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01/11 13:57
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture. Strong revenue growth (83% YoY) and improved operating margins are positive, but stagnant EPS and a lack of a share buyback program are concerns. The Q&A highlights conservative guidance due to uncertainties, with stable orders but no clear growth catalysts. While there is optimism around new partnerships and projects, the absence of a share buyback and unchanged EPS tempers expectations. Given these mixed signals, a neutral stock price movement is likely over the next two weeks.
EPS $0.08 EPS, unchanged year-over-year.
Revenue Revenue was up 83% year over year, due to normalized volume in Q1 2025 compared to Q1 2024, which was impacted by meaningful inventory digestion by Tier 1 customers.
Operating Margins Operating margins recovered sharply year-over-year due to higher revenue.
Operating Expenses Operating expenses grew 14% year over year, but are expected to moderate to middle single digits for the rest of the year due to sufficient R&D infrastructure.
Operating Cash Flow Operating cash flow was $109 million in Q1, highlighting strong business trends.
Volume Volume was 8.5 million units, with an expectation for Q2 volume to be about 7% higher.
Gross Margin Q1 gross margin was up slightly versus Q4 2024, primarily due to a lower percentage of supervision revenue.
Adjusted Operating Expenses Expected to grow approximately 7% year-over-year in 2025 compared to $926 million in 2024.
New Product Launches: Mobileye's technology is now included in Ford BlueCruise, and this cloud-enhanced function will also be adopted by a Korean OEM in future programs.
Design Wins: Mobileye achieved its first design win with Volkswagen during the quarter and is seeing traction from its imaging radar product.
Robotaxi Development: Mobileye Drive self-driving system for robotaxi business continues to accelerate, with Dallas as the initial operation geography in partnership with Lyft.
Market Expansion: Mobileye announced a joint release with Volkswagen and Uber to integrate Mobileye Drive-enabled ID.BUZZ robotaxis onto the Uber ride-hailing network in Los Angeles starting in 2026.
New Customer Acquisition: Mobileye achieved its first design win in about eight years with a European OEM and is seeing substantial opportunities from new customers.
Operational Efficiency: Operating cash flow was $109 million in Q1, with operating expense growth expected to moderate to middle single digits for the remainder of the year.
Supply Chain Management: Mobileye's supply chain is simple, with customers importing products, thus avoiding direct tariff costs.
Strategic Shifts: Mobileye is focusing on multicamera setups due to stringent safety requirements and the need for highway hands-free driving.
Ecosystem Approach: Mobileye's ecosystem approach is capital-light, with responsibilities distributed among partners like Volkswagen and Uber.
Global Production Uncertainty: Global light vehicle production in 2025 has become significantly more uncertain due to new trade friction, which could negatively impact production volumes and consumer spending.
Tariff Impact: While Mobileye does not incur direct tariff costs, they will be affected by negative impacts on global production volumes and consumer spending resulting from trade issues.
Economic Factors: There is potential for price elasticity and other economic effects on auto consumers, which could impact demand.
Production Volume Reduction: A scenario incorporating production shutdowns due to tariffs could lead to a 3% to 7% reduction in volumes from top customers, translating to about 1.1 to 2.2 million units annualized.
Forecast Deterioration: S&P IHS forecasts a global production deterioration of around 2% for the balance of 2025, which could translate to a bit below 1 million lower IQ units.
Customer Exposure: Mobileye's regional outlook already assumed a conservative view of 2025 production and customer demand prior to recent tariff developments.
Design Wins: Design win activity was brisk in Q1, achieving around 85% of the projected future volumes from design wins in all of 2024.
Technology Integration: Mobileye's technology is included in Ford BlueCruise and will be adopted by a Korean OEM, indicating a trend towards multicamera setups.
Ecosystem Approach: Mobileye is integrating its self-driving system into Volkswagen ID.BUZZ for Uber's ride-hailing network, showcasing a capital-light ecosystem approach.
New Customer Engagements: Achieved first design win in eight years with a European OEM and imminent design win for imaging radar with another European OEM.
Robotaxi Development: Mobileye Drive self-driving system for robotaxi business is accelerating, with initial operations planned in Dallas with Lyft.
Q2 Volume Expectations: Expect Q2 volume to be approximately 8.7 million to 9.3 million IQ units.
Revenue Growth: Expect Q2 revenue to be up approximately 7% year over year.
Operating Expenses: Expect operating expenses to be seasonally higher in Q2 versus Q1.
Gross Margin Outlook: Expect gross margin to be at or slightly below Q1 level.
2025 Production Outlook: Original expectations for 2025 remain valid despite potential tariff impacts, with a conservative view already incorporated.
Share Buyback Program: None
The overall sentiment is positive due to raised revenue and operating income outlooks, strong EyeQ and Supervision volume forecasts, and a promising robotaxi deployment plan. Despite some margin declines and higher operating expenses, the positive guidance and strategic partnerships, such as the Lyft robotaxi program, outweigh these concerns. The Q&A session provided additional confidence with expectations of faster growth than top OEMs and advancements in ADAS technology, supporting a positive stock price movement.
The earnings call summary and Q&A highlight strong progress in design wins, technology integration, and strategic partnerships, particularly with Volkswagen and Lyft. Despite some uncertainties in management responses, the increased guidance for supervision units and strong EyeQ shipments indicate robust demand. Additionally, the strategic Imaging RADAR deal and unique business model for robotaxi systems position Mobileye well for future growth. While operating expenses are rising, the long-term outlook remains positive, with significant contributions expected from new product launches by 2027.
The earnings call presents a mixed picture. Strong revenue growth (83% YoY) and improved operating margins are positive, but stagnant EPS and a lack of a share buyback program are concerns. The Q&A highlights conservative guidance due to uncertainties, with stable orders but no clear growth catalysts. While there is optimism around new partnerships and projects, the absence of a share buyback and unchanged EPS tempers expectations. Given these mixed signals, a neutral stock price movement is likely over the next two weeks.
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