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Date
Aug. 13, 2025 at 9 a.m. ET
Call participants
Chief Executive Officer — Omer Keilaf
Chief Financial Officer — Eldar Cegla
Head of Investor Relations — Adam Menacker
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Takeaways
Revenue-- $9.7 million in revenue for Q2 2025, representing a 46% year-over-year increase compared to Q2 2024 driven by both LiDAR unit sales and Non-Recurring Engineering (NRE) bookings.
First-half revenue-- $27.1 million in revenue for the first half of 2025, surpassing the total for all of 2024.
Full-year revenue guidance-- Management reaffirmed revenue guidance of $50 million to $60 million for 2025, implying more than a twofold increase in annual revenue for 2025.
NRE bookings-- More than $20 million in NREs booked year-to-date 2025, with 2025 NRE booking guidance raised to $30 million to $60 million, up from the prior range of $20 million to $50 million.
Gross margin-- Approximately 16% gross margin in the first half of 2025, with management indicating continued variability due to product ramp and NRE milestone timing.
Cash burn-- $7.3 million of cash burn in Q2 2025, down from $20.7 million in Q1 2025, in line with single-digit guidance.
Cash position-- $79.4 million in cash, cash equivalents, short-term deposits, and marketable securities at the end of Q2 2025.
Operating expenses-- Operating expenses totaled approximately $18.5 million in Q2 2025, reflecting a 20% decrease from $23.3 million in Q2 2024, including $2.3 million in share-based compensation.
Research & development expenses-- $13.2 million in research and development expenses in Q2 2025, down from $16.8 million in Q2 2024, with $1.4 million in share-based compensation.
Major OEM agreement-- Signed a Statement of Work (SOW) development agreement with a top-five global automotive OEM for hardware and software modifications of InnovizTwo targeting SOP in 2027, including shipment of units and potential to expand to short-range LiDAR.
Production ramp-- Initiated shipments from Fabrinet’s high-volume line, with plans to ship ten times more units in Q3 2025 than in Q2 2025.
Innoviz Smart launch-- Introduced auto-grade LiDAR targeting non-automotive industrial applications, followed by collaborations with Cogniteam, Spausch, CCTV, and CronAI, and integration with NVIDIA Jetson AGX Orin platform.
ATM program-- Launched a $75 million at-the-market equity offering program, with proceeds intended for R&D, operations, production scaling, and liquidity management amid NRE payment fluctuations.
Commercial revenue outlook-- Management indicated that Q3 2025 shipments from unit sales will likely result in the highest commercial revenue to date.
Summary
Innoviz Technologies(INVZ -13.19%) delivered record first-half revenue of $27.1 million in the first half of 2025 and sharply reduced cash burn to $7.3 million in Q2 2025, while advancing several major strategic initiatives. Management highlighted a significant new development agreement with a top-five global OEM, representing expansion into a new geographic region and future program potential. The company reported a high level of customer engagement in both automotive and non-automotive end-markets, supported by the dual launch of high-volume production at Fabrinet and the commercial introduction of Innoviz Smart. Leadership also announced a $75 million at-the-market equity offering to reinforce liquidity as customer programs and cash flows scale, while affirming a significant ramp in LiDAR unit shipments for Q3 2025.
The CFO stated, Our NRE payment plans are a key part of our financial model, and as demonstrated over the last several quarters, they helped us offset our spending significantly.
Management signaled intentions to maintain expense controls and preserve balance sheet strength while targeting new design wins in both automotive and industrial verticals.
The CEO commented that the non-automotive market offers "much higher ASPs compared to automotive" and substantially higher margin opportunities, positioning Innoviz Smart as a margin accretive growth driver.
Management cited active collaborations with leading partners including Mobileye, Volkswagen, and NVIDIA, all directly contributing to upcoming production and deployment cycles.
Industry glossary
LiDAR (Light Detection and Ranging): A sensor technology that uses laser pulses to measure distances for three-dimensional mapping, critical for enabling autonomous vehicle perception.
