Aeva Technologies, Inc.

Previous wording

The following discussion of Aeva’s results of operations and financial condition should be read in conjunction with the information set forth in the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon Aeva’s current expectations, estimates, and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”) under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references in this section to “we,” “our,” “us” “the Company” or “Aeva” refer to the business of Aeva Technologies, Inc., a Delaware corporation, and its subsidiaries.

Current wording

The following discussion of Aeva’s results of operations and financial condition should be read in conjunction with the information set forth in the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon Aeva’s current expectations, estimates, and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references in this section to “we,” “our,” “us” “the Company” or “Aeva” refer to the business of Aeva Technologies, Inc., a Delaware corporation, and its subsidiaries.

Previous wording

Founded in 2017 by former Apple engineers Soroush Salehian and Mina Rezk and led by a multidisciplinary team of engineers and operators experienced in the field of sensing and perception, Aeva’s mission is to bring the next wave of perception technology to broad applications from automated driving to industrial automation, consumer device applications, and security. Our 4D LiDAR-on-chip combines silicon photonics technology that is proven in the telecom industry with precise instant velocity measurements and long-range performance for commercialization.

Current wording

Founded in 2017 by former Apple engineers Soroush Salehian and Mina Rezk and led by a multidisciplinary team of engineers and operators experienced in the field of sensing and perception, Aeva’s mission is to bring the next wave of perception technology to broad applications from automated driving to industrial automation, consumer device, and security applications. Our 4D LiDAR-on-chip combines silicon photonics technology that is proven in the telecom industry with precise instant velocity measurements and long-range performance for commercialization.

Previous wording

As a development stage company, we work closely with our customers on the development and commercialization of their programs and the utilization of our products in such programs. Thus far, our customers have primarily purchased prototype products and engineering services from us for use in their research and development programs. We are expanding our manufacturing capacity through third-party manufacturers to meet our customers’ anticipated demand for the production of our products.

Current wording

As a development stage company, we work closely with our customers on the development and commercialization of their programs and the utilization of our products in such programs. Thus far, typically our customers have purchased products and engineering services from us for use in research and development programs, pilot and evaluation programs. We are expanding our manufacturing capacity through third-party manufacturers to meet our customers’ anticipated demand for the production of our products.

Previous wording

Unlike legacy 3D LiDAR, which relies on Time-of-Flight (“ToF”) technology and measures only depth and reflectivity, Aeva’s solution leverages a proprietary FMCW technology to measure velocity in addition to depth, reflectivity and inertial motion. We believe the ability of Aeva’s solution to measure instant velocity for every pixel is a significant advantage over ToF-based sensing solutions. Furthermore, Aeva’s technology is free from interference from other LiDAR and sunlight, and our core innovations within FMCW are intended to enable autonomous vehicles to see at significantly higher distances of up to 500 meters.

Current wording

Unlike legacy 3D LiDAR, which relies on Time-of-Flight (“ToF”) technology and measures only depth and reflectivity, Aeva’s solution leverages a proprietary FMCW technology to measure velocity in addition to depth, reflectivity and inertial motion. We believe the ability of Aeva’s solution to measure instant velocity for every pixel is a major advantage over ToF-based sensing solutions. Furthermore, Aeva’s technology is free from interference from other LiDAR and sunlight, and our core innovations within FMCW are intended to enable autonomous vehicles to see at significantly higher distances of up to 500 meters.

Previous wording

We believe Aeva is uniquely positioned to provide a superior solution with the potential to enable higher level of automation for vehicles. Furthermore, we believe the advantages of our 4D LiDAR-on-chip allow us to provide the first LiDAR solution that is fully integrated onto a chip with superior performance at scale, with the potential to drive new categories of perception across industrial automation, consumer devices, and security markets.

Current wording

We believe Aeva is uniquely positioned to provide a superior solution with the potential to enable higher level of automation for vehicles. Furthermore, we believe the advantages of our 4D LiDAR-on-chip allow us to provide the first LiDAR solution that is fully integrated onto a chip with superior performance at scale, with the potential to drive new categories of perception across industrial automation, consumer devices, and security applications.

Previous wording

Aeva’s future performance will depend on our ability to deliver on economies of scale. Our customers will require that our perception solutions be manufactured and sold at per-unit prices that are competitive. Our ability to compete in key markets will depend on the success of our efforts to efficiently and reliably produce cost-effective perception solutions that are competitively priced and affordable for our commercial-stage customers.

Current wording

Our future performance will depend on our ability to deliver on economies of scale. Our customers will require that our perception solutions be manufactured and sold at per-unit prices that are competitive. Our ability to compete in key markets will depend on the success of our efforts to efficiently and reliably produce cost-effective perception solutions that are competitively priced and affordable for our commercial-stage customers.

