Microvision Q3 2026 Earnings Call Transcript

Microvision (NASDAQ:MVIS) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Microvision reported strong third-quarter performance with revenue of $2.4 million, up significantly from $0.2 million in the same quarter last year, marking substantial growth in the company’s commercial progress.

The company is targeting a reduction in operating cash burn from approximately $60 million in 2026 to $40 million in 2027, supported by a recent workforce reduction affecting 28% of the organization.

Microvision remains confident in its 2026 revenue outlook of $10 to $15 million, with revenue expected to double in 2027, driven by existing purchase orders and expanded sales of IRIS and Mobia products.

Strategic initiatives include the expansion of the LiDAR portfolio with products like IRIS and HALO, as well as partnerships and commercialization efforts in industrial, security, defense, and automotive markets.

The company is focusing on maximizing non-dilutive liquidity sources and maintaining access to $40 million from its ATM facility to support its growth and operational needs.

Management highlighted the successful integration of Luminar’s assets and the establishment of Microvision Semiconductor to enhance internal ASIC development capabilities.

The launch of new products, such as Movia Pro, and strategic alliances, like the one with Blueband, are expected to drive further revenue growth and market expansion in 2027 and beyond.

Full Transcript

OPERATOR (Moderator)

Good afternoon and welcome to the Microvision third quarter 2026 financial and operating results conference call. At this time, all participants are in a listen-only mode. At the end of management’s remarks there will be a question-and-answer session. Investors can submit their questions within the meeting webcast by typing them into the Q&A button on the left side of their viewing screen. Analysts who publish research may ask questions on the phone line.

For an analyst to ask a question on the phone line, please press star-one on your phone. Please note this event is being recorded. I would now like to turn the conference over to Drew Markham. Please go ahead.

Drew Markham (SVP, General Counsel & Secretary, Head of People Ops)

Thank you. Good afternoon. I’m here today with our Chief Executive Officer Glen De Vos and our new Chief Financial Officer Christine Chambers. Following their prepared remarks, we will open the call to questions. Please note that some of the information you’ll hear in today’s discussion will include forward-looking statements, including but not limited to expected near-term and future revenue, operating expenses and cash usage, strategic plans and execution, expectations regarding product deliveries and commercial growth, impact of cost reduction activities, product applications and use cases, market opportunities, cash flow forecasts, liquidity and financing activities, availability of funds and access to capital, as well as statements containing words like believe, expect, plan, and other similar expressions.

These statements are not guarantees of future performance. Actual results could materially differ from the future results implied or expressed in the forward-looking statements. We encourage you to review our SEC filings, including our most recently filed Form 10-K and quarterly reports on Form 10-Q. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements.

All forward-looking statements are made as of the date of this call and, except as required by law, we undertake no obligation to update this information. In addition, we will present certain financial measures on this call that will be considered non-GAAP under the SEC’s Regulation G. For reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as for all the financial data presented on this call, please refer to the information included in our press release and our Form 8-K dated and submitted to the SEC today, both of which can be found on our corporate website at ir.microvision.com under the SEC Filings tab.

This conference call will be available for audio replay on the Investor Relations section of our website at www.microvision.com. Now I would like to turn the call over to Glen De Vos, our Chief Executive Officer. Glen.

Glen De Vos (Chief Executive Officer)

Thank you, Drew, and good afternoon everyone. Welcome to Microvision’s third quarter 2026 earnings call. Over the past several quarters, we have talked about the transformation underway at Microvision and our strategy to build a fundamentally different lidar company. Our goal was to broaden the portfolio to enable Microvision to have the right solutions for our three primary end markets: industrial, security and defense, and automotive. Now, as we enter the final months of 2026, I can state with confidence that our strategy is working and Q3 was a very important quarter for us.

We achieved significant progress across all areas of the business: the portfolio, commercial success, as well as the organization. Our progress in Q3 positions Microvision for near- and long-term revenue growth with an operating model that will drive positive cash flow. We’ll first take a look at the financials and then I will go into more detail about the key developments in the quarter that are delivering these results. One of those key developments was the addition of Christine Chambers to our team as our Chief Financial Officer, and it’s a pleasure to have her with us on the call today. So with that, I’m going to turn it over to Christine to go through the financials.

