Company: LIDRW
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001437749-25-004906
Chunk: 478

Company: AEye, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 3
Chunk 478
---
 conduct our business through one operating segment.

Components of Results of Operations 

Total Revenues 

We categorize our revenue as (1) prototype sales and (2) development contracts. In 2024 and 2023, our prototype sales revenue primarily related to unit sales of our 4SightTM product. Revenue from prototype sales is typically recognized at a point in time when the control of goods is transferred to the customer, generally upon delivery or shipment to the customer.

Development contracts represented the majority of our total revenues in 2024 and 2023. Revenue from development and/or collaboration arrangement contracts are earned from R&D activities and collaboration with OEMs and Tier 1 suppliers. These contracts primarily focus on customization of our proprietary 4SightTM capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of perception capabilities to meet specific customer needs. Revenue from development contracts is recognized when we satisfy performance obligations in the contract, which can result in recognition at either a point in time or over time. This assessment is made at the outset of the arrangement for each performance obligation.

Cost of Revenue

Cost of revenue includes the costs directly associated with the production of prototypes and certain costs associated with development contracts. Such costs for prototypes include direct materials, direct labor, indirect labor, inventory write downs, losses on purchase commitments, warranty expense, and allocation of overhead. Costs associated with development contracts include the direct costs and allocation of overhead costs involved in the execution of the contracts. 

       54

Operating Expenses

Research and Development

Our research and development, or R&D, efforts are focused primarily on hardware, software, and system engineering related to the design and development of our advanced lidar solutions. R&D expenses include:

      • 
      personnel-related expenses, including salaries, benefits, bonuses, one-time termination benefits, and stock-based compensation expense; 

      • 
      third-party engineering and contractor costs; 

      • 
      lab equipment; 

      • 
      engineering parts and test units; 

      • 
      new hardware and software expenses; and 

      • 
      allocated overhead expenses. 

R&D costs are expensed as they are incurred. With a reduced workforce and consolidated global footprint, we plan to be more focused on investments that support our strategy and product development goals in the future. We expect our R&D costs to increase slightly from 2024 as we continue to invest in the development of our Apollo product.

Sales and Marketing