Mobileye (MBLY) Q1 2026 Earnings Transcript

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DATE

Thursday, April 23, 2026 at 8 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Amnon Shashua
• Chief Financial Officer — Moran Shemesh
• Chief Communications Officer — Daniel V. Galves
• Executive Vice President of Business Development and Strategy — Nimrod Nehushtan

TAKEAWAYS

• Revenue -- $558 million, up 27% year over year, driven by higher EyeQ unit volumes and increased ADAS fitment rates, especially at core Western OEMs and from robust Chinese OEM export demand.
• Adjusted Operating Income -- $95 million, up 61% year over year, with a 17% margin, reflecting a four-percentage-point improvement compared to Q1 2025.
• Operating Cash Flow -- $75 million, characterized as strong despite some working capital headwinds.
• 2026 Full-Year Revenue Outlook -- Increased to $1.975 billion at the midpoint, implying 4% year-over-year growth, incorporating a shipment forecast of 38 million EyeQ units.
• 2026 Adjusted Operating Income Outlook -- Raised to $210 million at the midpoint, up from $195 million in prior guidance; reflects incremental China OEM volume which has lower average selling prices and profitability.
• Q2 EyeQ Shipments -- Forecasting 9.3 million units, with revenue expected to decline approximately 6% year over year and slight gross margin compression versus Q1.
• SuperVision Volumes -- 20,000 units delivered in Q1; Q2 forecast at 15,000 units; full-year expectation unchanged around 150,000 units, similar to or slightly below last year's level.
• Surround ADAS Design Wins -- Three design wins to date: Volkswagen Group, a major U.S. OEM, and Mahindra. Two of three are top 10 customers, with average ASPs cited at $100-$150 and gross margins similar to base ADAS (~70%).
• Goodwill Impairment -- $3.8 billion charge recorded in Q1, triggered by a roughly 35% market cap decline since December and reflected with a higher risk premium due to macroeconomic and geopolitical factors.
• Share Repurchase Program -- Announced initiation of a buyback targeting offset of dilution from stock-based compensation and the Menti transaction, using cash flow amid current valuations.
• Menti Robotics Integration -- Version 3.2 under assembly, version 4 planned for demonstration by early 2027 and intended for commercialization with cost and dexterity improvements.
• OEM Exposure and Market Share -- Western ADAS fitment and market share increased among top 10 customers, with continued gains as Mobileye replaces legacy competitor solutions.
• India ADAS Opportunity -- Mahindra added as third Surround ADAS customer, and regulatory changes from 2027 expected to accelerate countrywide ADAS adoption above current 8% penetration rates.
• SuperVision with Porsche and DRIVE with MOIA -- Both programs are advancing toward series production, with SuperVision demonstrating positive out-of-the-box U.S. performance on unplanned routes and challenging weather.

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RISKS

• A $3.8 billion goodwill impairment was recognized due to the significant market cap drop, “a higher risk premium because of the macroeconomic environment and geopolitical environment.”
• Guidance for China OEM volume remains conservative, with management stating low visibility and potential for volume reduction in the second half, “and this market is volatile.”
• Revenue-to-income conversion is pressured by incremental Chinese OEM volume that “converts at lower revenue per unit and profitability” than Western sales, which could blunt margin expansion amid volume growth.

SUMMARY

Mobileye Global (NASDAQ:MBLY) reported 27% revenue growth and 61% adjusted operating income growth, citing higher EyeQ volumes and expanded core OEM partnerships. The full-year revenue outlook was raised to $1.975 billion, mainly reflecting robust Q1 performance and higher shipment guidance, with volume upside concentrated in Chinese OEM exports and normalization of Western inventory levels. Management launched a share repurchase program to counteract dilution from equity-based compensation and the Menti Robotics acquisition, leveraging sustained cash generation despite recognizing a $3.8 billion goodwill impairment stemming from market cap compression and revised risk assessments. Strategic milestones include three Surround ADAS wins across key markets, validation progress with SuperVision and DRIVE pre-production programs, and positioning for regulatory-driven ADAS adoption in India and further partnerships in Europe and the United States.

• Management described execution against advanced product roadmaps as on track, with two production programs—SuperVision with Porsche and DRIVE robotaxi with MOIA—targeted for imminent launches.
• Surround ADAS design wins are expected to represent annual revenue increases of over 10% once the nominated OEM programs enter production, with India highlighted as a “huge organic opportunity.”
• OEM customers have not finalized autonomy roadmaps but show heightened interest in SuperVision and Surround ADAS over Level 3 features until more cost-effective solutions are commercialized.
• Advanced AI integration—including deployment of large vision-language models (VLMs) and simulator-based training—is scheduled for disclosure at an AI Day in July, addressing both automotive and robotics development progress.
• Management confirmed no current supply risks for memory components and noted higher DRAM costs are being passed through as a “few million” dollars, not expected to meaningfully impact profitability.
• India’s anticipated regulatory shift in 2027 is projected to drive ADAS take rates from current levels to 70%-90% within several years, reinforcing Mobileye's position with local OEMs.

