lazr-20230331

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-38791

LUMINAR TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

83-1804317

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

2603 Discovery Drive

Suite 100

Orlando

Florida

32826

(Address of Principal Executive Offices)

(Zip Code)

(407) 900-5259

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A common stock, par value of $0.0001 per share

LAZR

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of April 28, 2023, the registrant had 280,568,075 shares of Class A common stock and 97,088,670 shares of Class B common stock, par value $0.0001 per share, outstanding.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.		4
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		28
	Overview	28
	Industrialization and Customer Update	28
	Basis of Presentation	29
	Components of Results of Operations	29
	Results of Operations	31
	Liquidity and Capital Resources	32
	Critical Accounting Policies and Estimates	33
	Recent Accounting Pronouncements	34
Item 3. Quantitative and Qualitative Disclosures About Market Risk.		35
Item 4. Controls and Procedures.		35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.		36
Item 1A. Risk Factors.		36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		36
Item 3. Defaults Upon Senior Securities.		36
Item 4. Mine Safety Disclosures.		36
Item 5. Other Information.		36
Item 6. Exhibits.		37
SIGNATURES		38

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which involve substantial risks and uncertainties. These statements reflect the current views of management with respect to future events and our financial performance. These forward-looking statements include statements regarding product plans and performance, future growth and financial performance, preliminary purchase price allocations with respect to acquired assets, timing for revenue recognition and validation processes, expectations regarding funding of product and business development initiatives and capital expenditures, and anticipated impacts on our business of the ongoing COVID-19 pandemic and related public health measures. In some cases, you can identify these statements by forward-looking words such as “outlook,” “believes,” “expects,” “future,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words or phrases, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business.

These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including our history of losses and our expectation that we will continue to incur significant expenses, including substantial R&D costs, and continuing losses for the foreseeable future as well as our limited operating history which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter; our strategic initiatives which may prove more costly than we currently anticipate and potential failure to increase our revenue to offset these initiatives; whether our lidar products are selected for inclusion in autonomous driving or Advanced Driving Assistance Systems by automotive original equipment manufacturers (“OEMs”) or their suppliers, and whether we will be de-selected by any customers; the lengthy period of time from a major commercial win to implementation and the risks of cancellation or postponement of the contract or unsuccessful implementation; potential inaccuracies in our forward looking estimates of certain metrics, including Order Book, our future cost of goods sold (COGS) and bill of materials (BOM) and total addressable market; the discontinuation, lack of success of our customers in developing and commercializing products using our solutions or loss of business with respect to a particular vehicle model or technology package and whether end automotive consumers will demand and be willing to pay for such features; our inability to reduce and control the cost of the inputs on which we rely, which could negatively impact the adoption of our products and our profitability; the effect of continued pricing pressures, competition from other lidar manufacturers, OEM cost reduction initiatives and the ability of automotive OEMs to re-source or cancel vehicle or technology programs which may result in lower than anticipated margins, or losses, which may adversely affect our business; the effect of general economic conditions, including inflation, recession risks and rising interest rates, generally and on our industry and us in particular, including the level of demand and financial performance of the autonomous vehicle industry and the decline in fair value of available-for-sale debt securities in a rising interest rate environment; market adoption of lidar as well as developments in alternative technology and the increasingly competitive environment in which we operate, which includes established competitors and market participants that have substantially greater resources; our ability to achieve technological feasibility and commercialize our software products and the requirement to continue to develop new products and product innovations due to rapidly changing markets and government regulations of such technologies; our ability to manage our growth and expand our business operations effectively, including into international markets, such as China, which exposes us to operational, financial and regulatory risks; adverse impacts due to limited availability and quality of materials, supplies, and capital equipment, or dependency on third-party service providers and single-source suppliers; the project-based nature of our orders, which can cause our results of operations to fluctuate on a quarterly and annual basis; whether we will be able to successfully transition our engineering designs into high volume manufacturing, including our ability to transition to an outsourced manufacturing business model and whether we and our outsourcing partners and suppliers can successfully operate complex machinery; whether we can successfully select, execute or integrate our acquisitions; whether the complexity of our products results in undetected defects and reliability issues which could reduce market adoption of our new products, limit our ability to manufacture, damage our reputation and expose us to product liability, warranty and other claims; our ability to maintain and adequately manage our inventory; our ability to maintain an effective system of internal control over financial reporting; our ability to protect and enforce our intellectual property rights; availability of qualified personnel, loss of highly skilled personnel and dependence on Austin Russell, our Founder, President and Chief Executive Officer; the impact of inflation and our stock price on our ability to hire and retain highly skilled personnel; the amount and timing of future sales and whether the average selling prices of our products could decrease rapidly over the life of the product as well as our dependence on a few key customers, who are often large corporations with substantial negotiating power; our ability to establish and maintain confidence in our long-term business prospects among customers and analysts and within our industry; whether we are subject to negative publicity; the effects of the ongoing coronavirus pandemic (COVID-19) or other infectious diseases, health epidemics, pandemics and natural disasters on Luminar’s business; interruption or failure of our information technology and

