AEye (NASDAQ:LIDR) expects fourth-quarter revenue of approximately $1 million, roughly double its third-quarter total, as a lunar vehicle contract and repeat customer orders contribute to what would be the lidar company’s first million-dollar quarter.
The company reported third-quarter revenue of $506,000, about 2.5 times its second-quarter total and approximately 10 times revenue in the same period a year earlier. It marked AEye’s fifth consecutive quarter of sequential revenue growth, Chief Financial Officer Conor Tierney said on the earnings call.
AEye is providing quarterly revenue guidance for the first time. Tierney said the company expects the projected fourth-quarter level to become a new baseline, with revenue building from there in 2027. He cited the Lunar Outpost agreement, repeat orders and new customers as contributors to the outlook.
Customer Pipeline and Lunar Agreement
Chief Executive Officer Matt Fisch said AEye has more than 200 active technical engagements with potential customers and 32 customers running paid proof-of-concept programs, up 28% from the prior quarter. Those programs involve customers integrating and testing the company’s sensors before deciding whether to pursue larger commercial deployments.
Fisch said integration and testing typically take 12 to 18 months, and he expects several proof-of-concept programs to convert to commercial business in the next six to nine months. He said much of that time is spent by customers preparing their products or demonstrating them to their own customers.
One recent conversion is Lunar Outpost, which selected AEye’s Apollo sensor for its Pegasus lunar terrain vehicle, part of NASA’s Artemis program. AEye began recognizing revenue in the third quarter under a binding multimillion-dollar agreement.
Tierney said Lunar Outpost would be a significant contributor to fourth-quarter revenue, though not the only one. Revenue under the agreement is recognized as work hours are incurred, while billing is tied to milestones, he said. Most of the revenue is expected to be recognized over approximately the next 12 months, and Tierney said he did not anticipate significant delays.
Defense and Other Markets Expand
Fisch described defense as AEye’s most active and fastest-growing vertical. The company’s lead defense customer placed its fifth consecutive sensor order, and Tierney said volumes have increased with each order. The customer is integrating the sensor into an unmanned aerial vehicle, with an application that includes detecting thin power lines.
Tierney said the defense customer is among the proof-of-concept accounts AEye considers close to conversion, with the company expecting positive news over the next few quarters. AEye also recorded its first revenue from its STRATOS product through work with Swiftstrike AI on a counter-drone system.
Outside defense, Fisch said a second sports analytics customer had entered a paid proof-of-concept program using Apollo, alongside the previously announced selection by Alive3D. The applications include 3D spatial visualization, refereeing and athletic performance analysis.
Asked about automotive opportunities, Fisch said the automakers he and Chief Revenue Officer Laura Wrisley visited continued to view lidar as an essential component of more advanced autonomous driving. He did not provide a timeline for potential automotive program conversions.
Losses, Margins and Cash Outlook
For the first nine months of 2026, AEye reported revenue of $809,000, compared with $136,000 in the year-earlier period. Third-quarter GAAP net loss widened to $11.2 million, or $0.24 per share, from $10 million, or $0.22 per share, in the second quarter. Non-GAAP net loss narrowed to $7.2 million from $7.6 million.
Tierney said third-quarter gross margin improved by 45 percentage points, helped by revenue mix, lower product costs and reduced warranty reserves. The company has not yet reached positive gross margin, although he said AEye was “pretty close” and expected further improvement over the next few quarters. He did not specify a revenue level or date for reaching that threshold.
Cash, cash equivalents and marketable securities totaled approximately $63.1 million at Sept. 30, down from $71.5 million at the end of June. Third-quarter cash consumption, net of financing costs, rose to $8.3 million from $7.5 million, primarily because of inventory purchases for production.
AEye expects full-year 2026 cash consumption of $35 million and is targeting an approximately 15% reduction in 2027, including working capital needs. Tierney said the company’s current operating plan supports a cash runway into 2028, while noting that accelerated customer conversions could require additional working capital.
About AEye (NASDAQ:LIDR)
AEye, Inc is a technology company that develops artificial intelligence-enabled lidar and perception systems for automated driving and other machine-vision applications. Its technology is designed to help vehicles and machines detect, classify, and track objects in complex environments.
The company’s offerings are built around its 4Sight Intelligent Sensing Platform, which combines lidar hardware, perception software, and artificial intelligence. AEye develops solutions intended for automotive, mobility, trucking, logistics, industrial, and infrastructure applications, including advanced driver-assistance systems, autonomous vehicles, and intelligent transportation systems.
Founded in 2013 and headquartered in Dublin, California, AEye became a publicly traded company in 2021 through a business combination with CF Finance Acquisition Corp.