Thanks, Christine. I’d now like to turn the focus to how we’re making this happen, and it really starts with our portfolio and the commercial success we are experiencing across the board. Earlier this year with the Luminar acquisition, we significantly expanded our portfolio with IRIS, a long-range 1550-nanometer time-of-flight LiDAR. Over the past three quarters, we have reestablished commercial contracts for IRIS and restarted the production line in Orlando.

This has enabled us to secure POs that not only support 2026 guidance but continue to expand revenue in 2027 and beyond. IRIS delivers outstanding performance and is the pathway to HALO, our next-generation 1550-nanometer time-of-flight LiDAR, which will replace IRIS and deliver even greater value to existing and new customers. HALO will launch in Q4 of 2027, and we are now in the customer evaluation phase of the program. IRIS and HALO are perfectly positioned to dominate the industrial and security and defense spaces, where 1550-nanometer harsh-environment operation and a high-performance point cloud are essential requirements. 1550-nanometer LiDAR is also critical for defense applications, as it operates beyond the detection range of night vision systems like night vision goggles. Finally, IRIS and HALO are also fully NDAA-compliant products made in the USA. This is exactly what our security and defense customers require. IRIS is delivering, and customers like Overland AI and Lake Fusion Technologies will recognize the value and performance that IRIS brings together for their applications.

The selection of IRIS for these programs is another important validation of the technology and the broader opportunity for Microvision in ground autonomy and aviation applications. Now we are also seeing traction with the Intelligent Transportation System-related customers, or ITS, for traffic management and analytics, which represents a new customer base within the security and defense space. In Q3, we made critical deliveries to our development partners for work in this area. We see ITS and traffic management as a key growth area for us in ’27 and beyond, as HALO is a perfect fit for these applications with its range and field of view.

Furthermore, as we now have the critical suppliers fully engaged, Q4 will see a significant increase from Q3 for IRIS shipments as we accelerate our deliveries. In August, we announced initial and repeat purchase orders from customers in North America and Europe representing thousands of IRIS sensors across industrial, security and defense applications. Those orders spanned applications including off-road autonomy, space systems, material handling, logistics, robotics and other intelligent systems.

Now this is important for two reasons. First, near-term revenue confidence for ’26 and ’27. Those are the IRIS shipments, but also IRIS is the gateway to HALO. Existing IRIS customers will be able to seamlessly transition to HALO starting in Q4 of next year, and new customers can start their development using IRIS with a planned migration to HALO in early ’28. This secures both near-term and longer-term revenue expansion. HALO will bring the same outstanding performance and reliability in a smaller, lower-power and lower-cost package.

We have already begun customer evaluations of HALO during Q3, and we will have our pre-production samples available early next year for full customer testing and evaluation. Now IRIS isn’t the only thing that’s going on. Scantinel continues to make significant progress with the development of their 1550-nanometer FMCW ultra-long-range A-sample scheduled for early next year. As we have discussed, the progression from discrete components to a LiDAR-on-a-chip is exactly how we will continue to drive down costs for LiDAR while expanding performance. And that’s exactly what Scantinel does. Now in addition to long-range LiDAR, Scantinel is fundamentally technology, which is the packaging of high-power lasers and amplifiers onto a low-cost photonic integrated circuit, or PIC.

This applies to adjacent industries, and that is why the introduction of Scantinel’s ELSFP, which stands for the External Laser Source Small Form Factor package, is so compelling. The move to photonic interconnects for high-speed processing requires energy- and cost-efficient solutions. Scantinel ELSFP delivers exactly that, and this is as part of the overall trend going to optical interconnects for high-speed data. Now that creates an opportunity for Microvision in AI data center infrastructure, where increasing compute density is creating those significant challenges around bandwidth, power consumption and data movement.

And to frame it up, the external laser source market is rapidly expanding, with the TAMs growing into the multibillion-dollar levels by 2030. Now as Christine mentioned earlier, we are currently in discussions with potential licensees and development partners as we evaluate commercialization paths for this technology. It’s just an amazing opportunity for us, and it’s a good example of what we mean when we talk about extracting greater value from the technology portfolio we have assembled.

