Prepared remarks
Good afternoon, and welcome to indie's Second Quarter 2026 Earnings Call. Operator provided instructions. As a reminder, this conference is being recorded. I would now like to turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.
Thank you, operator. Good afternoon, and welcome to indie's Second Quarter 2026 Earnings Call. Joining me today are Donald McClymont, indie's CEO and Co-Founder; Naixi Wu, indie's CFO; and Mark Tyndall, EVP of Corporate Development and Investor Relations. Donald will provide opening remarks and discuss business highlights. Naixi will then provide a review of indie's Q2 results and business outlook. Please note, we will 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 financial measures such as non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share. For a complete reconciliation with GAAP and the definition of the non-GAAP reconciling items, please see our Q2 earnings press release in addition to the presentation summarizing our quarterly results and more details 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, everyone. I'm very pleased to report that indie delivered a quarter of solid growth and performance with revenue of $64 million, up 24% year-over-year and above the midpoint of our guidance. Before turning to our business achievements, let me provide some context on the market environment. Overall, the automotive semiconductor market continues to recover steadily, driven by improving vehicle production and sustained demand for electric vehicles. China continues to be a leader in the automotive ecosystem, fueled by strong domestic demand and the growing presence of Chinese vehicle brands in global markets. On a regional basis, China remained indie's strongest end market, followed by the U.S. and Europe. Outside of automotive, the emergence of physical AI and robotics is expanding the market opportunity for our high-performance SoCs as these applications require higher levels of processing, environmental sensing and real-time intelligence.
These favorable market dynamics are reflected in our second quarter results, and we believe they will intensify over the long run. Let me now turn to our recent business progress and key achievements during the past quarter. I'm excited to share that our 77 gigahertz radar chipset solution is gaining outsized traction through the deployment of our Tier 1 partner's Gen 8 radar product, with new wins expected with leading OEMs in North America and China, continuing to underline the leadership position that our radar technology enables. You may recall that on our last earnings call, we shared that indie was awarded an initial $25 million production order for our radar chipset. Since then, a design win was announced with a leading Tier 1 supplier supporting Volvo. These achievements highlight the continued market adoption of our radar solution and the increasing pace of customer engagement as we ramp production volumes.
This partner is important for indie and one through which we are actively looking to expand our success into adjacent physical AI markets. As a reminder, radar is now a foundational sensor within automotive with use cases across ADAS, autonomous driving, self-parking, in-cabin monitoring and other emerging functions such as automatic door opening and road surface monitoring. Radar represents significant growth for indie with most implementations averaging 4 to 5 radars per car and opportunities for higher deployment numbers as application adoption continues. Our solution is enabling for all these types of systems as it offers superior resolution, longer detection range and enhanced object detection and classification across a wide range of weather and lighting conditions, all at a price point to enable the complete automotive spectrum from high-end fully autonomous vehicles to $20,000 entry-level cars.
Industry forecasts underscore this momentum with key market research projecting the global automotive radar market to grow at an 18% CAGR through 2032, representing one of the fastest-growing segments within ADAS and the vehicle sensing ecosystem. According to Yole Group, by 2030 they expect up to 5 radar configurations per vehicle to become standard globally, driven by NCAP requirements, regional regulation and OEM differentiation strategies. And we are not standing still. As the sole supplier of radar chips in the 120 gigahertz frequency band, we are seeing applications evolve due to even greater performance and lower cost points that we can provide by using this frequency, driven by the ability to integrate antennas into the chip package. This enables new use cases, both in the car and as a key perception technology for physical AI. The 120 gigahertz radar brings unique benefits supporting higher spatial resolution, more precise range measurements, micro movement and environmental detection, ideal for industrial, robotic and smart infrastructure applications.
The 120 gigahertz solution has been successfully evaluated by several Tier 1s and OEMs across a wide range of physical AI applications. At the same time, our Photonics business is accelerating and becoming a core pillar of our product portfolio with its revenue stream increasing solidly. Quantum is one of the fastest-growing areas within Photonics. At less than $1 billion in 2025, the quantum photonics market is expected to exceed $14 billion, growing at a CAGR of 34% through 2035 according to SNS Insider. In fact, we achieved a record quarter for Quantum bookings while continuing to receive recurring orders for our LXM lasers used in quantum key distribution applications. Recent showcasing of our LXM and DFB laser portfolio have opened many new opportunities with new and current customers. indie is gaining meaningful traction through several customer-funded development programs, including one from a leading quantum customer and an additional project involving two Japanese companies.