NRE (Non-Recurring Engineering): Upfront customer payments covering design, development, and engineering services for new product integrations, recognized as milestone-linked revenue.
SOP (Start of Production): The scheduled launch point for serial manufacturing and delivery of products to a customer program.
RFQ (Request for Quotation): A formal solicitation from potential customers for pricing and proposal on defined commercial projects.
ATM program (At-the-Market program): A type of equity financing that allows companies to raise capital by selling shares over time into the open market at prevailing prices.
ASP (Average Selling Price): The average price realized per unit sold, a key profitability metric in manufacturing and technology sectors.
Full Conference Call Transcript
Omer Keilaf: Thank you, Adam, and good morning to everyone joining us on today's call. At the beginning of the year, we set a series of ambitious financial and business targets for 2025, and today, I'm happy to tell you that we are on track to meeting them. Our revenue for the quarter was $9.7 million, bringing the first half of the year to $27.1 million. This was more than our revenue for all of 2024. We are confident that we will meet our target of $50 to $60 million for the full year.
Cash burn in the quarter was $7.3 million, consistent with our guidance for single-digit cash burn, and with our intention to dramatically reduce cash burn this year as we continue to strengthen our financial position. Moving on to the business side, we recently announced a statement of development agreement with a top five passenger automotive OEM as we work towards a potential nomination. The agreement is for developing modifications to our InnovizTwo LiDAR for the OEM's level three global production passenger vehicle program, slated for SOP in 2027. This OEM is a new geography for us, and we think this could unlock further opportunities for us in the region.
We continue to make progress with our existing L3 and L4 programs as we look forward to customer SOPs. We are tremendously pleased with our partnership with Mobileye, Volkswagen, and others on their accelerating robotaxi plans. As these programs start to deploy, we believe that LiDAR technology is increasingly becoming recognized as a necessity for automotive safety and autonomous driving. In the second quarter, we launched Innoviz Smart, which brings our auto-grade LiDAR to industrial and other non-automotive applications. Just a few weeks after the launch, we announced collaborations with companies such as Cogniteam, Spausch, CCTV, and CronAI for security and safety projects. We are working with many others as we demonstrate and test the solution.
Additionally, we established Innoviz Smart's compatibility with NVIDIA Jetson AGX Orin platform. In all, Innoviz Smart is off to an amazing start. On the production side, to support growing demand from customers across L3, L4, and non-automotive applications, we've begun shipping units from Fabrinet's high-volume production line. It is a significant achievement for us that demonstrates that we are well-positioned to ramp InnovizTwo and scale our operations to meet growing demand and cross customer SOPs in 2026-2027. Last quarter, we told you that we are at the start of the next chapter of the Innoviz story, becoming the world's premier large-scale supplier of best-in-class LiDAR solutions for autonomous driving and beyond.
In the second quarter, we demonstrated that our journey is underway, and we are delivering on our mission as we ramp production and continue to win new customers. With that, let's jump into the details. Let me begin by telling you more about our Q2 and first-half financial results. In the quarter, we reported revenues of $9.7 million as we generated more revenues in just 2025 than in all of 2024. The revenues were driven by a combination of LiDAR unit sales and NREs. We are shipping units to our existing and potential customers, and as of July, we're shipping from Fabrinet as well as from our headquarters.
These units are going to various Mobileye drive customers, the new top five OEM we announced, and to VW to support the ramp of the autonomous VW ID Buzz shuttle that's been in the news. We ended the quarter with $79.4 million in cash and cash equivalents. We started the year with $80 million in NRE payment plans, and we grew the plan to approximately $95 million in Q1. In Q2, we further expanded the payment plans beyond the $95 million with the addition of the new top five OEM that we mentioned earlier. At the beginning of the year, we guided for $20 to $50 million in NRE bookings.
So far this year, we already booked more than $20 million in NREs, and given our outlook, we are increasing our NRE booking guidance for 2025 to $30 to $60 million. As we recognize revenues for these NREs, we are continuing to execute on our commitments, meet customer milestones, and pursue opportunities with new customers. Cash burn in the quarter was $7.3 million, in line with our guidance for single-digit burn in the second quarter versus $20.7 million in the first quarter. Supported by our balance sheet and NRE payments plan, we are well-positioned to deliver on the product ramps that we expect over the next two years.