INDUSTRY GLOSSARY

• ADAS (Advanced Driver Assistance Systems): Electronic systems in vehicles that use sensor inputs to assist drivers with driving and parking functions; includes basic safety features through to complex automation.
• ASP (Average Selling Price): The average price at which each unit (e.g., EyeQ chip) is sold to customers within a particular product segment.
• EyeQ: Mobileye’s family of system-on-chip (SoC) processors designed for ADAS and autonomous driving applications.
• ECU (Electronic Control Unit): Embedded system in automotive electronics that controls one or more of the electrical systems or subsystems in a vehicle.
• SuperVision: Mobileye’s advanced ADAS platform enabling high-level assisted driving navigation across road types with cloud-based features.
• Surround ADAS: A suite of ADAS solutions offering higher capability and typically higher average selling price than base ADAS, including perception coverage in all directions around the vehicle.
• DRAM: Dynamic Random-Access Memory; a type of semiconductor memory used in ECUs and ADAS hardware.
• SOP (Start of Production): The date when manufacturing of a new product or automotive program begins mass production.
• ODD (Operational Design Domain): The specific conditions (e.g., road types, weather, geography) under which a given driving automation system is designed to function.

Full Conference Call Transcript

Amnon Shashua: Thank you, Dan. Hello, everyone, and thanks for joining our earnings call. We delivered very good results in the first quarter. Revenue was up 27% year over year, adjusted operating income was up 61%, and our operating cash flow was again strong at $75 million despite working capital timing that was a modest drag. We have seen upward pressure on demand for our EyeQ product for the last several quarters. That continued in Q1, and is what we expect for Q2 as well. As a result of higher volume and revenue in Q1, we have raised our 2026 outlook toward the high end of our original guidance, leaving the outlook for the remaining three quarters essentially unchanged.

The geopolitical and economic environment remains volatile, but based on our visibility for Q2, we believe there is sufficient conservatism baked into the second half. Diving deeper into the drivers of our business, our ADAS business is very strong with very high margins and cash generation. Design wins over the last several years have secured our position with our main customers over the long term. India looks like a meaningful growth opportunity, and our focus over the last couple years on supporting Chinese OEMs on their export ambitions is paying dividends. Finally, the Surround ADAS segment gives us the opportunity to replace many of these base ADAS programs with much higher average selling prices over time.

On our advanced product portfolio, the current priority remains execution, and that is going very well. We have a number of production programs running in parallel, two of which start production in the relative near term. These are SuperVision with Porsche, and the DRIVE robotaxi with MOIA, the Volkswagen Group's autonomy division. For both programs, Mobileye Global Inc. is responsible for the development of comprehensive advanced ADAS and autonomy platforms integrating hardware, software, data, and maps into a complete system that must be provably safe, predictable, and verifiable. These solutions need to meet tens of thousands of requirements set by the automaker and need to be homologated to automotive-grade standards.

Each program gives us the ability to prove that Mobileye Global Inc. is the leader in developing and executing complex AI-based systems in the physical world at global scale. Systems that can be validated under strict standards, something that many companies talk about, but few besides us are actually executing on this vision. Specific updates as it relates to SuperVision are as follows. Progress is strong with performance tracking well to our objectives. As a concrete example, six weeks ago, we had the first OEM-directed drives in the U.S. for this system, having only tested in Germany and Israel previously.

Our first task was a 2,000-plus kilometer drive in a vehicle equipped with production EyeQ6 High SoC and ECU hardware with the latest software engines integrated into the production architecture. We had no prior knowledge of the route, which was across a diverse set of urban, suburban, and highway road types, and severe weather, including heavy snow. The SuperVision system performance was outstanding, with very few interventions encountered. This was an important proof point for our out-of-the-box performance and ability to generalize to a brand-new geography. We have a couple of more software releases to make, and then expect to have the capability to demonstrate to other potential customers in the various key geographies.

On robotaxi, we continue to make rapid progress. In Q1, Volkswagen announced the start of pre-series production of the ID. Buzz autonomous vehicle in a Hanover facility, with vehicles coming off the regular assembly line with Mobileye Global Inc.'s fully integrated self-driving system. Volkswagen's ability to produce fully integrated robotaxis at scale from an active automotive production line is very unique. MOIA, the Volkswagen division that will deploy these vehicles, announced that testing had begun in L.A. for the Uber collaboration. They also announced today that Orlando is the first launch city collaboration with BEEP. For both of these efforts, the path to commercialization is as follows. We continue the current process of testing, data collection, and validation.

Once we achieve sufficient proof points, we will begin accepting commercial riders with a safety driver until the required level of performance has been proven that allows us to remove the safety driver. That is the point where the scaling advantages of our approach, including crowdsourced mapping, our deep and diverse global dataset, and Volkswagen’s ability to ramp up production rapidly, will be self-evident in terms of our ability to expand geographic areas of operation more rapidly than competitors. And it is another opportunity for Mobileye Global Inc. to prove its end-to-end capability in terms of executing complex physical AI systems at scale.

All of this experience over the next two to three quarters would feed back to further improvements and fine-tuning to be ready for scaling in Europe once the ID. Buzz is fully homologated and certified, which is targeted for 2027. Turning to the Menti side, components of version 3.2 of the robot have arrived and will demonstrate incremental capabilities soon. The hardware roadmap for version 4 is nearly complete and is expected to be ready for demonstration by early 2027. This will be the version that we expect to commercialize for use cases and market entry and will be cost- and weight-optimized and offer enhanced dexterity and manipulation capabilities.

