Teleconferência de Resultados do 2T26 da Vuzix (VUZI): Receita cai com avanço dos programas de guias de onda e defesa

Principais Destaques

• A receita do 2T26 caiu 14% na comparação anual, para US$ 1,1 milhão, impulsionada principalmente por menores vendas unitárias do M400 e pela ausência de vendas de óculos inteligentes descontinuados no final de 2025.
• O prejuízo bruto melhorou para US$ 0,6 milhão, ante US$ 0,8 milhão. O prejuízo líquido atribuível aos acionistas ordinários permaneceu em US$ 7,7 milhões, enquanto o prejuízo por ação encolheu para US$ 0,09, ante US$ 0,10.
• O caixa e equivalentes de caixa somavam US$ 17,3 milhões em 30 de junho de 2026. A Vuzix tinha aproximadamente US$ 18 milhões em capital de giro líquido e nenhuma dívida de curto ou longo prazo.
• A administração está focada em três pilares de crescimento: óculos inteligentes corporativos, produtos e soluções OEM e guias de onda. Segundo a empresa, mais programas de clientes estão avançando do desenvolvimento e validação para a comercialização.
• A Collins Aerospace iniciou a produção inicial de sistemas de exibição em realidade aumentada baseados em guias de onda para aplicações em drones. A Vuzix espera pedidos adicionais de produção no segundo semestre de 2026 e descreveu 2027 como um ano potencialmente forte para a produção.
• A Vuzix também relatou interesse espontâneo em seus guias de onda planares para interconexões ópticas em data centers de IA, embora a gestão não tenha identificado clientes nem quantificado a oportunidade.

Principais Dados Financeiros

Em 30 de junho de 2026, a Vuzix mantinha US$ 17,3 milhões em caixa e equivalentes de caixa e aproximadamente US$ 18 milhões em capital de giro líquido. A empresa não possuía dívida de curto ou longo prazo em aberto.

Desempenho Operacional e dos Negócios

Óculos inteligentes corporativos

A administração afirmou que a demanda corporativa está se dividindo em duas categorias. O M400 e o mais recente LX1 atendem a aplicações que exigem um display monocular de rápida visualização, com os usuários atuais do M400 começando a migrar para o LX1. A Vuzix espera que aplicações com recursos de IA ampliem os potenciais casos de uso para o LX1.

A segunda categoria foca em óculos autônomos e de visão óptica direta (optically see-through), que projetam informações no campo de visão natural do trabalhador. A Vuzix está desenvolvendo o Ultralight Pro e outro dispositivo para um cliente OEM relevante voltados a essas aplicações. A gestão destacou que os clientes buscam cada vez mais produtos sem fio que combinem visores com guias de onda, processamento integrado, câmeras, áudio e conforto para uso contínuo ao longo do dia.

A Amazon utiliza óculos inteligentes Vuzix M400 para manutenção de robótica, esteiras e automação em centros de distribuição. Segundo a gestão, a Amazon expandiu o uso para o Ultralight Pro e desenvolveu aplicações impulsionadas por IA para tarefas operacionais e de manutenção em sua infraestrutura de data centers de IA.

Programas OEM

A Vuzix entregou óculos inteligentes iniciais baseados em guias de onda para uma montadora global líder no setor automotivo. Os dispositivos estão sendo testados em aplicações reais no chão de fábrica, e a administração disse que as conversas avançaram para o planejamento de implantação e produção. O cliente não foi identificado e nenhuma data de lançamento foi informada.

A Vuzix também está trabalhando com a Quanta em óculos inteligentes de primeira geração voltados a mercados de grande volume e pontos de preço mais acessíveis. A administração espera apresentar os sistemas na CES e descreveu o relacionamento como sólido.

Programas de defesa

A Collins Aerospace avançou do desenvolvimento para a produção inicial de sistemas de exibição em RA baseados em guias de onda para suporte a operações de drones e consciência situacional. A Vuzix também recebeu trabalhos de desenvolvimento subsequentes e informou que espera lançar mais de um dispositivo fruto da parceria.