Table of Contents

communications systems; cybersecurity risks to our operational systems, security systems, infrastructure, integrated software in our lidar solutions; market instability exacerbated by geopolitical conflicts, including Russia and China and including the effect of sanctions and trade restrictions that may affect supply chain or sales opportunities; and those other factors discussed in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (our “2022 Annual Report”) under the heading “Risk Factors” and in subsequent reports filed with the SEC which we encourage you to carefully read. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. We undertake no obligation to update any forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

WEBSITE AND SOCIAL MEDIA DISCLOSURE

We use our website (https://www.luminartech.com/) and various social media channels as a means of disclosing information about the Company and its products to its customers, investors and the public (e.g., @luminartech on Twitter, Luminartech on YouTube, and Luminar Technologies on LinkedIn). The information on our website (or any webpages referenced in this Quarterly Report on Form 10-Q) or posted on social media channels is not part of this or any other report that the Company files with, or furnishes to, the Securities and Exchange Commission (the “SEC”). The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)


	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	89,933	$	69,552
Restricted cash	2,226		1,553
Marketable securities	332,363		419,314
Accounts receivable	21,051		11,172
Inventory	14,918		8,792
Prepaid expenses and other current assets	33,859		44,203
Total current assets	494,350		554,586
Property and equipment, net	78,395		30,260
Operating lease right-of-use assets	20,986		21,244
Intangible assets, net	29,255		22,077
Goodwill	19,879		18,816
Other non-current assets	15,486		40,344
Total assets	$	658,351	$	687,327

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	29,916	$	18,626
Accrued and other current liabilities	64,662		52,962
Operating lease liabilities	5,906		5,953

Total current liabilities	100,484		77,541
Warrant liabilities	4,059		3,005

Convertible senior notes	613,001		612,192
Operating lease liabilities, non-current	17,061		16,989
Other non-current liabilities	6,026		4,005
Total liabilities	740,631		713,732
Commitments and contingencies (Note 14)
Stockholders’ deficit:
Class A common stock	30		29
Class B common stock	10		10
Additional paid-in capital	1,647,357		1,558,685
Accumulated other comprehensive loss	(2,000)		(4,226)
Treasury stock	(312,477)		(312,477)
Accumulated deficit	(1,415,200)		(1,268,426)
Total stockholders’ deficit	(82,280)		(26,405)
Total liabilities and stockholders’ deficit	$	658,351	$	687,327

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited, in thousands, except share and per share data)


	Three Months Ended March 31,
	2023		2022
Revenue:
Products	$	7,367	$	1,541
Services	7,142		5,314
Total revenue	14,509		6,855
Cost of sales:
Products	19,203		11,818
Services	9,930		4,836
Total cost of sales	29,133		16,654
Gross loss	(14,624)		(9,799)
Operating expenses:
Research and development	69,052		33,109
Sales and marketing	13,729		9,398
General and administrative	44,490		30,025
Total operating expenses	127,271		72,532
Loss from operations	(141,895)		(82,331)
Other income (expense), net:
Change in fair value of warrant liabilities	(1,054)		(3,857)
Interest expense	(1,665)		(3,280)
Interest income	1,905		1,071
Other income (expense)	(4,065)		468
Total other income (expense), net	(4,879)		(5,598)
Loss before provision for income taxes	(146,774)		(87,929)
Provision for income taxes	—		404
Net loss	$	(146,774)	$	(88,333)

