AEye's Q3 2025 Earnings Call: Contradictions Emerge on Customer Pipeline, OEM Partnerships, Capital-Light Model, and Market Size

Date of Call: November 6, 2025

Financials Results

• EPS: GAAP net loss of $0.30 per share in Q3, comparable to GAAP net loss of $0.48 per share in Q2; Non-GAAP net loss of $0.17 per share in Q3, improved from $0.35 per share in Q2.

Guidance:

• Full-year 2025 cash burn expected at the high end of the prior $27M–$29M range.
• Management frames 2025 baseline burn at ~ $25M and expects at least ~ $30M next year, with potential incremental spend tied to working-capital and customer commitments.
• Cash runway: $84.3M at quarter-end plus ~ $10M raised post-quarter (now >$90M) to fund production ramp and go-to-market execution.

Business Commentary:

* Customer Base and Revenue Pipeline Expansion: - AEye doubled its customer base since the end of the second quarter, bringing the total to 12 customer contracts signed year-to-date. - The company's non-automotive funnel grew sixfold from fewer than 100 prospects earlier in the year to nearly 600 today. - This growth is attributed to the unique value proposition of Apollo's long-range sensing, compact design, and software-driven versatility, which resonates with customers across various sectors.

• Manufacturing Capacity and Scaling:
• AEye announced an expansion of its agreement with LITEON, investing in a new dedicated production line for Apollo with capacity to produce up to 60,000 units annually.
• The company aims to meet accelerating demand by leveraging its capital-light model and just-in-time delivery strategies.

• This expansion reflects AEye's confidence in Apollo's commercial momentum and the need to scale production to meet customer expectations.

• Strategic Partnerships and Market Penetration:

• AEye forged strategic software partnerships with companies such as Blue-Band and Flasheye, expanding into defense, aviation, rail, and smart infrastructure markets.
• Internationally, AEye partnered with Black Sesame Technologies in China to deliver a full-stack obstacle detection solution.

• These partnerships enhance Apollo's capabilities, increase market reach, and translate into real sales opportunities, contributing to the company's revenue pipeline expansion.

• Financial Discipline and Capital Efficiency:

• AEye ended the quarter with $84 million in cash and raised an additional $10 million post-quarter end, reflecting a strong financial position.
• The company maintained a disciplined road map for scaling, focusing on key growth milestones and gating investments to specific customer commitments.
• The capital-light model has enabled AEye to expand efficiently by leveraging partnerships rather than heavy capital investments in manufacturing or software infrastructure.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted commercial momentum: “Apollo's clear differentiation is driving real sales,” doubled customer contracts to 12, tripled quotes, and described a growing pipeline; CFO noted $84.3M in cash (plus ~$10M post-quarter) providing runway into 2028 and disciplined burn reductions, and reiterated readiness to scale production with LITEON partnership.

Q&A:

• Question from Charles Fratt (Alliance Global Partners): Congratulations on the progress. Would -- Matt, would you expand on your confidence in the capital-light model, especially in the context of recent industry events?
  Response: AEye relies on a capital-light model using LITEON for manufacturing and software partners for perception (OPTIS) to avoid heavy upfront capex, enable just-in-time supply, resiliency, and preserve cash and flexibility.

• Question from Charles Fratt (Alliance Global Partners): That's great color. And then can you look at -- there's a big jump. You doubled your customer base to 12. Can you just talk more about that pipeline of customers? And within the 12 customers now, can you talk about the mix between auto and non-auto?
  Response: Funnel expanded from ~100 to ~600 prospects, technical engagements +50%, quotes tripled and contracts doubled to 12; wins span high-performance sectors (defense, rail, aviation, smart infrastructure) with growing automotive OEM interest due to Apollo's behind-windshield packaging.

• Question from Casey Ryan (WestPark Capital, Inc.): Matt, Conor, lots of progress, great update here. There's a lot to look at. I just wanted to ask, Matt, you used, I think, the more technical appropriate term of UAV as the defense opportunity. Is it fair to say that, that covers all drone applications potentially within defense? But then my question is, have you also seen an uptick or more interest from commercial drone manufacturers, particularly domestic as I know DJI is under review and there's a potential loss of them from the market. So presumably, other people are stepping up now at this point.
  Response: Interest covers UAVs and manned aerial vehicles and extends to commercial drone applications; the company is actively engaged across defense and commercial aerial sectors.

• Question from Casey Ryan (WestPark Capital, Inc.): Okay. Tremendous. And then quickly, on the auto OEM side for mass market, which I realize we're still some years away from, where do you sense the focus is? Are OEMs building for Level 3 and Level 4? Or are they still kind of trying to optimize for Level 2 and sort of hands-free type applications?
  Response: Based on RFIs over the past six months, AEye sees a notable shift in OEM requirements toward Level 3 and Level 4 capabilities.

• Question from Charles Fratt (Alliance Global Partners): Conor, would you mind just giving us a little more detail or a little more color on the institutional investor that you've lined up. Can you frame maybe the potential size of their investment and also the timing of the investment? And also, is that required to get to full production, that full production number of 60,000 units per year by the middle of next year?
  Response: Details not fully disclosed; a well-known institutional investor provided capital post-quarter (~$10M included in post-quarter raises), bringing cash to >$90M, which management says is sufficient for near-term execution and production ramp planning.