We didn’t have to build an entirely new technology stack to do this. We identified an additional significant commercial application for the technology we already own and as part of our portfolio. Now, in addition to IRIS and Scantinel, we have continued to develop our Movia short-range flash LiDAR products. Now Movia 120 continues its success for the European UGV market, and we plan to replace that in ’27 with Movia Pro, which we’ve launched this month. Now I’ll come back to Movia Pro in just a moment, but first I want to talk about Movia L60, the foundation for our Movia Air platform. We now have three offerings within that Movia Air platform.

The first is Movia Air, which is based on the Movia L60 sensor and adapted for use in drones to provide navigation and collision avoidance capability. This is especially important for package delivery and near-ground applications, delivery drones or drones that operate in congested areas. The second is Movia Air Plus, which is a complete LiDAR- and camera-based mapping and ISR, or intelligence, surveillance and reconnaissance, payload that can be mounted to any drone to provide real-time ISR capabilities and real-time communications to the ground.

And this is where Microvision’s perception platform shines, in being able to fuse camera and LiDAR into a human- and computer-readable 3D map in real time. No post processing, no waiting for the drone to come back. The payload develops a lightweight and highly detailed map that is securely transmitted to the ground, the UGVs or to other assets in real time. And third, we now have Movia Air Plus ISR, where we can deliver the entire system, including the drone and the supporting peripheral equipment.

This allows our customers to have a complete out-of-the-box solution ready to deploy. We have demonstrated the complete system with our development partner Robinson Unmanned at Jifix AUSA and have a full slate of upcoming U.S. and European demonstrations scheduled for the next months. Our partnership with J. Green is now a key part of moving from this demonstration phase to engagement and contracts. Similarly, our work with Avular in Europe is opening up that region for U.S. air.

Land and sea based autonomy are massive growth areas for Microvision, and we can play a critical role in all of these systems. Our full range of Movia Air platforms enables Microvision to deliver exactly what our customers need at every level of system capability. We first announced Movia Air products in August, and they are now ready to go. Let’s come back to Movia Pro. You’ve heard me talk about Movia S in the past. This was the generic description of our next-generation Movia short-range flash LiDAR platform. Movia Pro is the first configuration to launch, and it is like no other short-range LiDAR in the industry. Movia Pro not only delivers exceptional point cloud with unmatched uniformity and coverage, it has the full capability of an onboard system-on-chip and IMU, which means it can support not only the sensor model or the point cloud model, but full perception and advanced features.

This eliminates the need for costly external compute and interconnects, and Movia Pro is supported by Microvision’s open software framework, making it easier than ever for our customers to develop and integrate advanced features using Movia Pro’s histograms, point cloud or metadata. Movia Pro brings physical AI to the edge in a fully solid-state, compact and cost-effective package. We are currently engaged with requests for Movia Pro LiDARs with over 70 end customers, a significant increase versus the prior period when we were doing the pre-development with Movia S. With our launch of Movia Pro now taking place, we will begin that process of converting these customers from development to production contracts. The strong customer interest in orders from Movia Pro gives us confidence in our revenue outlook for 2027 and beyond, and Movia Pro is just the beginning for the Movia family of products. Over the course of the next year, we will be announcing additional Movia variants as Movia replaces existing Movia L applications and begins production with new Movia customers across all of our end markets.

Shifting gears a bit, in July we announced the formation of Microvision Semiconductor in Colorado Springs, our advanced ASIC development and mixed-signal design center. With more than three decades of custom IC development experience, MSI expands Microvision’s ASIC internal development capabilities, which is critical for us really on all of our products, but also opens up external revenue opportunities. As we announced in September with our Photonics Application Award, MSI brings a critical capability in-house while being able to serve the broader market and as an additional source of engineering service revenue for us.

And finally, earlier this month we announced our strategic commercial alliance with Blueband, an established leader in intelligent transportation system design and implementation. While Blueband will continue to support their existing customer and partnership base, this alliance immediately opens up the ITS market for both hardware and software sales from Microvision. ITS is a high-value, rapidly expanding market, and this partnership enables Microvision to accelerate its position in the space, expand its customer reach and generate revenue from Blueband’s established customer base.

Also, separate from our Blueband alliance, a leading smart mobility technology provider recently selected IRIS as its long-range sensor for applications within its automated traffic safety solutions. IRIS is also in the final stages of evaluation by a provider of autonomous and intelligent system solutions to deliver an integrated LiDAR perception solution for automatic traffic enforcement applications. These are two really good examples of programs starting with IRIS that will continue to grow over time with HALO.

