indie Semiconductor, Inc. Q1 FY2026 Earnings Call

Good afternoon, and welcome to indie Semiconductors' First Quarter 2026 Earnings Call. As a reminder, this conference call is being recorded. I will now turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.

Thank you, operator. Good afternoon, and welcome to indie's First Quarter 2026 Earnings Call. Joining me today are Don McClymont, indie's CEO and Co-Founder; Naixi Wu, indie's CFO; and Mark Tyndall, EVP of Corporate Development and Investor Relations. Don will provide opening remarks and discuss business highlights. Naixi will then provide a review of indie's Q1 results and business outlook. Please note that we'll be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For material risks and other important factors that could affect our financial results, please review our risk factors in our annual report on Form 10-K for the fiscal year ended December 31, 2025, as supplemented by our quarterly reports on Form 10-Q as well as other public reports filed with the SEC. Finally, the results and guidance discussed today are based on consolidated non-GAAP measures such as non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share. For a complete reconciliation to GAAP and definition of the non-GAAP reconciling items, please see our Q1 earnings press release in addition to a presentation summarizing our quarterly results in more detail on non-GAAP measures as posted on our website in advance of this call at www.indie.inc. I'll now turn the call over to Donald.

Thanks, Ashish, and welcome, everybody. Indie delivered a solid first quarter with revenue of $55.5 million, approximately $0.5 million above the midpoint of our guidance and up 3% year-over-year. Before turning to our business achievements, let me provide some context on the market environment. Looking at the broader automotive semiconductor market, we see a measured recovery with channel inventories largely normalizing and demand environments characterized as cautious but improving. Underlying global vehicle production remains range-bound, while secular content drivers, including the continued transition to software-defined vehicles, expanding ADAS adoption, increasing exterior and in-cabin sensing requirements are fueling demand for semiconductor content per vehicle as was always our thesis. This is a backdrop against which indie continues to advance our radar, vision and photonics portfolios, supporting growth that will consistently outpace the market. On a macro level, geopolitical tensions and shifting trade dynamics continue to impact the global supply chain affecting peers, customers and suppliers alike. These dynamics have contributed to elevated logistics costs and selective capacity constraints across the industry. However, even against this backdrop, indie is maintaining a positive trajectory, successfully managing through these challenges. Indie is experiencing tremendous growth in interest and activity in quantum and robotics. We continue to forge new opportunities with some of the trendsetting emerging companies in these high-growth markets with our expanding photonics portfolio in quantum and our vision processing and sensor ICs and embodied AI. As noted by the International Federation of Robotics, the broader robotics market, which spans industrial robots, mobile robots, cobots, humanoids and drones is forecast to grow from approximately $88 billion in 2026 to over $218 billion by 2031, a CAGR of nearly 20%. Within that opportunity, the Yole Group states that the global humanoid robotic market is set to increase from $600 million in 2025 to $6 billion in 2030 at a CAGR of 56% and then accelerate to $51 billion by 2035, a CAGR of 55% between 2030 and 2035. Let me now turn to our recent business progress and key achievements during the past quarter. I'm extremely pleased to share that our Tier 1 partner, who recently launched their Gen 8 radar solution built on indie's 77 gigahertz radar technology, representing the first 4TX/8RX radar available in the industry, has committed to a new production order of $25 million, driven by support for two key OEMs, one European and one Asian. This milestone is particularly rewarding as this order confirms previously communicated production expectations and multi-OEM acceptance following successful design, testing and qualification over the past many months. We are now positioned to ramp production efficiently, having secured additional back-end and test capacity across multiple suppliers in preparation for the ramp ahead. In parallel, we are advancing our second source foundry strategy to support manufacturing flexibility and, in some cases, to support a no-China, no-Taiwan requirement demanded by certain industry players. Moving to our Vision portfolio, the iND880 vision processor has begun production, supporting eMirror camera functionality at NIO, a premium Chinese EV OEM. This program moved from design to production in approximately six months, a testament to our team's technical readiness, execution discipline and close collaboration with customers and partners. And it further reinforces our commitment to reducing time to market and accelerating deployment. In addition, the camera mirror system we referenced last quarter with the largest Chinese OEM is now entering volume production. Additionally, at the Beijing Auto Show, several new models featured indie technology, including the Buick GL8, the AITO M9, the NIO ES9 and the Cadillac LYRIQ to name a few. These models are now entering the production phase in 2026. A defining advantage of the iND880 and increasingly a focal point in our customer engagements is a DRAMless architecture. By eliminating the need for external memory, the iND880 helps customers navigate DRAM supply constraints. In many cases, our customers are unable to source memory at all and using the 880 allows them to alleviate line-down situations. If DRAM can be sourced, it comes at a price premium measured in multiples rather than percentages. The 880 therefore massively reduces overall bill of materials in addition to lowering system resource demands on downstream AI processors and improving image signal processing throughput and real-time latency. What was originally an attractive design point for China OEMs has rapidly broadened into a global value proposition. We are now seeing accelerating engagement and likely commitments from U.S.-based customers often on compressed timelines as the architectural benefits of going memory-less are recognized across the industry. We expect this to remain a meaningful growth driver for our vision portfolio through 2026 and beyond. By way of update on our perception software portfolio, following the integration of Emotion3D, we recently announced a strategic partnership with Mahindra, a leading Indian OEM, to supply our OMS/DMS perception suite for the electric Origin SUV series. Additionally, we expect commitments from U.S.-based customers in the near future to add to our momentum. Our photonics portfolio continues to gain meaningful traction in the rapidly expanding quantum technology market. During the quarter, we announced the world's first commercially available ultraviolet distributed feedback, or DFB, laser at 399 nanometers, a wavelength precisely matched to the atomic cooling transition of ytterbium, the element used in the neutral atom quantum computing architecture that leads the industry today in physical qubit count. Our broader visible DFB laser family now spans wavelengths from the near ultraviolet to green, addressing the cooling, trapping and excitation requirements across the four atomic species that account for the substantial majority of cold atom quantum computing development. We are actively engaged with several of the leading quantum computing companies on next-generation laser source requirements, and we believe our differentiated photonics platform positions indie as a key enabling supplier to the quantum ecosystem as it scales over the coming decade. In the LiDAR space, we are finally beginning to see the adoption of FMCW technology into multiple markets. Our integration partners are completing designs which incorporate indie's iND83301 SoC into their products, replacing FPGA-based processing and delivering an 80% reduction in power consumption, a 40% reduction in solution size and a market-making cost position. We are seeing traction not only from the automotive industry, but from multiple areas in embodied AI. A key producer of AMR, or autonomous mobile robots, for warehouse management is engaged. Generally speaking, the embodied AI market is generating demand for many of our sensing products centered around vision, but including LiDAR and radar with applications also ranging from AMR through humanoids to drones. Our sensing technologies allow robots to better understand and navigate unpredictable environments and enable the transition from more traditional industrial robot implementations to more advanced, truly autonomous units. The pace of engagement is electrifying. We expect that it will begin to lead the automotive market in driving new technology as opposed to leveraging existing technologies. With that, I will turn the call over to Naixi to walk through our financial results.