Turning now to our recent business accomplishments, in June, we signed an SOW agreement with the top five passenger automotive OEM for a development project for a level three global production passenger vehicle program. This is a new program for us from a customer with whom we've been in discussion for quite some time. Beginning in Q2, we have been developing hardware and software modifications for the InnovizTwo to ensure seamless integration into the OEM's vehicle system. We've already begun shipping units to the customer, and we expect to ship hundreds of units in the coming months. This will facilitate a smooth ramp towards the planned data collection campaign as our companies work toward the series production agreement.
Start of production is slated for 2027. This SOW is a great milestone for Innoviz Technologies Ltd., not just because of the size of the customer, the volumes the program can generate, and the timeline, but because we believe other companies in this geography may follow suit. We've also started discussions with the customer to expand the collaboration to short-range LiDAR, which could be used in different programs at the OEM. This potential expansion of our engagement highlights the benefit of having multiple solutions on one platform.
As we've seen in previous programs with other customers, an SOW allows us to conduct development work on a program, which will allow us to meet SOP timelines while the commercial discussions for series production are progressing. With two out of five top global OEMs now working with Innoviz Technologies Ltd., our position in the LiDAR space is stronger than ever. Over the past few months, we've seen tremendous acceleration of plans to deploy level four robotaxis around the world. This truly feels like an inflection point for autonomous driving. To enable this trend, we are deeply engaged with our level four partners VW and Mobileye, and their customers, Moya, Holland, Verney, and others.
We are very pleased with the ramp in our collaboration with Volkswagen in support of Moya and Uber's planned rollout of the ID Buzz in multiple Europe and US cities starting in 2026. Ahead of the fleet launch, hundreds of ID Buzz shuttles will be equipped with a suite of Innoviz LiDARs in 2025. Recall that the ID Buzz, which is based on the Mobileye drive platform, has nine InnovizTwo LiDARs per vehicle: three long-range and six short to mid-range. We are also encouraged by the recent announcements from Lyft on the upcoming deployment of Mobileye-based autonomous vehicles by Holland and Bentler brand on the Lyft platform.
Critically, with this interest and acceleration in deployment plans, there seems to be a growing understanding that LiDAR is a must-have for true safe autonomous driving. Innoviz Technologies Ltd. offers a mature, scalable, cost-effective LiDAR solution, and our relationships with industry leaders support this vision. The team and I will be demonstrating our automotive products at the IAA Mobility in Munich in September. In addition to our automotive advances, we recently launched the Innoviz Smart, our automotive-grade LiDAR now available for applications such as security, mobility, aerial robotics, and traffic management. Developed to meet customer demand, Innoviz Smart is a rugged, reliable sensor.
It features low power consumption, a wide field of view, and a uniform high-resolution 3D point cloud that enables accurate object detection at distances of now up to 450 meters, even in harsh outdoor conditions like dust, sunlight, and rain. Shortly after unveiling the Innoviz Smart, we announced that we are partnering with Cogniteam to create a turnkey solution for a wide range of safety and security applications. We also announced that we are working with Spausch CCTV and CronAI to offer an integrated LiDAR vision perception platform. The platform is purpose-built for large-scale deployment across transportation, perimeter security, railways, and critical infrastructure. Additionally, Innoviz Smart is now part of the NVIDIA Jetson Orin AGX reference design.
This will allow more developers to benefit from NVIDIA's advanced AI processing capabilities in applications such as smart cities, traffic management, security, robotics, and more. There are many RFQs for non-automotive programs where the prospective customers see the advantages of using a LiDAR. These projects have significantly shorter design cycles, with much higher ASPs compared to automotive. In some potential projects, we've been able to demonstrate that a single Innoviz LiDAR can fulfill the application requirements as opposed to multiple from another LiDAR company. We are engaging with over a dozen companies that are exploring our solution for a variety of projects.