Net loss per share:
Basic and diluted	$	(0.40)	$	(0.25)
Shares used in computing net loss per share:
Basic and diluted	370,742,917		348,683,836
Comprehensive Income (Loss):
Net loss	$	(146,774)	$	(88,333)
Net unrealized gain (loss) on available-for-sale debt securities	2,226		(3,648)
Comprehensive income (loss)	$	(144,548)	$	(91,981)

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited, in thousands, except share data)


	Class A Common Stock	Class B Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss	Treasury Stock			Accumulated Deficit		Total Stockholders’ Equity (Deficit)
			Shares			Amount				Shares					Amount
Balance as of December 31, 2021			266,076,525	$	27		97,088,670	$	10		$	1,257,214	$	(908)		$	(235,871)	$	(822,487)	$	197,985
Shares repurchased			—	—			—	—			—		—			(39,648)		—		(39,648)
Issuance of Class A common stock upon exercise of Private Warrants			401,365	—			—	—			18,689		—			—		—		18,689
Issuance of Class A common stock upon exercise of stock options and vesting of restricted stock units			2,117,059	—			—	—			1,085		—			—		—		1,085
Retirement of unvested restricted common stock			(40,763)	—			—	—			—		—			—		—		—
Vendor payments under the stock-in-lieu of cash program			1,424,350	—			—	—			14,613		—			—		—		14,613



Share-based compensation			—	—			—	—			23,657		—			—		—		23,657
Payments of employee taxes related to vested restricted stock units			—	—			—	—			(516)		—			—		—		(516)

Other comprehensive loss			—	—			—	—			—		(3,648)			—		—		(3,648)
Net loss			—	—			—	—			—		—			—		(88,333)		(88,333)
Balance as of March 31, 2022			269,978,536	$	27		97,088,670	$	10		$	1,314,742	$	(4,556)		$	(275,519)	$	(910,820)	$	123,884

Balance as of December 31, 2022			291,942,087	$	29		97,088,670	$	10		$	1,558,685	$	(4,226)		$	(312,477)	$	(1,268,426)	$	(26,405)


Issuance of Class A common stock upon exercise of stock options and vesting of restricted stock units			4,715,737	1			—	—			1,038		—			—		—		1,039

Issuance of Class A common stock under the Equity Financing Program (See Note 10)			2,759,689	—			—	—			22,665		—			—		—		22,665
Vendor payments under the stock-in-lieu of cash program			1,627,690	—			—	—			16,741		—			—		—		16,741





Share-based compensation			—	—			—	—			48,800		—			—		—		48,800
Payments of employee taxes related to vested restricted stock units			—	—			—	—			(572)		—			—		—		(572)
Other comprehensive income			—	—			—	—			—		2,226			—		—		2,226
Net loss			—	—			—	—			—		—			—		(146,774)		(146,774)
Balance as of March 31, 2023			301,045,203	$	30		97,088,670	$	10		$	1,647,357	$	(2,000)		$	(312,477)	$	(1,415,200)	$	(82,280)

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net loss	$	(146,774)	$	(88,333)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,987		805
Amortization of operating lease right-of-use assets	1,610		885
Amortization of premium (discount) on marketable securities	(743)		444
Loss on marketable securities	3,033		—
Change in fair value of private warrants	1,054		3,857
Vendor stock-in-lieu of cash program	5,684		7,848
Amortization of debt discount and issuance costs	809		809
Inventory write-offs and write-downs	5,451		1,356

