Hesai Group Q3 FY2025 earnings call

• Q3 was a quarter of powerful momentum with net revenue up nearly 50% y/y and over 1 million LiDAR units produced in 2025. - Led the long-range automotive LiDAR market for 7 consecutive months, capturing 40% share in August. - Turned solidly profitable ahead of schedule, with Q3 GAAP net income RMB 256 million and nine-month GAAP net income RMB 283 million, achieving full-year profit target early. - New design wins from top ADAS customers across all 2026 models, 100% LiDAR adoption. - China's MIIT introduced conditional approval for L3 vehicle production and public consultation on L2 safety standards. - Launched Infinity IB LiDAR solution, paired with ETX and FTX LiDARs. - Successfully listed on Hong Kong Stock Exchange in September, raising $614 million after Green Shoe Option. - Adopted AI across R&D, operations, and customer support, achieving cost savings.

In Q3, Hesai Group achieved strong financial performance. Total shipments reached 441,398 units, up 229% year over year. Net revenue surged 47% to $112 million. The ADAS segment saw significant growth with new design wins from top customers and LiDAR becoming a standard feature. The robotics business also contributed, with expanding applications and new deals signed. ADAS LiDAR, particularly the ATX model, was a key volume driver, accounting for a large portion of deliveries. The revenue contribution of ADAS and robotics segments was not explicitly stated as a percentage but was highlighted in terms of growth and new opportunities.

• Raised full-year 2025 GAAP net income guidance to RMB 350 to RMB 450 million. - Q4 net revenues expected between RMB 1,000 million and RMB 1,200 million, up 39% to 67% y/y. - Shipments to continue accelerating, with 4Q shipments expected to reach ~600,000 units. - ATX LiDAR to account for ~80% of Q4 volumes, priced around $200 with discounts. - 2026 sees ADAS LiDAR shipments of at least 2 to 3 million units, potential ASP decrease due to product mix shift, volume-based pricing, and annual declines, but new growth engines like L3 vehicle deployment and overseas ADAS business.

• Competition from peers launching new products to undercut Hesai's ATX product. - Technology challenges with SPAD-based digital LiDAR, including noise and potential false triggering issues that need to be addressed for reliability and safety.

Q: Tina Hou from Goldman Sachs asked about pricing for next year, volume acceleration by OEMs, and 4Q and 2026 guidance.

A: Andrew Fan responded that 2025 full-year revenues expected ~RMB 3,000 to RMB 3,200 million, up nearly 50% y/y. Q4 shipments ~600,000 units, ATX to be 80% of Q4 volumes at ~$200 with discounts. Raised full-year 2025 GAAP net income to RMB 350 to RMB 450 million. 2026 sees ADAS LiDAR shipments 2-3 million units, potential ASP decrease but new growth engines like L3 deployment.

Q: Tim Hsiao from Morgan Stanley asked about competition vs ATX and SPAD-based digital LiDAR advantage.

A: David Li responded that Hesai's strategy is structured product releases, ATX is a complete victory in the market. On SPAD, challenges include noise and false triggering, but Hesai is diligently working on in-house solutions to address reliability and safety concerns.

Q: Jeff Chung from Citi asked about L3 legislation and confidence in guidance.

A: David Li responded that China's L3 legislation is a positive trend, safety redundancy and factory integration are key. Guidance confidence comes from value creation in autonomous driving, with L3 potentially creating 10x more value than L2, driving higher LiDAR content per vehicle.

Q: Jessie Lo from Bank of America Securities asked about BYD's 2026 LiDAR order.

A: David Li responded that Hesai is a key partner of BYD, supplying LiDARs since Q1 2025, with ATX leading in volume, and new models rolling out through 2025-2026, details to be shared when official announcements are made.

Q: Aaron Wong from Jefferies asked about robotic shipments in 2026.

A: David Li responded that robotics business is growing, with robotaxi shipments expected to grow exponentially, global deals with Motional, and non-auto robotics applications like home, factory, and agriculture robots with ~40,000-50,000 units shipped quarterly in 2025, anticipating 2x growth in 2026.

Q: Zhang Yu from Quatai Securities asked about major ADAS customers for 2026.

A: David Li responded that key customers include Li Auto, Xiaomi, BYD, Leapmotor, Zika, Great Wall Motor, Geely, and Chery, with new SOPs rolling out through 2025-2026.

Q: Sia Huang from SPDB International asked about overseas updates.

A: David Li responded that Hesai has new LiDAR supply deals globally, including with Motional for robotaxis, exclusive design win with a top European OEM, and support for Chinese OEMs in global expansion, with updates on the way.

Q: Lujia from BOCI asked about new business initiatives beyond LiDAR.

A: David Li responded that potential areas include enhancing sensing capabilities, integrating AI with sensing, space sensing, and leveraging infrastructure technologies beyond static sensing, with a focus on being a full-spectrum technology infrastructure builder