Hesai Group Q4 FY2025 earnings call

Product Progress - ADAS Market: Achieved 100% LiDAR adoption on best-selling models from partners like LiAuto and Xiaomi, broke into sub-RMB 100,000 price segment with Leap Motor. Secured 2,026 design wins with key partners, including 40 automotive brands across over 160 vehicle models. Launched revamped ATX LiDAR in November 2025, powered by in-house FMC 500 SOC, with order backlog exceeding 6 million units. - Robotics Market: Ranked number one across multiple major robotics LIDAR submarkets. JT128 LiDAR performed well in humanoid and quadruped robots, with over 200,000 units shipped in 2025. Secured orders from clients including Dream and Mova for robotic lawnmowers, and worked with nearly every leading player in RoboTaxi, RoboVans, etc. - International Expansion: Strategic partnership with Grab in Southeast Asia, selected as primary LiDAR partner for NVIDIA's Drive Hyperion 10 platform, achieved a key breakthrough in unifying high-performance LiDAR architecture across China and global markets, with HERSA being the only Asian LiDAR manufacturer with German VDA 6.3 process audit certification.

In 2025, the company achieved a milestone with an industry-first full-year net income of RMB $436 million. The flagship ADAS LiDAR, ATX, contributed to the company's number one position in the long-range automotive LiDAR market with over 40% share. The JT series entered mass production and shipped over 200,000 units in its first year, establishing leadership in robotics. In terms of revenue contribution, ATX LiDAR largely contributed to the company's strong performance in the automotive segment, while the JT series was a key driver in the robotics segment.

2026 Guidance - Raised 2026 LIDAR shipment outlook to between 3 and 3.5 million units. For the first quarter of 2026, expected net revenues to be between RMB 650 million and RMB 700 million, or US dollars 93 million to US dollars 100 million, representing year-over-year growth of approximately 24% to 33%. Anticipate strong demand for LiDAR in passenger vehicles and robotics driving meaningful increase in full-year 2026 revenues. Shipment guidance raised to 3 million to 3.1 million units for 2026, with ADAS and robotics LIDARs expected to roughly double year-over-year. - New Products: Anticipate initial revenue contributions from new state-of-the-art products beginning as early as 2026, which are expected to become the second growth engine, with potential to rival or surpass the current LiDAR segment within five years and scale another tenfold within a decade.

Q: Tina Howe with Goldman Sachs asked about details of robotics business verticals like robotaxi, robovan, human robot and their outlook in 2026 and beyond.

A: Andrew responded, detailing humanoid and quadruped robot with expected annual shipments in 2026 reaching five digit levels, Robotaxi with expected 5 to 10 LiDARs per vehicle for full 360 degrees coverage, robovans with market transformation and Hesai's position, and robotic lawnmowers with large untapped market and Hesai's strong partnerships.

Q: Tim Hizia with Morgan Stanley asked about relationship between Hersai and Sharpa and potential business cooperation.

A: Andrew responded that Hazai and Sharpa are fully independent operating entities, with Hazai as core shareholder providing strategic guidance, and open to future collaborations where strategic and commercial sense.

Q: Jeff Chung from Citi asked about first quarter volume guidance and first quarter and full year GP margin and OP margin guidance.

A: Andrew responded that first quarter 2026 total revenues expected between RMB 650 million to RMB 700 million, shipments in range of 400,000 to 450,000 LiDAR units including around 100,000 from robotics. For 2026, raised shipment guidance to 3 million to 3.1 million units, anticipating potential decrease in blended ASP due to volume-based pricing, standard annual decline for strategic OEM customers, and product mix shift.

Q: Aaron Wong with Jefferies asked if the company will provide full year net income guidance for 2026.

A: Andrew responded that due to differences in compliance requirements and listing rules between U.S. and Hong Kong markets, decided not to provide specific full-year net income guidance at this time, but confident in maintaining growth trajectory.

Q: Norman with UBS asked about the master plan behind non-auto, non-lighter new product.

A: David responded that the company will launch two groundbreaking products in next few months, targeting trillion RMB markets, with initial revenue contributions from 2026, potential to rival current LiDAR segment within five years and scale tenfold within a decade, leveraging core advantages in strategic foresight and LiDAR mass production experiences.

Q: Jesse Lowe with Bank of America Securities asked about next steps and differentiators in collaboration with NVIDIA.

A: David responded that being selected as LiDAR partner for NVIDIA's Drive Hyperion 10 platform makes the system setup and verification process easier, as NVIDIA's platform is a full-stack solution, and it's a smart way to push autonomy by utilizing unified solution.

Q: Dan Linren with CICC asked about outlook on ASP decline trend and methods for further cost reduction.

A: Andrew responded that ASP decline is mainly due to product mix, with ADAS LIDARs following typical annual automotive price declines, but offset by structural growth. For cost reduction, driven by scale (expected 3 to 3.5 million units shipped in 2026), proprietary technology (in-house FMC500 SOC and SPAD integration), and highly automated in-house manufacturing.

Q: Frank Tao with CNBI asked about outlook for operating expenses in 2026.

A: Andrew responded that operating expenses in 2025 came down by RMB 88 million despite substantial revenue growth, due to strong operating leverage and AI adoption. Anticipate modest increase in overall OPEX in 2026, primarily due to RMB 200 million invested in new eyes and muscles products in R&D, but excluding new business spend, OPEX expected to be well-managed, flat or even down in single digits.