As I mentioned, Q3 was the inflection point for Microvision, and we have made tremendous progress in strengthening and broadening our portfolio. Why is this so impactful? It enables Microvision to win in our primary end markets, delivering near-term revenue for ’26 as well as strong growth in ’27 and beyond. And this is exactly what we are now seeing. Let me shift over to the organization, third element. As Microvision advances its commercial growth strategy and path to profitability, we are taking deliberate steps to align our organization, talent and resources with our highest-priority opportunities.

Our focus is on building a leaner, more agile, commercially driven organization that operates with greater precision, accountability and efficiency. This includes restructuring our teams to ensure we have the right capabilities and resources directed towards the markets, products and customer opportunities we believe offer the greatest potential for near-term revenue generation and long-term growth. These decisions are part of a broader commitment to financial discipline and operational efficiency.

By prioritizing investments, streamlining our organizational structure and reducing our costs where appropriate, we are positioning Microvision to execute more effectively, accelerate commercialization and make measurable progress towards positive cash flow. Our objective is clear: focus on people, our capital and our capabilities where they can create the greatest impact. This restructuring is not simply about reducing costs; it’s about building the organization Microvision needs for its next phase of commercial growth, with the discipline, focus and execution capabilities required to deliver on our priorities and advance our path to profitability.

Now, before we call for questions, I want to leave you with a few thoughts about where Microvision stands today and where we are headed. When I started as CEO of Microvision just over a year ago, we set out a plan to transform the company, and that is exactly what we have been doing. Over the past three quarters, we have consolidated an industry-leading LiDAR-based technology, the unique skill set in mixed signal and photonics where that, you know, that serves our needs but it also serves a lot of needs in the broader industry and in particular for markets and applications where, you know, they want, you know, in defense and in space where they want to, you know, their customers want to maintain control of that, you know, in the U.S. with security, et cetera.

And so what we determined was MSI can be a great capability for us, but also, you know, basically a nice revenue generator so that we essentially can keep that capability running but without incurring a lot of additional costs and overhead for it. And so kind of best of both worlds. Yeah, not today. It was definitely part of the Luminar product line. We brought them in to support Scanthano on the photonics integrated circuit design that’s being done, and they are actually helping on custom silicon now and Movia. But those products and technologies haven’t gone to production, so those haven’t launched yet. They’re now supporting the broader organization within Microvision but, in addition to that, are attracting outside customers as well.

Yeah, I think there’s three pieces to that. The first starts with really good products. Iris is just an amazing performing product. It develops a point cloud that is outstanding at range—really good detection. As we brought that to other customers, it’s just easy to demonstrate and showcase that. And the same with Movia now. When you look at the point cloud that Movia Pro develops, it’s just beautiful. So, it starts with good products and having the right product for the end market, and those were two where we knew the demand was going to be there.

It’s just a matter of how do you get the right product to it. The second is there are some tailwinds in terms of the technologies that we have now and the fact that we’re a US–German company building in the US. Whether it’s FCC rulings or just the general concern about sourcing LiDAR from other countries, German OEMs and defense in Europe want to source from European suppliers. So there are tailwinds in terms of being positioned really well to provide that manufactured-in-the-US and NDA compliant offering.

Suddenly that’s a tailwind. The third part is James and the commercial team really getting traction. James joined us back in early August and has been able to drive engagements to closure and really move things. When you look at those three factors, that’s what’s driving the overall step-function improvement and trajectory going forward. Yeah. I’ll turn it over to you, Christine, and then I can add a comment.

Christine Chambers (Chief Financial Officer)

Yeah, absolutely. So I think, obviously, we’ve seen great gross margins in Q3 and tried to give some context to that with some of the assets and the inventory that we had on hand, saying that I think they will continue to fluctuate. I think as we change our product mix and the timing of our shipments, we’ll see some of that leverage that we’ve experienced in 2026 with the new product mix. We’ll probably get back to more normalized levels. But I’ll let—Glenn, any context to that that you want to add, Glenn?

