Transcript: Indie Semiconductor Q2 2026 Earnings Conference Call

Indie Semiconductor (NASDAQ:INDI) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below.

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Summary

Indie Semiconductor reported Q2 2026 revenue of $64 million, a 24% increase year-over-year, surpassing guidance midpoint.

Strategically, the company is gaining traction in the automotive radar market with its 77 GHz and 120 GHz solutions, and expanding into physical AI and quantum photonics.

The company announced significant design wins, including a radar chipset win with Volvo, and is leveraging its IND880 and IND881 SoCs in various applications.

For Q3 2026, Indie Semiconductor expects revenue between $67 to $73 million, with continued growth from its core business and the Wuxi subsidiary.

Management highlighted strong momentum in radar, vision, and photonics, and noted pending acquisitions and divestitures to strengthen its portfolio and focus.

Full Transcript

OPERATOR

Good afternoon and welcome to Indie Semiconductor's second quarter 2026 earnings call. Currently, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. 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.

Ashish Gupta, Investor Relations

Thank you, operator. Good afternoon and welcome to Indie Semiconductor's second quarter 2026 earnings call. Joining me today are Donald McClymont, Indie's CEO and co-founder, Nyxi Wu, Indie CFO, and Mark Tyndall, EVP of Corporate Development and Investor Relations. Donald will provide opening remarks and discuss business highlights. Nyxi 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, a presentation summarizing our quarterly results and more details on non-GAAP measures is posted on our website in advance of this call at www.Indeed.in.

I'll now turn the call over to Donald.

Donald McClymont, CEO

Thanks, Ashish, and welcome, everyone. I'm very pleased to report that Indie Semiconductor 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 Semiconductor'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, 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 GHz radar chipset solution is gaining outsized traction through the deployment of our Tier 1 partner's Gen 8 radar product, with new wins soon 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 Semiconductor was awarded an initial $25 million production order for a radar chipset, and 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 Semiconductor, 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 Semiconductor, with most implementations averaging four to five radars per car, with opportunities for far 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 P Market Research projecting the global automotive radar market to grow at an 18% CAGR to 2032, representing one of the fastest growing segments within the ADAS and vehicle sensing ecosystem.

According to Yole Group, by 2030 they expect up to five 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 GHz frequency band, we are now seeing applications evolve due to even greater performance and lower cost points that we can provide 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. 120 GHz 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 GHz 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 has opened many new opportunities with new and current customers.

Indie Semiconductor 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. In the recent AutoSense and In-Cabin USA event in Detroit, we showcased—to strong engagement and customer acclaim—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 Semiconductor as a leader in the 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, and 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, sedans, and electric SUVs.

With its ability to enable advanced camera and vision processing for ADAS applications, the IND880 remains extremely attractive to our customer base, as it 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 Semiconductor'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 XEV9s 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 Semiconductor 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 Naisheef to walk through our financial results. Thank you, Naishi. Indie Semiconductor'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 Semiconductor's technology leadership and expanding product breadth is positioning us to capitalize on these emerging opportunities.

We believe Indie Semiconductor 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 up. That concludes our prepared remarks. Operator, please open the line for questions.

OPERATOR

Thank you. We will 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 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up.

One moment while we poll for questions, and we'll hear from Craig Ellis with B. Riley Securities. Please go ahead.

Craig Ellis, Analyst at B. Riley Securities

Yeah, thanks for taking the question. And 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 to $50 million in revenue this year for that product?

Donald McClymont, CEO

So, I mean, we won't break down exact details of individual design wins for each customer. But that being said, Volvo has some significant volume. It has a high penetration rate as it's basically a luxury car manufacturer, so pretty much all of their models will feature this technology. So it's a very decent-sized design win for us. It's far from our only design win, and although it is the one that is the most public at the moment. In terms of where we see ourselves going for the rest of the year, obviously radar is still going to be a big driver for all of our growth through '26, '27, and '28 and '29, in fact.

So it'll be a big portion of the growth perspective that we have and the outlook.