Finally, on the buyback we announced this morning, we are a cash-generative company, which is unique in this space. That gives us the ability to pursue growth opportunities like we did with Menti, but also be opportunistic with our equity. While we are making strong progress on our advanced products, and conversion of our large future revenue pipeline, the realities of automotive development timelines and OEM confidentiality agreements limit what we can disclose publicly. In an environment where technology competitors are generating significant news flow, we believe that this lack of visibility has weighed on our stock price.

While we continue to execute, we see an opportunity to deploy cash towards share repurchase, which will benefit all shareholders by partially offsetting dilution from stock-based compensation and addressing dilution from the Menti transaction at significantly more attractive prices than those embedded at closing. I will now turn the call over to Moran. Thank you.

Moran Shemesh: Thanks for joining the call, everyone. Before I begin, please be aware that all my comments on profitability will refer to non-GAAP measurements. The exclusions in Mobileye Global Inc. non-GAAP numbers are typically amortization of intangible assets, which is mainly related to Intel's acquisition of Mobileye in 2017, and stock-based compensation. This quarter, we also excluded the goodwill impairment loss referenced in the press release, and transaction costs associated with the Menti acquisition which closed in early February. First quarter revenue of $558 million was up 27% year over year. This compared to the indication we gave on the January call of about 19% growth.

We had assumed shipments of approximately 10 million EyeQ units in the quarter, including some recovery of safety stocks at customers which had ended 2025 at a very low level. The upside in the quarter was the combination of higher share and higher ADAS fitment rates at core Western customers and, more meaningfully, robust Chinese OEM volume from the export market, a segment where we have higher share than we do on Chinese OEM vehicles sold domestically. Adjusted operating income was $95 million, up 61% year over year. Adjusted operating margin was 17%, up about four percentage points versus Q1 2025. Profitability was largely as expected.

Strong mix to our top 10 customers was a bit of a tailwind, offsetting the higher China OEM volumes which typically carry lower pricing and profitability. Operating expenses were as expected, representing about 25% of our full year expectation of around $1.1 billion, and were up versus Q4 mainly due to engineering reimbursement timing that relates to production program milestones and also the consolidation of Menti expenses as of early February. As I noted on the January call, we have been seeing consistent positive revisions from our customers throughout 2025, and that continued in the first quarter of the year.

Regarding the facility that Amnon mentioned earlier, turning to full-year guidance, we are increasing the revenue outlook to $1.975 billion at the midpoint, which implies 4% year over year growth. This is underpinned by about 38 million EyeQ units, which is up a little less than 1 million from the prior outlook, accounting for the upside in Q1. A bit more granularity on the volume is that the forecast assumes the current S&P production forecast of our top 10 customers, which is currently -3.5% year over year. It also assumes that the run rate of China OEM volume in 2026 comes down meaningfully from the first half levels.

We are not sure what will happen, but given low visibility on that part of the business, we prefer to stay conservative. We are increasing our outlook for adjusted operating income to $210 million at the midpoint, up from $195 million in the prior outlook. The two items impacting revenue-to-income conversion are: number one, a good portion of the incremental revenue is related to China OEM volume, which converts at lower revenue per unit and profitability than the rest of our volume; number two, on the SuperVision side, volume is consistent with our prior outlook, but we do have some incremental costs for the ECU, particularly related to memory.

Our assumption of operating expenses is unchanged at approximately 10% year over year growth to around $1.1 billion. Finally, on the full year, we have now provided an outlook for GAAP operating income. At the time of the January call, the impact of the amortization and stock-based comp from the Menti acquisition was not able to be estimated precisely. Now it is. The only thing to note is a reminder that only a portion of the shares issued as part of the acquisition will show up in the share count this year. That is because the majority are tied to vesting requirements for the multi-year milestones.

Therefore, the relevant accruals are included in the projected share-based compensation expenses referred to in the guidance. Another important point to note is that while there will be share-based compensation expense and some impact to the share count associated with these shares in 2026, it will be gradual as full vesting only occurs for 50% of the shares in 2028 and the remainder in 2030. Turning to the second quarter, we are assuming about 9.3 million EyeQ units and for revenue to decrease approximately 6% on a year-over-year basis.

We would expect gross margin to be slightly below Q1 level based on the mix of orders we are seeing currently and for operating expenses to be consistent with Q1 level, maybe slightly down. To conclude, we are almost four months into 2026 and continue to see positive demand signals from our customers on the core business. As Daniel discussed, we are also seeing very good execution progress ahead of a large number of advanced product launches over the coming one to two years which we expect to create significant growth for the company.

Finally, I am pleased that we are able to begin a share buyback program as we believe it takes advantage of the strong cash flow of our business and benefits all shareholders by offsetting a portion of RSU issuance, which is a critical part of Mobileye Global Inc.’s compensation structure. Thank you, and we will now take your questions.