Thank you, Donald, and good afternoon, everyone. Indie's first quarter revenue was $55.5 million, exceeding the midpoint of our outlook by $0.5 million, representing an increase of approximately 3% compared to the prior year period. Revenue from our core business was approximately $34.1 million, a sequential growth of over 20%, reflecting the continued momentum in our core ADAS portfolio. Revenue from WuXi was approximately $21.4 million, consistent with our expectations. Non-GAAP operating expenses during the quarter totaled $37.3 million, consistent with our outlook. As a result, our first quarter non-GAAP operating loss was $11.1 million compared to $15.1 million in the comparable period in 2025, demonstrating our continued progress towards achieving profitability. With net interest expense of $2.8 million, our net loss was $13.9 million and loss per share was $0.06 on a base of 223 million shares, consistent with our guidance last quarter. Please refer to the presentation located on our website for a more detailed breakdown of our non-GAAP measures. Turning to the balance sheet. During the quarter, we issued 4% convertible senior notes due 2031 with an aggregate principal amount of $170.5 million, or net proceeds of approximately $165 million after fees and offering costs. We used these net proceeds to repurchase a significant portion of our 2027 notes for a total of approximately $108 million. The remaining proceeds are retained for working capital and general corporate purposes. This refinancing extends our debt maturity profile by approximately four years, lowers our coupon and enhances our financial flexibility to support our growth strategy. As a result of the debt issuance and repayment activity I just discussed, along with routine operating activities, we exited the quarter with total cash and cash equivalents, including restricted cash, of $184.7 million, a net increase of $29 million from the fourth quarter of 2025. Turning to the previously announced potential divestiture of our equity interest in Wuxi indie Micro. As you may recall, we entered into the definitive agreement in October 2025 to sell our entire interest in Wuxi to UFA for approximately $135 million, payable net of taxes and fees in cash at closing. Following UFA's shareholder approval in November 2025, the transaction commenced its required regulatory approval process in China, including review by the Shenzhen Stock Exchange and the CSRC, and has continued to advance since then. While the exact timing of closing remains subject to the completion of that regulatory process, the transaction is progressing well, and we remain optimistic that the transaction will close later this year, consistent with our prior updates. Moving to our outlook for the second quarter of 2026. We expect to deliver total revenue between $59 million to $65 million with $62 million at the midpoint. We anticipate a revenue contribution from Wuxi in the second quarter of $25 million with our core business contributing approximately $37 million at the midpoint, representing approximately an 8% sequential growth or about 20% year-over-year growth in our core ADAS, photonics and adjacent business. We expect our non-GAAP operating expenses to be $38 million for Q2, relatively flat compared to Q1. Below the line, we expect net interest expense of approximately $3.1 million with no tax expenses. Assuming the midpoint of the revenue range and with a base of 227 million shares, we expect to improve our net loss per share to $0.05. From a financial perspective, our strong focus on managing operating expenses and our solid balance sheet, including anticipated proceeds from the sale of Wuxi, positions us well to support our path to strong and profitable growth as design wins ramp through 2026. With that, I'll turn the call back to Donald for closing remarks.

