ALMU earnings call analysis

NASDAQ:ALMU Q1 2026 Earnings Call Transcript Generated on 6/8/2026 Gary | Operator: Good day, and thank you for standing by. Welcome to Illuma's Q1 fiscal year 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference call is being recorded. At this time, I would like to turn the call over to Tony Rossi, investor relations for Illuma.

Please go ahead. Tony Rossi | Investor Relations

Thanks, Gary. Good afternoon and welcome to Aluma's first quarter fiscal 2026 earnings call. I'm here today with founder and CEO Jonathan Clampkin and CFO Christopher Stewart. Today's discussions and responses to questions may include forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These risks and uncertainties are detailed in the earnings press release issued today along with the reports filed with the United States Securities and Exchange Commission. These reports, along with today's earnings release, can be found under the Investors section of our website. Illuma assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Throughout the discussion, the company will refer to non-GAAP financial measures, including EBITDA and adjusted EBITDA. A reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures is included in our earnings press release and SEC filings. Now I'll turn the call over to Illuma's CEO, Jonathan Clampkin.

Jonathan Clampkin | Founder & CEO

Thank you, Tony. And thank you all for joining. Let's begin with the growing spotlight on AI adoption. It's rapid acceleration is driving unprecedented demand for optical component technologies for AI infrastructure. In response, Illuma has fast tracked the transition to commercial scale production of our high performance semiconductors. Illuma builds critical semiconductor photonics, including high-speed transceiver components and high-power quantum dot lasers for optical interconnects. We've invested in a breakthrough manufacturing platform with the potential to meet the performance, scale, and cost requirements for AI and other large volume markets. The way cloud computing became the new standard for deploying and managing digital services, we believe Illuma's approach will become the way of the future for semiconductor manufacturing. That is the definition of a disruptive technology. Think of the impact in the context of what is happening on a global scale. Demand for semiconductors in U.S. markets is at an all-time high, yet many fabs are overseas, and supply chain issues are impeding the usual way of doing things. Turn to Illuma. We do not rely on expensive indium phosphide substrates that now have historically long lead times and historically high prices. We currently work with multiple US-based fabs, including one well-known large volume pure play foundry. Manufacturing on small substrates made of materials that in short supply and with low volume specialty fabrication processes will not suffice. And Illuma is here to capitalize on this opportunity. The market for optical component technologies and AI infrastructure alone is projected to be several billion dollars within just a few years. And Illumis technology also applies to other high growth market verticals, including defense and aerospace, mobile and consumer electronics, industrial and robotics, to name a few. As we navigate a period of unprecedented demand, customer opportunities continue to expand, fueling our go-to-market plan. How were we executing? To begin, we completed an oversubscribed capital raise which strengthened our no debt balance sheet and boosted our cash to $38 million. With this strong financial position, plus the revenue generated from R&D contracts, we continue to execute our strategic priorities and accelerate our transition to commercialization. Our ongoing R&D contracts reflect our dual-use technology approach to address market needs. We selectively bid on programs to advance technologies important to government customers, but that also have commercial applications in our target markets. This quarter, we signed a new contract with NASA to leverage our scalable semiconductor platform for quantum. Our approach provides a path to low-size weight and power quantum systems making them viable for space-based platforms. Programs like this provide non-dilutive funding for development, while commercial companies evaluate our technology for potential integration. As a reminder, Alumis technology combines best-in-class semiconductor materials with large-volume microelectronics manufacturing. We recently announced that, in collaboration with Thorlabs, We will be delivering a presentation on Aluma's scalable photonics platform at SPIE Photonics West Conference in January. This is the world's largest annual conference and exhibition for optics and photonics technologies, and we look forward to sharing our breakthrough at this prestigious gathering. We will also host a company booth at the exhibition, which is a terrific venue to meet with existing and potential customers and to showcase our technologies. Key to our go-to-market plan is increasing manufacturing readiness. This means qualifying our processes for production. To do so, we have increased wafer fabrication levels at our foundry partners nearly five-fold and made an investment in wafer-scale test capabilities. On the latter, we recently inked an amazing deal to acquire significant capital equipment assets from a major components and solutions provider at nearly one cent on the dollar. Also critical to increasing manufacturing readiness is adding team members to our team. We recently filled important roles, including director of supply chain manufacturing, director of technology enablement, among others, and we continue to recruit in the areas of business development, manufacturing, and operations. I am thrilled at the caliber of applicants we are interviewing. What we are doing at Aluma is attracting elite candidates, and we look forward to adding more talent to the team as we drive our transformative technology forward. The demand for high performance semiconductor components continues to rise, especially for photonic technologies supporting the adoption of AI. It's exciting to see new customer opportunities converging around our vision, growing interest in our technology, and the meaningful impact we're poised to deliver at scale. As we deepen and expand engagements with prospective customers, we're uncovering even greater opportunity aligned with our offerings and product roadmap. This reinforces confidence in our technology, approach, and business model. All pieces are falling in place to create the one plus one equals three value proposition that we believe paints a bright future for Aluma its customers, and its shareholders. Now I'll turn the call over to our CFO, Chris Stewart, to discuss the financials.

Christopher Stewart | CFO

Thanks, Jonathan. Now I will share some highlights of our first quarter fiscal 2026 financial results. We are pleased to report another solid quarter of revenue from our government and commercial contracts. For the quarter ended September 30th, revenue was $1.4 million, compared to $481,000 a year ago and $1.3 million in the prior quarter. GAAP net loss for the first quarter was $1.5 million or $0.09 per share versus a net loss of $730,000 or $0.06 per share in Q1 of last year and a net loss of $859,000 or $0.05 per share in the June quarter. The increase in net loss from the prior quarter was primarily attributable to higher payroll and stock-based compensation expense. Non-GAAP net loss for the quarter was $437,000 or 3 cents per share versus a net loss of 550,000 or 4 cents per share in the first quarter last year and a non-GAAP net loss of 112,000 or 1 cent per share in the June quarter. Adjusted EBITDA for the quarter was a loss of $450,000 compared to a loss of $457,000 for the comparable period last year and a loss of $113,000 in the prior quarter. We ended the first fiscal quarter with $38.1 million in cash and cash equivalents, and we currently have no long-term debt. During the quarter, we closed a follow-on public offering for 1.955 million shares, raising net proceeds of $23.4 million. The capital significantly strengthened our balance sheet more than doubling our cash position. We expect this additional cash will support our plan to transition from exclusively R&D revenue to initial commercial product revenue. Now, turning to our expectations for fiscal 2026, we continue to expect revenue in the range of 4 to 6 million, as we stated in our year end call. For majority of our contracts, revenue is recognized upon achievement of technical milestones. Once again, in the quarter, we hit all of our planned milestones, adding to our impressive track record of timely delivery. That said, revenue may vary quarter to quarter depending on the timing of achieving and receiving customer sign-off on these milestones. We view this R&D revenue as important, non-diluted financing that supports our development efforts and progress towards commercial readiness. As previously discussed, we are highly selective in bidding only on projects we believe will have an impact in our commercial target markets. while our strategic priority for fiscal 2026 is positioning Illuma to begin the transition to commercial product revenue. Going forward, we expect to prudently increase spending as we invest in growth initiatives, including increased production for technology validation and expanding our business development, manufacturing, and operations teams. With our established capital efficient market, we are focusing our investments on what is most critical for an effective transition to commercialization. Several of the industries that we are targeting are poised for significant technology-enabled growth, and we plan to be ready for this major inflection point in the semiconductor industry. Now I'll turn the call back to Jonathan for his closing remarks before we open the call to your questions.