Share-based compensation	55,954		26,698

Product warranty and other	586		107
Changes in operating assets and liabilities:
Accounts receivable	(9,877)		9,757
Inventories	(11,578)		(768)
Prepaid expenses and other current assets	9,932		(3,300)
Other non-current assets	(4,156)		158
Accounts payable	11,191		5,983
Accrued and other current liabilities	11,651		1,200
Other non-current liabilities	(1,488)		(343)
Net cash used in operating activities	(64,674)		(32,837)
Cash flows from investing activities:


Acquisition of Seagate’s lidar business	(12,608)		—
Purchases of marketable securities	(81,623)		(193,687)
Proceeds from maturities of marketable securities	148,345		91,454
Proceeds from sales/redemptions of marketable securities	20,165		12,842

Purchases of property and equipment	(11,680)		(5,004)


Net cash provided by (used in) investing activities	62,599		(94,395)
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock under the Equity Financing Program	22,665		—
Proceeds from exercise of stock options	1,036		1,092


Payments of employee taxes related to stock-based awards	(572)		(516)
Repurchase of common stock	—		(43,920)

Net cash provided by (used in) financing activities	23,129		(43,344)
Net increase (decrease) in cash, cash equivalents and restricted cash	21,054		(170,576)
Beginning cash, cash equivalents and restricted cash	71,105		330,702
Ending cash, cash equivalents and restricted cash	$	92,159	$	160,126



Supplemental disclosures of noncash investing and financing activities:
Issuance of Class A common stock upon exercise of warrants	$	—	$	18,689
Operating lease right-of-use assets obtained in exchange for lease obligations	1,211		5,746

Purchases of property and equipment recorded in accounts payable and accrued liabilities	7,978		1,950
Vendor stock-in-lieu of cash program—advances for capital projects and equipment	2,520		—

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1. Organization and Description of Business

Luminar Technologies, Inc. (together with its wholly-owned subsidiaries, the “Company” or “Luminar”) was incorporated in Delaware. Luminar is a global automotive technology company ushering in a new era of vehicle safety and autonomy. Over the past decade, Luminar has been building from the chip-level up, its light detection and ranging sensor, or lidar, which is expected to meet the demanding performance, safety, reliability and cost requirements to enable next generation safety and autonomous capabilities for passenger and commercial vehicles as well as other adjacent markets. The Company’s Class A common stock is listed on the Nasdaq Global Select Market under the symbol “LAZR.”

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”) filed with the SEC on February 28, 2023. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosures. The significant estimates made by management include inventory reserves, valuation allowance for deferred tax assets, valuation of warrants issued in a private placement in connection with the initial public offering of Gores Metropoulos, Inc. (the Company’s former name) (“Private Warrants”), valuation of assets acquired in mergers and acquisitions including intangible assets, forecasted costs associated with non-recurring engineering (“NRE”) services, product warranty reserves, stock-based compensation expense and other loss contingencies. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results could differ from those estimates.

Segment Information

The Company has determined its operating segments using the same indicators which are used to evaluate its performance internally. The Company’s business activities are organized in two operating segments:

(i) “Autonomy Solutions,” which includes manufacturing and distribution of lidar sensors that measure distance using laser light to generate a 3D map, non-recurring engineering services related to the Company’s lidar products, development of software products that enable autonomy capabilities for automotive applications, and licensing of the Company’s intellectual property (“IP”). In January 2023, the Company acquired certain assets from Seagate Technology LLC and Seagate Singapore International Headquarters Pte. Ltd. (individually and collectively, “Seagate”). Assets purchased from Seagate have been included in the Autonomy Solutions segment.

(ii) “Advanced Technologies and Services” (“ATS”), which includes development of application-specific integrated circuits, pixel-based sensors, advanced lasers, as well as designing, testing and providing consulting services for non-standard integrated circuits.

Concentration of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, debt securities and accounts receivable. The Company’s deposits exceed federally insured limits. Cash held by foreign subsidiaries of the Company as of March 31, 2023 and December 31, 2022 was not material.

