The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included in Part I, Item 1. “Financial Statements,” of this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Please also see the sections titled “Special Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and Part II, Item 1A. “Risk Factors” for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Quarterly Report on Form 10-Q. Overview We are engaged in developing and operating autonomous robotic systems designed to navigate and perform work in complex, human-centered environments. Serve has developed an advanced platform that combines proprietary hardware, artificial intelligence, computer vision, and cloud-based fleet management software to enable safe, reliable, and scalable autonomous operations across multiple physical domains. We design, engineer, deploy, and operate low-emission robotic systems built on this platform. Serve operates autonomy systems across multiple domains spanning both outdoor and indoor environments. Our sidewalk delivery operations provide autonomous last-mile delivery services for restaurant and retail partners, while our healthcare operations, enabled through the acquisition of Diligent Robotics in 2026, deploy robots in hospital settings to support clinical staff through logistics and workflow automation. Serve is shaping the future of physical AI in real world environments. We are expanding our platform into adjacent markets, customer segments, and operating environments where autonomous mobility can address labor constraints, improve service levels, and reduce emissions. We intend to leverage our core autonomy stack, fleet management infrastructure, and operational expertise to support additional use cases across both outdoor and indoor settings. Financial Highlights For the three months ended June 30, 2026 and 2025, we generated revenues of $3.2 million and $0.6 million, respectively, and reported net losses of $64.1 million and $20.9 million, respectively. For the six months ended June 30, 2026 and 2025, we generated revenues of $6.2 million and $1.1 million, respectively, and reported net losses of $113.1 million and $34.1 million, respectively. As noted in our unaudited condensed consolidated financial statements, as of June 30, 2026, we had an accumulated deficit of $322.0 million. Recent Developments Acquisition of Vebu, Inc. On February 17, 2026, the Company acquired all of the issued and outstanding equity of Vebu, which was accounted for under the acquisition method of accounting. Refer to the “Liquidity and Capital Resources” section for discussion of the purchase price and the acquisition’s impact on the Company’s liquidity. Acquisition of Diligent Robotics, Inc. On January 27, 2026, the Company acquired all of the issued and outstanding equity of Diligent, which was accounted for under the acquisition method of accounting. Refer to the “Liquidity and Capital Resources” section for discussion of the purchase price and the acquisition’s impact on the Company’s liquidity. 38 Table of Contents Outlook and Challenges Facing Our Business There are a number of factors that affect our business which include, among others: Overall Demand for Last-Mile Delivery and Hospital-Based Automation Our potential for growth depends significantly on continued demand for last-mile delivery of food and other items on our partner platforms and for automation solutions from our hospital customers. The demand for last-mile delivery can fluctuate based on various market cycles, weather and local community health conditions, as well as evolving competitive dynamics. The demand for hospital-based automation solutions can fluctuate based on budget cycles, staffing levels, operational priorities, and broader healthcare industry conditions. Our largest stream of projected revenue comes from maximizing utilization of our outdoor delivery robot fleet to perform deliveries on our partner platforms. Matching algorithms on these platforms as well as the extent of their merchant and end-customer participation in robotic delivery directly impacts the utilization rate of our robots, both of which can be challenging to predict. Our ability to gain additional partners and to generate revenue with such additional partners is dependent on numerous factors, including, among others, the partner’s consumer base and desire to use robotic delivery, along with normal-course onboarding for new partners. These uncertainties make demand difficult to forecast for us and our partners. Our healthcare-related revenue depends on the continued utilization of robots within hospital workflows. The extent to which hospitals are able to support, operate, and scale robotic deployments directly impacts utilization rates, all of which can be challenging to predict. In addition, hospitals may face limitations in infrastructure, staffing, or internal support required to sustain robotic fleets. These uncertainties make demand difficult to forecast for us and our customers. Customer Concentration A significant portion of our revenue is concentrated with a limited number of customers. The following table represents the concentration of revenue for all customers that accounted for more than 10% of our revenues: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Customer A sales as a percentage of total revenues 11 % 31 % 12 % 29 % Customer B sales as a percentage of total revenues 22 % N/A 17 % N/A Customer C sales as a percentage of total revenues N/A 39 % N/A 46 % A significant portion of our accounts receivable is concentrated with a limited number of customers. The following table represents the concentration of accounts receivable for all customers that account for more than 10% of our total accounts receivable as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Customer A receivables as a percentage of total accounts receivable 11 % 11 % Customer B receivables as a percentage of total accounts receivable N/A N/A Customer C receivables as a percentage of total accounts receivable N/A N/A Customer D receivables as a percentage of total accounts receivable N/A 18 % Customer E receivables as a percentage of total accounts receivable 14 % 30 % Customer F receivables as a percentage of total accounts receivable 13 % N/A There are inherent risks whenever a large percentage of total revenues and accounts receivable are concentrated with a limited number of customers. The loss of any or all of these customers could have a negative impact on our planned operations. 