Jonathan Clampkin | Founder & CEO

Thank you, Chris. The fiscal year is off to a promising start with key objectives already underway. In support of our go-to-market strategy, we've made continued progress to strengthen our financial position, increase our manufacturing readiness, and expand our team. Demand for high-performance semiconductor technology in our key target markets continues to grow, and we believe we'll be in a position to deliver at the scale required by our customers. We look forward to sharing more information with you in the near future. I want to thank our incredible team for their commitment and hard work, and a special thank you to all our investors for your support and enthusiasm that drives us every day. Operator, you can now open the call for questions.

Gary | Operator

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question today comes from David Williams with Benchmark.

Please go ahead. David Williams | Analyst, Benchmark

Hey, Dylan. Thanks for taking the questions and congrats on the continued progress here.

Christopher Stewart | CFO

Thanks, David.

David Williams | Analyst, Benchmark

Thank you. So, Jonathan, maybe first, last quarter you talked about having, you know, around 20 engagements or so, and just wondering if you could give us an update on how those are progressing and if there's been any that's kind of fallen out of that funnel or if they've progressed and just kind of how you're seeing the funnel of activity today.

Jonathan Clampkin | Founder & CEO

Yeah, we've made continued progress with ongoing active engagements, especially in defense and aerospace areas. and AI infrastructure. Defense in aerospace continues to be strong, and we've been advancing engagements in this vertical across the pipeline. Maybe some notable achievements include a recent sample delivery to a key customer, custom NRE work that we're doing in this area related to our imaging sensors. And then sort of in terms of maybe the growth of the pipeline, There are some newer customers in the AI infrastructure space that are evaluating, in particular, high-speed transceiver component technology. So we continue to look at our market verticals broadly, but same as last quarter, there's a particular focus on AI infrastructure, optical component technologies for AI infrastructure, defense and aerospace, and mobile and consumer electronics.

David Williams | Analyst, Benchmark

Perfect. Thank you. And then maybe just you talk about your commercial readiness here and that you've, by 5X, increased the wafer to your FAB partners. Can you maybe give us a little bit of an update on where you are and how quickly you can stand up the FABs? If you were to get an order today, how long would it take you before you could have volume kind of production out of your FAB partners?

Jonathan Clampkin | Founder & CEO

So it's, yeah, obviously dependent on specific volume and market vertical and the qualification requirements for that market vertical. But as you mentioned, we are running more and more wafers through our FAB partners now on the order of fivefold, meaning the number of wafers or number of wafer lots that we're running through our FAB partners. The things that we're making at our external FAB partners are primarily detectors for imaging sensors and high-speed components for transceiver applications intended to deploy both in defense and aerospace, but also in AI infrastructure. With the capacity that we have in place now, we could support a reasonable volume, the types of volumes that you'd expect in defense and aerospace, and also in sort of the optical component technologies. For a big consumer market like mobile, or consumer electronics, we'd have to invest additionally in overall capacity.

David Williams | Analyst, Benchmark

Okay. Very good. But you feel pretty confident that what you have lined up today, that you can support the probably nearer term type of potential engagements in aerospace and defense and optical?

Jonathan Clampkin | Founder & CEO

That's correct. And, you know, there are several different use cases and formats sort of low to medium speed versions of some of our transceiver components, higher speed versions of our transceiver components, but at least some of them are ready, you know, to deliver for evaluation and ready to qualify for a customer's requirements.

David Williams | Analyst, Benchmark

Okay. And on that transceiver side, can you talk a little bit about exactly what your components are, where are you participating, and then how do you Is there a way to kind of size that market if you break it out? And maybe not even breaking it out, but just kind of thinking about the lower speed and mid and maybe even upper speed. But where do you play and what do you think that total market is for you?

Jonathan Clampkin | Founder & CEO

So thanks for asking this, David. One of the reasons I'm so excited about that market is that we're uncovering more and more use cases and architectures We've engaged with some newer customers in that space as recently as the last month or two. And what we're finding is that there's interest and a need for high performance technology for higher speed transceivers, for more traditional pluggable optics formats, just at higher data rates. Some of the component technologies today are very expensive. I still feel very strongly about our business model to deliver high performance semiconductor chips. And I think the margins could be very good there, especially in this market. So again, one of the reasons I'm so excited about that market is that some of our prospective customers are interested in very high performance, high speed components for a few different use cases. Some are interested in sort of lower speed but higher volume and arrays of devices. And then a little bit longer term, you know, co-packaged optics will eventually, you know, start to deploy and see adoption. And some of our high-power laser and quantum dot laser technology could make an impact there. So I'm very excited about sort of near-term prospects as well as, you know, future prospects a few years out.

David Williams | Analyst, Benchmark

Okay. Fantastic. And then, you know, kind of going back to the prior question, but as you think about commercialization and how close you are and maybe tipping over some of these engagements, can you kind of talk us through the timeline of when you think you might have something that you might be able to announce in terms of a design win or falsification or something that kind of gives us a trajectory on that revenue opportunity, even if we're looking out into 27 or beyond?

Jonathan Clampkin | Founder & CEO

in the company for the transition to commercialization. And so what that means is really solidifying the relationships with some of our prospective customers and maybe even some of the newer customers that have come to the table in the last couple of months. So in terms of timing, our goal is to get to initial commercial product revenue sometime during this fiscal year. I don't think we're ready to say what the volumes would be, what the prices would be, what the total revenue would be. Chris will answer other questions related to revenue and guidance. Our current revenue is based on bookings and R&D contracts. But what we're doing now is really laying the foundation for commercial scale production. And that means delivering more and more samples to our customers and solidifying relationships that might come in the form of NRE commitments from our customers, and at least some small volume orders, which might initially be for sampling purposes. But the point is, we're ensuring that we're going to be ready when customers are ready to adopt technology and place orders.

David Williams | Analyst, Benchmark

Certainly appreciate it. One last one, if I may. Chris, just on the revenue or excuse me, on the balance sheet, you feel pretty comfortable that that will get you to kind of a cash flow or a cash neutral position from your current balance?

Christopher Stewart | CFO

Yeah, there's a lot of dependencies in terms of like how the markets play out and what investments we need to make to support certain customers. But what we've said is we believe we have plenty of cash on the balance sheet to get to that initial revenue. And then we'll see if that gets us all the way to cash flow positive or if we need to make some investments in capacity to support really, really rapid growth.

David Williams | Analyst, Benchmark

Thanks so much. I certainly appreciate it. Best of luck on the quarter, gentlemen. Thanks again. Thank you, David.