A empresa está se preparando para lançar um programa de desenvolvimento de guias de onda de última geração financiado pelo governo dos EUA, com foco parcial em campos de visão mais amplos e outras melhorias de desempenho. Separadamente, uma oportunidade de dispositivo vestível sob medida com uma agência de segurança do governo norte-americano atingiu a fase de proposta, com decisão de contratação prevista para mais adiante em 2026.

Guias de onda e fabricação

A Vuzix investiu aproximadamente US$ 1,2 milhão em ativo imobilizado durante o primeiro semestre de 2026, focado principalmente em equipamentos de fabricação de guias de onda em sua fábrica em Rochester, Nova York. O investimento tem como objetivo aumentar a produtividade, reduzir o tempo de transição (changeover) e permitir que programas de desenvolvimento e produção funcionem simultaneamente.

A empresa também está desenvolvendo materiais avançados de alto índice e processos de replicação por nanoimpressão. A administração afirmou que o objetivo é aprimorar o desempenho óptico, mantendo a escalabilidade de fabricação e as vantagens de custo.

Além dos óculos inteligentes, a Vuzix recebeu interesse espontâneo de diversos participantes do ecossistema de data centers de IA referente a guias de onda planares para interconexões ópticas. A aplicação potencial usaria vidro passivo para mover dados de forma óptica com maior largura de banda e menor consumo de energia por bit. A gestão informou que as negociações estão ativas, mas não forneceu nomes de clientes, cronograma comercial ou estimativa de mercado.

Perspectivas da Administração

• A administração espera pedidos de produção adicionais da Collins Aerospace durante o segundo semestre de 2026 e acredita que a produção poderá se expandir ainda mais em 2027. A oportunidade permanece em fase inicial.
• A Vuzix espera obter mais clareza sobre as discussões de implantação com a montadora OEM mais para o final do segundo semestre de 2026, mas declarou que o cliente controla o cronograma de lançamento.
• A empresa espera que o ritmo da receita corporativa melhore nos próximos trimestres, à medida que a adoção do LX1 se desenvolva e os produtos de visão óptica direta progridam rumo à comercialização.
• A prioridade declarada da administração é converter programas corporativos, OEM e de defesa validados em produção, mantendo a disciplina sobre o capital alocado.

Riscos e Pontos de Atenção

• A receita atual permanece limitada e caiu na comparação anual, enquanto a empresa continuou a reportar prejuízo bruto e prejuízo líquido trimestral de US$ 7,7 milhões.
• O uso de caixa operacional subiu para US$ 6,6 milhões, ante US$ 4,8 milhões, enquanto as atividades de financiamento geraram US$ 4,1 milhões em recursos provenientes de ofertas ATM.
• Vários programas importantes continuam dependentes de validação de clientes, decisões contratuais, conclusão de ferramentaria e cronograma de produção.
• A administração não pôde fornecer um cronograma de implantação para o programa OEM automotivo e caracterizou a oportunidade de produção com a Collins Aerospace como em estágio inicial.
• Detalhes comerciais para a oportunidade de interconexão óptica, incluindo clientes, receita potencial e prazos, permanecem indefinidos.

Destaques das Perguntas e Respostas dos Analistas

Interconexões ópticas: A administração afirmou que o interesse dos clientes tem sido majoritariamente espontâneo e envolve várias partes do ecossistema de data centers de IA. A Vuzix está dedicando um tempo significativo à oportunidade, mas não identificou participantes nem estimou seu tamanho.

Parceria com a Quanta: A Vuzix e a Quanta estão desenvolvendo óculos inteligentes voltados para mercados de grande volume. A administração espera que os produtos sejam exibidos na CES e afirmou que a parceria combina os recursos ópticos e de guias de onda da Vuzix com a fabricação de produtos em grande escala e o acesso a clientes da Quanta.

Collins Aerospace: A Vuzix espera mais pedidos de produção no segundo semestre de 2026 e atividades de desenvolvimento subsequentes. A administração informou que o produto se destina a um grande segmento do mercado de defesa dos EUA voltado para controle de drones e consciência situacional, mas não forneceu valores dos pedidos.