Glen De Vos (Chief Executive Officer)

Yeah, I think Iris has been a very strong performer. The team has done a really nice job negotiating with suppliers and really controlling the COGS on the product. And then, as demand has increased, it’s helped us. Movia—kind of what Christine is alluding to—is your first launch of product: not uncommon for gross margin to be a little bit thinner as your volumes aren’t there yet. But in terms of long-term target for these products with the markets that we’re serving, at 40 to 45% that’s where we need to be, and I think we have a clear path to getting there.

Christine Chambers (Chief Financial Officer)

Yeah. You know, I talked about the reduction in cash burn, and that is directly related to your comment in that we focused the cost reductions, the reductions in force, in R&D and G&A. So we will continue—we’ll see those sort of in 2020 materialize and then drop to the bottom line as well as we think about improvement. So yes is the answer. We’ll see that next year.

OPERATOR (Moderator)

Certainly. I will now turn this call back over to Christine Chambers to read questions submitted by shareholders. Thank you.

Christine Chambers (Chief Financial Officer)

Thank you, operator. Looking at the questions here, Glenn, I think there’s a first question for you which talks a little bit about our customers and our brands. The first question is: Why has Microvision only named a couple of customers? Is it because they don’t exist? And if we don’t name them, why are we confident?

Glen De Vos (Chief Executive Officer)

Yeah, it’s a great question. I understand it totally because when I was in automotive for many years, I used to get the same question: Why don’t the OEMs let you talk about them? The two comments I’ll make are, one, we’ve been able to now start naming customers—whether it’s end partners or overland partners like Avular, Blue Band—so names will be increasingly forthcoming. But the big gating factor there is the brand management at the customer or the program management.

In a lot of cases where we are with these customers is pre-production. By the way, this is a key element to our growth story because we’re shipping—we’re really happy with the Iris shipments that we’re making—but in many cases the volume really ticks up as we get more into 27 and 28 and not so much in 26. Those customers haven’t announced their programs. What’s very common in our industry is that customers will hold off on announcing partners until their programs have been announced. They control the narrative around the end product and the end platform.

That’s what we’re seeing here. Believe me, we ask our customers, hey, can we talk about this? But we can’t do it until they give us their explicit permission. Then we can. You’ll see more because the customers do exist; the POs are real. You’ll see more of that as we go into Q4 and as we go into 27. But at this point in time, we announce when we can with the customers that are supportive of that. As those programs mature and they get into production and then they complete their announcements, they’re going to say, hey, sit tight—we want you to hold off. I totally understand the frustration because I would love to be talking about what we’re doing with our customers.

You just have to sit tight until you have their permission. More to come on that.

Christine Chambers (Chief Financial Officer)

Thanks, Glenn. The second question is around our products and applications: Which product, applications, and markets are expected to contribute most to Microvision’s revenue growth in full year 2026 and full year 2027? And what is the central value proposition? Maybe I can take part of that, Glenn, and then you can add to it. I think what we mentioned is that, as we think about supporting 2026 and 2027, first of all we have POs—$10 million of POs—that we just need to get shipments to.

The second thing is that we talked about the work that James is doing, and we really have that committed pipeline for Iris, which supports roughly half the revenue projected in 2027. The timing of the shipments and supply chain availability will determine revenue timing. But there is really a robust committed pipeline behind both those new products, the Iris inventory, as well as new products for Movia and demand for Movia in 2027. Glenn, would you want to add to that?

Glen De Vos (Chief Executive Officer)

Yeah, I think in terms of the central value prop, it really varies a little bit by end market. If you think about the three markets that we serve, industrial tends to have a large range inside of it. For instance, for us in the industrial market, off-road autonomy—trucking that’s off-road and autonomous that needs LiDAR—or heavy equipment, mining, that kind of thing. Those are long-lived programs that have multiyear development activities and testing, and so you have clear line of sight to what their revenue is going to be on that platform typically for four to five years.

On the other extreme within industrial, you have distributors that are selling 10, 15, 20 at a time to automation companies or small buyers that are spot buys. You try to aggregate demand and come up with a schedule, but those are very short time from purchase order to invoice. So it really varies quite a bit across industrial. Security and defense tend to be a little bit more predictable—not unlike what I talked about with the industrial off-road vehicle base—where you have longer-lived programs, longer ranges, longer line of sight to what that revenue is going to look like. For us, as we put together the picture for 2027, as Christine mentioned, it’s really nice to have a significant portion of that revenue stream more or less either in POs or in high confidence. Then the balance, we say, look, based on customer input to us—what they need and want to buy—here’s where we think that’ll be.