We believe our LiDAR is very well suited to win in the market, offering better value and better technology to customers. We will be demonstrating the Innoviz Smart at the ITS Intelligent Transport Systems World Congress in Atlanta later this month. The growing interest in Innoviz Smart validates the path we took to the non-automotive space. By first focusing on developing and bringing to production an automotive-grade device for higher volume applications, we can now offer non-automotive customers an easy-to-integrate, reliable solution. In the next few years, we believe that the Innoviz Smart could drive significant incremental revenue for Innoviz Technologies Ltd. with limited incremental spending.
We are making great progress in this space and are very optimistic about our opportunities for growth in this segment given the strength of our solution. Let me now update you on our production capabilities. At the beginning of the year, we said that we would ship an order of magnitude more units in 2025 than in 2024. We are seeing growing demand for LiDAR units from existing customers and from companies with whom we are engaging on new programs. To meet their needs, we are on track to ship 10 times more units in the third quarter versus the second quarter. Last month, we announced that we are starting to ship units from Fabrinet's high-volume production line.
This marks a major milestone in our journey to mass-produce our InnovizTwo LiDAR platform. The ramp-up at Fabrinet's facility follows months of collaboration and extensive training, ensuring that all production procedures meet Innoviz Technologies Ltd.'s rigorous quality standards. With these initial shipments, Innoviz Technologies Ltd. moves closer to meeting the growing demand for scalable autonomous vehicle solutions for automotive OEMs and mobility companies worldwide. Now let's move on to our outlook. Driven by the NRE payments that we expect in 2025 combined with sales of LiDAR units, we continue to expect a more than twofold increase in our revenues year over year for 2025 at $50 to $60 million.
As you saw in the first half, our cash burn has continued to decline thanks to our tightly managed expenses as well as the actions we took in the first quarter. On the operational front in 2025, we continue to target one to three new programs. We expect one to two in addition to the SOW that we already signed. Given that we've already booked more than $20 million in NREs this year, we are raising our guidance for NRE bookings in 2025 to $30 to $60 million from $20 to $50 million. All in all, our year is progressing very nicely. And with that, I'll turn it over to Eldar to talk about our financials.
Eldar Cegla: Thank you, Omer, and good morning, everybody. In 2025, our company continued to make strong financial and operational progress. Revenues in the quarter were $9.7 million, bringing the first half to $27.1 million. As Omer said, we generated more revenues in the first half of the year than in all of 2024. We ended Q2 with approximately $79.4 million in cash, cash equivalents, short-term deposits, and marketable securities on the balance sheet. We decreased cash used in operations and capital expenditure in the second quarter to just $7.3 million, in line with our guidance for a single-digit cash burn.
This was due to strong cash inflows from NRE payments and the realization of the benefits of our operational realignment earlier in the year. Gross margins in the quarter were approximately 16% for the first half of the year. Going forward, we expect margins will continue to vary. This is due to the product ramp timing and the NRE payment fluctuation based on our customer's milestone. Looking into the remainder of 2025 and beyond, we remain confident in our ability to manage our expenses effectively and keep our cash burn rate down on an annualized basis.
Our NRE payment plans are a key part of our financial model, and as demonstrated over the last several quarters, they helped us offset our spending significantly. With every development milestone that we meet on a customer's program, we unlock a portion of the NRE payments associated with that program. As we work to expand our NRE payment plan and get closer to our 2026 production ramp, we are launching an at-the-market or ATM program in the amount of $75 million. We intend to use the net proceeds from the ATM for general business purposes, including activities such as R&D operations and supporting our production efforts.
We may also use proceeds to buffer the lumpiness of the NRE payment plan and to be able to maintain a sufficient level of liquidity on our balance sheet. As a tier-one automotive supplier, it is important that we are able to demonstrate financial strength to our customers. Having the ATM program signals to our customers the strength and stability of our company and the continued capacity to serve our customers. Now turning to the income statement, our Q2 revenues of $9.7 million were up 46% year over year, supported by NREs as well as sales of LiDAR units. Our operating expenses for Q2 were approximately $18.5 million, a decrease of 20% from $23.3 million in Q2 2024.