Operator: We will now open the call for questions. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that analysts limit themselves to one question and a follow-up so that others have an opportunity to do so as well. One moment while we poll for questions. Our first question comes from Edison Yu with Deutsche Bank. Please proceed with your question.

Analyst: Hi. Thank you. This is Winnie on for Edison. First question is on the ADAS side. It seems like the year’s guide is raised reflective of the Q1 beat. So just curious what conditions you are seeing now in the channel, and because you have given us some guidance for the rest of the quarter, can you just refresh some of that to reflect what you are seeing in the first half of the second quarter? Thank you.

Moran Shemesh: I think that basically, in terms of the guidance, we are reaffirming our guidance from the January call and adjusting it for the upside that we are seeing in Q1, as we do not anticipate this upside to impact the rest of the year. So that is the main reason. And as for the upside, I can briefly mention what we were seeing. First, on the China OEM export volume, we think that probably half of the upside is coming from there. We are seeing very strong demand for both Q1 and also incorporated into Q2. For the second half, we are still conservative and this market is volatile, but we are seeing very good demand on that.

Some of our customers have very significant year-on-year growth on export. Secondly, ADAS fitment rate is increasing in 2026 for our top OEM customers. We are seeing constant demand here throughout the year, so this is unchanged from our January call. And third is the safety stock inventory adjustment for our customers. We talked about it in 2025 being at a very low level, even below three weeks or so, and they have now increased their respective stock to approximately four to five weeks which is kind of normal. We do not anticipate this volume to reverse this year, as it is a normal stock they need for their ongoing shipments.

Amnon Shashua: Just to add on the macro side, there are a few tailwind effects that we are benefiting from. The first one is the increase in export volumes by the Chinese OEMs with our strong customers. Interestingly, these volumes are in emerging markets like Asia and South America and are not necessarily competing with the European volumes that we have. So we can benefit from an overall increase in volumes. The second is that we have increased our market share in our key customers. Although we have been in the majority of the volumes of our top 10 customers, it was not necessarily 90-plus percent in all of them.

Over the past two years we have been increasing our market share, replacing older solutions by competitors. So that is also a tailwind effect, and overall, we do not anticipate these two trends to weaken. We expect them to continue as they were, and it is what stands behind the revision to the guidance.

Analyst: That is very helpful. Thank you. A follow-up on Menti, I was wondering if you can give us an update on the progress made thus far, and would it be reasonable to assume some kind of proof of concept later in the year with external customers? Thank you.

Amnon Shashua: We are making progress on two fronts. One is the hardware. What we have shown a month or two ago was version 3.1, and version 3.2 is being assembled now, with better dexterity and improved hands as well. Software-wise, we are integrating VLMs into the system, designing tasks that are more targeted to home-use tasks or to B2C domains. We have another version 3.5 of the hardware in two months from now, and version 4, which is the hardware to go into mass production, should be ready by end of this year, early next year. Regarding the proof of concept, we are still analyzing the domains.

Part of our analysis is the viability of the B2C model rather than B2B, or starting B2C and then B2B. So we are still analyzing the opportunities of the use cases that we are building for the robots.

Operator: Our next question comes from Christopher Patrick McNally with Evercore ISI. Please proceed with your question.

Analyst: Thanks so much, team. Amnon, I wanted to focus on the upcoming KPIs to the driver-out as you test in Los Angeles and Florida, and maybe what is to come after driver-out with respect to commercial scale. So if I divide it into two parts, on the driver-out, what is left in your timeline to validate the service for that fall in Q4 launch, as you mentioned?

Amnon Shashua: Our milestones for the driver-out are first to start validation on the final Level 4 vehicle. There are still a few more months until we get the final vehicle ready for series production, then we will start the validation. Also, there are some things that we need to close with the remote operators, make sure that everything there is running as we plan. Then we start with the commercial drives with a safety driver, and towards the end of the year remove the driver. We are on track with all our plans in that area. What comes after that? Our first priority is driver-out on an SDS system that is fully homologated both software and hardware, automotive grade.

This is a huge moat. Once we get that, the second is scale. We want to see 2027 with at least six cities and hundreds of vehicles, at minimum. That is the next real big milestone. Then we will look at the market and see whether we need to simply remain an SDS provider, which at the moment is our plan A, or to extend our vertical integration. We will see what happens by 2027.

Analyst: Perfectly clear, and I think you basically hit on the first part of my follow-up. But if we take the second, we all understand driver-out is not really the end of AV development or service. Could we talk about the original ODD expansion? Will the first commercial service go on the highway? And how do we think about those AV improvements which are non-safety-critical, like smoothness of the ride and your service getting better as it ramps, into 2027 in the U.S.?

Amnon Shashua: We are talking about robotaxis, so robotaxis is full deep urban point to point in cities. We have the capability also to support the highways, but we will start in deep urban inside the cities and then gradually expand into highways as well. In terms of comfort, this is part of our KPIs today. I do not see us coming out with a commercial service that does not have the necessary comfort level of driving. Of course, the most important is the safety level, but we are, in our KPIs, measuring what would be called roadmanship, making sure that at the comfort level we are also meeting our KPIs. All of that should be in 2026.

2027 is more focused on scaling, both scaling number of vehicles and reducing the ratio of teleoperators to vehicles. That would be the goal for 2027.

