Innoviz Q2FY26 Results: Record $18.1m revenue, defense push
- Innoviz reported record Q2FY26 revenue of $18.1 million, driven by automotive NREs and defense wins
- Gross margins turned positive as the company secured a $3.5 billion defense contract for counter-UAS systems
- A $30 million direct offering strengthened the balance sheet, supporting expansion into the Perses defense brand
- Full-year 2026 revenue guidance remains at $67-73 million, with defense expected to contribute 10% of sales
*this image is generated using AI for illustrative purposes only.
Innoviz Technologies (NASDAQ: INVZ) reported record second-quarter revenues of $18.1 million for Q2FY26, driven by automotive program milestones and initial traction in the defense and security sector.
The LiDAR provider also strengthened its balance sheet with a $30 million registered direct offering, bringing total cash and equivalents to approximately $48.5 million excluding the new proceeds.
Financial Performance
The company’s gross margins returned to positive levels in the quarter, supported by an uplift in non-recurring engineering (NRE) recognition as key automotive programs approach start of production (SOP). Cash used in operations and capital expenditures was approximately $15.2 million. Innoviz maintains no long-term debt.
| Metric | Q2FY26 | Note |
|---|---|---|
| Revenue | $18.1 million | All-time record |
| Cash & Equivalents | $48.5 million | Excl. recent offering |
| Capital Raise | $30 million | Registered direct offering |
| Operating Cash Use | $15.2 million | Ops + Capex |
Defense and Security Expansion
Innoviz launched its Perses brand to target defense and homeland security markets, citing a multi-billion-dollar total addressable market. The company secured a $3.5 billion order for LiDAR units for counter-UAS and perimeter security applications. Six companies have publicly announced engagement with Innoviz for defense applications, including Drive Group, Regulus, Giveon Defense, Cognitium, Aeronaus, and Kela.
Management expects non-automotive sales to grow from 1% of revenues in 2025 to 10% in 2026 and 20-30% by 2027. The CEO noted that defense ASPs are an order of magnitude higher than in the automotive space, which should drive gross margin improvement.
Automotive Business Updates
In the automotive segment, Innoviz announced a new partnership with a top-10 global OEM to develop a LiDAR-based perception stack for highway driving. Existing programs remain on track:
- Volkswagen ID. Buzz testing continues in six cities, including LA, Orlando, Austin, Hamburg, Munich, and Oslo.
- Mobileye announced its robotaxi platform using nine Innoviz LiDARs per vehicle.
- Daimler Trucks Level 4 platform is delivering units to support SOP milestones.
What the Numbers Show
The shift toward defense applications represents a strategic pivot toward higher-margin, faster-cycle revenue streams. With defense backlog already halfway to the 2026 target, the company aims to reduce reliance on low-margin automotive NREs. The $30 million capital raise provides operational runway into 2028, allowing Innoviz to scale production ahead of expected volume ramps in both sectors.
Outlook
Innoviz reiterated its 2026 revenue guidance of $67 to $73 million, expecting the bulk of second-half revenues to arrive in the fourth quarter due to customer milestone timing. The company targets $20 to $30 million in new NRE payment plans and expects to add two to three new automotive programs this year.
How will the transition to higher-margin defense contracts impact Innoviz's overall gross margin trajectory compared to its automotive-focused peers?
What specific risks could delay the recognition of the $3.5 billion defense backlog, and how might regulatory hurdles affect the timeline for revenue realization?
Given the heavy reliance on Q4 for meeting 2026 guidance, what contingency plans does management have if automotive SOP milestones with partners like Volkswagen or Daimler are delayed?
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