Gary | Operator

The next question is from Richard Shannon with Craig Hallam.

Please go ahead. Richard Shannon | Analyst, Craig Hallam

Well, thanks, Jonathan and Christopher. Let me ask a couple questions here. Jonathan, let's start with one of your early comments here regarding photonics and specifically fast-tracking some work here. Maybe you can elaborate on what exactly this means and probably have a couple of follow-ups on this topic.

Jonathan Clampkin | Founder & CEO

I think our sort of focus areas in optical interconnects for the near term are becoming more and more clear. the more deeply we get engaged in customers and understand the requirements for that market. So fast tracking means dedicating resources to that specific market vertical and a few key prospective customers. And it also means ramping up the manufacturing readiness effort around the components that we're building for that market vertical and the hiring of people that have backgrounds in photonic component technologies for that specific market vertical. So it's a bit of a focused effort. And because of the funding that we've raised, we're able to accelerate and hire people probably faster than initially anticipated. We're able to run more and more wafers at our foundries more than initially anticipated because of the additional resources we have.

Richard Shannon | Analyst, Craig Hallam

Okay. Jonathan, can you elaborate on what kind of components we're talking about here? You've obviously talked about quantum dots in the past here, which is obviously an emitter of a laser. What about, I think you're alluding to other components here, and I would assume detectors are in that, but any other components that you've also been working on that seem to be grabbing some attention?

Jonathan Clampkin | Founder & CEO

Yes, so generally, ALUMA's technologies are emitters and detectors, as you know, for sensing and communication applications. So we work on both emitters and detectors, but we leverage this highly scalable platform to build those components. Quantum dot lasers, there's a lot of interest for that technology, especially for light engines for silicon photonics applications and maybe for some externally modulated lasers in the future. But I think that's a little bit more of a longer term prospect. In the near term, high performance just, you know, emitters and detectors are in very high demand right now. And if you recall, we've been working on high speed detectors initially with the Navy to deploy novel high-speed transceivers for multimode fiber links on aerial platforms. And a different flavor of that could be applied to a few different use cases in the data center market. And without going into too many specific details of exactly what we're doing, there are more than one use case for that technology. And again, this is in part why I'm so excited because slightly different flavors in terms of what the targeted speed performance is, the targeted sensitivity, the targeted format, how many of these detectors and are they arrays of detectors or banks of detectors or individual detectors. These are components that are traditionally somewhat expensive, especially when you get to the higher speeds. And I think Aluma can make a real impact here because of how we do our manufacturing on different substrate platforms that are a lot less expensive and could lead to not only the scale, the higher volume, but also lower cost in the future.

Richard Shannon | Analyst, Craig Hallam

Okay. That's helpful, Jonathan. Thanks for that perspective. Maybe a couple more questions for me. In the press release, you talked about a goal of, I think, three to seven new development contracts for this year, and you didn't give us any sort of number last quarter, at least that I recall. So maybe you can help us understand where you're expecting some of these to come from. Do you already have visibility into these opportunities with the government or with commercial partners here? And maybe kind of give us more detail there, please.

Jonathan Clampkin | Founder & CEO

Yes. So last quarter we said three to seven new contracts, and this quarter we announced a one-time contract with NASA. So that's one of those three to seven. We do have a few pending bids out there that we expect to hear on in the next few months, and we're working on a few more proposals for for a few strategic government contracts. At the same time, we're also in discussions with some of our commercial partners in one case where we're performing on some NRE and discussing sort of a next phase of that work. And we are getting some requests from some of our commercial customers to scope out some NRE work. So I think we'll have more information to share as we go, but at least At this moment, we feel fairly comfortable with the three to seven number. Maybe one other item I'll just add related to that topic. I think eventually what you're going to see is that we're going to start to transition to bigger, you know, contract opportunities, meaning because the transition to commercialization is really our goal, setting the foundation for the transition to commercialization in this fiscal year. That's our highest strategic priority. And so what that means is that we may not bid on some of the smaller government contracts that we have in the past, even though those lead to nice prospective customer engagements and eventually more funding, it could be that we transition to bidding only on sort of larger scale opportunities that feed into our commercial opportunities. And if the commercial business picks up sooner than later, then obviously that's where our focus will be. And I think it's timely because if you think about the change in administration and budget cuts to some of the funding agencies and general slowdown with government funding and the recent government shutdown, it's a good time for us to focus on commercial because There might not be as much government contract funding. Maybe there will be some government funding really to support infrastructure and U.S.-based semiconductor manufacturing, which is what Luma is all about. And moving forward, I mean, our goal was to transition to commercialization, to leverage what we did in terms of developing technology under these R&D contracts. So I think that's sort of the shift that you'll you'll see moving forward. But again, just to come back to your question, we've bid on contracts, a few commercial and several government-funded contracts across agencies, primarily DOD and some NASA and DOE.

Richard Shannon | Analyst, Craig Hallam

Okay. That's helpful, Jonathan. You partially answered my next question, but I'm going to ask anyway just to make sure there's a more complete answer here. But Just wondering about any impacts from the government shutdown. It sounds like there's been some here. It sounds like maybe this is more slowing down the initial RFQ, RFI process, but how about other contracts that are in process here? Are those being slowed down as well?

Jonathan Clampkin | Founder & CEO

There's been, I mean, the government is shut down now, so it's hard to reach anyone. But there has been some general slowness in terms of new programs getting reviewed and contracts getting executed. We have seen that. It hasn't had a major impact on us because, as you know, we don't heavily rely on that funding. It's been really great to win some of that funding because it's been non-diluted funding, so it's really kept our cash burned down, and it's led to a lot of other things, not only with government customers, but with commercial customers or partners that are supporting us on some of those programs. But generally speaking, yes. I mean, things have been slower than usual. It's taking longer to get a contract signed. And there are some programs out there that we had bid on that got delayed and in some cases canceled and reformatted into something else. But again, we weren't relying on any of those bids in terms of capital needs. or revenue guidance. Everything that we speak of in terms of guidance is based on bookings and some assumptions around the success in delivering on milestones.

Richard Shannon | Analyst, Craig Hallam

Okay. That sounds great. Thanks for that detail. Last question. I'll jump out of line here. Just asking about the FAB relationships here. The last quarter you talked about engaged with four of them and two more that might possibly enter the fold here. It sounds like that number might might go up here in this in this past quarter if you could update on that and then I guess I'm probably more interested in when a relationship becomes more formalized and contractual and one where you might even announce that Parker I know last quarter you said you're not going to announce them or even give that information out to potential partners until you actually have to but wondering if that's in the in the cards anywhere in the near future thank you so Jonathan Clampkin | Founder & CEO: We haven't formally added any new FAB partners in the last couple of months, but have increased the level of runs, the number of runs that we're doing at several of those FABs. And there are some new activities happening with some supply chain partners. Just to paint the entire picture, you know, one type of partner is a fab that does what we refer to as sort of the front-end fab. We deliver our wafers and devices get fabricated. But there are a few other steps in our process that happen other places. And so we've had to set up a supply chain. There's some, you know, back-end work, some integration work, wafer scale integration work. There's even some tests. So there are a number of partners that we've added to our supply chain. Some of them I might not characterize as a fab. But to answer your question, we may make announcements, but generally at this stage, given the volume of wafers that we're running at our fabs, we'll continue to do that. Maybe as things start to ramp up based on customer demand and we have data that statistical data that we're sharing with customers and we are ready to share information about qualified processes for a specific standard or for a specific customer, that might be a little bit more timely in terms of sharing a little bit more of our supply chain. I mean, generally speaking, you know, photonic component manufacturers don't share a lot of detail on their supply chain. We're certainly gonna try to find creative ways to share different proof points and forms of validation with our shareholders, but being mindful of confidentiality and trade secret information.