These engagements are particularly important because they highlight the differentiation of our photonic light source platform, allowing us to advance innovation and position us well for future production revenue as quantum applications move towards commercialization. Beyond Quantum, demand for our photonics portfolio continued to strengthen. We delivered a significant increase in sales bookings, reflecting growing customer demand and confidence in our technology. We also saw increased demand for our optical fiber components driven by the expanding adoption of AI and security solutions, creating demand for enterprise data infrastructure, which enables organizations to harness data securely, efficiently and at scale. Taken together, these results demonstrate the demand for our photonic solutions and reinforce our confidence in the long-term growth opportunities ahead. Moving to our Vision portfolio.
Our latest addition is the iND881, an Edge AI SoC engineered for low power consumption and real-time responsiveness, delivering capabilities purpose-built for demanding edge perception tasks. Building on the success of our flagship iND880, the iND881 not only delivers the image processing excellence of its predecessor, but also incorporates a powerful heterogeneous AI engine, further expanding functionality not only for our automotive core business, but also for industrial and consumer applications such as smart cameras for AMRs and humanoids as well as high-speed smart industrial cameras that require real-time processing and low latency capabilities. At the recent AutoSens and InCabin USA event in Detroit, we showcased strong engagement and customer acclaim for an industry-first solution that combines DMS, OMS and emitter functionality within a single mirror unit. Powered by our iND881 SoC, the platform sets a new standard for integration and system efficiency.
No other competing SoC on the market today can deliver this level of functionality in a single device. This differentiation is generating great customer interest with multiple design engagements currently underway with leading OEMs and Tier 1 suppliers. Our vision processing solutions are becoming the preferred industry platform for e-mirror solutions, further establishing indie as a leader in this space as we continue to secure new design wins with major automotive manufacturers and Tier 1 suppliers. With surging DRAM prices, we have capitalized on the opportunity to approach new and existing customers with our cost-optimized iND880 DRAMless architecture. By eliminating the need for external memory, the iND880 helps customers navigate any 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.
Our iND880 vision processor continues to deliver success for customers, having secured several new design wins with leading Chinese OEMs in addition to Cadillac with a wide range of vehicle classes ranging from large SUVs and sedans to electric SUVs. With its ability to enable advanced camera and vision processing for ADAS applications, the iND880 remains extremely attractive to our customer base and is being evaluated across multiple vehicle programs, setting up a healthy opportunity pipeline. The iND88X family is also gaining increased traction with many physical AI customers with China providing a large number of design wins. Two of our key wins are with leading humanoid robot manufacturers, Unitree and Agibot, which according to Omdia Research, each shipped more than 5,000 robots in 2025. The success of our emotion3D acquisition underscores the value of our hardware-plus-software strategy, which is now beginning to deliver recurring royalties to our revenue stream.
By bringing together emotion3D's proven AI vision algorithms and our highly integrated automotive SoCs, we have established a differentiated one-stop-shop platform for advanced in-cabin sensing that extends well beyond silicon alone. Our traction within in-cabin perception and driver and occupant monitoring is now further underpinned by the field-proven combination of indie's emotion3D software and vision processing SoCs, providing a pre-integrated DMS/OMS platform that is an attractive solution for customers looking to accelerate their time to market and reduce development risk. By offering our customers software, hardware, or a combination of both in a pre-integrated perception stack, we also provide ultimate flexibility in design approach. In recognition of our emotion3D software capabilities, we recently received the Supplier Excellence Award from Mahindra in their XEV 9S program. Through deep collaboration between Mahindra and our software team, we delivered AI-powered in-cabin software that enhances safety, comfort and the user experience, bringing advanced in-cabin intelligence to market.
Last quarter, we announced that indie had entered into a definitive agreement to acquire the CMOS image sensor group from ams OSRAM AG. Imaging is a key component of sensor-rich platforms with high-performance visual applications such as humanoids, cobots and industrial automation. By leveraging these intelligent and high-performance sensors, we continue to build our foundational strategy to support rapid growth in the emerging physical AI market. Our transaction remains under review by regulatory authorities, and we anticipate closure prior to year-end. Turning to the previously announced potential divestiture of our equity interest in Wuxi indie Micro. While the exact timing of closing remains subject to the completion of its regulatory process, the transaction is progressing well, and we remain optimistic that the transaction will close later this year, consistent with our prior updates. With that, I'll turn the call over to Naixi to walk through our financial results.