Our goal, of course, is always to overdrive that piece because that’s where we can get some overachievement. But again, across those three end markets, it’s a lot of variability in terms of those lead times and the sell cycle, if you will.

Christine Chambers (Chief Financial Officer)

That’s great. Thanks, Glen. The next question is about the capital raising alternatives and how should the investment community think about the framework management applies when evaluating future capital raising alternatives to maintain sufficient operating liquidity? Maybe I’ll start with that because I’ve mentioned a few of those in our remarks earlier. But I think there’s three aspects to it. First of all, really prioritizing and maximizing those non-dilutive sources of liquidity.

And we have some of those examples with Blueband and the strategic alliances and strategic partners and licensing opportunities. We do also, as a reminder, we have the ATM as a $40 million facility. And then I think the third one is around us developing and focusing on communicating fundamental financial results in terms of growth, cost reductions, and cleanup of the balance sheet to help sustain, to help attract and bring long-term capital. So that’s really our focus as we think about capital raise alternatives for operating liquidity.

The next question for Microvision. Microvision previously indicated that certain industrial customers evaluating Movia L choose to wait for Movia S. Has Microvision received any material pre-orders or other firm commitments for Movia S, and when will these ship, and if so,

Glen De Vos (Chief Executive Officer)

Yeah. And that’s not uncommon, where a new customer looks at a Movia L and then looks at Movia S and wants the latest generation, so not a surprise. You know, the good news for us is I’m confident in our ability to move all the Movia L inventory that we have, so that’s not a concern for me. But what’s great is the excitement around Movia S. And I mentioned that we already have engagements and demand coming out of 70, plus 70 customers. We have already shipped to over 18 of those customers in terms of evaluation units and samples.

So as we kind of ramp up the build plan now, the plan is we’ll continue to ship out to the balance and more. And, you know, what that is is this is that phase of, you know, moving through evaluation and then getting into POs. And really, for us, it’s two paths. One is direct to the OEM. The other is a lot of interest from large distributors that think this is a great product that they can move. And so we’re going down both channels. But right now, really, really excited about the fact that, you know, I think last time we talked it was about 25 customers.

Now it’s about 70, over 70 now. There’s just a real strong growth and looking for that product and all of its capabilities. And so that, I think, is one of the real bright spots for the quarter, is being able to get that into people’s hands.

Christine Chambers (Chief Financial Officer)

Thanks, Glen. The next question is, does the FCC action on foreign-produced robotics components create a measurable tailwind? We’ve talked a little bit about that tailwind earlier today, but to what extent do customers favor domestic suppliers? And how much competition does Microvision face from Chinese lidar manufacturers compared with Western and Chinese competition? How much does Microvision see itself as differentiated?

Glen De Vos (Chief Executive Officer)

That’s a big question. Let me just go through the different pieces of that. Yes, the FCC action on foreign-produced robotics components definitely creates a tailwind for us, and we’re seeing that effect. So that’s one of the reasons, as I mentioned earlier, whether it’s FCC or the desire for NDAA or it’s those types of things, that’s one of the tailwinds that we’re seeing drive interest in the product and engagement. Because if you’re developing a robotic system for the U.S., the last thing you need to be told after you’ve done all the work is, well, you can’t use that component.

So Microvision becomes a safe path for them. To what extent do customers favor domestic suppliers? It depends a little bit by industry. In automotive, generally speaking, their supply chain management will buy from anywhere in the world. It’s a global market, it’s a global supply market. You’re competing head to head with every global supplier out there. When you get into more specialty markets like robotaxis, that’s a bit of a different animal. They’re going to be a little more concerned about the impact of a Chinese lidar on a U.S. robotaxi.

So you’re going to see there’s a greater degree of sensitivity there. As you get into security and defense, there’s a very high level of sensitivity there. And in fact, defense is kind of the extreme. So as we think about the end markets and paths to revenue, for us, we’re looking very clearly at, okay, how do I leverage that? Now, geopolitical advantages are never permanent. Over time that changes. So at the end of the day, we have to be competitive with Chinese or with the rest of the world lidar providers. And so when you think about that, part of your question was how do we see ourselves as differentiated? Well, one of it is through the products that we make. The technology is 1550. It’s a real advantage in defense and those applications where we don’t want to be able to see and have visibility through night-vision goggles or those types of detection, because 905 or 940, you can see very easily.