Richard Shannon | Analyst, Craig Hallam

Okay, that makes sense. That is all from you guys, thank you.

Christopher Stewart | CFO

Great, thanks Richard.

Gary | Operator

The next question is a follow-up from David Williams with Benchmark.

Please go ahead. David Williams | Analyst, Benchmark

I appreciate you taking the follow-up here. I just wanted to ask, on the optical interconnects on the transceiver side, what is it that's driving your accelerated potential there? Is it an economics perspective? Is it the volume? Is it performance? What exactly, if you kind of look at while your customers are coming to you, what is driving that business there?

Jonathan Clampkin | Founder & CEO

Well, the first way I'd answer that question is that that market is really booming right now. And there's a lot of demand, not only now, but expected in the coming years, as I'm sure you know, especially from some recent earnings calls from companies active in that market. So part of it is there's so much activity. Volumes are growing. And as we're growing as a company, we're engaging more and more customers that in some cases are new to our technology and sharing with us slightly different use cases for our technology and some of those end markets. I mean, that's a market that we knew was expected to grow substantially. And one of the reasons, as I mentioned, that we're sort of uh, dedicating lots of resources to that market in terms of customer interactions, business development, uh, and even, you know, the fraction of wafers we're running through our fabs, you know, geared toward transceiver components. The reason that we're doing that is, um, there's more than one use case, uh, and, uh, there's, um, high demand, um, and the component technologies that are needed are, are, um, are, you know, not inexpensive. They're expensive, and customers want more of them, and they'd like to see them at lower cost. So that, you know, really points to manufacturing approaches like Illumis, scaling and reducing cost. And so that's a very exciting market right now where I think, don't quote me on numbers, but I think some of the usual things uh, usual suppliers, um, are, are, you know, seeing significant increase in, in number of chips, uh, deploying in that market for maybe a few million to double digit millions. So it's a very exciting time to see volumes grow for components that are, uh, you know, very high performance in nature in terms of speed performance and, uh, and other specifications.

David Williams | Analyst, Benchmark

Great. Then when you engage with the customer in that supply chain or in the optical side, are you engaging at the customer level? So would it be with an NVIDIA or the hyperscalers, or is it more in the module or OEM side? Just kind of where do you typically engage within that?

Jonathan Clampkin | Founder & CEO

Across all levels of that value chain. As you know, that industry has gone through lots of changes in the last decade or so, and so the hyperscalers are deeply involved in the supply chain. That used to be different when Ciscos of the world would buy components. Component suppliers were not making so much margin, and so component suppliers said, maybe we need to start making modules. But then the higher-level customers made investments in contract manufacturing and packaging and assembly. And so hyperscalers are deeply involved in technology definition and supply chain. And the good news for Aluma is what that means for component suppliers is that chip suppliers can – can benefit from a fairly profitable business. And so that's one of the reasons that we're, you know, so excited about that market. Very high-end chips that not so many companies in the world know how to make. And Aluma has an opportunity to scale, deliver the performance, and bring costs down.

David Williams | Analyst, Benchmark

And just one last question here, I promise. But just was going to ask, if you can kind of walk through, you talked earlier about the low lower data rates the mid and the upper end but what is it that's kind of drawing you in and can you maybe speak to the components where you're seeing the most the pull ends on that on the low end we would suspect that your high performance would be at the very upper end but that we think it's interesting uh that you talked about the low end there so maybe just some color around the low and mid the range and why you're being pulled in there i mean generally speaking i i've i've said that Jonathan Clampkin | Founder & CEO: you know, we're identifying more and more use cases in the data center market. So if you think about AI clusters and short reach and higher speed and how you get there, and I'm sure you know what companies are doing, in some cases developing new technologies for short reach, but, you know, very high aggregate data rates. But, you know, outside of you know, short reach for compute clusters like that. Hyperscalers need more and more optics for rack to rack. And, you know, generally, you know, switch ASICs are increasing. There's been really nice announcements from Broadcom and others, you know, 100 terabit switches. So sort of across the board, there's more and more demand for high-performance transceiver components, you know, meaning higher volumes coming whether it's short reach, a few meters out to 100 meters, or sort of in the middle, up to a few kilometers, and maybe even longer. I would say most of the use cases where we're seeing interest in our technology are mostly around sort of the short and mid-reach, few meters out to maybe 100 meters, and then from there to maybe a couple of kilometers. And without going into too much detail, you know, formats of transceivers, whether it's pluggables or efforts being made to put optics on boards, you know, that's what we see really growing in the near term. Co-packaged optics is something many companies and fabs are investing in, and I think that's coming, you know, that'll slowly get adopted. And we have technology that that's applicable there as well, like the quantum dot lasers, for example, are a good fit, especially in the co-packaged optics world. So I'm just very enthusiastic about that end market because there's near-term demand, near-term growth, and expected long-term growth, especially as things like co-packaged optics start to get adopted over the next few years.

David Williams | Analyst, Benchmark

Thanks again.

Certainly appreciate it. Gary | Operator

Thanks, David. This concludes our question and answer session. I would like to turn the conference back over to Jonathan Clampkin for any closing remarks.

Jonathan Clampkin | Founder & CEO

Thank you. We look forward to connecting at investor conferences and other meetings in the future. Thank you for joining and have a great day.

Gary | Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. jsPDF 3.0.3 D:20260608224439-00'00'

NASDAQ:ALMU Q4 2025 Earnings Call Transcript Generated on 6/8/2026 Gary | Conference Operator: Good day, and thank you for standing by. Welcome to Illuma's fourth quarter and full fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference call is being recorded. At this time, I would like to turn the call over to Tony Rossi, investor relations for Illuma.

Please go ahead. Tony Rossi | Investor Relations, Illuma

Thanks, Gary. Good afternoon and welcome to Aluma's fourth quarter in year-end 2025 earnings call. I'm here today with founder and CEO Jonathan Clampkin and CFO Christopher Stewart. Today's discussions and responses to questions may include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These risks and uncertainties are detailed in the earnings press release issued today, along with the reports filed with the United States Securities and Exchange Commission. These reports, along with today's earnings release, can be found under the Investors section of our website. Voluma assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Throughout the discussion, the company will refer to non-GAAP financial measures, including EBITDA and adjusted EBITDA. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in our earnings press release and SEC filings. Now I'll turn the call over to Illumis CEO, Jonathan Clampkin. Jonathan?