Thank you, Donald, and good afternoon, everyone. Indie's second quarter revenue was $64 million, exceeding the midpoint of our outlook by $2 million, representing an increase of 24% compared to the prior year period. Revenue from our core business was approximately $36 million, a sequential growth of over 5%, reflecting the continued momentum in our ADAS portfolio, while revenue from our Wuxi subsidiary was $28 million. Non-GAAP operating expenses during the quarter totaled $37.9 million, consistent with our outlook. As a result, our second quarter non-GAAP operating loss was $8.9 million compared to a loss of $14.5 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 $11.7 million, and the loss per share was $0.05 on a base of 227.6 million shares, consistent with our guidance last quarter.
Please refer to the presentation located on our website for a more detailed breakdown of non-GAAP measures. Turning to the balance sheet: we exited the quarter with total cash and cash equivalents, including restricted cash, of $149 million, a net decrease of $35.7 million sequentially. This decline was primarily driven by our non-GAAP operating loss with additional cash used to build inventory in preparation for upcoming demand, increasing accounts receivable in line with our revenue growth and ongoing CapEx investment. Moving to our outlook for the third quarter of 2026, we expect to deliver total revenues between $67 million and $73 million. At the midpoint of this range, we anticipate our core business to reach approximately $40 million and our Wuxi subsidiary to contribute roughly $30 million in the third quarter. We expect to continue to improve our non-GAAP operating expenses to $37 million for Q3, down from approximately $38 million in Q2.
Coupled with expected net interest expense of approximately $3.2 million and no tax expenses, we expect our net loss per share to decrease to approximately $0.04, assuming the midpoint of the revenue range and a base of 230 million shares. In summary, our second quarter results reflect broad-based momentum across radar, vision and photonics, and we remain focused on delivering continued growth. With that, I'll turn the call back to Donald for closing remarks.
Thank you, Naixi. indie's business remains solid as evidenced by our strong second quarter results with accelerating top-line growth heading into the third quarter. Our radar and vision programs continue to gain traction with leading OEMs and Tier 1 partners, and our expansion into Quantum and Physical AI is opening new avenues for outsized growth. With the pending CMOS image sensor acquisition further strengthening our portfolio, indie's technology leadership and expanding product breadth is positioning us to capitalize on these emerging opportunities. We believe indie offers one of the broadest and most differentiated product portfolios in the industry to meet the diverse needs of these 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.
Questions and answers
Operator provided instructions. And we'll hear from Craig Ellis with B. Riley Securities.
Donald, congratulations on the revenue momentum at midyear. I wanted to follow up on the Volvo win. Can you help us understand the timing with which that converts to revenue and its size? And on the subject of radar, how are we tracking versus what I think has been an expectation for around $35 million to $50 million in revenue this year for that product?
We won't break down exact details of individual design wins for each customer. That being said, Volvo has significant volume and high penetration across its model lineup, so it's a very decent-sized design win for us. It's far from our only design win, though it is the most public at the moment. In terms of where we see ourselves going for the rest of the year, radar is still going to be a big driver for our growth through 2026, 2027, 2028 and 2029. So it will be a large portion of the growth perspective that we have in our outlook.
That's great. And then the follow-up relates to the DRAMless product, the iND880. There's been a lot of reporting out of Asia and China within the last three months that the manufacturing situation is getting even more painful than it was when you spoke to us three months ago about the cost of DRAM and its availability. Can you help us understand the degree to which that's converting to revenue this year or the extent to which it's giving you pipeline visibility for the coming years?
It's a meaningful part of the growth that we see. It has come to us very swiftly because of the urgency of the situation. People have to ship somehow, and that means that regular design cycles often accelerate. We have seen things convert very quickly within a few weeks or a quarter at most. Yes, that's driving some significant upside for us at the moment in a few markets, not only automotive but also in physical AI, which has been a nice surprise that these products can be used in other applications.
Next, we'll move to Cody Acree with Benchmark StoneX.
Congrats on the progress. Donald, maybe just following up on Craig's question on radar and if you can just include vision, can you help frame your ramp expectation, maybe the slope or scale of the ramp that you envision over the next few quarters for both those programs?
Both will ramp very steeply. We should see the slope of the ramp accelerate from where we are right now, and you'll see that reflected in the Q3 guide. We are very excited about both product families. We are seeing traction that brings us into new OEMs and sometimes new markets. We also see applications outside of automotive in humanoid robotics and drones using our technologies, so the opportunity set is expanding.