The Company’s revenue is derived from customers located in the United States and international markets. Three customers accounted for 33%, 23% and 17% of the Company’s accounts receivable as of March 31, 2023. Three customers accounted for 27%, 23% and 11% of the Company’s accounts receivable as of December 31, 2022.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022. There has been no material change to the Company’s significant accounting policies during the three months ended March 31, 2023.

Recent Accounting Pronouncements Not Yet Effective

The Company has reviewed, or is in the process of evaluating, all issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such accounting pronouncements will cause a material impact on its consolidated financial position, operating results or statements of cash flows.

Note 3. Business Combinations and Acquisitions

Acquisition of Seagate’s Lidar Business

On January 18, 2023, the Company acquired certain assets (including intellectual property (“IP”), equipment and other assets) and employees from Seagate Technology LLC and its affiliates (together “Seagate”). The Company simultaneously licensed IP from Seagate. The aggregate purchase price of $12.6 million for the said acquired assets and the license was paid in cash. The acquired assets and employees comprised Seagate’s lidar development operations and have been combined into the Company’s research and development team. This transaction has been accounted for as a business combination.

Recording of Assets Acquired and Liabilities Assumed

Price allocation includes preliminary estimates of fair value of certain working capital and deferred tax balances. Preliminary estimates of fair values included in the condensed consolidated financial statements are expected to be finalized within a one-year measurement period following the acquisition date after which any subsequent adjustments will be reflected in the consolidated statements of operations.

The following table summarizes the preliminary purchase price allocation to assets acquired (in thousands):


	Preliminary Recorded Value





Property plant and equipment	$	3,163

Developed Technology (1)	8,240



Goodwill (2)	1,063
Other assets	142
Net assets acquired	$	12,608

(1)Technology and IP Licenses were measured using the cost approach. Significant inputs used as part of the valuation of intangible assets include personnel costs, overhead costs, developer’s profit, and expected time to reproduce.

(2)Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected future economic benefits as a result of other assets acquired that could not be individually identified and separately recognized. Goodwill is not amortized. The factors that made up the goodwill recognized included workforce and expected synergies derived from the technology application to the Company’s current technological platforms. The entire amount of goodwill is expected to be deductible for tax purposes and is allocated to the Autonomy Solutions segment, which is also deemed the reporting unit.

Identifiable intangible assets recognized (in thousands):

Useful Life

Preliminary Recorded Value

Developed technology

4 — 6 years

8,240

The acquired business did not contribute distinct revenues but added additional operating expenses primarily related to personnel-related costs of the hired team of former Seagate employees and related facilities costs in the period from January 18, 2023 to March 31, 2023. Such operating expenses were not material to the operating results of the Company for the three months ended March 31, 2023.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 4. Revenue

The Company’s revenue is comprised of sales of lidar sensors hardware, components, NRE services and licensing of certain information available with the Company.

Disaggregation of Revenues

The Company disaggregates its revenue from contracts with customers by (1) geographic region based on a customer’s billed to location, and (2) type of good or service and timing of transfer of goods or services to customers (point-in-time or over time), as it believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. Total revenue based on the disaggregation criteria described above, as well as revenue by segment, are as follows (in thousands):


	Three Months Ended March 31,
	2023				2022
	Revenue		% of Revenue		Revenue		% of Revenue
Revenue by primary geographical market:
North America	$	13,198	91	%	$	4,968	73	%
Asia Pacific	592		4	%	1,860		27	%
Europe and Middle East	719		5	%	27		—	%
Total	$	14,509	100	%	$	6,855	100	%
Revenue by timing of recognition:
Recognized at a point in time	$	7,358	51	%	$	1,541	22	%
Recognized over time	7,151		49	%	5,314		78	%
Total	$	14,509	100	%	$	6,855	100	%
Revenue by segment:
Autonomy Solutions	$	10,673	74	%	$	5,898	86	%
ATS	3,836		26	%	957		14	%
Total	$	14,509	100	%	$	6,855	100	%

Volvo Stock Purchase Warrant

As disclosed in the Company’s 2022 Annual Report, the Company had previously issued certain stock purchase warrants (“Volvo Warrants”) to Volvo Car Technology Fund AB (“VCTF”) in connection with an engineering services contract. The Volvo Warrants vest and become exercisable in two tranches based on satisfaction of certain commercial milestones. The fair value of the first tranche of the Volvo Warrants was recorded as a reduction in revenue in 2021. The second tranche of the Volvo warrants will be recorded as reduction in revenue upon achievement of sales of a certain number of the Company’s sensors to Volvo for use in their commercial vehicles, which had not commenced as of the end of March 31, 2023.