Jonathan Clampkin | Founder and CEO, Illuma

Thank you, Tony. I would like to begin by welcoming everyone to Illumis' first conference call as a NASDAQ-listed company. I would especially like to acknowledge our two new covering analysts, Richard Shannon from Craig Hallam and David Williams from Benchmark Equity Research. Thank you all for joining. I'm excited to highlight what our team accomplished in fiscal 2025 and the bright future we see ahead. I'm also excited to have our new CFO, Christopher Stewart, join me today on our conference call debut. By way of introduction, Chris brings over 20 years of financial leadership experience at high-growth technology companies. Chris has the strategic and financial perspective needed to scale Illuma through its next stage of growth. Let me begin by sharing that we have an incredibly successful year executing on our plan. We consistently perform on our R&D contracts while still having a relatively small team consisting primarily of R&D personnel. Looking ahead, with confidence in our technology's capabilities and relevance, we are building a critically important business development and go-to-market team to accelerate our engagements in target commercial markets. Interest in our technology has never been higher. We count 20 active engagements with prospective customers, including OEMs, Tier 1 and Tier 2 suppliers, system integrators, and chip manufacturers that are evaluating our technology for potential integration in future generation products. I believe that we are approaching an inflection point when our game-changing technology will be ready for commercial adoption, aligning with the growing demand for high-performance semiconductors across a wide array of applications and industries. For those new to the Illumistory, we started with a simple but powerful concept. Semiconductors are everywhere, and they can be better. We believed that if you could take the highest performance semiconductor materials and innovate ways to manufacture them at scale, the impact across industries would be transformational. This was no easy feat. The modern semiconductor industry has been around for over 70 years, and yet successfully scaling compound semiconductors, which are higher performing materials made from two or more elements, has remained elusive. Fast forward, following extensive R&D, 30 issued and pending patents, and the numerous trade secrets, our team has seemingly cracked the code. Our proprietary technology is sufficiently compelling that we have attracted key government agencies like DARPA, NASA, and the Navy to support us to advance these next-generation semiconductors for mission-critical applications. These partnerships have brought non-dilutive capital for strategic R&D that has enabled technical feasibility and provided market credibility. In this regard, the term dual-use technology comes to mind, addressing the demanding requirements for government or defense while also creating value in commercial markets. Developing technology for mission-driven systems and subsequently scaling it for commercial deployment is not a new concept, but it is core to our strategic approach. And until now, this commercial scaling of compound semiconductors has been rather limited. Leveraging our transformative technology, we have been purposefully bidding on R&D contracts to further innovation, grow our reputation, and advance our goal to commercialize in target markets. For example, we have been collaborating with the U.S. Navy to apply Illumiz Optical Interconnect technology to aircraft to help move large amounts of information quickly between sensors and onboard computers. This core technology is highly adaptable to data center interconnects for AI infrastructure, where it can enable high-speed transfer of massive data sets between compute nodes. In fact, we're engaged in discussions with several Tier 1 suppliers exploring the integration of our technology for AI infrastructure. We're also collaborating with the Department of Energy and the Navy to advance Illuma's imaging sensor technology for critical systems to enable them to see beyond what is visible to the human eye. Our technology not only meets their rigorous requirements, but it can also be adapted for broader applications in our target markets, including mobile devices, consumer electronics, industrial automation, robotics, and autonomous systems. Several Tier 1 suppliers and OEMs across these markets are actively evaluating our technology. To this end, we have attracted significant interest from prospective customers, and our pipeline of opportunity is growing. Several third parties have validated our technology through sample evaluations, and we have active engagements with 20 prospective customers. We expect our future business development team to advance these engagements across our funnel and to increase the pipeline to approximately double the number of commercial revenue growth opportunities over the next fiscal year. Here's how we size up the opportunity and how we are positioned to capitalize on it. We believe our technology is poised to become indispensable across the semiconductor industry. As one senior tech leader from a major tier one supplier put it, If Aluma succeeds, the entire industry will have to manufacture this way. That's the very definition of a disruptive technology, and Aluma has the platform to accelerate adoption across numerous markets. Based on market research and internal analysis, we estimate our SAM, the market segments that our technology addresses, could reach $4.9 billion by 2030, growing at a 48% compound annual growth rate from a base of $1 billion in 2026. Coming back to Illumistory. With substantial momentum in technology advancement, IP generation, supply chain development, and customer traction, we were ready for a bigger public stage. On March 28th, we announced both our uplisting to NASDAQ and the closing of an oversubscribed public offering with $13.8 million in gross proceeds to pursue significant growth opportunities we see in commercial markets. We are also proud to be an early advocate of restoring American leadership in semiconductors. In addition to the reshoring of semiconductors aimed at incentivizing increased U.S. semiconductor manufacturing, we believe it is critically important to protect American innovation, a core principle at Illuma, where from our headquarters in California, we have established a one-of-a-kind R&D and manufacturing capability. On May 1st, we rang the closing bell at NASDAQ to celebrate our uplisting. This was a proud milestone for our team, our board, and our shareholders. Building from this, we were recently added to the Russell 3000 Index and MSCI Global Micro Cap Index, providing additional visibility and opportunity as a public company, as well as increased liquidity for our trading partners. To summarize our strong financial position, we have $15.7 million in cash and cash equivalents, no debt, and a solid portfolio of contracts to support R&D and commercialization in fiscal 2026. With our capital life manufacturing model, we believe Aluma is positioned to scale quickly and effectively to address mass market opportunities. In our early days, we concentrated on building our IP portfolio and our R&D and manufacturing capabilities. Now that we have a strong foundation in place, we are expanding our business development capabilities to focus on commercial market opportunities. Our efforts in fiscal 2026 are aimed at establishing the foundation to transition from R&D revenue to commercial product revenue. We attracted new talent to our technical team, and we're fortunate to have Chris join our executive leadership. We recently ramped up wafer fabrication activities with our foundry partners and added equipment to support prototyping and test and validation. We are also seeing momentum building in defense and aerospace, data center interconnects for AI infrastructure, and mobile and consumer electronics, and markets with significant growth potential for Aluma. Our partnerships with government agencies continue to strengthen, and we recently announced New wins, including contracts with NASA, the U.S. Navy, and the Department of Energy. These programs will advance Illumis semiconductor platform for quantum systems, optical interconnects, and imaging sensors. We are also engaged directly with major defense tech companies that are evaluating our technology for mission-critical systems applications. We unveiled the manufacturing breakthrough in collaboration with Thor Labs, advancing quantum enabling capabilities with Illumis CMOS-compatible semiconductor platform, which is scalable to 300-millimeter wafers, today's industry standard used by leading semiconductor fests. This innovation supports commercial scalability and positions us to accelerate adoption of quantum systems. Beyond our ongoing R&D work with government agencies, we're actively engaged with a leading quantum company to explore integration of our technology. Tying it all together, Illumis technology is being considered for many of today's most exciting growth sectors. Shortwave infrared sensors for 3D imaging and health monitoring, optical interconnects that transmit data seamlessly using light, and quantum systems that will usher in a new era of high-performance computing. These are very exciting times, and Illuma is where the future is headed. Now, I'll turn the call over to our new CFO, Chris Stewart, to discuss the financials.