This quarter's operating expenses included $2.3 million of share-based compensation compared to $3.8 million in Q2 2024. Research and development expenses for Q2 were $13.2 million, a decrease from $16.8 million in Q2 2024. The decrease is primarily related to the allocation of costs related to sales of NRE and to the operational realignment in Q1. The quarter's R&D expenses included $1.4 million in share-based compensation compared to $2.6 million in Q2 2024. To conclude, Q2 represented a robust quarter from both a revenue margin and cash flow perspective.
Looking into Q3 and the rest of the year, we are focusing on future ramping of the InnovizTwo, developing the next generation InnovizThree, and securing additional design wins in the automotive and non-automotive segments as we continue to focus on tightly managing cash burn and maintaining a strong balance sheet. With that, I'll turn the call back to Omer for a few closing remarks.
Omer Keilaf: Thank you, Eldar. Before I wrap up the call and open for Q&A, I wanted to recap some of our recent developments. We reported record first-half revenues with improved cash burn. We announced an SOW agreement with a top five global automotive OEM to develop certain modifications to our InnovizTwo LiDAR for the OEM's level three global production passenger vehicle platform targeting 2027 SOP. With line of sight to an expansion opportunity at the OEM's other programs with our short-range product, we are proud of the fact that we are working with two out of five auto OEMs that together have close to one-fifth of global auto market share while continuing to pursue other top automakers.
The adoption of robotaxis, many of which will be powered by Innoviz Technologies Ltd., is accelerating around the world. The deployment of LiDAR-powered shuttle fleets highlights the fact that LiDAR technology is critical to autonomous driving. This is increasingly recognized by the industry. For non-automotive applications, we launched Innoviz Smart, and we are already establishing partnerships with companies like NVIDIA, Cogniteam, Spausch, and CronAI. We're seeing a number of parallel RFIs and RFQs for the Innoviz Smart. The ASPs are higher, and the design phases in this segment are shorter than in automotive, making it a very attractive market.
Our pipeline of RFIs and RFQs, both in auto and non-auto, is a testament to both the maturity of our technology and its critical role in the future of driving safety, security, and other end markets. With the company well on track to meeting the goals we set out for ourselves at the start of the year, we are laser-focused on becoming the world's premier large-scale provider of best-in-class LiDAR solutions for autonomous driving and beyond. With that, operator, let's open it up for Q&A.
Adam Menacker: Thank you.
Operator: To ask a question, please raise your hand using your mobile or desktop application, or press 9 on your telephone keypad, and wait for your name to be announced. Our first question is from Mark Delaney with Goldman Sachs. Mark, please go ahead.
Mark Delaney: Yes. Thank you very much for taking the questions. First question is in regards to the development program with the top five auto OEM. What do you think it would take for that development program to become a series production win, and when do you expect to know if the development program is going to become a series production award?
Omer Keilaf: So, basically, as we said, the SOP is in 2027. So we have already started to work on the program towards the SOP. Otherwise, the long lead items that are required are not going to be met. Meanwhile, we are working on the contract and basically the different, I would say, final details. And we hope that we'll be able to converge it as soon as possible.
Mark Delaney: Okay. Thanks for that. And if the development program does become a series production award, do you have any clarity on what that program may look like in terms of annual volumes when fully ramped and if your LiDAR is going to be standard fit or optional on vehicles?
Omer Keilaf: Sure. We'll, of course, be happy to share more information once we'll be able to announce the customer. It's a very big OEM, having its fifth, you know, one of the five top five OEMs. Obviously, the volume of this OEM is high. And we are already starting to talk about potentially expanding to using also the short range for other programs. But it's not a single vehicle line. There are several lines. And, of course, we'll be happy to share more as we go. But, at least the first line, as far as I know, it's a standard fit.
