Innoviz Q2 2026 earnings: Record revenue came with a wider operating loss

Innoviz Technologies (NASDAQ: INVZ) reported Q2 2026 revenue of $18.1 million, up about 86% from $9.7 million a year earlier, while diluted net loss per share narrowed to $0.08 from $0.09 for the quarter ended June 30, 2026. Record revenue did not translate into higher gross profit, and operating cash use more than doubled as receivables and inventory absorbed cash.

Core financial results

Revenue came from a combination of non-recurring engineering services and LiDAR unit sales, although Innoviz did not disclose the contribution from each category. Cost of revenue rose about 112%, faster than revenue, reducing gross profit to $0.7 million and gross margin to 3.9%.

Operating expenses increased only 3%, but the lower gross profit caused the operating loss to widen in dollar terms. Net loss was nearly unchanged, while the per-share loss narrowed as the weighted-average share count increased to 224.6 million from 200.1 million.

Business and market developments

Innoviz launched Perciz to address defense and homeland security applications including counter-UAS systems, perimeter protection, and situational awareness. The company announced six defense and security engagements over the preceding three months and said systems containing its sensors were operating at multiple locations.

On July 30, after the quarter ended, Innoviz received initial orders totaling approximately $3.5 million from a defense customer for several hundred LiDAR units. Additional purchases depend on the successful completion of the first deployment, so the initial order should not be treated as evidence of broader production volumes.

Automotive programs with Volkswagen, Mobileye, and Daimler Truck remained on track for start of production according to management. Innoviz is also developing a LiDAR-based perception stack with a top-10 global automaker using NVIDIA hardware. Mobileye’s robotaxi initiative represents a potential opportunity for approximately 150,000 incremental LiDAR units, but this figure is not a firm order or recognized revenue.

Higher cost of revenue and working capital absorbed much of the revenue gain

Cost of revenue increased from $8.2 million to $17.4 million, outpacing sales growth and compressing gross margin by about 12 percentage points. The resulting $0.9 million decline in gross profit, combined with a $0.6 million increase in operating expenses, explains why the operating loss widened despite record sales.

Cash conversion also weakened. Changes in trade receivables used $8.5 million of cash during the quarter, while inventory used another $1.5 million. A $4.3 million cash contribution from higher trade payables provided a partial offset, but net cash used in operations still reached $14.4 million.

Liquidity stood at approximately $48.5 million on June 30, consisting of cash and cash equivalents, short-term deposits, marketable securities, and short-term restricted cash. That figure excludes approximately $30 million of gross proceeds from a registered direct offering that closed on July 29.

2026 guidance

Innoviz reiterated all of its financial and operating targets for 2026. With first-half revenue of $25.2 million, the full-year range requires approximately $41.8 million to $47.8 million of revenue in the second half, materially more than the first-half total.

NRE refers to engineering services associated with program development, testing, validation, qualification, and product adaptation. Payments can depend on milestones extending across multiple years.

Recent insider transactions

The supplied insider data shows no purchases or sales during the previous six months. It lists six transactions over the past two years, all direct stock awards or grants to directors on May 13, 2026, with a reported transaction value of $0.

Share quantities were not included in the supplied transaction data, so the size of the individual awards cannot be assessed.

Risks investors should monitor

• Gross-margin pressure: Cost of revenue grew faster than sales, leaving only a 3.9% gross margin. Continued revenue growth may not narrow losses if this relationship persists.
• Cash consumption and working capital: Operating cash use more than doubled, with receivables and inventory accounting for significant outflows. The subsequent financing increases liquidity but does not eliminate the importance of cash conversion.
• Second-half execution: Achieving the unchanged annual revenue target requires substantially more second-half revenue than Innoviz generated during the first six months.
• Early-stage defense commercialization: The $3.5 million initial order and six partnerships establish early traction, but additional volumes depend on deployments, evaluations, customer procurement decisions, and definitive agreements.
• Automotive program dependency: Potential volumes, including the Mobileye robotaxi opportunity, remain dependent on third-party platform decisions, regulatory approvals, and customers proceeding to production.

Summary

Innoviz nearly doubled quarterly revenue, supported by NRE services and LiDAR sales, while adding initial defense-market orders alongside its existing automotive programs. However, lower gross margin, a wider operating loss, and increased working-capital cash use limited the financial benefit of that growth. The main issues ahead are whether defense engagements convert into repeat orders, automotive programs progress to production, and second-half revenue scales enough to support the reiterated annual target.