Receita corporativa: A administração atribuiu o recente desempenho estagnado em parte a uma transição entre produtos monoculares consolidados e sistemas com visão óptica direta voltados para IA ainda em validação de engenharia. Espera-se que o LX1, o Ultralight Pro e um dispositivo OEM deem suporte ao crescimento futuro, sujeitos à aceitação dos clientes e à comercialização.

OEM automotivo: Os sistemas iniciais foram testados em ambientes fabris operacionais, com feedback positivo, segundo a administração. As discussões agora focam na implantação e produção, mas a Vuzix não pode identificar o fabricante nem definir uma data de lançamento.

Transcrição Completa da Teleconferência de Resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

Operator

Thank you. order 2026 Financial Results Conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the call, please press star zero. your telephone keypad. As a reminder, this call is being recorded. Now I'd like to turn the call over to Ed McGregor, Director of Investor Relations at VU6. Mr. McGregor, you may begin.

Edward McGregor

Thank you, Operator, and thank you everyone for joining us today. Welcome to the Vuzix Corporation's second quarter 2026 Financial Results Conference Call. For this today are our Vuzic CEO, Paul Travers, and our CFO, Grant Russell. Before I turn the call over to Paul, I'd like to remind you that management's prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements during the question and answer session. The company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. could differ materially from those contemplated by any forward-looking statements due to factors including general, economic, and business conditions, competition, changes in business strategy or development plans, our ability to attract and retain qualified personnel, changes in legal and regulatory requirements, and other risks described in our SIP SIC filings. Any projections represent management's estimates as of today, August 13th, 2026. The user assumes no obligation to update them except as required by law.

This afternoon, the company issued a press release announcing its 2Q 2026 financial results and filed its 10Q with the SEC. Participants may wish to review those documents as we will provide a summary of the results on today's call. may include certain non-GAAP financial measures. When required, reconciliation to the most directly comparable GAAP measures can be found in the company's SEC filings. I'll now turn the call over to Vuzix CEO Paul Travers, who will give an overview of the company's operating results and business outlook. Paul will then turn the call over to Grant Russell, Vuzic's CFO. He'll provide an overview of the company's financial answer results. After that, we will move on to the Q&A session.

Paul Travers

Thank you, Ed, and thanks to everyone for joining us today. With the first half of 2026 behind us, Vuzix is focused around our three core growth pillars. Enterprise smart classes. OEM products and solutions, and wave guides. They're connected by the technology manufacturing capabilities, intellectual property, and customer relationships we have built over many years. The business opportunities in front of us look very different from a year ago. Across all three pillars, we are seeing expansion in both the number and quality of opportunities involving major enterprise customers, defense organizations, OEM partners, and technology companies. AI is a game-changing driver as enterprises look for practical ways to bring AI-powered intelligence to their frontline workforce. and into the physical workplace.

These are not early stage discussions. A growing number of programs have cleared development and validation and are heading toward commercialization. As that work converts into production volumes, it has the potential to change both the size and the mix of USIC's revenue. Two things in particular have changed to get us here. customer requirements have converged around optically see-through, self-contained glasses, and the software work required to deploy a solution is getting easier as AI takes on much of the integration. I will come back to both of these. Let me begin with enterprise smart glasses. AI is profoundly changing the relationship between people and computers, and that is game-changing for wearable smart glasses.

AI will automate many tasks, but skilled tradespeople, technicians, and frontline workers operating in the physical world are not going away. The opportunity is to dramatically augment those workers by connecting them directly to the intelligence and capabilities of AI. Put simply, AI does not eliminate the frontline worker. It makes connecting that worker to the digital world far more important and valuable. During COVID, remote support drove significant interest and sales in smart glasses, but it addressed a relatively narrow need created by temporary circumstances. AI enterprise smart glasses are fundamentally different from a basic remote support application, and we believe AI represents a lasting change in how people interact with computers and how work gets done. The opportunities we are seeing today are tied to ongoing productivity, efficiency and augmenting the frontline workforce, needs that will persist and grow as AI becomes more deeply embedded across the enterprise.