Mark Delaney: Got it. Thanks. One more from me if I could, please, and I'll pass it along. You spoke about filing for the ATM. Can you help investors better understand how quickly the company plans to use the $75 million ATM that you announced this morning? And any guidance on how much you may look to raise this year? Thank you.
Omer Keilaf: Sure. So as you know, the company was already taking several steps to minimize our cash burn and reduce it as much as possible. In today's report, we talked about $7.3 million that, away from being even with the quarter. So we'll continue to close this gap with winning more programs, getting more NREs, and we said that we are also expecting a growth in the sales of LiDARs. And we intend to look on the ATM opportunistically and with consideration for our liquidity at any given time. The structure of the ATM program really helps us to buffer some of the lumpiness related to NRE payments and timing variabilities. So we'll work with it along the way.
And that's, I think, there is a nice fit between the ATM structure with the NRE payment plan that we have. And again, we are, as you see, we are working to close the gap as much as possible.
Operator: Thank you. Our next question is from Josh Patel from JPMorgan. Josh, please go ahead. Josh, your line is open. Okay. We will move on to Kevin Garrigan from Rosenblatt. Kevin, please go ahead.
Kevin Garrigan: Yes. Hey, Omer. Hey, Eldar. Thanks for taking my questions and congrats on the progress. Going off of Mark's question on the statement of development work agreement, can you just tell us what's different with this agreement, if there is any, in terms of process or timeline? I think the typical process is the RFI and RFQ timelines, then design win sign, then development on the platform. But you're already working with the OEM. So can you just tell us what the changes with this agreement are?
Omer Keilaf: Sure. This is actually beyond the process of the RFI and RFQ that are behind us. Only that the OEM has experienced needs to make modifications to the requirements, and therefore, you know, it required us to start working on some of the design changes while working with us on concluding some of the contract details. So it's not very different other than the fact that since the RFQ process took longer than the OEM has expected, it required us to start working on the program, you know, meanwhile trying to converge on the contract. We had a similar situation in the past with Volkswagen.
If you might recall, you know, we made an announcement about winning a program pending commercial agreement with a customer we haven't announced who it is. And later, we, you know, we announced it's the ID Buzz. Similar background, similar reasons. Sometimes there are, you know, some delays in the process, but the OEM wants to start working on the program because the SOP timeline doesn't change. So it's a very similar situation to what we had at the time.
Kevin Garrigan: Got it. Okay. That makes sense. And then just looking at the overall autonomous vehicle market, does the acceleration of robotaxi deployments accelerate timelines or benefit L3 at all? Or are they kind of on two different spectrums?
Omer Keilaf: I think that it's a good question. I think that right now, the programs, I don't know if there is a correlation between the sense of urgency between one and the other. I think autonomy is a topic that is now picked up again, and car makers are interested to look on their next, and autonomy is an important element in it. I think that the split between level three and level four is somehow different. So you have level three, which comes from large OEMs, the traditional OEMs, then you have the level four, which are more like based on, I would say, commercial vehicles, trucks, etc. This is something that we also experience a pickup right now.
We are also on programs that are related to trucks that are also targeting SOP in 2027. So in a whole, I think the whole topic of autonomous driving is going through a gold rush once again. It's hard for me to say if the two are, you know, because every customer is either going on level three or level four. So it's hard to connect between the two.
Kevin Garrigan: Yep. Okay. That makes sense. Okay. Perfect. Thanks, guys.
Omer Keilaf: Sure.
Operator: Our next question is from Colin Rusch from Oppenheimer. Colin, please go ahead.
Colin Rusch: Thanks so much, guys. You know, can you talk about your ability to tune the LiDAR for industrial applications, or do you feel like you're going to end up having to, you know, start building multiple SKUs as you see some of the proliferation into some of these incremental end markets?
Omer Keilaf: Sure. I'm happy to talk about it. So, basically, the Innoviz Smart is the same LiDAR that we are selling to automotive. If you see the image of the Innoviz Smart, you can actually see that it's based on two parts. There is the LiDAR, and there is an add-on to the back of the LiDAR that we connect to it, which is used as kind of a conversion of some of the interfaces and easier connectivity to some of the applications that are currently used. So it really is the same LiDAR. We're coming off from the same production line and same test, etc. From that perspective, it's the same.
