[Management View]
Key metrics: Q2 revenue of $15.6 million, a 17% sequential decrease and a 5% YoY decline. Gross loss of $12.4 million (GAAP) and $10.8 million (non-GAAP).
Strategic priorities: Focus on commercial markets (trucking, security, defense) due to slower-than-expected automotive autonomy adoption. Transitioning production to Thailand for better unit economics.

[Outlook]
Performance guidance: Lowered 2025 revenue guidance to $67 million–$74 million and sensor shipments to 20,000–23,000 units.
Future plans: Emphasis on commercial market opportunities, HALO development, and cost reduction initiatives.

[Financial Performance]
YoY/QoQ trends: Q2 revenue down 17% sequentially and 5% YoY. Gross loss impacted by non-cash warranty adjustment and reduced sensor volumes. Operating expenses at $27 million (GAAP) and $47 million (non-GAAP).

[Q&A Highlights]
Question 1: Hi. Thanks so much for taking my question. I was wondering if you can help us size the opportunities from some of the other adjacent markets that you were referring to before. And then if there's any update on, you know, potential customer engagements and how compatible will the HALO quality be for those end markets?
Answer: The commercial markets I've referred to are very large. I'm not prepared to give you specific sizes today. We will share customer information in future calls. We've not done that today. We do expect to leverage the HALO platform in our commercial markets as well as, of course, the automotive market.

Question 2: Okay. Thank you. And then maybe a second question. In the deck, I think there was a sentence that said, basically, the shipment of series production sensors were at unfavorable economics. I was just wondering if you can elaborate on that. Is it essentially, you know, lower volume? And then are there any sort of contract terms that can help offset in case, you know, customer volume comes in lower in the future? Thank you.
Answer: Tom, you want to handle that?
Tom Fennimore: Sure. Winnie, this refers to the trend I've talked about over the last few quarters. Given the lower than expected volumes as we ramp up our initial EX90 program, we are underwater on the sensor economics. We're currently selling them at prices lower than what we can produce them at. We're taking actions to close that gap, as Paul mentioned on the call. One of those is transitioning more of the production over to Thailand, and we're going to continue to do what we can to close the gap. But that's a trend we've been talking about for the last few quarters just given the lower expected volume. The unit economics on IRIS aren't where we want them to be.
Winnie Dong: Got it. Thank you so much.

Question 3: Yes. Good afternoon. Thank you for taking the questions. I also had a question starting with the commercial markets. Maybe you can elaborate on when you expect to begin realizing revenue from these other end markets? And when you think it could be at a material level?
Answer: As I mentioned in my call, we're realizing revenues today, and we're increasing our investment in our sales and marketing efforts in that area and expect that we will be able to grow those revenues over the course of 2026. We're not providing 2026 forecasts today. But it's already a material part of our revenues this year.

Question 4: Okay. And as you think about reaching non-GAAP OpEx into the low $30 million range, is that also going to be able to fund these adjacent opportunities? Or would there be additional investment needed on top of that low $30 million target in order to fund these play markets?
Answer: No. Those investments are consistent with the investment trade-offs we're making in the business to hit the OpEx target that Tom mentioned.
Mark Delaney: Okay. One other one for me, if I could please, and I'll pass it on. As you think about the automotive market, you did mention the time frames for wider scale level three. And, you know, I think in the past, the company thought of ADAS as being the key market rather than robotaxis. Are you reevaluating where it makes the most sense for you to focus within the automotive industry? Do you still see ADAS as the key opportunity, or do you think robotaxis may be something you want to focus more on, especially given the industry momentum that's starting to build in the robotaxis area? Thanks.
Paul Ricci: Well, I didn't mean to suggest that level three was referring specifically but rather to higher levels of autonomy within passenger vehicles. That's been an area that Luminar has been highly focused on and an area where the HALO architecture has its keenest advantages. That part of the passenger vehicle market has progressed more slowly than the company anticipated, and while it will occur, we're confident. We don't feel as confident in the timing of its progression and hence the reason for the relative emphasis on other market opportunities.
Mark Delaney: Okay. Thank you.

Question 5: Hi. Good afternoon, and thanks for taking my questions. Maybe just to get started with guidance, could you help us unpack the downside revision to the full-year revenue guidance? Specifically, how much of the $15 million reduction is tied to lower sensor shipment expectations and how much of that would be attributed to the wind-down of the non-core data contract? Thanks, and I have a follow-up.
Answer: Yeah. And, Josh, I'll take this. So if you think about that $15 million delta, about two-thirds of it is related to the lower sensor shipments. Right? We took it from 30,000 to 33,000 down to 20,000 to 23,000. So that 10,000 sensor decline explains about two-thirds of the gap, and then the other third is related to the cancellation of the data contract that we talked about on the call.
Josh Patwa: That's great. Just as a follow-up, maybe it would be great to, you know, hear your perspective on what positions Luminar to succeed in the smart applications or infrastructure market. I believe you're already seeing some traction, but some of your peers have been more focused on that market over the past couple of years. Just trying to get a sense of, you know, what sets Luminar apart.
Paul Ricci: Well, as I mentioned, we have existing revenues in that market. We're participating now. We do have some technological advantages, we believe. We think we also introduce LiDAR capabilities at lower price points for that market than might otherwise be available. We're confident. And it's a big extensive market that's growing very rapidly today, so we're not overwhelmed by the initial participation of other participants.
Josh Patwa: Understood. If I could just sneak one more in. Could you maybe provide an update on the partnership with Mercedes-Benz? It appears they're also considering alternative technologies from some of your competitors. What are you hearing from them regarding their approach and strategy? And how does Luminar fit in their future plans?
Paul Ricci: I think you were asking about Mercedes. Is that right? Yeah. We have a development agreement with Mercedes, and we're executing against the milestones in that development agreement. It is our hope that we convert that development agreement into a production agreement based on the achievement of those milestones and the strengthening relationship that comes along with that. But that remains a goal that remains a decision hour in the future.
Josh Patwa: Great. Thanks for taking my questions, and good luck.

