Innoviz’s Pivot to Defense: From Automotive LiDAR to Counter-UAS

First defense orders, new Perciz brand, and a $30M raise signal a strategic pivot with higher-margin potential.

INVZ · Earnings Call · 2026-08-05

The Strategic Pivot

Innoviz Technologies reported Q2 2026 results that mark a clear strategic inflection. CEO Omer Keilaf opened the call by declaring, “The recent months have been transformative for Innoviz as we enter the defense and homeland security markets.” — Omer Keilaf · 2026-08-05 The company, historically an automotive LiDAR supplier, has launched a dedicated defense brand, Perciz, targeting Counter UAS and perimeter security. This is not just a cosmetic rebranding — it comes with concrete orders and a strategic reallocation of focus. The company announced its first multimillion dollar defense order, “$3.5 million for several hundred LiDAR units that will be deployed in Counter-UAS and perimeter security.” — Omer Keilaf · 2026-08-05 This order is a validation of the company's technology and its ability to move beyond automotive. The defense vertical is expected to be a significant growth driver. Management projects non-automotive revenue to grow from 1% of total revenue in 2025 to 10% in 2026 and 20-30% in 2027. The margin profile is far more attractive than automotive, as Keilaf noted: “ASPs that are in order of magnitude higher than in the auto space.” — Omer Keilaf · 2026-08-05 This echoes a theme from prior calls where the company highlighted the higher ASPs in non-automotive applications. In the August 2025 call, Omer stated, “The ASPs for nonautomotive are significantly higher and the margins are significantly higher.” — Omer David Keilaf, Chief Executive Officer · 2025-08-13

Defense Traction

The momentum in defense is building rapidly. The company has announced six partner engagements in the past three months, including collaborations with Drive Group, Regulus, and Givon Defense. The focus on homeland security is a direct response to evolving threats. Keilaf emphasized the technology's unique capabilities:

Our LiDARs can precisely localize small drones and therefore, have the ability to support better protection of borders and critical infrastructures like airports and energy facilities.
Omer Keilaf · 2026-08-05

The counter-UAS market is particularly compelling. Traditional radar and camera systems struggle with small, low-flying drones, especially fiber-optic or autonomous ones. Innoviz's LiDARs offer high-resolution 3D perception at long ranges, overcoming these challenges. The company is working with system integrators to provide not just the hardware but also the compute and tracking software, enabling faster time-to-market. In the Q&A, Keilaf explained, “We are providing them not only with the LiDAR, but also with software capabilities.” — Omer Keilaf · 2026-08-05 This integrated approach increases the value per customer and creates recurring revenue streams from support and maintenance, a theme noted in prior calls. In November 2025, he mentioned, “So there is a certain element of recurrent revenues coming from support over several years.” — Omer Keilaf, Chief Executive Officer · 2025-11-12

Automotive Progress

While the defense story dominates, the automotive business continues to advance. The company announced a new development program with a top 10 global OEM for a LiDAR-based perception stack, and Mobileye's robotaxi platform will use 9 Innoviz LiDARs per vehicle. The ID. Buzz is expanding to six cities. However, the strategic narrative has clearly shifted. The company's keyword trajectory shows a marked increase in defense-related terms (Counter UAS, perimeter security, homeland security) while automotive terms remain steady but less prominent. This is a deliberate repositioning to capitalize on a faster-growing, higher-margin market. The automotive business provides the technology foundation and production scale that gives Innoviz credibility in defense, but the growth is now expected to come from physical AI applications.

Financial Position and Outlook

Innoviz reiterated its 2026 revenue guidance of $67-73 million, with revenue in Q2 at a record $18.1 million. Gross margins returned to positive due to NRE recognition and defense unit shipments. The company ended the quarter with $48.5 million in cash, plus the additional $30 million from the July offering. This capital raise, alongside the defense orders, provides the balance sheet to support the expansion. CFO Eldar Cegla noted, “The use of the proceeds will include supporting the commercialization of Perciz, our Defense and Security brand.” — Eldar Cegla · 2026-08-05 The company believes it now has funding to reach profitability in 2027-2028, assuming the defense ramp accelerates. The shift to defense is a company-unique strategy. While some peers are also exploring non-automotive applications, Innoviz's dedicated brand and early orders give it a first-mover advantage. The defense market is fragmented and security-driven, offering ASPs that are multiples of automotive. As Keilaf said, “We are in a very interesting time for the company. There is many activities related to the defense market.” — Omer Keilaf · 2026-08-05 In summary, Innoviz is undergoing a strategic transformation that could fundamentally alter its revenue mix and profitability. The defense pivot is real, backed by orders and a dedicated brand. For investors, the question is whether the company can execute on the pipeline of additional contracts and scale the defense business as quickly as management suggests.