Operator: Our next question comes from Joseph Robert Spak with UBS. Please proceed with your question.

Analyst: Thanks. Good morning. One quick follow-up on the guidance and then a bigger question. Amnon, on the guidance, I know you mentioned that one of the reasons for the EBIT flow-through versus the revenue flow-through was some of the China mix. But if I understood correctly, I thought the better China volume was in the first quarter, and that you are still assuming sort of that low-9 million sort of pace globally for the rest of the year. So maybe just help me understand some of that conversion. And if you could, I think you mentioned Q2 is still trending pretty well there, so maybe some even more near-term expectations on the quarter.

Moran Shemesh: For the China OEMs that you mentioned, it is not just in the first quarter. It is also in the second quarter. So in terms of the year, the portion of China OEM has increased by a few hundreds of thousands of chips, which impacts, of course, the conversion of revenue to profitability, as the export volumes in China are for a lower ASP than what we sell in the West. So that is the guidance clarification.

Amnon Shashua: Just to add to this, to clarify, these China export volumes do have lower ASP. However, they are for new markets that today, or until today, we did not have any sales in. So it is not that there is a competition between higher-ASP, higher-margin European business, for example, or American business for us that now comes from a lower ASP from China. These China volumes go to, let us say, blue oceans when it comes to ADAS penetration. So it is a net gain for us.

Analyst: Thank you. And then just to follow up on Chris’ prior question with the DRIVE product, I appreciate the commentary on the KPIs, but what is really the process here between the different parties? Where does sign-off on moving to the next phase lie? Is it with you, with MOIA, with the TNC? And you did briefly sneak in there at the end, Amnon, that you would look after these launches whether it makes sense to remain an SDS player or extend that vertical integration. The latter clearly gives you more freedom. Is there anything that prevents you from doing that from a partnership or exclusivity perspective?

Amnon Shashua: No. Nothing prevents us from pursuing the right business direction. It also depends on how the future plays out. Are there going to be one or two SDS suppliers out there, which is our current assumption, or are there going to be multiple? If there are going to be multiple, maybe the right business decision is to go more vertically integrated. But it is too early to tell. Right now, our focus is on the SDS, on the driver-out, the SDS hardware, the software, the roadmap, the teleoperation. There is a lot going on there. The maps—making sure that the maps scale so that we can scale quickly from city to city during 2027.

That is the focus of the company. We have no limitations on how to pursue our business model. As for the first part of your question, the driver-out eventually depends on the customer, which is MOIA and Volkswagen. We are supplying the technology. We do not determine when the driver would be out, but our KPIs and milestones of both parties are targeting 2026.

Operator: Our next question comes from Joshua Buchalter with TD Cowen. Please proceed with your question.

Analyst: Hey, guys. Thanks for taking my question. I will start with one on the model. I am a little confused on the ASP trends implied in the guidance. You mentioned China tends to be lower ASP, but if I sort of run this low-9 million EyeQ shipments per quarter through the rest of the year, it implies ASPs continuing to trend down through the rest of the year despite China becoming a lower part of the mix, and potentially some advanced ADAS solutions later in the year. Can you help walk me through the ASP trends through the year, and if we should indeed be modeling low-9 million EyeQ shipments per quarter through 2026? Thank you.

Moran Shemesh: In the January earnings call, we discussed ASP with regards to the second chip that we have this year. We have approximately one specific program with a dual chip when the second chip is discounted. We have approximately 800,000 units this year. So this is an ASP headwind of about $0.80. And with the China OEMs, we did increase, as I mentioned before, the China portion in terms of volume for 2026. So this is an additional maybe $0.30 to $0.40 decrease in ASP since our last estimation, although volume has increased significantly. So that is the explanation.

Daniel V. Galves: It is also pretty difficult to be precise about it because there are other parts of the business as well. And just to be clear, we are not assuming additional advanced product launches for this year.

Analyst: Okay. Thank you both. Then maybe a bigger picture one. Amnon, given your position in the industry, I was hoping you could reflect on how the regulatory environment for autonomous mobility broadly and robotaxis has changed over the last year, and when we should expect that to be a more meaningful part of Mobileye Global Inc.’s model. Thank you.

Amnon Shashua: In the U.S., it is self-certification, which is very convenient to start ramping up. In Europe, the bar is much higher in terms of homologation, and this is the advantage of our partnership with MOIA and Volkswagen—that they take the homologation part to homologate the vehicle in Europe. I believe that as robotaxis start proliferating from the thousands of units to tens of thousands to hundreds of thousands, we will see more regulation coming in everywhere, not only in Europe, but also in the U.S.

So having a very clear and precise and crisp definition of safety—in our case, it is RSS and PGF, stuff that we talked about back in the past—is very important to prepare the company towards an environment in which the regulatory profile is going to be much more risk-oriented.

Nimrod Nehushtan: If I may add to this, if you see the communications from other companies on robotaxi launches, it is primarily either in China or in the U.S. You see much less news coming for the European market. We think that some of the reasons for that are the regulatory requirements in Europe that we have been actively working on with VW for the past year and a half almost. Through this engagement, we have exposure to how regulators view this business, and they do require specific KPIs and very detailed explanations on validation concepts and testing methodologies, how you overcome different unexpected events and safety assurances, etc.