Question 6: Thanks. Just an opportunity for a question. I figured I'd just kind of give you more of a 10,000-foot one. What are you hearing from Volvo as your partner in terms of the EX90? You know, I actually, someone in my firm purchased one, had all these issues with the digital keys. Just a disaster of a car. Unrelated, obviously, to your sensor, but just curious, like, what are they blaming this product failure on? And what do you think that means going forward in terms of, you know, maybe putting more technical effort there relative to their autonomy group, which, you know, on the trucking side, we've heard a variety of things. In terms of the investment that they're making or they're maintaining at least in the US on autonomy. And the knowledge base they have there. So can you just give us, to the extent you can, obviously, I know you know, most companies don't like to talk about their partners, but, like, some sense on what the future is for Volvo as a company and how that may help or hurt you in the future in terms of sales.
Answer: I can't comment on Volvo's position in the automotive market. I'm not qualified to do that and wouldn't do it in any case. I can say they've been an excellent partner with us, and they've been an early leader in the deployment of LiDAR technologies. We work with them in the spirit of that and continue to support their efforts. I mentioned and Tom confirmed that forecasted volumes for shipments to Volvo this year have been lower than we anticipated. But we continue to work with them on deployment and towards completing a development production agreement for the next-generation HALO architecture.
Walter Bychak: How do you think that market evolves? Meaning that do you think the OEMs like Volvo are trying to develop stuff internally and, therefore, your relationship with Volvo can evolve where they continue to use your existing and future sensor developments? Or do you see them more likely to partner as they shift from ADAS to full autonomy with external technology partners, which will then, therefore, I would assume, put more pressure on you to develop partnerships with technology companies that use LiDAR. So how do you see that over the next three years, that market evolving, the importance of, you know, the relationship with the OEM, versus the relationship with the autonomous or level four technology company?
Paul Ricci: Well, we'll have to see how things play out. But so far as we can see, many, most of the automotive manufacturers have a serious investment and commitment towards autonomous technology. And that includes sourcing LiDAR hardware and software from us in some cases. I expect the boundary between what they do and what we do and what others do to evolve over time. And I would be surprised if they jettisoned their efforts as your question might suggest, given the importance they attach to the value creation in those efforts.
Walter Bychak: Yeah. I don't think I was trying to suggest that. I think maybe in my first question, I was noting at least on the trucking side, there's some clear indication that they've reduced people in the United States. But on the automotive side, which is a different company, I guess, different people, I was just more trying to figure out if you think, you know, three years from now, four years from now, your contracts are going to be driven by the OEM determining it versus, let's say, Volvo cuts a deal with Noro tomorrow, and Noro is going to be their technology partner, and then you got to work with Noro to be the LiDAR sensor in their stack if they end up, you know, having one or not.
Paul Ricci: Well, Volvo is in the stages of, as are other manufacturers, of completing contracts now that determine production in 2027, 2028, and 2029. So I think the reality of three to four years from now is occurring now, contractually.
Walter Bychak: Okay. Thank you.
Paul Ricci: Thank you.

[Sentiment Analysis]
Tone of analysts: Cautious but inquisitive, seeking clarity on strategic shifts and financial adjustments.
Tone of management: Pragmatic and focused on addressing challenges and leveraging new opportunities.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | Q2 2024 |
|-------------------------|---------------|---------------|---------------|
| Revenue | $15.6 million | $18.8 million | $16.4 million |
| Gross Loss (GAAP) | $12.4 million | $10.2 million | $11.0 million |
| Gross Loss (non-GAAP) | $10.8 million | $8.6 million | $9.4 million |
| Operating Expenses (GAAP)| $27 million | $25 million | $28 million |
| Operating Expenses (non-GAAP)| $47 million | $45 million | $46 million |
| Cash and Marketable Securities | $108 million | $139 million | $120 million |

[Risks and Concerns]
- Lowered revenue and sensor shipment guidance for 2025.
- Continued gross losses due to unfavorable sensor economics.
- Uncertainty in the timing of widespread automotive Level 3+ adoption.
- Potential impact of transitioning production to Thailand on unit economics and customer deliveries.

[Final Takeaway]
Luminar's Q2 2025 earnings call highlighted significant strategic shifts and financial adjustments amid slower-than-expected adoption of higher-level automotive autonomy. The company is focusing on commercial markets such as trucking, security, and defense, while transitioning production to Thailand to improve unit economics. Despite lowered revenue and sensor shipment guidance, management remains confident in their technology and long-term opportunities. Investors should monitor the company's progress in commercial markets and the impact of cost reduction initiatives on financial performance.