Aeva Technologies, Inc.

Good day. My name is Stephanie, and I will be your conference facilitator. I would like to welcome everyone to AVA Technologies' fourth quarter and full year 2025 earnings conference call. During 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.

Thank you, and welcome, everyone, to Ava's fourth quarter and full year 2025 earnings conference call. Joining on the call today are Suresh Salahian, Ava's co-founder and CEO, and Saurabh Sinha, Ava's CFO. Ahead of this call, we issued our fourth quarter and full year 2025 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 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. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of AVA'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's website under the investor relations link. And with that, let me turn the call over to Suresh.

Thanks, Andrew, and good afternoon, everyone. 2025 was a transformational year at Ava. In an evolving industry, we significantly solidified our leadership position with more customers adopting our unique perception platform and industry leaders partnering with us to further accelerate our momentum. And coming out of one of our best CESs to date this past January, AVA is building on that momentum and off to a very strong start in 2026. We see a growing number of exciting opportunities to pursue this year and are focused on aligning supply to respond to the rapidly increasing demand for AVA's suite of perception solutions. This will build on 2025's significant accomplishments, One of the biggest is our first major passenger vehicle production program award. This is from a top European passenger OEM long known as a leader in the automotive industry with a strong track record of bringing industry defining capabilities to market at mass volume. AVA will be the exclusive lighter supplier to this OEM globally outside of China. In addition, NVIDIA also selected AVA as the reference LiDAR sensor for its Drive Hyperion development platform, which is being adopted by an expanding number of major OEMs to bring level three and higher automation to their production vehicles. This is another major validation for the need for LiDAR from one of the leaders in the industry. As the core LiDAR sensor on the platform, NVIDIA will incorporate our unique 4D data to enable OEM development, validation, and simulation, which we believe could further accelerate the adoption of AVA's perception platform across the automotive industry. We also continue to deliver on milestones for existing production customers, such as Daimler Truck. With Daimler Truck, we successfully completed on-road validation of our Atlas B samples and are on schedule to deliver final C samples this year. As the exclusive long-range LiDAR supplier and primary detection sensor for Diamond Trucks autonomous production trucks, we are excited to continue supporting the progress towards commercialization. To advance a growing number of opportunities beyond just automotive, we formed a strategic collaboration with LG Inotech to bring 4D LiDAR to a broad range of physical AI applications, where LG Inotech is already a major player with significant global scale. The goal of our partnership is to leverage each other's strengths to accelerate deployment of AVA's 4D LiDAR across multiple markets. As part of this, LG Unitec is investing up to $50 million in AVA through a combination of an equity stake, non-dilutive investment for new joint products for physical AI, and capital investments to bring production capacity online for our next generation of products. Since forming the partnership last May, we have made quick progress on a number of fronts, including joint development of Omni, the new 360-degree product to be unveiled at CES last month. This is in addition to AVA's line of EVE precision sensors designed for micron-level accuracy in factory automation applications. Shipments of these sensors began in late 2025 to our initial customers, such as SICK, and are on track to ramp up this year. I am pleased to say that Ava's financials also reflect our building momentum. We doubled our revenue in 2025 to a new record for the company, driven by increasing censorship and expanding applications. To better position Ava to meet this growing demand, we bolstered our balance sheet by approximately $150 million with leading partners, LG Unitec and Apollo. With one of the strongest balance sheets in the industry and expanding interest for our differentiated technology, We look forward to another exciting year in 2026. Now let's dig a bit more into recent business developments. Starting first with our Global Production Program Award from a top European passenger OEM. This is the OEM we have been working on a development program with over the course of 2025 and previously referred to as a global top 10 passenger OEM. The award is significant for a couple of reasons. First, in scale, the OEM sees Level 3 capabilities as a key differentiator for next-generation vehicles and is developing a standardized automated driving platform for broad deployment globally across multiple vehicle model lines and not just the top-end models. AVA will act as the exclusive Tier 1 suppliers globally outside of China through the middle of next decade with the target SOP in 2028. Second, this win marks the first major passenger OEM transitioning from time-of-flight to FMCW. This OEM has extensive experience with time-of-flight LIDAR, including an initial rollout of limited Level 3 capabilities. The OEM selected AVA for its next generation following extensive evaluation of other solutions and AVA's ability to help the OEM achieve key use cases needed to safely enable Level 3 on a broader scale. Given this OEM's reputation as an industry leader in bringing new features and capabilities to the automotive market at mass volume, we believe their selection of AVA is a tremendous vote of confidence in the superior performance and scalability of our differentiated technology. We expect this to deepen our engagement with other major OEMs and potentially drive other OEMs also considering our perception technology to make a similar decision. With our growing pipeline and deepening engagements, I'm happy to share that a new global top five passenger OEM has selected AVA for a development program focused on the configuration, integration, and validation