AEye revenue jumps to $506,000 in third quarter as margin improves
Key Facts
AEye reported on November 5 results for the third quarter ended September 30, 2026, posting revenue of $506,000, about 10 times the amount it generated in the same period a year earlier and about 2.5 times second-quarter revenue. The company said it was the fifth consecutive quarter of revenue growth. The growth puts the business on an upward trajectory, but comes from a small revenue base relative to the losses the company recorded during the period. The net loss under accounting standards was $11.2 million, or $0.24 per share. On a non-GAAP basis, the company posted a loss of $7.2 million, or $0.15 per share.
In the first nine months of 2026, revenue was $809,000, compared with $136,000 in the corresponding period of 2025, or nearly six times as much. Revenue for those nine months was also about 3.5 times full-year fiscal 2025 revenue. The company reported revenue of $202,000 in the second quarter of 2026, compared with $22,000 in the second quarter of 2025. The figures show revenue rising quarter by quarter, with third-quarter revenue more than doubling the previous quarter's level. But revenue remains limited relative to the net loss recorded in the quarter.
Gross margin improved to negative 35% in the third quarter from negative 80% in the second quarter, an increase of 45 percentage points. AEye attributed the improvement to a higher-value revenue mix and lower product costs as the cost of materials used in production declined. The company also said lower warranty reserves, alongside improved return rates for its Apollo product, contributed to the improvement. The margin change came alongside revenue growth, while gross margin remained negative. Cash used, after net financing costs, totaled $8.3 million during the quarter.
On liquidity, cash, cash equivalents and marketable securities totaled $63.1 million on September 30, 2026. The company expects full-year cash use to reach $35 million, including about $5 million in working capital to support commercial expansion. It said it is targeting a roughly 15% reduction in cash use in 2027. In its second-quarter commentary, AEye said its cash resources would allow it to execute multiple-year commercial programs through 2028; third-quarter data showed a cash and marketable securities balance below the figure it reported then. The company says its current resources support operations and multiple-year commercial programs through 2028 under its current plan.
On customers, the number of entities receiving revenue-generating shipments rose to 32 in the third quarter, up 28% from 25 customers in the second-quarter results. The company said it has more than 200 active technical engagements, each a candidate for a paid proof-of-concept test. In defense, its lead customer placed its fifth order, continuing a pattern of repeat purchases, while AEye said defense remains its most active sector and activity there continues to grow quarter over quarter. In the second quarter, the company reported that its defense engagement had doubled quarter over quarter and that the same customer had placed its third consecutive paid order at the time. The order figures point to continued dealings with the customer, while technical engagements remain potential opportunities rather than revenue-generating shipments in themselves.
The company recorded its first revenue from its STRATOS product through its work with Swiftstrike AI to develop it and integrate it into counter-drone systems. It also began recording revenue under a binding multi-million-dollar agreement with Lunar Outpost, which selected Apollo for its Pegasus lunar vehicle. In other applications, AEye said a second company ordered Apollo for use in next-generation sports analytics, following Alive3D's selection of the product. These developments add commercial sources from the defense, space and sports applications sectors to the customer base receiving revenue-generating shipments. The statement did not specify the revenue generated by each program individually.
The company expects fourth-quarter 2026 revenue to be nearly double the third-quarter level, marking its first quarter with revenue of $1 million, driven mainly by Apollo-related commercial programs. Chief Executive Matt Fish said the company expects to continue converting its record sales pipeline into sustainable commercial activity, driving significant revenue growth in 2027. The fourth-quarter forecast follows revenue of $506,000 in the third quarter, with the company linking the expected increase to its commercial programs. The target to reduce cash use in 2027 represents a parallel track to the revenue expansion management expects. The results did not include a verified closing share price for November 4.