Christopher Stewart | CFO, Illuma

Thanks, Jonathan. First, I want to say that I'm thrilled to be at Illuma. The company is making great progress with its game-changing technology, And I really look forward to working with this talented team as we continue to build on our strong financial foundation and make the transition from R&D to commercialization. Now I'll share some highlights of our fiscal fourth quarter and full year 2025 financial results. We are pleased to report another strong quarter of revenue from our government and commercial research and development contracts. For the quarter ending June 30th, we reported revenue of $1.3 million compared to $279,000 in the same quarter of 2024 and $1.3 million in the third quarter of 2025. Revenue for the full fiscal year was $4.7 million, slightly above the high end of our previous guidance of $4.4 to $4.6 million. This compares to $919,000 for fiscal 2024. GAAP net loss for the fourth quarter was $859,000, or 5 cents per share, versus a net loss of $989,000, or 8 cents per share, for the comparable period last year. On a sequential basis, GAAP net income for the third quarter was $1.5 million, or 12 and 11 cents per basic and diluted share. The change in net income from the prior quarter was primarily due to a $2.6 million one-time non-cash gain in the fair value of derivative liabilities recorded in the third quarter. Non-GAAP net loss for the fourth quarter was $112,000, or one cent per share, compared to a GAAP net income of $7,000, or break-even on a per-share basis in the prior quarter, and a loss of $817,000, or seven cents per share, in the comparable period last year. Adjusted EBITDA for the quarter ended June 30, 2025 was a loss of $113,000 compared to a loss of $718,000 in the same quarter last year and a gain of $109,000 in the prior quarter. Adjusted EBITDA for the year was $186,000 compared to an adjusted EBITDA loss of $3.5 million for fiscal 2024. The year-over-year improvement in adjusted EBITDA was primarily due to the $3.7 million increase in revenue. We closed the fourth quarter with a strong balance sheet, including $15.7 million in cash and crash equivalents, compared to $1.3 million as of June 30, 2024, and $15.9 million as of March 31, 2025. We were fortunate to have a low cash burn model. Sorry. We currently have no debt, and given the near balance of revenue and operating expense in fiscal 2025, we were fortunate to have a low cash burn model. Our net cash used in operating activities was $1.1 million in fiscal 2025, compared to $3.5 million in fiscal 2024. Now, turning to our expectations for fiscal 2026, Illuma expects revenue in the range of approximately $4 to $6 million, primarily from new and existing government and commercial R&D contracts. For most of these contracts, revenue is recognized on achievement of program milestones. The timing of reaching these milestones can lead to quarter-to-quarter variability in our revenue. We view this revenue as important non-diluted financing that supports our development efforts to progress our technology toward commercial readiness. Given our disruptive technology and shifting more of our focus to commercialization, We are highly selective with these engagements, bidding only on projects we believe will have broad commercial appeal in our target markets. Going forward, we expect to gradually increase spending as we invest in growth initiatives, including increased wafer fab production and expanding our business development, operation, and technical teams. We expect to approximately double headcount over the course of fiscal 2026 and expect our expenses to increase accordingly. We are extremely proud of our accomplishments to date, especially the speed with which our small team has transitioned from idea to validation, revenue generation, and customer traction, all while being prudent with our resources and increasing shareholder value. With our historically capital efficient model, we plan to increase investment in areas that we believe will position us to benefit from exciting opportunities we see for our technology. Our momentum continues to build as we lay the groundwork to effectively transition to commercialization and a critical time when several of our target market industries are poised for significant technology-enabled growth. Now I'll turn the call back to Jonathan for his closing remarks before we open the call to your questions.

Jonathan Clampkin | Founder and CEO, Illuma

Thank you, Chris. We are extremely encouraged by the confidence our current and prospective customers have in our technology, our ability to deliver, and by the huge opportunities ahead of us across multiple industries. We are deeply committed to our mission, which is to deliver the world's highest performing semiconductors, and to our business model, which combines cutting-edge IT with capital-like manufacturing. We anticipate that fiscal 2026 will be a year of considerable progress in value creation. Our priorities are to execute on our R&D contracts while also accelerating the development of our commercial opportunities across several large and exciting markets. Our objectives are aimed to best position us to capitalize on the large market opportunities we expect over the next few years and to drive toward long-term profitable growth. These include building our business development and go-to-market team by hiring experienced and connected leaders in our target markets, while also investing in our production capabilities to advance manufacturing readiness. Following our uplisting to NASDAQ, we are also committed to having a best practices, investor relations program, and we recently engaged financial profiles to help us communicate the Illumist story to a larger universe of potential investors. We will be participating in several upcoming investor conferences, including the LB Micro Conference in San Diego in October and the Craig Hallam Alpha Select Conference in New York City in November. We look forward to seeing some of you at these events. Lastly, I would like to thank our incredible team, our shareholders, and our customers for joining us on our journey to reshape semiconductor manufacturing for future generation systems. Operator, you can now open the call for questions.

Gary | Conference Operator

Thank you. The first question is from Richard Shannon with Craig Hallam.

Please go ahead. Richard Shannon | Analyst, Craig Hallam

Well, great. Thanks, Jonathan and Chris. Great to be on your first conference call. Thanks for having me on here to ask a few questions. I think I'm going to start with the first one regarding your guidance for this year here and trying to understand the assumptions built in here. So Chris, I heard your comments about This is including both new and existing government-related contracts. Maybe you could help us understand to the extent to which you're expecting new contracts coming in here versus just the baseline of the ones you've had in fiscal 25.

Christopher Stewart | CFO, Illuma

Yeah, our guidance is really focused mainly on contracts that we have either already signed or are near signing. but we are working on additional contracts. We're being somewhat conservative with our guidance as the timing of meeting the milestones to achieve revenue and signing these contracts is a little bit unclear. But the key thing from our perspective is You know, we're really focused on the transition to commercial this year. So, again, you know, the revenue is great. We consider it non-diluted financing, funding our R&D. But, you know, we're trying to shift our focus more to being commercial ready, increasing our production capabilities, and engaging on the commercial side. So that's a little bit about, you know, where the guidance is coming from.

Richard Shannon | Analyst, Craig Hallam

Okay, that is helpful, Chris. Thanks for that. And I'll take your cue to maybe talk more on the commercial side here. So you talked about 20 engagements. You mentioned, I think, a few different end markets here. I guess I'd love to have you elaborate a little bit more, maybe in a few different areas. First of all, what are some of the new engagements and which markets they're in? And then I think probably the area that a lot of people are interested in here is which markets do you think are going to get to some sort of commercial agreement here sooner rather than later?