It’s in the visible light spectrum. You know, everything the sensor and everything it illuminates can be seen. So, you know, we play to those advantages as well as the open software framework approach that we have taken to essentially make our products easier to integrate into our customer systems. And so, you know, we look at each aspect of the end market, identify those markets where we think we have differentiated advantages and that can maintain better pricing and margin, and that’s where we’re going after. And that’s where we have to just keep innovating every year to stay ahead.

Christine Chambers (Chief Financial Officer)

Thanks. Pivoting to production readiness. Are there concerns about production readiness in 2026 and 2027?

Glen De Vos (Chief Executive Officer)

No, I think on the production readiness side, from a capitalization, from an operational side, you know, I think we have a good plan for that and managing that. Now, you know, depending on how demand goes, if we have more demand, we’ll have to react to that. That’s certainly a good problem to have, but I’m confident that PPM can do it. And this is one of the benefits in the Luminar acquisition: we were able to acquire a facility that had in place a full operations capability and then consolidate the capital equipment into that operation with very low levels of investment.

So we were able to bring together those lines and that equipment. So we’re staffing, we’re training, we’re prepared for that. On the operations side, the bigger risk—and this is always the case now—is on the supply chain, and that’s primarily driven a little bit by tariffs and just managing cost. That’s kind of tamped down a little bit, but that’s still there. But then also data center demand—circuit boards are now a constraint. And, you know, with a lot of price pressure on circuit boards and material cost pressure there—FPGAs and memory chip, I mean, there’s, you know, the data center demand and, you know, the growth of data centers just has put a lot of stress on the electronic supply base for those particular components.

So that’s why earlier in the year we did pre-buys on FPGAs, we did pre-buys on memory, we did a number of spot buys to make sure that we had access to enough materials so we could start production effectively while demand grows. But that’s the one area that we’ll continue to focus on and strengthen is supply chain and supply chain risk management.

Christine Chambers (Chief Financial Officer)

Great. And I think we’ve got time just for one more question, so I’ll go to a slightly different area. How is the perception software stack monetized along with the Movia hardware for non-automotive customers, and what role does it play in improving customer adoption and reducing system costs and improving gross margins?

Glen De Vos (Chief Executive Officer)

Sure. So software will play a role depending on the end market. For security and its related applications like tolling, Movia Pro is a great product for toll booth basically monitoring, and, you know, that’s where its software and analytics plays a great role. In defense, it’s really all about the real-time mapping and analytics that Movia Air delivers and Movia Air Plus deliver. So creating that map, building that map, transmitting it securely to the ground or to the UGVs.

Broader industrial, it’s being able to put safety features like LCAST, or features that our customers want to put onto our products, and that’s where open software framework comes in. And so, you know, we talk about software plays an important role in reducing cost of the product. Software can play an important role in terms of customer adoption through open software framework, which in turn reduces system and development costs for our customers. And, you know, do those things correctly—that’s how you expand gross margins.

Christine Chambers (Chief Financial Officer)

Glenn, so I’m just going to hand it back to you for some closing remarks.

Glen De Vos (Chief Executive Officer)

Thanks, Kristine. I want to emphasize as we close up today three key points that we’ve discussed. First, you know, when you look at where we are today, we have the product and technology portfolio to compete within our end markets. That’s what we’re seeing in this quarter. Second, we’re now delivering sustainable and diversified revenue growth across that expanding customer base. So very healthy, resilient, and diversified revenue growth. And then finally, the organization aligned and our operating cost model aligned to deliver the revenue while driving to positive cash flow.

You know, it’s been an amazing year for Microvision so far, and personally, I could not be more excited about our future. So with that, Christine, I’ll turn it back to you to wrap up.

Christine Chambers (Chief Financial Officer)

Thanks, Glenn. And this concludes our question and answer session. I want to thank everybody for their participation in our results call and everybody’s continued support of Microvision. With that, I’ll hand back to the operator.

OPERATOR (Moderator)

Thank you. This concludes today’s conference call. All parties may disconnect and have a great day.

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