing through regulatory review, with closing expected in late 2026 as previously guided

Guidance

• For Q3 2026, total revenue is guided between $67 million and $73 million, with the midpoint split to approximately $40 million from core business and $30 million from the WUSHI subsidiary • Non-GAAP operating expenses are projected to decrease to $37 million in Q3 2026, down from $37.9 million in Q2 2026 • Q3 2026 net loss per share is expected to decrease to approximately $0.04 (based on midpoint revenue and 230 million weighted average shares) • Management reaffirmed the long-term corporate target of achieving 55%+ gross margins, with the Wuxi divestiture expected to help the firm reach the intermediate milestone of 50% gross margins as previously targeted

Segment performance

Consolidated total revenue for Q2 2026 was $64 million, a 24% year-over-year increase. Core business revenue (covering radar, vision, and photonics product segments) was approximately $36 million, with sequential growth of over 5% driven by momentum in the ADAS portfolio. Revenue from the Wuxi Indy Micro (WUSHI) subsidiary was $28 million. Non-GAAP operating expenses totaled $37.9 million, leading to a non-GAAP operating loss of $8.9 million, a improvement from the $14.5 million non-GAAP operating loss in Q2 2025. Net loss for the quarter was $11.7 million, or $0.05 loss per share. WUSHI is noted as a drag on consolidated gross margins, while core business segments are growing with improving profitability profiles.

Risks & headwinds

• Forward-looking results are subject to general market risks and uncertainties that could cause actual performance to differ materially from management projections, as detailed in Indy's SEC filings • Ongoing DRAM supply chain constraints and price volatility create near-term production planning challenges for customers and Indy - The pending acquisition of the AMS Osram CMOS image sensor group and the planned Wuxi Indy Micro divestiture are both subject to regulatory review, with closing timing dependent on completion of these processes - Quantum photonics and physical AI market commercialization trajectories are still uncertain, making near-term revenue contribution hard to forecast

Analyst Q&A

• Q: The analyst asks for details on the timing, size, and 2026 revenue outlook for the recently announced Volvo radar design win, against a prior $35-$50 million full-year 2026 revenue expectation for the radar product line. /

  A: Management declined to share exact details for the individual customer win, but confirmed it is a substantial design win with high penetration across Volvo's full model portfolio. Management added that the win is not the only recent radar design win, and noted that radar will remain a key driver of company growth through the end of the decade. (239 characters)

• Q: Given worsening DRAM manufacturing constraints and pricing pressure, what is the near-term revenue contribution and long-term pipeline visibility for the DRAM-less IND880? /

  A: The IND880 is already contributing a meaningful portion of the company's projected 2026 core growth, driven by urgent customer demand to alleviate supply issues. It has secured dozens of design wins across low-, mid-, and high-tier vehicles, with exposure to China as well as high-volume North American Tier 1s. Management confirmed the IND880 is on track to potentially deliver more 2026 revenue than the radar segment, as guided last quarter. (341 characters)

• Q: What are the key benefits of the IND880's DRAMless architecture, and what types of systems is it integrated into for its recent China design wins? /

  A: The IND880 is used both in standalone vision systems (eMirror, DMS, OMS) and as a preprocessor for central ADAS processors. It processes video on-device without dumping raw frames to external memory, which lowers latency and reduces the processing burden on central ADAS chips, easing implementation for customers. (252 characters)

• Q: What is the expected content value per physical AI/robot device, and can Indy leverage existing automotive supply chain relationships for these new markets? /

  A: ASPs are currently higher because volumes are still early, but high-end robotic applications can require $100 of Indy content across vision, radar, and processing components. Indy can leverage existing relationships, as many automotive Tier 1s are expanding into the robotics market, and the firm already has direct relationships with module makers analogous to automotive Tier 1s for physical AI. (301 characters)