I would also want to add there's something interesting that we are currently seeing in some applications. Look, when you talk about non-automotive, in some of these cases, we're still talking about, you know, a moving object. It could be a robot. It could be an AGV. And these require also functional safety. Any vehicle with above a certain mass that moves around people requires a sensor that meets functional safety. And there is actually not sufficient, and I'm not familiar with any good LiDAR out there in the non-automotive sector that meets functional safety. I mean, there are, but there are really, really low one d or two d LiDAR sensors.
And that's kind of a gap where we see in these markets. Our LiDAR comes from automotive, which means it meets the ISO 26262 and covers and overlaps probably all, if not most, of the other requirements for functional safety in other industries. And this is something that we see as a huge opportunity for us to step in. And so, you know, today, see these non-automotive applications run with experimental sensors for development. But once they need to be operating in areas where you have people, they need to have functional safety used, even if it's not an automotive application or for activity.
So this is something that we identified recently with some customers that were looking at our LiDAR. And, you know, other than that, what is interesting is that we are currently going into an established market. It's not like two years ago where we had to educate many people on what is a LiDAR and why you might want to use a LiDAR. There are many customers already using LiDARs in different applications, and they are much more educated, also about the gaps of the LiDARs that they are using today. And for us, it's pretty easy to demonstrate the advantages related to using Innoviz LiDAR with our significantly higher performance, robustness, and functional safety.
So it's very, I would say, it's very exciting to see, you know, the reaction of several customers when they see the LiDAR in action. I was participating in a lecture about homeland security a few weeks back. I felt that when I demonstrated the LiDAR, people looked at me as if I came from a spaceship, landed from another star, showing them technology they've never ever really experienced. There are many markets that haven't yet really used LiDARs at this performance, and they can disrupt. So it's pretty exciting, and I look forward to seeing where our LiDARs are going to be used, and we'll share with it with you guys over time.
Colin Rusch: That's super helpful. And then, you know, with the proliferation of customers and potential customers, you know, we're seeing just so much activity. And I think the gold rush that you've mentioned is an apt analogy here. You know, can you talk about your strategy for selecting customers and where you're putting energy? Obviously, you know, NRE is one indication of a deeper relationship. But yet, can you talk to us around how you're managing your engineering resources to help your customers on a downstream basis?
Omer Keilaf: Sure. So today, our portfolio is based on InnovizTwo long-range and short to mid-range. And our main focus, probably 95% of it, is still in the auto space. Since there are RFQs that are converging and we have this customer that we are working towards this kickoff of the program. And also since the fact that we always see the automotive as the, you know, winner takes most kind of market, which eventually would be only limited to maybe two suppliers. So that's still very key for us to be a leader in this activity and book all of these wins ahead of those launches.
Meanwhile, we are using the excess capacity of our production, which we are ramping up now, in order to start penetrating non-automotive customers. The sales cycles in these markets are shorter than automotive, and therefore, we expect that this is the right time for us to start working in this environment. We benefit by working with different integrators that are already deep in the, I would say, the circles are talking with the different customers and building the application layer. So we are providing them a platform. Many of them are relying on the NVIDIA Jetson environment, and the fact that we've integrated the Innoviz Smart into the Jetson helps them to do a more seamless integration.
So maybe to summarize, 95% still on automotive, trying to capture our position, be a winner take most in this sector, using now the InnovizTwo C sample, which is beyond the design freeze and ramp up of volume to penetrate into the non-automotive market. We continue to develop new technologies, InnovizThree, probably we'll talk about it on our next earnings, and we expect to show it at the end of the year. A very exciting product. It's a new step in our development for cost, for size, and for performance. We look on second generations for the different long-range and short-range. So, you know, there's a lot to do yet.
But we are in a very, I would say, in a very interesting time. Because we see the level of engagement we get from customers, you know, when we are showing them our product. So we feel that we're on the right track to be where we are aiming.