Contract assets and liabilities

Contract assets primarily represent revenues recognized for performance obligations that have been satisfied but for which amounts have not been billed. Contract liabilities consist of deferred revenue and customer advanced payments. Deferred revenue includes billings in excess of revenue recognized related to product sales and other services revenue and is recognized as revenue when the Company performs under the contract. Customer advanced payments represent required customer payments in advance of product shipments according to the customer’s payment term. Customer advance payments are recognized in revenue as or when control of the performance obligation is transferred to the customer.

The opening and closing balances of contract assets were as follows (in thousands):



	March 31, 2023		December 31, 2022
Contract assets, current	$	7,904	$	15,395
Contract assets, non-current	5,985		2,575
Ending balance	$	13,889	$	17,970

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The significant changes in contract assets balances consisted of the following (in thousands):



	March 31, 2023		December 31, 2022
Beginning balance	$	17,970	$	9,907
Amounts billed that were included in the contract assets beginning balance	(8,414)		(4,228)
Revenue recognized for performance obligations that have been satisfied but for which amounts have not been billed	4,333		12,291
Ending balance	$	13,889	$	17,970

The opening and closing balances of contract liabilities were as follows (in thousands):



	March 31, 2023		December 31, 2022
Contract liabilities, current	$	4,558	$	1,993
Contract liabilities, non-current	414		1,015
Ending balance	$	4,972	$	3,008

The significant changes in contract liabilities balances consisted of the following (in thousands):



	March 31, 2023		December 31, 2022
Beginning balance	$	3,008	$	898

Revenue recognized that was included in the contract liabilities beginning balance	(1,492)		(489)
Increase due to cash received and not recognized as revenue and billings in excess of revenue recognized during the period	3,456		2,599
Ending balance	$	4,972	$	3,008

Remaining Performance Obligations

Revenue allocated to remaining performance obligations was $37.7 million as of March 31, 2023 and includes amounts within contract liabilities. The Company expects to recognize approximately 83% of this revenue over the next 12 months and the remainder thereafter.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 5. Investments

Debt Securities

The Company’s investments in debt securities consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	March 31, 2023
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. treasury securities	$	228,254	$	27	$	(1,392)	$	226,889
U.S. agency and government sponsored securities	5,000		—		(25)		4,975
Commercial paper	27,286		—		(84)		27,202
Corporate bonds	73,411		—		(493)		72,918
Asset-backed securities	4,523		—		(33)		4,490
Total debt securities	$	338,474	$	27	$	(2,027)	$	336,474
Included in cash and cash equivalents	$	29,828	$	2	$	(3)	$	29,827
Included in marketable securities	308,646		25		(2,024)		306,647


	December 31, 2022
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. treasury securities	$	191,075	$	3	$	(2,598)	$	188,480
U.S. agency and government sponsored securities	4,999		—		(75)		4,924
Commercial paper	74,755		—		(232)		74,523
Corporate bonds	111,123		—		(1,214)		109,909
Asset-backed securities	11,945		—		(110)		11,835
Total debt securities	$	393,897	$	3	$	(4,229)	$	389,671

Included in marketable securities	$	393,897	$	3	$	(4,229)	$	389,671

The following table presents the gross unrealized losses and the fair value for those debt securities that were in an unrealized loss position for less than 12 months as of March 31, 2023 and December 31, 2022 (in thousands):


	March 31, 2023				December 31, 2022
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
U.S. treasury securities	$	(1,392)	$	174,013	$	(2,598)	$	158,888
U.S. agency and government sponsored securities	(25)		4,975		(75)		4,924
Commercial paper	(84)		27,202		(232)		74,523
Corporate bonds	(493)		72,918		(1,214)		109,909
Asset-backed securities	(33)		4,490		(110)		11,835
Total	$	(2,027)	$	283,598	$	(4,229)	$	360,079