It is much more nuanced than just the high-level technological debate that is being made on public stages. We think we have a significant advantage in being fairly advanced in this process, and this will prove, we believe, as a competitive advantage in the next few years, being one of the only, if not the only, robotaxi enablers in the European market, which in and of itself has potential of tens of millions of commuters. Thank you.

Operator: Our next question comes from George Gianarikas with Canaccord Genuity. Please proceed with your question.

Analyst: Hi, everyone. Thank you for taking my question. I was wondering if you could comment on some of the recent traction that NVIDIA has seen with their reference design and what your pitch is to OEMs in terms of total cost of ownership, and why they should pick your solution. Thank you.

Amnon Shashua: At the end of the day, it is a combination of performance and cost. If you refer to ALPAMAYO, we downloaded ALPAMAYO—it does not seem like a production-worthy system. It is something nice to play with, but it is not anywhere close to being production worthy. Whether an OEM can take it and upgrade it or refine it for a production-worthy system is yet to be seen. I would add that in 2016 NVIDIA had something similar with pixel labeling that they announced open source for the automotive industry. OEMs did nothing really—there was no real traction for it. Bringing something into production is tough. Taking a demo-ware or a nice demo into production—there is a death valley in between.

And this is something that Mobileye Global Inc. is very good at. This 2,000-kilometer expedition that I mentioned in my script is very meaningful. It is an OEM taking a number of competing systems; one of them is the Mobileye Global Inc. system with Porsche, which is not yet ready—it is maturing over time. It is maturing; this year it will be ready for start of production, but it is not yet fully matured. Doing a 2,000-kilometer expedition without us knowing the route in advance, in very significant weather conditions—urban, suburban, highways, day and night, and snow—and our system really excelled.

So this shows that going from demo to production is an art and a science, and something that Mobileye Global Inc. excels in. It is not just a matter of “here is an open-source network that does something cool; can we then refine it and bring it to production?” Just to mention, a production program we have with an OEM has about 60,000 requirements. This is what it takes to go from a demo to a production system. One of the strengths of Mobileye Global Inc. is not only that we are experts in AI—that we build an AI system and we are experts in learning—we have cost-optimized solutions and we know how to bring stuff into series production.

And this is difficult.

Analyst: Thank you. And maybe as a follow-up, there is a lot written about Volkswagen and their future strategy. I just wondered if you could please comment on your relationship there and their commitment to deploy your solutions over time. Thank you.

Nimrod Nehushtan: Ultimately, the reality today is that all of the upcoming SOPs, product launches across all brands of Volkswagen Group mostly—spanning from base ADAS in lower-priced vehicles to robotaxi and everything in between—of the upcoming SOPs are with Mobileye Global Inc. products. This is the plan of record. It has been the plan of record in the past couple of years, and it did not change. If anything, we managed to expand our business with Volkswagen in these two years, also winning projects for the base segment, introducing Surround ADAS for the first time with Volkswagen Group on very high-volume vehicles. We are seeing them pulling additional vehicle platforms to the already nominated products we have with them.

We need to distinguish between some news that comes out that serves certain interests and the realities of their planning schedules. Our experience in this industry shows that the first thing to change, if there is indeed a decision to take a different product, is these bank schedules, and they did not change. If anything, they changed for the better from our line of sight. We are not seeing any evidence of change of course. We are not seeing risk to our existing projects as a consequence. Of course, we need to finish the execution and get to the SOP date, but the business opportunity remains very significant for us when we finish the execution.

Operator: Our next question comes from Shreyas Patil with Wolfe Research. Please proceed with your question.

Analyst: Great. Thanks so much. Maybe just to follow up on some of your earlier comments. I am curious what you are seeing in the pipeline amongst OEMs. From the outside perspective, it does seem a bit jumbled. We have seen Mercedes and BMW appear to be pulling back from L3 in Europe, focusing on effectively SuperVision-like products. Ford and GM are talking about deploying their own solutions within the next three years. Others are partnering with AV players such as Nissan and Wayve. So how many opportunities are actually available to pursue in areas like SuperVision and Chauffeur in your view? Or have OEMs sort of laid out their plans for autonomy over the next few years?

Amnon Shashua: I think by and large, OEMs have not yet made up concrete plans. We see opportunities for SuperVision. We see even more opportunities for Surround ADAS. With Level 3, I believe we will see the bigger opportunities as we get closer to production with Audi on Level 3, or as we get the driver-out of our robotaxi and also show a significant cost reduction of the robotaxi stack, which we can show by the end of the year. So SuperVision and Surround ADAS—we see significant opportunities, but with OEMs, it takes time, and we cannot predict the timing at this point. Our focus is really the execution. Execution will bring more opportunities.

Analyst: Okay, great. And maybe just a quick modeling follow-up. I think you talked about higher DRAM costs for this year. Maybe if you could help quantify that, and is that something you can pass along via price adjustments?