• Question from Richard Shannon (Craig-Hallum Capital Group LLC): Apologize for the ambient noise here. I'm trying to watch my daughter's volume [ off, turning up here ] at the same time. I may have missed the prepared remarks to this topic here, but the 6 new wins you talked about in the quarter here. Can you describe the applications and volume opportunity that you're looking at here?
  Response: The six wins are foundational proof-of-concepts across high-performance use cases—aviation, rail, smart infrastructure—with customers indicating intent for higher volumes as programs move from Phase 1 to later phases.

• Question from Richard Shannon (Craig-Hallum Capital Group LLC): And maybe just a follow-up, Conor, what are we talking about in terms of the investments you're -- that you're going to be making here with LITEON? I assume this is in the form of some CapEx is being conferred to them or whatever. But maybe you can just help us understand what that investment is and the magnitude of it over what time?
  Response: Management expects limited incremental burn; 2025 guidance ~ $27–29M (baseline ~ $25M), and at minimum ~ $30M next year to support working-capital and gated investments tied to customer commitments; LITEON partnership allows flexible, milestone-driven spending.

• Question from Richard Shannon (Craig-Hallum Capital Group LLC): A question, I'll jump on the line here. You talked about investing in capacity of 60,000 units annually here. Do you have any visibility on the time frame by which you might be approaching high utilization with that kind of a unit volume here? I assume it's not in the next year or 2, but if it is, I'd certainly love to get some context on that.
  Response: High utilization won't be immediate; capacity scaling will be phased and sequenced, with flexibility via the capital-light model and partner support to align investments with demand milestones.

Contradiction Point 1

Customer Pipeline and Growth Strategy

It reflects differing perspectives on the customer pipeline and growth strategy, which are crucial for understanding the company's trajectory and potential future revenue.

Can you provide an update on the customer pipeline and the auto vs. non-auto mix? - Charles Fratt(Alliance Global Partners, Research Division)

2025Q3: Our customer base has doubled since the end of Q2, reaching 12 contracts year-to-date. - Conor Tierney(CFO & Chief Business Development Officer)

Can you provide details on the four additional new business wins? - Scott Christian Buck(H.C. Wainwright & Co, LLC)

2025Q2: Over 100 potential customer engagements with 30 in advanced negotiations. - Conor B. Tierney(CFO & Chief Business Development Officer)

Contradiction Point 2

OEM Engagement and Partnerships

It highlights changing information on the company's engagement and partnerships with OEMs, which can influence the timing and scale of revenue generation.

What are OEMs prioritizing when targeting mass market applications, and are they optimizing for Level 2 or transitioning to Levels 3 and 4? - Casey Ryan(WestPark Capital, Inc., Research Division)

2025Q3: In the last 6 months, there has been a significant shift toward Level 3 and 4 requirements in the RFIs we receive from OEMs. - Matthew Fisch(CEO & Chairman)

Can you provide more details on the NVIDIA integration? - Poe Fratt(Alliance Global Partners)

2025Q2: We are seeing a lot of interest in the $30 million production opportunity, which is really a full Level 2 solution. - Matthew Fisch(CEO & Chairman)

Contradiction Point 3

Capital-Light Model and Manufacturing Partnership

It reflects on the company's strategy and commitment to a capital-light model, which can significantly impact financial planning and operational efficiency.

Can you explain your confidence in the capital-light model given recent industry events? - Charles Fratt(Alliance Global Partners)

2025Q3: Our capital-light model on the manufacturing side relies on a partnership with LITEON, which provides a global footprint and experience working with the automotive industry. This allows for flexibility and resiliency without requiring large upfront capital investments, ensuring efficient scaling and low upfront costs. - Matthew Fisch(CEO)

Does increased liquidity increase your confidence in meeting OEM financial due diligence requirements? - Kevin(Alliance Global Partners)

2024Q4: We are leveraging our Tier 1 manufacturer's balance sheet and manufacturing capabilities to fund upfront capital requirements, allowing us to avoid the need for significant upfront investment. They will provide us with the manufacturing and component sourcing expertise required to scale. - Conor Tierney(CFO)

Contradiction Point 4

Apollo's Market Size and Customer Growth

It involves differing perspectives on the size and growth potential of the Apollo lidar product line, which is essential for understanding the company's market positioning and business strategy.

Customer pipeline composition and auto/non-auto mix? - Charles Fratt(Alliance Global Partners, Research Division)

2025Q3: Our customer base has doubled since the end of Q2, reaching 12 contracts year-to-date. - Conor Tierney(CFO)

Can you provide insight into the market size between auto and non-auto segments? - Charles Fratt(Alliance Global Partners)

2025Q1: There are two contracts that we have that are closed, and we are waiting for some of the other ones to be closed out. And we believe that we have the business for the quarters that are next. - Conor Tierney(CFO)

Contradiction Point 5

Automotive Market Focus and Customer Engagement

It highlights the strategic focus on the automotive market and customer engagement, which can affect business development and market positioning.

What are OEMs prioritizing in mass-market applications, and are they still focused on Level 2 or transitioning to Levels 3 and 4? - Casey Ryan(WestPark Capital)

2025Q3: In the last 6 months, there has been a significant shift toward Level 3 and 4 requirements in the RFIs we receive from OEMs. We are seeing a shift in OEM focus to higher automation levels. - Matthew Fisch(CEO)

Could you elaborate on the non-automotive opportunities AEye is exploring? - Kevin(Alliance Global Partners)

2024Q4: Our customer base is made up of leading OEMs who are focused on integrating our unique LiDAR technology into their next generation of ADAS systems. - Matt Fisch(CEO)