As of March 31, 2023, the total amortized cost basis of the Company’s available-for-sale securities exceeded its fair value by $2.0 million, which was primarily attributable to widening credit spreads and rising interest rates since purchase. The Company reviewed its available-for-sale securities and concluded that the decline in fair value was not related to credit losses and that it is more likely than not that the entire amortized cost of each security will be recoverable before the Company is required to sell them or when the security matures. Accordingly, during the three months ended March 31, 2023, no allowance for credit losses was recorded and instead the unrealized losses are reported as a component of accumulated other comprehensive income (loss).

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Equity Investments

The Company’s equity investments consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):


	Condensed Consolidated Balance Sheets Location	March 31, 2023		December 31, 2022
Money market funds(1)	Cash and cash equivalents	$	34,202	$	42,056
Marketable equity investments(1)	Marketable securities	25,716		29,643
Non-marketable equity investment measured using the measurement alternative(2)	Other non-current assets	4,000		4,000
Total		$	63,918	$	75,699

(1) Investments with readily determinable fair values.

(2) Investment in privately held company without readily determinable fair value.

The Company assesses its non-marketable equity investments quarterly for impairment. Adjustments and impairments are recorded in other income (expense), net on the condensed consolidated statements of operations.

Note 6. Financial Statement Components

Cash and Cash Equivalents

Cash and cash equivalents consisted of the following (in thousands):



	March 31, 2023		December 31, 2022
Cash	$	25,904	$	27,496
Money market funds	34,202		42,056
U.S. treasury securities	29,827		—



Total cash and cash equivalents	$	89,933	$	69,552

Inventory

Inventory comprised of the following (in thousands):



	March 31, 2023		December 31, 2022
Raw materials	$	8,066	$	3,614
Work-in-process	3,706		2,329
Finished goods	3,146		2,849
Total inventories, net	$	14,918	$	8,792

The Company’s inventory write-offs and write-downs (primarily due to obsolescence, lower of cost or market assessment, and other adjustments) was $5.5 million and $1.4 million for the three months ended March 31, 2023 and 2022, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):



	March 31, 2023		December 31, 2022
Prepaid expenses	$	14,729	$	15,653
Contract assets	7,904		15,395
Advance payments to vendors	5,394		7,919

Other receivables	5,832		5,236
Total prepaid expenses and other current assets	$	33,859	$	44,203

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Property and Equipment

Property and equipment consisted of the following (in thousands):



	March 31, 2023		December 31, 2022
Machinery and equipment	$	25,817	$	14,047
Computer hardware and software	7,978		6,797
Land	1,001		1,001
Leasehold improvements	19,359		885
Vehicles, including demonstration fleet	3,357		3,222
Furniture and fixtures	817		818
Construction in progress	32,143		13,642
Total property and equipment	90,472		40,412
Accumulated depreciation and amortization	(12,077)		(10,152)
Total property and equipment, net	$	78,395	$	30,260

Property and equipment capitalized under finance lease (capital lease prior to adoption of ASC 842) were not material. Construction in progress increased due to increased capital expenditure related to build out of series production equipment and facilities, which are expected to be completed over approximately next 12 months.

Depreciation and amortization expense associated with property and equipment was $1.9 million and $0.7 million for the three months ended March 31, 2023 and 2022, respectively.

Intangible Assets

The following table summarizes the activity in the Company’s intangible assets (in thousands):


	March 31, 2023		December 31, 2022
Beginning of the period	$	22,077	$	2,424
Additions	8,240		21,890
Amortization	(1,062)		(2,237)
End of the period	$	29,255	$	22,077

The components of intangible assets were as follows (in thousands):


	March 31, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount	Weighted Average Remaining Period (Years)
Customer relationships	$	3,730	$	(867)	$	2,863	4.2	$	3,730	$	(664)	$