Previous wording

Commercialization of LiDAR-based Applications. We expect that our results of operations, including revenue and gross margins, will fluctuate on a quarterly basis for the foreseeable future as our customers continue on research and development projects and begin to commercialize advanced driver assist, autonomous and industrial automation solutions that rely on LiDAR technology. The development cycles of our products with new customers varies widely depending on the application, market, customer and the complexity of the product, and can vary from several months to seven or more years depending on the industry. These development cycles result in us investing our resources prior to realizing any revenue from the commercialization or obtaining any firm commitments of pricing, volume or timing of purchases of our products by our customers. As customers reach the commercialization phase and as the market for LiDAR solutions matures, these fluctuations in our operating results may become less pronounced.

Current wording

Commercialization of LiDAR-based Applications. We expect that our results of operations, including revenue and gross margins, will fluctuate on a quarterly basis for the foreseeable future as our customers continue on research and development projects and begin to commercialize advanced driver assist, autonomous and industrial automation solutions that rely on LiDAR technology. The development cycles of our products with new customers varies widely depending on the application, market, customer and the complexity of the product, and can vary from several months to years depending on the industry. These development cycles result in us investing our resources prior to realizing any revenue from the commercialization or obtaining any firm commitments of pricing, volume or timing of purchases of our products by our customers. As customers reach the commercialization phase and as the market for LiDAR solutions matures, these fluctuations in our operating results may become less pronounced.

Previous wording

Sales Volume. Each product program will have an expected range of sales volumes, depending on the end market demand for our customers’ products as well as market application. This can depend on several factors, including market penetration, product capabilities, size of the end market that the product addresses and our end customers’ ability to sell their products. In addition to end market demand, sales volumes also depend on whether our customer is in the development or production phase. In certain cases, we may provide volume discounts or strategic customer pricing on sales of our solutions, which may or may not be offset by lower manufacturing costs related to higher volumes which in turn could adversely impact our gross margins. Our ability to ultimately achieve profitability is dependent upon progression of existing relationships to production and our ability to meet required volumes and required cost targets and gross margins. The protracted development cycle required for customers to reach the commercialization phase, as well as any delays of our current and future customers’ programs could result in us being unable to achieve our revenue targets and profitability in the time frame we anticipate. This could result in Aeva requiring to raise additional debt or equity capital, which may not be available or may only be available on terms that are onerous or highly dilutive to our stockholders.

Current wording

Sales Volume. Each product program will have an expected range of sales volumes, depending on the end market demand for our customers’ products as well as market application. This can depend on several factors, including market penetration, product capabilities, size of the end market that the product addresses and our end customers’ ability to sell their products. In addition to end market demand, sales volumes also depend on whether our customer is in the development or production phase. In certain cases, we may provide volume discounts or strategic customer pricing on sales of our solutions, which may or may not be offset by lower manufacturing costs related to higher volumes which in turn could adversely impact our gross margins. Our ability to ultimately achieve profitability is dependent upon progression of existing relationships to production and our ability to meet required volumes and required cost targets and gross margins. Delays in our current and future customers’ programs could result in us being unable to achieve our revenue targets and profitability in the time frame we anticipate. Such delays could result in us requiring to raise additional debt or equity capital, which may not be available or may only be available on terms that are onerous to Aeva’s stockholders.

Previous wording

Our condensed consolidated financial statements include the accounts of our wholly owned subsidiaries. We have eliminated intercompany accounts and transactions.

Current wording

Our condensed consolidated financial statements include the accounts of our wholly owned subsidiaries. We currently conduct our business through one operating segment.

Previous wording

Aeva is engaged in design, manufacturing and sale of LiDAR sensing systems and related perception and autonomy-enabling software solutions serving customers in automotive, industrial, and other markets. Under our customer agreements, Aeva delivers a specified number of sensing systems at a fixed price under customary terms and conditions. The sensing system units sold under these agreements are typically prototypes that are used by the customer for its research, development, evaluation, pilot, or testing purposes. We also enter into non-recurring engineering service arrangements with certain of our customers to customize Aeva’s perception solution to meet customer specific requirements.

Current wording

Aeva is engaged in design, manufacturing and sale of LiDAR sensing systems and related perception and autonomy-enabling software solutions serving customers in automotive, industrial, and other markets. Under our customer agreements, Aeva delivers a specified number of sensing systems at a fixed price under customary terms and conditions. The sensing system units sold under these agreements are typically products that are used by the customer for its research, development, evaluation, pilot and testing purposes. We also enter into non-recurring engineering service arrangements with certain of our customers to customize Aeva’s perception solution to meet customer specific requirements.