39 Table of Contents Inflation and Market Considerations; Availability of Materials, Labor & Services We consider most on-demand purchases as discretionary spending for consumers, and we are therefore susceptible to changes in discretionary spending patterns and economic slowdowns in the geographic areas in which merchants on our partners’ platforms operate and in the economy at large. Discretionary consumer spending can be impacted by general economic conditions, unemployment, consumer debt, inflation, gasoline prices, interest rates, consumer confidence and other macroeconomic factors. Inflation can lead to increased cost of material and labor for restaurants and merchants who may in turn raise prices on the items they sell and result in a reduction in demand for those items. To the extent inflation reduces economic activity and consumer demand for items we deliver, it could negatively impact our financial results. Continued uncertainty in or a worsening of the economy, generally or in a number of our markets, and consumers’ reactions to these trends could adversely affect our business and cause us to, among other things, reduce the number and frequency of new market openings or cease operations in existing markets. However, inflation can also serve as a tailwind that may accelerate the adoption of automated robotic last-mile delivery, as labor becomes more expensive and drives up the cost of delivery by humans. Intellectual Property We rely on patented and non-patented proprietary information relating to product development, manufacturing capabilities, and other core competencies of our business. Protection of intellectual property is critical. Therefore, steps such as additional patent applications, confidentiality, and non-disclosure agreements, as well as other security measures are important. While we believe we have a strong patent portfolio and there is, to our knowledge, no actual or threatened litigation against us for patent-related matters, litigation or threatened litigation is a common method to enforce or protect intellectual property rights. Such action may be initiated by or against us and would require significant management time and expense. Supply Chain Constraints We cannot be sure whether global supply chain shortages will affect our future robot build plans. In order to mitigate supply chain risks, we may need to incur higher costs to secure available inventory and place non-cancelable purchase commitments with our suppliers, which could introduce inventory risk if our forecasts and assumptions prove inaccurate. Higher costs of components would affect our cash runway and delays in the manufacturing of our robots would push out our revenue forecasts. Governmental and Regulatory Conditions Our potential for growth depends on continued permission and acceptance by local governments and municipalities where our robots perform deliveries. Changes in regulations such as the imposition of a cap on the number of robots or technical requirements such as robot size and weight restrictions or limitations on autonomy within a certain geographic area could reduce or limit our ability to generate revenues or impact our unit economics in those markets. Components of Results of Operations Revenue Our revenue consists of fleet services, which includes revenue generated from delivery services, branding services, and data monetization; and software services, which includes revenue generated from licensing software to customers, and engineering and development projects. Cost of Revenue Cost of revenue consists primarily of allocation of personnel time related to revenue activities, allocations of depreciation on robot assets used for revenue producing activities, allocation of amortization expense of developed technology, allocations of network costs, and costs related to data, software and similar costs that allow the robots to function as intended and for the Company to communicate with its robots while in service. Research and Development Expenses Research and development expenses primarily consist of costs incurred by research and development functions. These costs are expensed as incurred. 40 Table of Contents General and Administrative Expenses General and administrative expenses primarily consist of costs incurred by general and administrative functions, including executive management and administrative functions, including finance and accounting, legal and human resources. Operations Expenses Operations expenses primarily consist of costs incurred by field operations functions. Sales and Marketing Expenses Sales and marketing expenses primarily consist of costs incurred by sales and marketing functions. Other Income (Expense) Other income (expense) primarily includes the following items: •Interest income, which consists primarily of interest earned on our cash and cash equivalents and marketable securities. •Interest expense, which consists of stated rates of interest on financing instruments, fees incurred related to financing instruments or accretion of debt discounts. •Realized gain (loss) on foreign currency translation, which consists primarily of remeasurement of transactions and monetary assets and liabilities denominated in currencies other than the functional currency at the end of the period. •Realized gain (loss) from the sale or maturity of marketable securities. •Other income. •Other expenses. 