All-day wearable smart glasses are a natural interface for making that connection with AI that can see what workers sees. understand what they are asking, and access relevant enterprise knowledge, the glasses can understand the task and provide real-time information or guidance while leaving the workers hands-free. Unlike a phone, tablet, or laptop, they stay with the worker and task at hand throughout the day, turning smart glasses from primarily a communications tool into an always available AI-enabled productivity platform. It's worth a brief discussion on what customers are asking for. In nearly every new program we are engaged in today, the customer wants optically see-through smart glasses. sees the real world directly with information presented within their natural field of view rather than through a camera or on a screen off to the side and a growing number want that in a self-contained pair of glasses with no tethered compute unit that is a demanding combination the display has to be bright enough work environments, efficient enough to run a full shift on a battery, light enough to wear on your face, and yet small enough that the product still looks and feels like eye wear. Those are exactly the constraints waveguide optics exist to solve. And they are a large part of why our optical and wearable system are being pulled into so many customer conversations at once. There is one more change worth calling out.

For years, the practical barrier to enterprise smart glasses was not mainly the hardware. It was the software. Every deployment needed custom integration into a customer's existing systems, and that work was slow, expensive, and scarce. is changing that. A great deal of the integration work that used to require a dedicated development team can now be done with AI doing much of the coding. We use AI this way in our own development and we think it should meaningfully lower what it takes for an independent software vendor or even an end customer's own team to stand up a solution. That matters because the software effort has historically been one of the barriers sitting between customer interest and customer deployment. And as AI-enabled smart glasses can understand what the worker saw, said, and accomplished during the job, it can easily help automate much of the administrative work that follows. Documenting the work performed, preparing service reports, identifying and ordering replacement parts, scheduling follow-up physics, updating enterprise systems, and even identifying additional work that may be required.

For frontline workers, this is transformative and allows the worker to focus on the physical work while AI handles the digital work around it. Amazon is a good example of an innovation leader in this space. Its reliability and maintenance engineering teams have been using Vuzix M400 smart glasses to support robotics, conveyors, and automation equipment within fulfillment centers for several years now. More recently, Amazon expanded its usage of Vuzix smart glasses to our next-generation Ultralight Pro smart glasses. Amazon has developed their own AI-driven applications to support maintenance and other operational activities inside its AI data center infrastructure. We are seeing similar AI driven interests across logistics, warehousing, manufacturing, and other frontline environments from other Fortune 500 companies looking to use AI both to assist workers while they perform their jobs and to automate the digital workflows surrounding that work. Our second pillar is OEM products and solutions.

Muzix brings together optics, electronics, wearable product design, manufacturing experience, and real-world enterprise deployment knowledge. Our OEM products and solutions business is designed to take customers from product concept through design, engineering qualification, and ultimately production. One example is the WaveGuide based smart glasses platform we have been developing with a leading global automotive manufacturer. We've delivered the initial systems and worked through adjustments from there. Feedback has been very positive and discussions are proceeding around formal factory floor rollouts. These smart glasses were designed around a live manufacturing requirement, combining our enterprise wearable experience with our waveguide display technology. At the same time, development of Vuzix Next Generation Ultralight Pro smart glasses continues.

They were designed from the outset for enterprise and industrial users looking to bring AI into the hands-free workplace. It's lightweight, stand-alone, waveguide-based design combines with a wide field of view camera that can provide AI with visual context. The high-performance audio with noise-canceling microphones and integrated speakers provide for natural voice interaction. The all-day wearability, safety certification, prescription support, and enterprise-grade performance all combine for the ultimate AI user experience. We continue to work with a growing list of prospective customers and partners around validating the platform before we complete the tooling. Our approach to new products has also become more disciplined. Our development decisions are tied to identifiable customers, validated use cases, and commercial opportunities.

Customer-driven OEM programs can take longer than launching a Vuzix branded product ourselves, but they carry lower commercial risk because development is anchored to a defined customer requirement and real-world use case. This lets us invest behind demonstrated customer needs rather than anticipated demand while retaining the opportunity to turn successful programs into broader Vuzix platforms. Our objective is to move more of these OEM programs into production programs while maintaining discipline around the capital we commit. Defense and security agency activity spans all three growth pillars and continues to build, with more substantive engagements and clearer pathways from development towards production. Drones and unmanned systems have become core operational tools, while wearable displays and HUDs provide a natural interface for situational awareness, coordination, maintenance, medical information, and secure data delivery. U.S.-based design and manufacturing of critical optical technologies is also becoming more relevant to defense customers and primes. Collins Aerospace Program has moved from development into initial production for waveguide-based AR display systems supporting drone applications.