Moran Shemesh: The DRAM is the responsibility of our Tier 1s. Mobileye Global Inc. just sells the chip. On the SuperVision area, we buy the memory directly for the ECU. It is a relatively small business. We are talking just about a few million dollars, and we are passing that through to customers. The dynamics there are changing, so it is not something that is expected to significantly impact our costs, but it is a few million currently.

Operator: Our next question comes from Mark Delaney with Goldman Sachs. Please proceed with your question.

Analyst: Yes, thank you very much for taking my question. The company discussed the performance of its pre-production vehicle in the U.S. with EyeQ6 High. You spoke to that doing well across urban, suburban, and highway settings and achieving your mean time between failure objectives. Can you remind investors what Mobileye Global Inc. is targeting for MTBF for this product, how it compares to competitors, and maybe most importantly, given what you were able to see on the unplanned route, is it catalyzing any incremental OEM business interest?

Amnon Shashua: We are not sharing our MTBF goals. SuperVision is an eyes-on system, so MTBF is important but not as crucial as it is for robotaxi. There are other KPIs like comfort, not only disengagements but also comfort, ODDs—what kind of ODDs can you satisfy? There is a long list of requirements. It is not just one number that determines the driving experience of the product. It also changes from OEM to OEM—an OEM has a lot to say about the driving experience because they set the requirements. So it is not only the base technology that determines the driving experience; there is a lot that goes into it.

What I can say is that this 2,000-kilometer expedition has shown the excellence of our product even though the product is not yet finished, especially compared to other competing demo systems that were part of this expedition. It shows that the gap—the discrepancy—between all the talk that you hear and the actual performance is huge.

Analyst: Thanks. My other question was related to Mobileye Global Inc.’s efforts in AI. Now that you have the Menti Robotics transaction completed, can you speak more to the synergies between the existing Mobileye Global Inc. efforts in AI and what Menti brings? Are you able to work better jointly to accelerate your efforts in real-world AI? Thanks.

Amnon Shashua: We are planning an AI Day around July timeframe, where we are going to lay down our complete vision of AI. Just to give perspective, the software running today on our EyeQ6 High—internally we call it Gen 1.5. In about two months, it will be Gen 2.0, and by the end of the year, it will be Gen 3.0. We are working very fast on a rewrite in order to accommodate the best AI has to offer, whether it is GenAI, whether it is simulators—everything—and we will be very transparent about it in our AI Day.

So expect around July a consolidated view of how we take modern AI and bring it into physical AI, both in terms of robotaxi and in terms of robotics.

Operator: Next question comes from Luke Junk. Please proceed with your question.

Analyst: Thank you. First, I wanted to ask, bigger picture, as already referenced, there has been a lot of chatter about OEMs pulling back from L3 applications and refocusing on L2+. Are you seeing any broader repercussions of this, specifically in terms of Surround ADAS and the amount of interest you are seeing at the front end of the funnel? It seems like it is really an area the market is consolidating around right now.

Amnon Shashua: We are engaging with OEMs on Level 3, but I would say that Level 2+ or SuperVision is gaining more traction with OEMs, and Surround ADAS is gaining even more traction. I believe that driver-out with the robotaxis, especially when you have a credible cost-down path, will reignite Level 3 and Level 4 consumer programs with OEMs.

Nimrod Nehushtan: The debate around Level 3 is not new. It has been going on and off—there have been cycles of excitement versus skepticism—for ten years now. Ultimately, it is a very challenging product because it requires robotaxi performance levels, but for a privately owned vehicle, so the cost is supposed to be significantly lower in a much more efficient system. Also, in order to have a useful product, it needs to be available in a broad enough ODD, or at least in a broad enough area to satisfy the needs of consumers. We believe that our product with Audi, which is progressing well, is going to satisfy these key requirements.

As we progress with execution, we will be able to show this and expose this to the OEMs—that it is not an “if” question, it is a “when” question, and the “when” is imminent. I do not think that any OEM has question marks on the value proposition to consumers. It is a consensus that the ultimate value proposition to consumers is eyes off and mind off—giving back time to the driver. This remains a compelling case. OEMs may be more cautious in going all-in developing this when it is not clear there is an available solution. We believe that we will be providing this available solution very quickly relative to others, and this can reignite the momentum with OEMs.

Analyst: Thank you for that. Maybe a related question. Some OEMs with robotaxi offerings have been recently trumpeting the advantages of their data collection efforts. Can we get an update on where Mobileye Global Inc. is making strides in this regard in terms of extracting more data in REM and maybe some of the specific benefits of your test fleet, both for advanced products and robotaxi? Thank you.

Amnon Shashua: We have no shortage of data. As we mentioned a year or two years ago, we have hundreds of petabytes of data that we can leverage for our development. Not only that, we added simulators that can run billions of hours of driving experience overnight—I talked about it at CES. It is not that we lack data. For the robotaxi, we just need to do the validation with the final hardware in terms of the vehicle platform, and this should be done in a few months from now. Thank you, Luke.

Operator: Our next question comes from Gary Mobley with Loop Capital Markets. Please proceed with your question.

Analyst: Hi, guys. Thanks for taking my question. I wanted to ask you about Surround ADAS. Perhaps you can give us an update there. More specifically, looking at your top 10 OEM customers, what percentage of those have committed to conversion to Surround ADAS? And maybe you can give us an update as to the timing or contribution for revenue from Surround ADAS and the ASP impact.