Previous wording

Personnel-related expenses, including salaries, benefits, and stock-based compensation expense, for personnel in Aeva’s research and engineering functions; and

Current wording

Personnel-related expenses, including salaries, benefits, and stock-based compensation expense, for personnel in our research and engineering functions; and

Previous wording

General and administrative expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of Aeva’s executive, finance, information systems, human resources, and legal teams, as well as legal and accounting fees for professional and contract services.

Current wording

General and administrative expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of our executive, finance, information systems, human resources, and legal, as well as legal and accounting fees for professional and contract services.

Previous wording

Selling and marketing expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of Aeva’s business development team as well as advertising and marketing expenses. These include the cost of trade shows, promotional materials, and public relations.

Current wording

Selling and marketing expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of our business development team as well as advertising and marketing expenses. These include the cost of trade shows, promotional materials, and public relations.

Previous wording

Interest income consists primarily of income earned on Aeva’s cash equivalents and investments in marketable securities. Interest income varies based on Aeva’s cash equivalents and marketable securities balance and changes in the interest rates.

Current wording

Interest income consists primarily of income earned on our cash equivalents and investments in marketable securities. Interest income varies based on our cash equivalents and marketable securities balance and changes in the interest rates.

Previous wording

Other income and expense primarily consist of foreign currency transaction gains and losses, as well as realized gains and losses on marketable securities.

Current wording

Other income and expense primarily consist of changes in the fair value of Series A warrants, fair value of private placement warrants, interest expense on convertible notes and foreign currency transaction gains and losses, as well as realized gains and losses on marketable securities.

Previous wording

Research and development expenses decreased by $5.0 million, or 18%, to $22.1 million for the three months ended September 30, 2025, from $27.1 million for the three months ended September 30, 2024. The decrease was primarily due to a $4.6 million decrease in research and development material expense, a $1.7 million decrease in payroll related expense, a $0.7 million decrease in stock based compensation expense, a $0.2 million decrease in consulting expense, a $0.2 million decrease in depreciation expense, a $0.2 million decrease in facility expense, and a $0.2 million decrease in software license expense, partially offset by a $2.8 million increase in research and development services.

Current wording

Research and development expenses increased by $1.2 million, or 6%, to $22.8 million for the three months ended March 31, 2026, from $21.6 million for the three months ended March 31, 2025. The increase was primarily due to a $1.6 million increase in research and development material expense, a $1.1 million increase in stock based compensation expense, a $0.1 million increase in consulting expense, a $0.2 million increase in depreciation expense, partially offset by a $1.7 million decrease in payroll related expense.

Previous wording

Interest income decreased by $1.4 million, or 78%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was due to a decrease in the overall balance of interest-bearing cash equivalents and marketable securities for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.

Current wording

Interest income decreased by $0.1 million, or 13%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was due to a decrease in the interest rate, partially offset by an increase in the overall balance of interest-bearing cash equivalents and marketable securities.

Previous wording

The change during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was due to a $25.4 million increase in the fair value of the Series A warrants issued in connection with the Facility Agreement.

Current wording

The change during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was due to an increase in the fair value of the Series A warrants issued in connection with the Facility Agreement.

Previous wording

Other income increased by $0.2 million during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, due to gain on foreign currency transactions.

Current wording

Interest expense increased by $1.2 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, due to interest expense related to the convertible notes.

Previous wording

On July 2, 2024, Aeva and the parties to the Delaware Stockholder Litigation entered into a term sheet, and on December 6, 2024 entered into a formal settlement agreement, which will be subject to court approval, to fully and finally resolve the Delaware Stockholder Litigation. In connection with the settlement, we agreed to pay a total settlement cost of $14.0 million in exchange for a release of all claims. The settlement is being paid pursuant to our indemnification obligations and from available director and officer insurance policies. As of September 30, 2025, we have paid in full the $14.0 million previously accrued in connection with the settlement of the Delaware Stockholder Litigation. We have also recovered $2.5 million from an insurance carrier. On September 12, 2025, the Delaware Court of Chancery issued a final order approving the terms and conditions set forth in the settlement agreement. See Note 15 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information about the Delaware Stockholder Litigation.

Current wording

On July 2, 2024, Aeva and the parties to the Delaware Stockholder Litigation entered into a term sheet, and on December 6, 2024 entered into a formal settlement agreement, which will be subject to court approval, to fully and finally resolve the Delaware Stockholder Litigation. In connection with the settlement, we agreed to pay a total settlement cost of $14.0 million in exchange for a release of all claims. The settlement was paid pursuant to our indemnification obligations and from available director and officer insurance policies. As of March 31, 2026, we have paid in full the $14.0 million previously accrued in connection with the settlement of the Delaware Stockholder Litigation. We have also recovered $2.5 million from an insurance carrier.