In parallel, we are putting the required systems in place for the launch of a U.S. government-funded next-generation waveguide development effort, including work aimed at larger fields of view and other performance improvements for future defense requirements. Additionally, we are engaged with the U.S. government securities agencies around custom wearable solutions. One of these customer opportunities has progressed through the proposal stage with the customer currently targeting a contracting decision later this year. Across these programs, customers care about manufacturability, supply chain security, and where critical technologies are produced. Vuzic's ability to design and manufacture advanced waveguides in the United States while also supporting complete wearable systems is an important differentiator. Our third pillar is waveguides, which we continue to believe represents one of Vuzic's largest long-term opportunities. In many respects, it is also the technology foundation underlying our other two pillars, enterprise smart classes and OEM products and solutions.

The rapid evolution of AI has created a new level of interest and investment in AI-enabled smart glasses. As AI has become more capable of seeing, understanding, and interacting with the world around us, the value of an all-day wearable interface has become much more compelling. This is driving new investments across the industry, including from companies that had previously set smart glasses aside and at the same time is increasing the need for high performance waveguide based displays. And as I mentioned a moment ago, customers are converging on optically see-through displays in self-contained eyewear. That requirement leads directly to waveguides because waveguide optics are the only practical approach. we know of that delivers a true see-through image within the size, weight, and power budget of all-day glasses. But optical performance alone is not enough. These waveguides must also be manufactured reliably, at scale, and at costs that make high-volume products possible.

During the first half of 2026, we continued investing in Vuzix Rochester, New York based manufacturing and R&D facility to support more waveguide programs simultaneously, reduce change over time, and increase throughput as programs move from development towards production. We invested approximately $1.2 million in fixed assets during the first six months, primarily for new wave guide manufacturing equipment. Most of this investment is intended to create a more flexible environment where one line can support development while another supports production or both can support production as volumes increase. On the materials side, our chemistry capabilities are focused on advanced high index materials and replication processes intended to improve optical performance while preserving the scalability and cost advantage of nano imprint manufacturing. As you all know, Quanta is an important partner of Vuzix. Quanta brings high volume and product manufacturing capability and access to a broad customer ecosystem, while Vuzix brings waveguide design, optical engineering, manufacturing know-how, and intellectual property. Together, Quanta and Vuzix are to become turnkey system solution providers for technology companies, eyewear brands, and platform providers of display-enabled AI smart glasses.

Ultimately, the waveguide market will not be won by the best laboratory hero samples. It will be won by companies that can combine optical performance with repeatability, yield, scale, and cost, while supporting very large volume customers. That is the position Vuzix has spent years building towards. This industry has taken longer to arrive than any of us expected. That said, the pieces needed for long-term sustainable growth are now falling into place. customers are converging on optically see-through, self-contained glasses, and that is what we build. We have the engine to manufacture the waveguides behind them, a base that takes years to stand up, and ours is running. And customers are now paying for OEM versions of what we have created in commercial programs as defense.

Very few companies have stayed with this long enough to have all three. Our confidence today is not based on hope about the market. It is based on what customers are asking us for now. What is new is the pace. AI has given enterprise smart glasses a much broader purpose. software barrier that used to slow deployment is now coming down. OEM programs are moving from validation into commercialization, defense programs are moving towards production, and our wave guideline is scaling to support both. This is happening across all three pillars at once, with programs involving some of the world's largest and most sophisticated organizations.

Waveguide design and manufacturing is clearly a cornerstone pillar of the Vuzix business and we're investing in it accordingly, expanding our imprint capacity, reconfiguring our plant floor, adding metrology and continuing to advance our materials and process capabilities. We believe that progression has the potential to change Vuzic's financial performance as these programs convert. not only through higher revenue, but through better utilization of the manufacturing and technology infrastructure we have already built. In other words, the opportunity is not simply to grow the top line, it is to begin demonstrating the operating leverage these three pillars are capable of delivering. our focus is straightforward, execute and convert these customer programs into production. At our annual meeting, we noted that our waveguide capabilities have potential applications beyond smart glasses. Today, we can be more specific that one of those areas is optical interconnect in AI data centers. We have received inbound interest in our Planar waveguides as a way to move data optically within AI systems with greater bandwidth and lower energy per bit. This inbound interest has come from multiple corners of the AI data center ecosystem, the underlying requirement is closely related to what we already do.