Craig Ellis, Analyst at B. Riley Securities

That's great, thank you. And then the follow-up relates to the DRAM-less product, the Indie 880. 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. So can you help us understand the degree to which that's converting to revenue this year, and the extent to which it's giving you pipeline visibility for the coming years?

Thank you.

Donald McClymont, CEO

Yeah, I mean, it's a chunk of the growth that we see. It has come to us very swiftly because of the expediency and the nature of the situation. People have to ship somehow, and that means that regular design cycles go out the window. So we have seen things convert very quickly within a few weeks or a quarter at max. And yeah, that's driving some pretty significant good news for us at the moment in a few markets, not only automotive, but also in physical AI, which also is kind of a surprising and very nice upside for us that these products can be used in the other application.

OPERATOR

Next we'll move to Cody Acree with Benchmark StoneX.

Cody Acree, Analyst at Benchmark StoneX

Thank you, guys, for taking my questions and 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?

Donald McClymont, CEO

Yeah, I mean, they're both going to ramp very steeply. We should see the slope of the ramp accelerating from where we are right now. You should see that, of course, already in the guide for Q3. We are super excited about it on both fronts. We are seeing so much traction for both the product families, bringing us into new OEMs and even into new markets in some cases. So it's super exciting. We have applications, as I mentioned before, outside of automotive as well, in humanoid robotics and also even in drones we're seeing our technologies getting used to.

So it's super exciting.

Cody Acree, Analyst at Benchmark StoneX

Thanks for that, Donald. And then maybe can you just help frame or give any details to the size of your current non-auto revenue in physical AI, quantum photonics, what have you, whatever details you can provide, and then maybe how significant do you expect that non-auto business to grow to either the end of this year or end of next would help?

Donald McClymont, CEO

Well, we don't really sub-segment, and it's still, let's say, nascent. I'd say perhaps the physical AI markets are a little nearer. You know, we quoted some numbers for the leading customers of ours who manufactured thousands of robots in the last 12 months. And, you know, we are seeing predictions of these markets going into multiple millions across many applications in robotics, not just humanoids, but AMRs also. Quantum is a little harder to call, but I would say just at this very moment there's a lot of buzz about it.

Some of the guys out there are beginning to deploy qubit numbers above 100,000 units, and it is getting close to the point where quantum advantage should reach a tipping point. So, I mean, it's really hard to put a number on it, but, I mean, it is an exciting market. It is an exciting time to be alive and see our products going into these amazing new machines.

OPERATOR

Next we'll hear from Anthony Stoss with Craig-Hallum.

Anthony Stoss, Analyst at Craig-Hallum

Good afternoon, everybody. Donald, just wanted to also follow up on the Indie 880. Last quarter you mentioned that you thought it would be more revenues potentially in 2026 than the radar. If you can shed more detail if it's going into low-end cars. I know it's heavily exposed to the China market. Just your sense on the billing of the number of models per quarter and what you think kind of the steepness of the ramp looks like in Q4. And then I had a follow-up.

Donald McClymont, CEO

Yeah, I mean, we are a little more indexed to China for this particular application, but we do now have wins in and with North American Tier 1s who are very significant volume in this application space. We're seeing the application being deployed in low, mid-tier, and above, and probably dozens of models by now.

Anthony Stoss, Analyst at Craig-Hallum

Okay, and shifting gears to the topic of gross margins. In the past you've talked about trying to get to or expecting to get to 55% plus gross margins down the road. And I think not too long ago you were hoping for 50% gross margins late this year. Where do you think that now shakes out? Do you still have hopes for a 50% gross margin quarter in Q4?

Donald McClymont, CEO

Well, we don't typically guide gross margin, but through the divestiture of Wuxi, which I would say is potentially a drag on gross margin, you know, we're in a good spot where we can get to our corporate goals.

OPERATOR

And we'll move on to John Tanwunjin with CJS Securities.

John Tanwunjin, Analyst at CJS Securities

Thank you for taking my questions. I was wondering if you could quantify the number of wins you had in the quarter driven solely by the DRAM shortages that are out there and kind of how many engagements do you have in the pipeline, and if you could provide a little further detail, what kind of average revenue those kinds of engagements have on an annual basis?

