Arbe Robotics Ltd. Q1 FY2026 earnings call

• Strategic Transition: The company is shifting from a chipset-focused automotive supplier to a provider of complete radar solutions across automotive and multiple adjacent markets, opening new growth opportunities and expanding total addressable market. New CEO Ram Mathnes took office in April to accelerate this execution-focused transition.
• Automotive Milestones: Shipped initial chipset batches to Chinese tier 1 partner HiRAN to support production of 48x48 channel high-end radar for level 4 autonomous vehicles, and HiRAN is developing a lower-cost 24x12 channel chipset-based radar for mass market vehicles, granting the company access to China's fast-growing 2+ and level 3 autonomous vehicle market. Received Phoenix radar orders from global robotaxi customers, and is progressing through advanced evaluation processes with multiple Chinese and European automakers for data collection programs. The company was added to NVIDIA's expanded Drive Hyperion ecosystem for autonomous driving, and continues joint work on radar-based free space mapping and AI-driven automotive capabilities.
• Non-Automotive Expansion: Began selling complete end-to-end radar systems in addition to chipsets, enabling entry into shorter sales cycle adjacent markets including defense, homeland security, perimeter security, smart infrastructure, logistics robotics, and physical AI autonomous systems. Initial system shipments have been completed to customers across these markets, and a dedicated production line has been set up to scale system manufacturing. The U.S. Army has already purchased hundreds of defense units, with additional orders expected.
• Financial and Operational Updates: Closed an underwritten registered direct offering during the quarter that raised $18.5 million in gross proceeds, strengthening the balance sheet and providing financial flexibility for growth investment. Implemented cost reduction measures expected to cut ongoing operating expenses by approximately 15%, with full impact effective in Q2 2026.

The company currently reports aggregate total financial results rather than separate segment-level performance. For Q1 2026, total company revenue was $0.5 million, flat compared to $0.5 million in Q1 2025. Total backlog as of March 31, 2026 was $1 million, all expected to be recognized within 12 months. Gross profit was a negative $0.1 million, an improvement from a negative $0.3 million gross loss in Q1 2025. The company operates two product categories: automotive chipsets and complete end-to-end radar systems for adjacent non-automotive markets. Complete radar systems have a higher absolute average unit price (AUP) and higher absolute dollar profit per unit than automotive chipsets, but lower percentage gross margins due to additional costs for components, mechanics, and testing.

• Management reaffirms the full-year 2026 guidance provided on February 26, maintaining the previously projected range.

No explicit discussion of material business risks or operational failures was included in the prepared remarks or question-and-answer session of this call.

Q: Can you share more detail on traction for your radar in defense applications like drones? / A: Defense has two core high-potential applications for our radar: autonomous military vehicles (off-road, where radar outperforms other sensors in dust, rain, and fog), and perimeter security for detecting intruders and unauthorized drones. The U.S. Army has already purchased hundreds of units, and additional orders are expected. We are actively pursuing business development with both legacy defense prime contractors (like Lockheed Martin) and emerging new market players, a shift from a year ago when we did not target this market at all.

Q: How has being included in NVIDIA's Drive Hyperion ecosystem changed your conversations with automotive OEMs? / A: NVIDIA is the leading global provider of autonomous vehicle software stacks, which are core to bringing reliable autonomous driving to consumers. Inclusion in their ecosystem has increased interest from OEMs, whether they have already selected NVIDIA's stack or are still evaluating potential AV platform providers. The broader breakthroughs in general AI and deep learning are accelerating progress on autonomous driving software, which we expect will drive deployment first in China and then in Western markets.

Q: What is the pricing and gross margin difference between complete radar systems and automotive chipsets? / A: Complete non-automotive radar systems have a significantly higher average unit price than automotive chipsets: automotive chipset volumes are very large, which drives down per-unit pricing via economy of scale, while non-automotive system volumes are lower, leading to higher per-unit pricing. Percentage gross margins are slightly lower for complete systems than chipsets, as systems require additional costs for mechanical parts, third-party components, and testing, but the absolute dollar profit per system is much higher than per chipset.

Q: What was the cost of the new system production line, and is current capacity sufficient for projected demand? / A: The investment to build the line was less than a low hundreds of thousands of dollars, and the line currently supports hundreds of systems per month / thousands of systems per year, which matches current projected pipeline demand. We have the flexibility to increase capacity as demand grows in coming quarters, and have already started discussions with contract manufacturers for further future expansion.