Moving light with precision through passive glass manufactured repeatably and at scale. We have been actively exploring this area and we are encouraged by the possibilities for Vuzix in this new space. With that, I'll turn the call over to Grant for the financial overview. Grant?.

Grant Russell

Thank you, Paul. As Ed mentioned, the 10Q we filed this afternoon provides a detailed explanation of our quarterly and year-to-date financials. So we'll provide you with just some color on the key numbers for our second quarter ending June 30, 2026 only. Total revenues for the second quarter ending June 30, 2026 were $1.1 million versus $1.3 million in 2025, a decrease of 14%. Product sales were $0.9 million for Q2 2026 versus $1 million for Q2 2025, with the reduction primarily due to decreased unit sales of our M400 product and the lack of current period sales of smart glasses that were discontinued at the end of 2025. Engineering services and OEM product sales were 0.2 million versus 0.3 million, a decrease of 8%. The gross loss for Q2 2026 was 0.6 million as compared to a gross loss of 0.8 million in the prior year's quarter, an overall 15% improvement. R&D expense was 3.1 million for Q2 2026 versus 2.6 million in Q2 2025, up 20% primarily due to to higher external new product development costs and increased personnel costs.

Sales and marketing expense was $1.2 million versus $1.4 million in Q2 2025, a decrease of 11% primarily due to lower non-cash stock-based compensation. Total GNA expenses for the second quarter ending June 30th, 2026 were $2.7 million versus $2.8 million in Q2 2025, a decrease of 3%. The net loss attributable to common shareholders. For our second quarter of 2026 was 7.7 million or 9 cents per share as compared to 7.7 million or 10 cents per share for Q2 of 2025. Now for some balance sheet and cash flow highlights. As of June 30th, 2026, cash and cash equivalents were 17.3 million and our net working capital was approximately 18 million. The company continues to have no current or long-term debt obligations outstanding.

For the third time, With three months ending June 30th, 2026, net cash used in operating activities was 6.6 million as compared to 4.8 million in the prior year's period, an increase of 1.8 million year over year. three months ended June 30th, 2026. Cash used for investing activities on fixed assets and patents with $0.4 million versus $0.9 million in the comparable 2025 period. For the three months ending June 30, 2026, cash provided by financing activities with $4.1 million versus $7.9 million in the comparable 2025 period, driven by ATM net proceeds.

Operator

in both periods. With that, I would like to turn the call back over to the operator. Thank you. You'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions.

Thank you. Our first question comes from the line of Christian Swab with Craig Hallam Group. Please proceed.

Unknown Speaker

Hey guys, thanks for taking my question. It's Ben, I'm for Christian here. First question is on this expanded opportunity with optical interconnects. Can you give us a little bit more detail regarding the types of customers you guys have talked to? And also any initial thoughts on the size of the opportunity?.

Paul Travers

Hey, Ben, thanks for the question. It's a really good one. I am just sorry. It's not difficult to take a look at who those players are these days. I can say a lot of it's been inbound to Vuzix. We've done some of our own outreach, but I really can't get into specifics on this call. What I can say is the interest is real. It's significantly engaged us on our part.

We're spending a fair amount of time with it, and we're going to have a whole lot more to update for you on shortly. Sorry, I just can't get further into it at this point.

Unknown Speaker

No, no, that's, that's all right. I get it. Um, any, my second question here is, can you go, can you talk a little bit more about the relationship with quantum and any more updates you can share there? Yes.

Paul Travers

Yes, actually. We had some inbound questions and that was actually one of the questions that was on the list of this will be great, two birds with one stone. As everybody knows, we have a great working relationship with Quanta. At this point in time, we're working on ... We built some early generation smart classes going on with them right now. We fully expect that at the CES show, which is where they do a lot of announcing and showing of some of their latest stuff, They'll be shown. These things are designed for the high volume marketplace, and they're focused on price points that the mass market and the broader markets could afford to play and pay on. So things are moving forward. The relationship is as strong as it's ever been, and we're looking forward to sharing and a whole lot more as these next generation systems come out.

