Mobileye Global, Inc. Q1 FY2025 earnings call

• Q1 results were closely aligned with expectations; revenue up 83% y/y due to normalized volume compared to low Q1 2024. Operating margins recovered sharply. Operating expense growth 14% in Q1, expected to moderate to middle single digits for the rest of the year. Operating cash flow was $109 million in Q1.
• Core single-chip front camera driving assist systems business trends were strong in Q1 in terms of supply demand and design wins. Global light vehicle production in 2025 uncertain due to trade friction, but supply chain simplicity means no direct material tariff costs yet affected by global production and consumer spending impacts.
• Design win activity was brisk in Q1, with design wins in Q1 already at around 85% of 2024 full-year projections. Trend towards multicamera setups mainstream due to safety requirements. Announced first design win with Volkswagen during the quarter. Imaging radar product has first design win outside driving product line imminent with European OEM.
• Mobileye Drive self-driving system for robotaxi business continues to accelerate: announced Dallas as geography for initial operation with Lyft, Marubeni as owner-operator; Volkswagen and Uber to integrate Mobileye Drive-enabled ID.BUZZ robotaxis onto Uber network in LA starting 2026; Holon booked order for autonomous shuttle enabled by Mobileye Drive.

In Q1, revenue was up 83% year over year. Core single-chip front camera driving assist systems had volume of 8.5 million units in Q1, and Q2 volume is expected to be about 7% higher with revenue up approximately 7% year over year. Revenue contribution from core single-chip front camera driving assist systems is a significant part, with strong trends in current supply demand and design wins for future volume.

• Q2 expected to deliver approximately 8.7 million to 9.3 million IQ units and revenue up approximately 7% year over year at midpoint of revenue range. Gross margin expected at or slightly below Q1 level. Operating expenses seasonally higher in Q2 versus Q1.
• Continue to monitor global macro environment, especially tariff-related developments. Original outlook remains valid even after recent forecast reductions, with confidence in performing within full-year 2025 guiding range.

• Global light vehicle production in 2025 uncertain due to trade friction, which may affect global production volumes and consumer spending. Tariff-related developments could drive 3% to 7% reduction in volumes of top 10 customers, translating to about 1.1 to 2.2 million units annualized. Macro events may cause delays or longer decision-making processes for OEMs regarding advanced products like supervision and chauffeur.

Q: Joseph Spak with UBS asked about how the VW Uber announcement works, including business model.

A: Amnon Shashua explained Mobileye delivers self-driving system with one-time payment per car and recurring license fee based on fleet utilization; Volkswagen produces cars with Mobileye Drive system, Uber is demand generator.

Q: Joshua Buchalter with TD Cowen asked about 2025 guide and customer engagement.

A: Dan Galves and Amnon Shashua responded that guide was conservative, no clear indication of demand fall in back half; design win activity brisk with 85% of 2024 full-year projections in Q1, and continued strong demand from customers for future generations of products.

Q: Luke Schuch with Baird asked about China market and imaging radar award.

A: Amnon Shashua said focus in China is supporting Chinese OEMs and Western OEMs; imaging radar award is just for the sensor itself, separate from Chauffeur product.

Q: Shreyas Patil with Wolfe Research asked about 2025 guidance and ADAS penetration.

A: Moran Shemesh said aligned with global production midpoint, and expecting incremental units from new launches and share gains within top customers, with China expectations showing upside.

Q: Adam Jonas with Morgan Stanley asked about GenAI and R&D outside automotive.

A: Amnon Shashua talked about REM technology and exploring other growth engines in physical AI space.

Q: Antoine Chkaiban with New Street Research asked about Lyft robotaxi rollout and cloud-enhanced ADAS.

A: Amnon Shashua explained robotaxi rollout stages and cloud-enhanced ADAS is integrated in high-volume projects; Dan Galves reiterated economic aspects of robotaxi business.

Q: Mark Delaney with Goldman Sachs asked about consumer vehicle part and supervision/chauffeur.

A: Amnon Shashua said macro events cause delays, but still confident in engagements, with progress made and new engagements; Dan Galves talked about ASP in consumer vehicles.

Q: Aaron Rakers with Wells Fargo asked about OEM opportunities and ASP.

A: Amnon Shashua and Dan Galves responded that OEM opportunities still exist with progress, and robotaxi business adds pure upside to ASP analysis.

Q: Gary Mobley with Loop Capital asked about European OEM reengagement and non-GAAP gross margin.

A: Amnon Shashua said it's about product advantages; Moran Shemesh said still anticipating increase in gross margin with mix differences.

Q: Edison Yu with Deutsche Bank asked about robotaxi performance threshold and liability.

A: Amnon Shashua said clear metrics on performance, Moran Shemesh said aspects behind them; Edison Yu asked about liability, Moran Shemesh said aspects behind them.

Q: Tom Narayan with RBC asked about Surround ADAS vs supervision and Tesla commentary.

A: Amnon Shashua said Surround ADAS is next level of ADAS, migration from front-facing to surround; talked about Tesla's use of simulators and AI in China.