Thank you, Naixi. Indie's business remains very solid as evidenced by strong first quarter results and a positive outlook for the second quarter. Radar and vision programs remain firmly on track, highlighted by success with multiple OEMs. With the addition of quantum and embodied AI, indie's technology leadership and expanding product portfolio position us well to drive growth. We believe no other semiconductor company offers a product portfolio as well suited as indie's to meet the diverse needs of these emerging markets. We are confident in our business as our radar and vision design wins continue to ramp. That concludes our prepared remarks. Operator, please open the line for questions.

And we'll take our first question from Cody Acree with Benchmark StoneX.

Congrats on the progress. Donald, maybe we can start with your $25 million order. Can you walk us through your expected delivery schedule? How does that pace through the rest of the year?

First of all, we are very pleased to receive the order, especially as it came in one discrete chunk, and it underlines the commitment of our Tier 1 customer to the end customers that they have committed to them at this point. We were aware of the situation ahead of time, but the fact that we were able to publicly discuss and highlight this was pleasing to us and indicates that the project is coming to fruition. In terms of scheduling, this order is not the only order we have and is tied to a couple of key customers to ensure capacity is secured. Having the orders on the books is advantageous and helpful in that respect. As noted in our prepared remarks, it was one of the tools we used to secure additional capacity. We do not expect to provide detailed timing on when this particular order will ship out, but it will be the first of many as we work to maximize revenue from this program.

Are those wafers already in the path of work in process? And can you talk about delivery schedules for revenue ramp?

We have a number of wafers in the line, which we have discussed previously, and we have secured capacity for those as well. We expect that this program will contribute meaningfully this year, and this order reconfirms that expectation.

You talked about back-end packaging, test and substrate availability, and your diversification of your foundry strategy. Can you update us on the progress, what's left to be done? Is that now substantially behind you?

The market is very tight right now because of demand from AI. This is not something that will run automatically; it will require close monitoring for the foreseeable future. However, we are comfortable with the diversification of our supplier base and our ability to deliver as a result. We have addressed much of the risk through multiple suppliers, and that gives us confidence in our capability to meet demand.

We'll take our next question from Sujeeva De Silva with ROTH Capital.

Congratulations on the initial purchase order, Donald. Can you give us some sense of the initial customer's end customers and the auto models they're using this for? Is it premium, mainstream, L2+ or advanced L3, L4? Any color about where this is landing would be helpful.

This is largely mainstream. We're supplying multiple radars per vehicle in most cases. The vehicles range from low- to mid-tier through high tier and even commercial vehicles. Our products are expected to achieve deep penetration and widespread adoption. These are not limited to higher-end levels like Level 3 or Level 4; you will find them on vehicles such as a Volkswagen Golf or Toyota Corolla. So we expect broad penetration.

That's helpful. Can you help us understand how this Tier 1 layers in beyond the initial two customers for this purchase order? Are there more customers behind it, or will these two customers ramp initially? How will that progress in your pipeline?

There are multiple customers expected to ramp at varying times across jurisdictions, including China, Europe and the U.S. This particular purchase order was driven to provide a commitment to the two OEMs mentioned in our script, but it is far from limited to those two.

We'll take our next question from Anthony Stoss with Craig-Hallum.

Pretty close on the pronunciation. Donald, I wanted to hone in on the iND880. Can you share a range of the pipeline or the design wins you have? And do you think the iND880 solution might generate more revenue for you than radar in 2026?

We have been pleasantly surprised by the resonance of the iND880. We expected commercial value, but adoption took longer with some conservative customers who believed they could source memory, which turned out not to be the case. We are seeing pipeline opportunities in the tens of millions of dollars per year in annual revenue, and interest is moving very quickly because memories are difficult to source and, when available, command very high prices. It is possible that the iND880 could exceed radar revenue this year due to these dynamics.

In your prepared remarks and press release, you mentioned drones. Would the same iND880 be going into those? Or what kind of indie solutions would be going into many of these drones you referenced?

We have several activities ongoing. The iND880 is being considered for drones, and there is a derivative with additional functionality, including an AI processor, that may also be used. Partners are evaluating LiDAR processors, and through our automotive Tier 1 customers we are seeing demand for radars on such platforms as well. There is a high level of content potential, the market is moving quickly, and ASPs are attractive.

We'll take our next question from Jon Tanwanteng with CJS Securities.

Last quarter, you had some headwinds in the Wuxi business. Can you talk more about the underlying trends there and how they're developing?

There were headwinds in the China market, particularly at the lower end of the electric vehicle market, driven by a change in Chinese government subsidy policy, which impacted Q1. As we highlighted last quarter and reiterated here, we expect a bounce back in the next quarter. Generally in the China market, we see some unit headwinds, but content per vehicle is increasing significantly, which we believe will offset unit weakness. We are seeing strength in our vision portfolio in China at the moment.

Thank you. There are no further questions on the line at this time. I'll turn the meeting back over to Donald.

Thanks everybody. Thank you for your time and looking forward to seeing you at the investor conferences over the course of the quarter.

This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.