And then can you help frame or give any details to the size of your current non-auto revenue in Physical AI, Quantum, photonics — what details can you provide? And how significant do you expect that non-auto business to grow by the end of this year or end of next year?
We don't really subsegment those revenues publicly, and it's still nascent. For physical AI, we quoted numbers for leading customers who manufactured thousands of robots in the past 12 months. Predictions suggest these markets could grow into multiple millions of units across many robotics applications, not just humanoids but AMRs as well. Quantum is harder to call today, though there's a lot of buzz and some players are deploying qubit counts into the hundreds of thousands. It's getting closer to the point where Quantum Advantage could reach a tipping point. It's hard to put precise numbers on it right now, but these are exciting markets and we're seeing our products used in many of these machines.
Next, we'll move to Anthony Stoss with Craig-Hallum.
I wanted to follow up on the iND880. Last quarter, you mentioned that you thought it could generate more revenue in 2026 than radar. Can you shed more detail if it's going into low-end cars? I know it's heavily exposed to the China market. What's your sense on the number of models per quarter and what the steepness of the ramp looks like in Q4? And then I have a follow-up on gross margins.
We are somewhat more indexed to China for this application, but we now have wins with North American Tier 1s who represent significant volume in this space. We're seeing deployments in low, mid-tier and above, probably across dozens of models by now. Regarding gross margins, we don't typically guide on gross margin. However, through the potential divestiture of Wuxi, which could be a drag on margin, we are in a position where we can get to our corporate goals.
And we'll move on to Jon Tanwanteng with CJS Securities.
I was wondering if you could quantify the number of wins you had in the quarter driven solely by DRAM shortages and how many engagements you have in the pipeline. If you could provide further detail on what kind of average revenue those engagements have on an annual basis, that would be helpful. Also, on cash flow: you've been building inventory for the ramp. How should we think of that burn going forward, especially in front of the growth you're seeing?
The iND880 has an ASP of around $10 and sometimes there are one or two deployed per application. It's hard to give an accurate number of design wins; it's similar to the question about numbers of models — so it's in the range of dozens of design wins. On cash usage, we did invest in inventory to support steep ramps and address tight supply chains. Nominally, cash usage should generally follow our net profit or loss on a quarterly non-GAAP basis, which should give a reasonable indication. There are below-the-line costs like some CapEx, but that's what we're expecting.
Moving on, we'll hear from Natalia Winkler with UBS.
On physical AI, can you help us understand the content per robot or per application? How does that compare to the automotive market? And as you pursue these physical AI sockets, do you need to go to a completely different supply chain, or can your existing relationships with Tier 1s be helpful to get these design wins?
Both approaches are applicable. Traditional Tier 1s are beginning to turn some focus toward physical AI away from automotive, and it can be a more profitable market. You can consider a humanoid robot or any robot as a car with legs or a car as a robot with wheels — many electronic implementations are applicable to both. We have direct relationships with module manufacturers analogous to Tier 1s for the physical AI business, and we have direct relationships with Tier 1 customers who are in some cases entering robotics. We can leverage both.
And in terms of content per robot opportunity, per device?
ASPs are typically higher for physical AI today because volumes are still small, so it's early to say what the dollar content per robot could be. We have applicable parts for high-end robots where they have multiple sensors spanning vision, radar, and LiDAR. Some of the back-end processing could easily be $100 per robot for advanced implementations.
And we'll move on to Joshua Buchalter with TD Cowen.
Congrats on the results. I wanted to ask about the iND880 wins in China. Any details on what types of architectures it's being integrated into? And what are the pros and cons of integrating the 880 without DRAM into a central ADAS processor? Does that make integration easier or harder?
We are used in stand-alone systems such as electronic mirror systems, OMS and DMS, and we are also used as a preprocessor in front of a central ADAS processor. That allows us to process video on the fly rather than dumping frame by frame into large external memories, which is the source of the current problem. The net effect is lower video latency and reduced processing burden on the central ADAS processor. Many customers tell us they are overwhelmed by processing raw video streams, and we can take that burden off them so they can use central processing for higher-value perception tasks. In our opinion and in the view of many engineers at our customers, it makes implementation easier.
Got it. That's really helpful.
That will conclude today's question-and-answer session. I would now like to turn the floor back to management for closing remarks.
Thanks, everybody, for attending. I hope to see a few of you at the conferences in the coming weeks and months, and see you next quarter.
Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.