Previous wording

To date, we have incurred negative cash flows from operating activities and incurred losses from operations as reflected in our accumulated deficit of $732.0 million as of September 30, 2025. We expect to continue to incur operating losses due to continued investments that we intend to make in our business, including development of products. As of September 30, 2025, we had cash and cash equivalents and marketable securities totaling $48.9 million. We also have the ability to draw on the Facility Agreement up to $125.0 million through November 8, 2026 in exchange for the issuance of preferred shares, and we intend to draw down on the Facility Agreement if and as required by our capital needs. As of September 30, 2025, all conditions to draw under the Facility Agreement were met. We believe that our sources of liquidity, including financing available to us through the Facility Agreement will be sufficient to fund our operating and capital expenditure for at least 12 months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

To date, we have incurred negative cash flows from operating activities and incurred losses from operations as reflected in our accumulated deficit of $792.3 million as of March 31, 2026. We expect to continue to incur operating losses due to continued investments that we intend to make in our business, including development of products. As of March 31, 2026, we had cash and cash equivalents and marketable securities totaling $99.5 million. We also have the ability to draw on the Facility Agreement up to $125.0 million through November 8, 2026 in exchange for the issuance of preferred shares, and we intend to draw down on the Facility Agreement if and as required by our capital needs. As of March 31, 2026, all conditions to draw under the Facility Agreement were met. We believe that our sources of liquidity, including financing available to us through the Facility Agreement will be sufficient to fund our operating and capital expenditure for at least 12 months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

For the nine months ended September 30, 2025, net cash used in operating activities was $92.9 million, attributable to a net loss of $120.1 million and a net change in operating assets and liabilities of $24.7 million, partially offset by non-cash charges of $51.9 million. Non-cash charges primarily consisted of $25.4 million change in the fair value of warrant liability, $16.5 million in stock-based compensation, $3.8 million of loss on joint development agreement, $4.1 million in depreciation and amortization expense, and $2.6 million in amortization of right of use assets, partially offset by a $0.9 million in accretion of discount on available for sale securities. The change in net operating assets and liabilities was primarily due to a $19.3 million decrease in other current liabilities, a $1.5 million decrease in accounts payable, a $3.1 million increase in inventories, a $2.2 million decrease in accrued employee costs, a $2.4 million decrease in lease liability, and a $0.8 million increase in accounts receivable, partially offset by a $3.1 million decrease in other current assets, a $0.6 million increase in accrued liabilities, a $0.5 million increase in other noncurrent liabilities and a $0.3 million decrease in other non-current assets.

Current wording

For the three months ended March 31, 2026, net cash used in operating activities was $25.8 million, attributable to a net loss of $35.0 million and a net change in operating assets and liabilities of $1.3 million, partially offset by non-cash charges of $10.4 million. Non-cash charges primarily consisted of $9.4 million in stock-based compensation, $1.3 million in depreciation and amortization expense, $0.5 million in amortization of right of use assets and $0.1 million in accretion for convertible notes, partially offset by a $0.5 million in accretion of discount on available for sale securities and a $0.5 million change in the fair value of warrant liability. The change in net operating assets and liabilities was primarily due to a $6.1 million decrease in accrued employee costs, a $0.4 million decrease in lease liability, a $0.2 million decrease in accounts payable, a $0.2 million decrease in accrued liabilities, a $0.2 million increase in inventories and a $0.1 million increase in accounts receivable, partially offset

Previous wording

For the nine months ended September 30, 2025, net cash provided by investing activities was $77.7 million, attributable to proceeds from maturities of available-for-sale investments of $106.3 million, partially offset by purchase of investments of $25.5 million and purchase of property, plant and equipment of $3.1 million.

Current wording

For the three months ended March 31, 2026, net cash used in investing activities was $20.5 million, attributable to purchase of investments of $36.8 million and purchase of property, plant and equipment of $2.2 million, partially offset by proceeds from maturities of available-for-sale investments of $18.5 million.

Previous wording

For the nine months ended September 30, 2025 there were no significant changes to our critical accounting estimates except for as described below. For a more detailed discussion of our critical accounting policies and estimates, please refer to our 2024 Form 10-K and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

For the three months ended March 31, 2026 there were no significant changes to our critical accounting estimates as noted below. For a more detailed discussion of our critical accounting policies and estimates, refer to our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

See Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.

Current wording

See Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.