Colin Rusch: Thanks so much, guys.
Operator: To ask a question, please raise your hand using your mobile or desktop application. Wait for your name to be announced. Our next question is from Casey Ryan with Westpark. Casey, please go ahead.
Casey Ryan: Good morning, gentlemen. Very exciting update. Terrific news. One thing I'm curious about is you mentioned commercial revenues in the quarter were good. Would you qualitatively say this has been one of your highest commercial revenue contributions? And then it sounds like you're saying it's going to be 10x in Q3. So Q3 might be your highest commercial revenue shipments, splitting that out from NREs.
Omer Keilaf: So as we said on the call, we are ramping up our production line, and the revenues coming from units probably would be, as you said, our peak to date. And this is, you know, we're only starting. Right? So this is, we see also the maturity in our lines, in our headquarters, also coming from Fabrinet. Next year, we are doing an SOP with Volkswagen. So we need to ship two products. It's the long-range and short-range. Middle of the year or Q3. Both of them are going to go through production validation at Fabrinet prior to the SOP. Meanwhile, we are working to book new businesses. I think Mobileye being on the Mobileye platform obviously contributes.
We are looking to hear about new opportunities that might come in other than the ones that are already booked. And we have the NVIDIA Hyperion, which NVIDIA is offering to different customers based on the InnovizTwo short and long-range so far. So, yeah, I think, you know, we talked about the fact that, you know, our strategy right now is in our vision is in becoming one of the largest suppliers of LiDARs around the world, and we intend to be them.
Casey Ryan: And so sort of in this vein of commercial revenues, you know, taking the ID Buzz as an example, if Uber will be deploying those vehicles, say, you know, '26, at what point would VW actually be pulling units from you? How many quarters in advance, I guess? I'm trying to figure out what the timing would look like if it would be twelve months in advance or six months in advance or something like that. Because you guys would be somewhat of a leading indicator if, you know, assuming we could see all the information, would obviously need to send LiDARs to VW before the vehicles could be made into deployed into an Uber network. Right? Sure.
Maybe, Eldar, if you want to take this one.
Eldar Cegla: Sure. Of course. Usually, the industry is working in just-in-time methodology. Usually, we should expect to see it a quarter before they deploy their vehicles to the market. So something like that.
Casey Ryan: Okay. So if it's Q1, then late Q3 Q4, something like that for Innoviz. Basically.
Omer Keilaf: The SOP is currently targeted for Q3. But other than that, we, you know, we are to continue to ship units to support the ramp-up and testing. Not only to Volkswagen but also other Mobileye customers such as Holland. There was also an announcement related to Lyft and partnering with Holland, which is based on the Mobileye platform, which obviously is also based on our LiDARs. So it's going to be a mix of LiDARs shipped as samples for testing, data collection, SOPs, and probably additional NREs coming from new programs and existing ones.
Casey Ryan: Yeah. Well, I mean, this is all very positive. I think. And, you know, potentially, we will see the early stages of the sort of robotaxi wave through your results as you move forward. Very quickly on the non-automotive opportunities. Do you expect any change in sort of pricing and margin profile, or will those be pretty consistent with your automotive sales if and when those move into commercial developments?
Omer Keilaf: No. No. The ASPs for non-automotive are significantly higher, and the margins are significantly higher. We are talking about, in the order of several thousands compared to the several hundreds. So definitely, the non-automotive is a very rewarding market for us to operate in. And, you know, we work against the benchmark of very expensive other LiDARs. So we provide a better product. So no need to discount.
Casey Ryan: It feels like a very compelling sales pitch. Listen. Tremendous progress. It sounds like a very exciting back half of the year is coming. So thank you for taking my questions.
Omer Keilaf: Absolutely. Thank you.
Operator: There are no further questions. I'm handing the call over to Omer for closing remarks. Thank you.
Omer Keilaf: Okay. Thank you very much for attending our Q2 2025 earnings. We look forward to continuing to update you with our progress. And thank you very much. Bye-bye.