Donald McClymont, CEO

Well, 880 has an ASP of around $10, and sometimes there are one or two deployed per application. It would be hard to give you an accurate number of how many design wins. It's kind of similar to the question of numbers of models that was asked just before there. So it's in the same range—dozens of design wins.

John Tanwunjin, Analyst at CJS Securities

Okay, great. Thank you. And then just a question on cash flow. I know you've been building inventory for the ramp. How should we think of that burn going forward, especially in front of the growth that you're seeing?

OPERATOR

Moving on, we'll hear from Natalia Winkler with UBS.

Natalia Winkler, Analyst at UBS

Hi, thank you very much for taking my question. So the first one I had was on physical AI. Would it be possible for you guys to help us understand kind of the content, you know, whether it's for robot applications maybe? How does it compare to the automotive market? And maybe as a part of that, as you guys pursue some of those physical AI sockets, do you have to go to a completely different supply chain, or could some of your existing relationships with Tier 1 be helpful to get these design wins?

Donald McClymont, CEO

I mean, taking the last one first, both are applicable. Some of the traditional Tier 1s all over the world are beginning to turn their focus a little bit towards physical AI. AI away from automotive. And it's perhaps a more profitable market. And the, I mean, the sort of net reasoning for that is you can consider a humanoid robot or any kind of robot as a car with legs or a car as a robot with wheels. And many of the electronic implementations are applicable for both. So from our perspective, we have direct relationships with, let's say, module manufacturers, which would be analogous of tier 1s for the physical AI business.

And we have direct relationships obviously with our tier one customers who are in some cases actually already entering into certain aspects of the robotics market. So we're able to leverage both, is the answer.

UNKNOWN Analyst

Thank you. And then in terms of the content per robotic opportunity, I guess per device,

Donald McClymont, CEO

I don't know, I mean the ASPs are typically significantly higher because the volumes are still small. So it's probably really too early to say what the dollar content for a robot could be. I mean, we have applicable parts that could be used in high-end applications of a robot where they have multiple sensors ranging from vision, radar, lidar even. I mean, and some of the processing that goes on on the back end of that could easily be $100 per robot.

OPERATOR

And we'll move on to Joshua Buchalter with TD Cowen.

Joshua Buchalter, Analyst at TD Cowen

Hey guys, thank you for taking my question and congrats on the results. I wanted to ask about the 880 wins in China. Any details you can provide on what types of architectures it's being integrated into and anything you can give on the pros and cons of integrating the 880 without DRAM into a central ADAS processor. Does that make it easier? Harder? Just be curious to hear your thoughts on that. Thank you.

Donald McClymont, CEO

So we get used in standalone systems, things like electronic mirror systems, OMS, DMS, and we also get used as a preprocessor that goes in front of maybe a central ADAS processor. So what that does is we have the ability to process video, if you like, on the fly, so we don't dump frame by frame into large external memories, which is currently where the problem is. There's a net side effect of that in that the video latency in our implementation is significantly easier and alleviates significantly the processing required for a central ADAS processor.

Sometimes we just hear of them from our customers that they're choking on having to process the raw video streams and we can take that burden off them and they can go to use their processing for things that are more valuable, perception and such as that. So in our opinion, certainly it makes the implementation much easier and also in the opinions of many of the engineers at our customers.

Joshua Buchalter, Analyst at TD Cowen

Thank you for the call, that was really helpful. And then for my follow up, maybe just can you help us understand, you know, what hurdles are left with the Wuxi divestiture that need to be cleared before you can complete the deal. Thank you.

Donald McClymont, CEO

I mean, just. We're in the throes of regulatory still. It's like there's an ongoing dialogue. It's a very constructive Q&A process. And we set the expectations that this deal would close in Q4 of this year. And I think we remain optimistic about that.

OPERATOR

And that will conclude today's question and answer session. I would now like to turn the floor back to management for closing remarks.

Donald McClymont, CEO

Thanks, everybody, for attending. Hope to see a few of you at the conferences in the coming weeks and months and see you next quarter.

OPERATOR

Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.

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