Jonathan Clampkin | Founder and CEO, Illuma

Great. Thanks, Richard. Maybe I'll take that one. One thing I'll mention is that our near-term commercial focus is defense and aerospace, which, as you know, is typically a lower volume but high margin market, AI infrastructure, including data center interconnects, which is a large volume market, typically in the sort of millions of units per year, and then mobile and consumer electronics, which is very large volume, typically tens of millions of units per year. As you likely know, our technology is broadly applicable, so there are other markets that we're active in, such as automotive, industrial and robotics, and even quantum computing and communications. But those we see as slightly longer term revenue opportunities. The first three I mentioned are where our focus is today.

Richard Shannon | Analyst, Craig Hallam

Okay, fair enough. Thanks for that. Let me ask a question. You talked about winning, I think, three to seven government development-related contracts this year. Maybe if you can quantify what the potential of revenue is from these contracts you have visibility into to give us a sense of potential scale here, and then any way to help us understand in what areas they might be focused on to be great.

Jonathan Clampkin | Founder and CEO, Illuma

Maybe I can start with areas to focus on. So, as Chris mentioned, we have historically been somewhat selective of government contracts that we bid on, bidding only on programs that are very synergistic with our technology, and where we see synergies with commercial applications. And moving forward, we're probably being even more selective with those contracts. So most likely no new major areas outside of traditional sort of image sensing applications, 3D imaging, and communications applications, because that's where we see lots of synergy with commercial market opportunities. And Chris, I don't know if you want to add.

Christopher Stewart | CFO, Illuma

No, I just say in terms of the size of the contracts, they really vary. You know, if you've probably seen, you know, we've had contracts as big as, $11 million over three years and as small as a couple hundred thousand dollars. And, you know, the ones that we're bidding on today are, you know, just like the priced ones. They're all over the place. Not quite as big as the biggest, but in that range.

Richard Shannon | Analyst, Craig Hallam

Okay. That's helpful perspective. Let me ask one more question. I'll jump out of line here. So also in your press release, you talked about one of the strategic priorities for this year. about enhanced manufacturing readiness and specifically expanding supply chain partnerships. My specific question here is I think one of the key aspects of this is establishing an external high volume founder relationship here and just want to get a sense of when we might expect to see that announced.

Jonathan Clampkin | Founder and CEO, Illuma

Well, what I can say is we have engagements currently with four fabs, meaning we've delivered wafers to those four fabs for development and to fabricate small volumes of our product offerings. And we're also in discussions with two other prospective fab partners. And as you know, our supply chain also includes partners for things like test assembly, integration, and packaging. You know, under NDA, if justified by a business opportunity with a customer, we have disclosed our FAB partners to some prospective customers, but disclosing such supply chain information prematurely may limit our opportunities because FABs are competitors with one another, and prospective customers have preferred boundaries. So I would say while we're not entirely opposed to disclosing supply chain information, such disclosures, you know, should be made by us opportunistically. For example, if a particular FAB relationship is to be leveraged to deliver technology to a customer. And maybe I'll just close by saying, you know, the weight for capacity of our FAB partners varies. Some FAB partners are small volume FABs. Some are very large volumes. And our BAT partners are primarily in the U.S.

strategically. Richard Shannon | Analyst, Craig Hallam

Okay. That's very helpful detail, Jonathan. I will jump on the line.

Thank you. Jonathan Clampkin | Founder and CEO, Illuma

Thank you, Richard.

Gary | Conference Operator

The next question is from David Williams with Benchmark.

Please go ahead. David Williams | Analyst, Benchmark Equity Research

Good afternoon, gentlemen. Thanks for taking my questions, and congrats on the really solid progress here. Thank you, David. Thanks, David. Yeah. lot of the higher level, but I want to ask maybe if we think about, you know, if you had, say, a 1 million unit order, you said in the past that it would qualify as maybe a low to mid volume, but what could we expect in terms of maybe a revenue opportunity, kind of thinking about your ASPs and the different markets, but I'm just trying to understand the magnitude of what even a small order could look like in terms of revenues.

Jonathan Clampkin | Founder and CEO, Illuma

I so maybe I'll make a couple of comments one relates to sort of those three sort of near-term primary market focuses for us the defense and aerospace which tends to be lower volume but very high margin market and we see lots of growth in that market the AI infrastructure data center interconnects we're seeing a lot of activity there and interest in our technology as well and that's sort of a few million unit per year opportunity. And then the sort of more volatile market is the mobile and consumer electronics, where volumes are extremely high, tens of millions per year, more cost sensitive, but we see an appetite to adopt new technology and a willingness to pay a little bit more for this chip technology, at least in the near term until, you know, volumes increase and and cost to come down. But it might be worth making a comment just on how we sort of progress through the business development funnel and kind of where we are so that maybe we could set some expectations for timing and scale of some of these opportunities. So a typical progression for us are starting with discovery, targeting customers and having initial meetings, technology evaluation this is where we might need to follow meetings with an NDA so that we can have more in-depth technical and business discussion we share proprietary information and our prospective customers share desired specifications and then maybe request samples to evaluate and test to validate our data and then NRE or custom development where we're generating prototypes for the customer toward meeting their customer specifications. And we're at various stages of those first few steps of the supply chain with those 20 prospective customers that I mentioned. What comes next is qualification. That's when you'd expect the design win, and now you're qualifying the production in unison with your customer, and then eventually production, in production for, intended product delivery. So, again, if I look at the 20 active engagements, we're in steps one, two, and three with those prospective customers. And it's really when we're at the later stage when a customer makes a commitment and wants to move to the qualification stage that we might be able to provide more information on scale and volumes in the near term versus long term.

David Williams | Analyst, Benchmark Equity Research

Really great color there. So I guess in the near term, if we look out over the next 12 months, how likely do you think it could be if you could have something that can move fairly quickly? Because it seems like on the mobile side, maybe it moves more quickly on the cycle as opposed to maybe AMD that takes longer. But it seems like on the mobile, you could potentially grab something maybe a little earlier. Is that fair?

Yeah. Jonathan Clampkin | Founder and CEO, Illuma

I think mobile and consumer electronics I would quantify as a very volatile market that can grow very quickly, but timings are typically less clear. So we tend not to provide guidance on when we expect a significant commercial engagement in mobile. It doesn't mean that we're not engaged with prospective customers across the supply chain in that market. Defense and aerospace is quite a bit more stable. There's lots of activity there. Much of our revenue comes from government agencies, specifically geared toward defense and aerospace applications, and we have active engagements with defense and aerospace tech companies that are sampling and evaluating our technology, and they seemingly could move faster. And then sort of the third focus market for us, the AI infrastructure and data center interconnect, That's a market that exists, but is starting to adopt some new technologies to enable the growth that is expected and required. So things like co-packaged optics and massively parallel optical interconnects. So there's sort of an inflection point happening in that industry, and that's usually the best time to engage and have those customers adopt the new technologies. So what excites us about Illumis technology and market focus is that if we just look at those three primary near-term focuses, you sort of cover the entire gamut of something that's very stable in near-term, something that's fastly growing and happening, and something that could be huge in volumes but is a bit more volatile. So we could sort of find a balance across those different market protocols to ensure that we're capitalizing in the near-term but also building very very good value in the long term.