41 Table of Contents Results of Operations Comparison of Results of Operations for the three months ended June 30, 2026 and 2025 The following table summarizes our operating results as reflected in our unaudited condensed consolidated statements of operations and comprehensive loss during the three months ended June 30, 2026 and 2025, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods (in thousands). Three Months Ended June 30, 2026 2025 Change Change % Revenues $ 3,238 $ 642 $ 2,596 404 % Cost of revenues 12,017 3,501 8,516 243 % Gross loss (8,779) (2,859) (5,920) 207 % Operating expenses: Research and development 20,279 9,120 11,159 122 % General and administrative 24,844 8,078 16,766 208 % Operations 7,862 2,124 5,738 270 % Sales and marketing 4,301 463 3,838 829 % Total operating expenses 57,286 19,785 37,501 190 % Loss from operations (66,065) (22,644) (43,421) 192 % Other income (expense): Interest income 1,927 1,794 133 7 % Realized loss on foreign currency translation (4) — (4) 100 % Other income 3 — 3 100 % Other expenses (24) — (24) 100 % Net loss before income taxes (64,163) (20,850) (43,313) 208 % Benefit from income taxes (36) — (36) 100 % Net loss $ (64,127) $ (20,850) $ (43,277) 208 % Revenues increased by $2.6 million, or 404%, to $3.2 million, for the three months ended June 30, 2026, compared with $0.6 million for the same period in 2025. This increase was primarily driven by a $2.0 million increase in fleet services revenue due to overall expansion and diversification of the robot fleet and partnerships. The remaining increase of $0.6 million was attributable to an increase in software services revenue. Cost of revenues increased by $8.5 million to $12.0 million for the three months ended June 30, 2026, compared with $3.5 million for the same period in 2025, due primarily to the integration of recent acquisitions and expansion of the outdoor robot fleet. Research and development expense increased by $11.2 million to $20.3 million for the three months ended June 30, 2026, compared with $9.1 million for the same period in 2025, due primarily to an increase in personnel-related costs and stock-based compensation expense. General and administrative expense increased by $16.8 million to $24.8 million for the three months ended June 30, 2026, compared with $8.1 million for the same period in 2025, due primarily to an increase in personnel-related costs, including stock-based compensation expense, as well as higher amortization expense associated with acquired intangible assets. Operations expense increased by $5.7 million to $7.9 million for the three months ended June 30, 2026, compared with $2.1 million for the same period in 2025. The increase was primarily attributable to an increase in personnel-related costs and higher depreciation expense associated with the expansion of our robot fleet. 42 Table of Contents Sales and marketing expenses increased by $3.8 million to $4.3 million for the three months ended June 30, 2026, compared with $0.5 million for the same period in 2025. This increase was primarily due to an increase in personnel-related costs. Other income (expense) increased by $0.1 million to $1.9 million for the three months ended June 30, 2026, compared with $1.8 million for the same period in 2025. This increase was primarily due to an increase in interest income as a result of interest earned from cash on hand and marketable securities. Comparison of Results of Operations for the six months ended June 30, 2026 and 2025 The following table summarizes our operating results as reflected in our unaudited condensed consolidated statements of operations and comprehensive loss during the six months ended June 30, 2026 and 2025, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods (in thousands). Six Months Ended June 30, 2026 2025 Change Change % Revenues $ 6,222 $ 1,082 $ 5,140 475 % Cost of revenues 24,002 5,410 18,592 344 % Gross loss (17,780) (4,328) (13,452) 311 % Operating expenses: Research and development 39,316 16,000 23,316 146 % General and administrative 39,760 12,828 26,932 210 % Operations 14,817 3,793 11,024 291 % Sales and marketing 6,174 702 5,472 779 % Total operating expenses 100,067 33,323 66,744 200 % Loss from operations (117,847) (37,651) (80,196) 213 % Other income (expense): Interest income 4,033 3,586 447 12 % Interest expense — (3) 3 (100) % Realized loss on foreign currency translation (14) — (14) 100 % Realized loss on investments (1) — (1) 100 % Other income 38 — 38 100 % Other expenses (24) — (24) 100 % Net loss before income taxes (113,815) (34,068) (79,747) 234 % Benefit from income taxes (684) — (684) 100 % Net loss $ (113,131) $ (34,068) $ (79,063) 232 % Revenues increased by $5.1 million, or 475%, to $6.2 million, for the six months ended June 30, 2026, compared with $1.1 million for the same period in 2025. This increase was primarily driven by a $3.7 million increase in fleet services revenue due to overall expansion and diversification of the robot fleet and partnerships. The remaining increase of $1.4 million was attributable to an increase in software services revenue. Cost of revenues increased by $18.6 million to $24.0 million for the six months ended June 30, 2026, compared with $5.4 million for the same period in 2025, due primarily to the integration of recent acquisitions and expansion of the outdoor robot fleet. 43 Table of Contents Research and development expense increased by $23.3 million to $39.3 million for the six months ended June 30, 2026, compared with $16.0 million for the same period in 2025, due primarily to an increase in personnel-related costs, including an increase in stock-based compensation expense, as well as increased software costs due to network usage. General and administrative expense increased by $26.9 million to $39.8 million for the six months ended June 30, 2026, compared with $12.8 million for the same period in 2025, due primarily to an increase in personnel-related costs, including stock-based compensation expense, as well as higher amortization expense associated with acquired intangible assets and increased professional fees largely related to acquisition activities. Operations expense increased by $11.0 million to $14.8 million for the six months ended June 30, 2026, compared with $3.8 million for the same period in 2025. The increase was primarily attributable to an increase in personnel-related costs, higher depreciation expense associated with the expansion of our robot fleet, and increased facility costs related to our entry into new markets. Sales and marketing expenses increased by $5.5 million to $6.2 million for the six months ended June 30, 2026, compared with $0.7 million for the same period in 2025. This increase was primarily due to an increase in personnel-related costs. Other income (expense) increased by $0.4 million to $4.0 million for the six months ended June 30, 2026, compared with $3.6 million for the same period in 2025. This increase was primarily due to an increase in interest income as a result of interest earned from cash on hand and marketable securities. Key Metrics We regularly review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. The following metrics are inclusive of the outdoor and indoor robot fleet. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Daily Active Robots 792 160 811 116 Daily Supply Hours 9,809 1,723 10,051 1,189 Daily Active Robots. We define daily active robots as the average number of robots performing daily deliveries during the period. This metric is reflective of the total robot fleet, including both indoor and outdoor robots. Daily active robots reflect our operation team’s capacity to have active robots in the field performing delivery services or generating branding revenues. We closely monitor and strive to efficiently increase our daily active robots as we improve our autonomy and resultant human-to-robot ratios and increase the number of partners on our platform. Daily Supply Hours. We define daily supply hours as the average number of hours our robots are available to perform daily deliveries during the period. Supply hours represent the aggregate number of robot hours per day during which we can utilize our robots for delivery, inclusive of both indoor and outdoor deliveries. Supply hours increase as we add active robots and increase the operating window of those robots in a day. We closely monitor and strive to efficiently increase our fleet’s daily supply hours. Liquidity and Capital Resources As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents, and marketable securities of $240.4 million, which consisted of $79.1 million in cash and cash equivalents, $156.3 million in short-term marketable securities, and $5.0 million in long-term marketable securities. Cash and cash equivalents consisted of cash on deposit with banks as well as an institutional money market account. Marketable securities consisted of commercial paper, corporate bonds, U.S. government agency securities and U.S. Treasury securities. We have generated significant operating losses from our operations as reflected in our accumulated deficit of $322.0 million as of June 30, 2026. We have historically funded our operations from issuance of equity and debt securities. To execute on our strategic initiatives to continue to grow our business, we may incur operating losses and generate negative cash flows from operations in the future, and as a result, we may require additional capital resources. We believe our 44 Table of Contents existing cash and cash equivalents and marketable securities will be sufficient to meet our working capital and capital expenditures needs for at least the next 12 months. Our future capital expenditures will depend on many factors, including, but not limited to our growth, our ability to attract and retain customers, the continuing market acceptance of our offerings, the time and extent of spending to support our efforts to develop our platform, the expansion of sales and marketing activities, and the timing and extent of spending for policy initiatives. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected. The following table shows a summary of our cash flows for the periods (in thousands): Six Months Ended June 30, 2026 2025 Change Net cash (used in) provided by: Operating activities $ (84,738) $ (25,426) $ (59,312) Investing activities (27,714) (81,934) 54,220 Financing activities 85,326 100,795 (15,469) Increase (decrease) in cash and cash equivalents $ (27,126) $ (6,565) $ (20,561) Operating Activities Net cash used in operating activities was $84.7 million and $25.4 million for the six months ended June 30, 2026 and 2025, respectively. The increase of $59.3 million primarily consisted of an increased net loss of $79.1 million, adjusted for certain non-cash items, which primarily includes an increase of $13.8 million of non-cash stock-based compensation expense and an increase of $11.5 million of depreciation and amortization expense. These increases were offset by a decrease of change in operating assets and liabilities of $4.4 million. Investing Activities Net cash used in investing activities was $27.7 million and $81.9 million for the six months ended June 30, 2026 and 2025, respectively. The decrease of $54.2 million was primarily due to an increase in acquisition activity of $15.8 million, offset by an increase in net proceeds from marketable securities of $59.0 million. Financing Activities Net cash provided by financing activities was $85.3 million and $100.8 million for the six months ended June 30, 2026 and 2025, respectively. The decrease of $15.5 million primarily consisted of a decrease of $11.4 million in proceeds from exercises of warrants and a decrease of $4.4 million in proceeds from the issuance of the Company’s common stock during the period. Off-Balance Sheet Transactions During the periods presented, we did not have, and we do not currently have, off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes. Critical Accounting Estimates There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. 45 Table of Contents Emerging Growth Company and Smaller Reporting Company Status We are an “emerging growth company,” as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to either early adopt or delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act until the earlier of the date on which we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. We are also a “smaller reporting company,” as defined in Item 10(f) of Regulation S-K, and we will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the prior June 30. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K. Similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.