of our Atlas Ultra sensor for their next generation global production vehicle platform. The OEM selected AVA for the development program after extensive experience with Simon Flight Lidar and a growing appreciation that our unique performance helps address key use cases critical to enabling higher levels of automation and at scale. We believe that AVA is well positioned given our differentiated performance, balance sheet, and commercial momentum with more leading OEMs awarding AVA as well. Another example of our growing momentum is NVIDIA selecting AVA's 4D LiDAR as the reference LiDAR sensor for its Thrive Hyperion platform. NVIDIA is one of the top leaders in autonomous vehicles and works with some of the biggest OEMs and industry players, such as Mercedes-Benz, Stellantis, Uber, and others. Drive Hyperion provides a common platform for integrated sensor and compute designed for real-world autonomous driving applications. The same architecture consisting of a common suite of LiDAR, radar, and cameras can support a wide range of vehicle types, from passenger vehicles, robotaxis, and delivery fleets across multiple configurations. We believe NVIDIA selection further solidifies the case for LiDAR to enable higher levels of automation and has the potential to accelerate adoption of our technology. As the reference sensor on the DRIVE Hyperion platform, NVIDIA is integrating our 4D data for OEM development, validation, and simulation. This has the potential to effectively make AVA a core LiDAR supplier to passenger and commercial vehicle OEMs using the platform globally outside of China. And as OEMs incorporate AVA's added dimension of velocity into their AV stack, we believe it will drive greater collaboration with AVA and the potential reliance of our technology that positions us well to win their production programs. Beyond automotive, AVA continues to expand into new applications. As we highlighted at AVA Day last summer, our unique perception platform leverages the same core hardware components with different software to reach an $80 billion-plus market opportunity across a wide range of applications. This includes the fastly growing multi-billion-dollar defense market, where LiDAR is increasingly used for autonomous vehicles, drones, and security. We are engaged with a number of leaders in this space and recently announced our first defense win with Forterra. Forterra is a key provider of autonomous mission systems for defense and other complex operational environments and has selected AVA to use our glider technology for its autonomous vehicle system, Autodrive. Forterra is also transitioning to AVA due to our combination of long-range, velocity, and vehicle positioning technologies. that enhances perception including unstructured and in GPS denied environments where defense vehicles need to operate. And unlike existing solutions, our sensors are also undetectable by night vision systems, a critical feature in sensitive operational environments. We believe that large defense market can be a meaningful portion of our business in the near term. They have already begun sizable shipments to Forterra last quarter and look forward to supporting this program as well as other defense opportunities that we're currently engaged on. Moving now to AVA's key objectives, let me start with a review of our 2025 goals before turning to our plan for 2026. So we set ambitious goals for 2025 that were designed to further position AVA on a path for significant and sustainable growth, and it was an incredibly successful year. We exceeded our target for two additional wins with a top European passenger OEM production win, and NVIDIA in automotive, with SIG-AG and LMI technologies in manufacturing and factory automation, as well as others such as Census, GATSO, and smart infrastructure. In terms of product and manufacturing readiness, we successfully completed the final release for our Atlas product, as well as the buildup of our automated final assembly lines. which we expect to enable systems' annual capacity to reach 100,000 units. And as we'll discuss later on, one of our objectives for this year is to focus on increasing capacity of our supply chain in collaboration with our key partners. AVA also made significant strides towards expanding into new applications, such as precision sensing with our EVE sensors that have already begun shipping, and a strategic collaboration with LG Innotech that has resulted in our expansion into new physical AI and robotics applications with joint new products that we aim to bring to the market. We accomplished all of this while meeting our financial targets to grow revenues by about 100% and also reducing operating expenses by more than 10%. Looking to 2026, we are focused on further solidifying our leadership position in sensing and perception and our path to profitability. In particular, We are targeting another four or more commercial wins this year, including within automotive and non-automotive applications. At the same time, we will be equally focused on upcoming production launches with our customers. We are on schedule to begin shipping our Atlas C samples to Diamond Truck this year and are working closely together ahead of startup productions. We also plan to further accelerate our expansion within the industrial robotics and the broader physical AI space with a release of Omni that is targeted for the second half of this year and a five-time increase in industrial sensor shipments. To support our growing programs, we will build on the work to scale our manufacturing achieved last year. Key milestones will be beginning manufacturing on our fully automated final assembly line, as well as working with our key partners to increase capacity for our module supply chain to support the growing number of commercial wins. And lastly, we plan to do all of this while continuing to strengthen our financial position. Consistent with the financial framework that we shared at Ava Day last year and what we delivered over the prior few years, we target another year of significant growth while maintaining similar levels of operating expenses. So to sum it up, we expect this year will be another major year for AVA with significant opportunities to advance our commercial momentum with new wins while keeping our ongoing focus on supporting existing programs and for financial discipline.