Innoviz reports Q1 revenue miss as OEM deferrals weigh on results
First-quarter revenue of $7.1 million was constrained by delayed engineering milestones, though unit shipments hit record levels amid a production ramp-up at Fabrinet.
Innoviz Technologies reported first-quarter 2026 revenue of $7.1 million, a figure significantly impacted by the deferral of non-recurring engineering (NRE) milestones at the request of original equipment manufacturers (OEMs). The company noted that OEMs requested additional content and accelerated activity timelines, causing certain milestones to shift into future quarters. Despite the revenue shortfall, Innoviz achieved record unit shipments in the period, representing approximately half of its total volume shipped throughout all of 2025. This surge was driven by a successful production ramp-up at its manufacturing partner, Fabrinet.
Gross margin for the quarter stood at negative 22 per cent, a result of an unfavourable revenue mix and the low absorption of fixed production costs during the early stages of the increased manufacturing volume. Management attributed the revenue shift to OEM requests to pull forward future activities, which extended tasks beyond the quarter's end. However, the company confirmed that purchase orders are already in place for these milestones and expects to complete the related tasks and recognise the revenue within the 2026 calendar year.
In response to the quarter's performance, Innoviz reiterated its full-year 2026 revenue guidance of $67 million to $73 million. This outlook assumes the recovery of delayed NRE payments and continued acceleration of unit shipments in the second half of the year. Management anticipates securing $20 million to $30 million in new NRE payment plans during 2026, aiming to maintain NREs as a stable dollar-basis component of the business while transitioning toward higher-margin series production as existing automotive programs reach start-of-production.
The company is actively expanding into defence and homeland security markets, targeting high-margin opportunities for drone detection and all-weather surveillance. Innoviz identified a critical gap in the defence sector for detecting small, low-altitude targets where traditional radar and camera systems face limitations. Management highlighted a high sense of urgency in this segment, noting that defence average selling prices are significantly higher than automotive equivalents and that the company is receiving multiple daily inquiries regarding LiDAR applications for security and autonomous delivery.
On the automotive front, Innoviz highlighted its next-generation Innoviz3 sensor, designed to meet OEM requirements for behind-the-windshield installation. The device features a smaller form factor and integrated colour imaging to solve packaging constraints where sensors compete for limited space. Management expects the non-automotive 'Physical AI' segment to grow from 1 per cent of 2025 revenue to up to 10 per cent in 2026. Furthermore, the company anticipates significant gross margin improvement later in the year as higher production volumes at Fabrinet lead to better absorption of fixed costs.