Great. And then just my last question.

Unknown Speaker

this will be on defense. You talked about, you know, Collins going into initial production. Um, can you help us kind of gauge that opportunity? Uh, over the next year and anything we should expect or any news kind of we should be looking for there.

Paul Travers

We, in the second half here, were fully expecting more production orders. I can tell you we've also gotten a follow on development work which we'll share more on here also in the second quarter the the production side of the house These guys have built this product for a very large segment of the US defense space, and it's for drones and remote flying of drones and situational awareness at the same time because they're optically see-through. And so they share with us some very compelling numbers, but it's early in the game. 2027 should be a really good year for production as it rolls out with those guys. And you'll see more than one device coming from them. Sorry, I wish I had more granular and better, tighter answers for you on that, but quite probably wouldn't be happy if I was sharing some of the inside stuff they shared with us. No, I understand.

Operator

That's all I got. I'll go back in the queue. Thanks, guys. Yes, thanks, Ben. Thank you. That concludes today's Q&A session. I'd like to pass the call back over to Paul Travers for closing remarks.

Paul Travers

We've actually gotten a few other inbound Q&A stuff. So I thought, Ed, if he could read the questions back, I can take a shot at giving some answers. Sure, Paul. We have a few.

Edward McGregor

The first question, why has enterprise revenue been flat and what changes that?.

Paul Travers

Yes, so the enterprise demand for Vuzix these days is really splitting into kind of two paths. Where people need a glanceable monocular display, The right tool is the M400 and our newest LX1. They serve applications that are well defined today. We have an installed base that are working with those products. And we see people that were using M400s upgrading to LX1s. So we should see some nice momentum, knock on wood, with our LX1s. as acceptance rolls into the market, and with AI, we're seeing AI wrapped around the use, in particular around the LX1, for applications that are giving it really new markets and new opportunities that it's going to play in. So that's one of the paths.

At this point in time, those are our major products that we're offering into the marketplace. The other path, which I think I hope you guys have all heard, where applications need information in the worker's natural field of view. customers are waiting for and designing apps around optically see-through systems that Vuzix is making that are in the EVT side of the business right now. They need self-contained products with the processors built in, and those products are inherently AI driven. They are designed for the AI user. user and users that enterprise today is trying to give capabilities to make their jobs happen faster and easier. The Ultralight Pro addresses that, as will another device that we're developing for one of our key OEM customers. Both of these tracks are moving forward towards different products and different timelines. But with the momentum that's building around those, we expect that the flat nature of the transition that we're going through is going to start cranking up and shifting.

Edward McGregor

showing growth here over the coming quarters. Okay, Paul. The second question we have is, can you identify the automotive OEM you're working with and maybe discuss their rollout timeframe?.

Paul Travers

We kind of included this question because we get it so often from folks, so we thought we'd try to address it. First, we cannot name who this customer is. I can tell you they are a Tier 1 automotive manufacturer. If you don't know who this company is, when you hear it, you've been living in a hole. It's very obvious. They're a leading global manufacturer. We have delivered initial systems. We have gone back and forth with those systems, working with people on their plant floors, working with people in the actual applications. These are live, real applications that they're testing them on their plant floors with, and the feedback has been really positive.

Discussions now have moved from, well, can you do this and can you change that, to how are we going to get these things deployed and how do we get them into production programs? factory floor seems to like the product at the same time, the users seem to like them. I cannot put a timeframe though on the customer's deployment discussions other than to say it's continuing to progress in a timely fashion, especially when you consider how large of a project this could be, but also the size of the company that we're working with. Sorry, that's, I know, a bit vague, but it should be getting clearer here later in the second half of this year. That's it folks. I would like to thank everybody again for following Vuzix and I really look forward here to the second half and going into next year with all of the great things that Vuzix has in the queue. and sharing with everybody the progress that we're making. Exciting times. Thank you very much, everybody.

Operator

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