David Williams | Analyst, Benchmark Equity Research

Great. Appreciate the color there. And then maybe just kind of think about your resources and how constrained you've been, very selective on those products. But as you double your head count, especially on the engineering side, should we expect that you can take on more of these opportunities? And is there a way to kind of think about how many of those that come to you that you're moving forward with as opposed to maybe what you're not moving forward with?

Jonathan Clampkin | Founder and CEO, Illuma

Yeah, that's a good question. I would say that it's good to remind everyone that we do have a small team and resources are limited. So we have been very selective, both with government contracts that we bid on, but I should say also with commercial opportunities. We try to focus on where we see near-term revenue opportunities and where there are synergies with our technology. What I would say is that as headcount grows, we are going to leverage the additional resources to focus on the commercial revenue opportunities. So if we had a bigger team, we could bid on more government contracts, but that's not the primary focus moving forward.

David Williams | Analyst, Benchmark Equity Research

Okay, thanks. And then maybe just one last one for me here, but if, say, you had an order, if you were at the end of maybe that design cycle and you secured an order, how quickly could you ramp to maybe a mid-volume if you got the order today? Is that something you do in six months because you've done a lot of work on the supply chain, or is that a longer maybe design cycle or a longer time to production?

Jonathan Clampkin | Founder and CEO, Illuma

So I think it depends a bit on the market vertical and the requirements, but we have established small to medium volume processes. And so in the near term, reasonable volumes, even upwards of a million units, we could certainly support in the near term. The larger volumes that you might expect in mobile and consumer electronics, we could support maybe the front end of a program, but we're going to need to rely heavily on our supply chain partners because we don't intend to scale by adding lots more equipment in-house. We're going to scale by leveraging the capabilities of our partners. So hopefully that answers your question. In the near term, we're confident that we could deliver relatively quickly for sort of small to medium volumes, and we're making investments with supply chain partners to ensure that we can deliver on the higher volume markets thereafter.

David Williams | Analyst, Benchmark Equity Research

Is it fair to assume that you feel fairly comfortable with the progress you've made, and if you did have, say, a high-volume order, that you would be able to bring those or stand up that FAB partners quickly enough to fulfill that?

Jonathan Clampkin | Founder and CEO, Illuma

I feel confident in the status of the technology and in the supply chain partners that we've selected. They seem committed to the technology. They see lots of opportunity to adopt this technology for companies even other markets that we're not necessarily pursuing. And as I mentioned, you know, four current FAB partners, which is important to, you know, to have multiple suppliers or partners in your supply chain. Four FAB partners, multiple suppliers of substrates, multiple vendors that support packaging and integration, and so on.

David Williams | Analyst, Benchmark Equity Research

All right, very good. And lastly, Chris, just wanted to say congratulations and looking forward to working with you.

Christopher Stewart | CFO, Illuma

Thanks, same here. Great to have you.

Appreciate it. Jonathan Clampkin | Founder and CEO, Illuma

Thank you for the questions.

Gary | Conference Operator

The next question is a follow-up from Richard Shannon with Craig Hallam.

Please go ahead. Richard Shannon | Analyst, Craig Hallam

Well, hi, guys. Thanks for letting me ask a quick follow-on here, probably more for Chris. So I want to get a sense of how to think about OPEX throughout this year. You talked about doubling headcount, and I think your comment was a commensurate amount of growth on the OpEx side here. Just any way you can quantify how we should think about that going throughout the year. And then using that as a proxy for ultimately thinking about what kind of cash burn that you're expecting within the context of this $46 million sales guide for the year.

Thank you. Christopher Stewart | CFO, Illuma

Right. So, yeah, so like we said, we're expecting to give or take double headcount over the course of the year. Our spending, you know, really today is largely headcount driven. So as we add headcount gradually over the year, our expenses are going to drift up. Our non-headcount spending, a lot of that is FAB related as we run wafers through our FAB partners. And that we're going to be increasing through the year. But also, I wouldn't look for any major step functions. I would look at it as a gradual increase over the course of the year. You know with revenue, you know where it's at, you know, I think you'll see a slight uptick in burn but again You know, it's going to be gradual and we're we're doing things in a very measured way meaning You know, we're adding the right headcount or we're being selective Waiting till we find the right people and we're kind of reading the signals within the market and trying to kind of react accordingly and make sure we have a the team in place to capitalize on the opportunities we have. We did talk a little bit about our priorities. Today, I just remind everyone today, we don't have a business development team, so we are going to be definitely looking to build out that business development team this year, as well as expanding our R&D teams and our operations teams to really, again, this year, a lot of this year is about positioning us to make that transition from pure R&D to commercial.

Richard Shannon | Analyst, Craig Hallam

Okay, great, guys. That's all for me. I'll jump out of line.

Christopher Stewart | CFO, Illuma

Thank you.

Thanks very much. Gary | Conference Operator

The next question is a follow-up from David Williams with Benchmark.

Please go ahead. David Williams | Analyst, Benchmark Equity Research

We've got to keep you on your toes to keep you busy, so I appreciate the follow-up here. But one other quick one I wanted to ask is, Jonathan, you alluded to this earlier, but how do you think about where your technology progress is today? And is there anything that you think is standing in the way, or is it simply just adoption from the customer side? So is it fair to say that we've done all the heavy lifting and now it really is just that commercial adoption is where we are?

Jonathan Clampkin | Founder and CEO, Illuma

Thanks for the question. Yeah, I think it's important to recognize that we've developed a disruptive technology. Very happy with the progress we've made over the last few years. But this is a disruptive technology. It's not sort of an off-the-shelf, like we're making something just a little different than someone else already. So when you have such a disruptive technology that can really impact multiple markets, that requires a commitment from customers. You know, this is for future generation systems. Again, not a direct replacement of an existing component in a system that's already in production. So it's all about aligning the timing here, like advancing our go-to-market strategy with the new BizDev team, progressing the engagements across the stages of the funnel to really get those solid foundational commitments from the customers. that we've maybe already done custom development for. They've adopted the technology. It's not always clear to us the timing. When do they want to integrate this technology into the next generation products? But, you know, biz dev and go to market is critical for us. And then also advancing the production capacity so that we're ready to deliver at scale. I think we're at a stage where there's enough excitement and enthusiasm and interest in our technology. It's matured to a level that's meeting the requirements of many of our customers and prospective customers. And so it makes sense at this time to start to make investments to really scale, to be running more and more wafers through our foundries, you know, to really qualify the processes and ensure that they're ready when the customers, you know, ask us to deliver at scale.

David Williams | Analyst, Benchmark Equity Research

Fantastic. Thanks so much. Again, appreciate it. Best of luck on the quarter.

Jonathan Clampkin | Founder and CEO, Illuma

Thank you very much.

Gary | Conference Operator

This concludes our question and answer session. I would like to turn the conference back over to Jonathan Clampkin for any closing remarks.

Jonathan Clampkin | Founder and CEO, Illuma

Jonathan Clampkin Yeah, I'd like to thank everyone for joining our inaugural conference call, and we look forward to reporting on our progress on our first quarter call.

Thank you. Gary | Conference Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. jsPDF 3.0.3 D:20260608224659-00'00'