Nimrod Nehushtan: Our first Surround ADAS design win announcement was roughly a year ago. It was with Volkswagen Group, which basically committed to upgrade their entry fleets to Surround ADAS starting 2028. As some reference numbers, the average ASP is around $100 to $150, with similar gross margins to our base ADAS volume, which is roughly 70%. Over the past two quarters, we managed to add two additional OEMs. So up to date, we have three. One is the major U.S. OEM that we announced back at CES, which, in a similar fashion to VW, decided to upgrade the entire electric fleet to Surround ADAS from base ADAS today—actually with a higher ASP than what VW has, with more content.

Recently, we also announced Mahindra, the first Indian OEM to adopt Surround ADAS. So now we have three, and two of them are today our top 10 customers. We believe that Mahindra represents a significant growth opportunity given that the Indian market is just now starting to adopt ADAS. In India, less than 10% of vehicles have ADAS at all, and regulation coming up in 2027 is expected to accelerate this to the higher 90s in just a couple of years, which is a huge organic opportunity for us. Through this product with Mahindra, we can benefit and be a market leader in India.

Zooming out on Surround ADAS, thinking in just a year to have three design wins, two out of the top 10 OEMs with significant volumes—this in and of itself, without new design wins, can represent, when these will be launched, more than a 10% increase in revenue on a yearly basis. As this gains momentum and as we make progress in execution, which we are, and we show this to more and more OEMs, we expect this to generate more interest, and these growth numbers can be even improved in the future.

Analyst: Thanks. I appreciate that color. And for Moran, I had more of a housekeeping question. Can you give us some context around the goodwill impairment charge in the quarter?

Moran Shemesh: In Q1, versus our previous evaluation from December, market cap went down about 35%. So we had to do an impairment assessment in the quarter. I have to say this goodwill is kind of unique in its nature, since it is goodwill pushed down to Mobileye Global Inc. from Intel on the acquisition of Mobileye in 2017. So even initially, it was a very significant portion of our net assets, which is not something reasonable for our company to have—goodwill on its own assets. On the valuation itself, we recognized a goodwill impairment of $3.8 billion. On the business aspect, we kept the same projections but reflected a higher risk premium because of the macroeconomic environment and geopolitical environment.

That impacted the valuation and we recognized this impairment in Q1.

Operator: Our next question comes from Aaron Rakers with Wells Fargo. Please proceed with your question.

Analyst: Yes, thanks for taking the question. I wanted to ask first on SuperVision. I apologize if I missed it. Can you help us appreciate the volumes that were shipped this last quarter in SuperVision, and any updated views on the volumes as we start to think about the Porsche ramp going forward as we move through 2026 and into 2027?

Moran Shemesh: We delivered in Q1 20,000 units. We are seeing stability in demand. 2025 was high in SuperVision. For Q2, we estimate 15,000 units—roughly the same number. We are still pretty conservative for the second half, and for the full year we are still estimating about 150,000 units or a bit more, kind of consistent with or a bit lower than 2025. In case that demand changes or there is any further impact—it is not something that we are seeing—orders keep coming, and this business has had stability for the last few quarters. As for Porsche, we are not anticipating volume in 2026.

Amnon Shashua: The ramp-up will start in 2027, towards the second half of the year.

Daniel V. Galves: Just to recap, we did not change our SuperVision volume assumptions for the year.

Analyst: Perfect. And as a quick follow-up, I want to go back to the memory question. I know that you talked about your partners handling the pricing dynamics. But at a higher level in the current situation, are you seeing any risk from just actual supply of memory impacting any of your OEM customers or your partners from a procurement perspective? Is that a headwind that we should think about, or have you not seen any of that? Thank you.

Nimrod Nehushtan: We did not see direct reporting or direct planning from our customers to accommodate for this. Our revised guidance reflects the recent discussions we had with our customers, and of course they baked in all of these risks into their current estimates. Of course, we need to keep a close cap on the situation and monitor it, but we are not seeing any direct imminent change.

Operator: Maria, this next question will be our last question today.

Operator: Our last question will be from Steven Fox with Fox Advisors. Please proceed with your question.

Analyst: Hi. Good morning. I will try to make it a good one. I was wondering if you can go back and maybe expand on the initial comments you made in the prepared remarks about India. It sounded like you were saying you are more bullish about it. How much, and if you could talk about why, and whether there is any influence potentially down the road from your position with Chinese exports? Thanks very much.

Amnon Shashua: Thank you.

Nimrod Nehushtan: The Indian market has been lagging in terms of ADAS adoption rates compared to Europe, U.S., China, Japan, and Korea. Recent numbers suggest roughly 8% ADAS take rates in the Indian market, which refers to vehicles sold in India by both Indian OEMs and foreign OEMs. Just for reference, the Indian automotive market is roughly 5 million units per year. So in the pure size, it is a very significant opportunity. There is regulation coming up in 2027 which is expected to incentivize and mandate OEMs to adopt ADAS solutions starting 2027, and we expect this to increase the ADAS penetration rate from the 8% it is today to 70%, 80%, 90% in two or three years.

We are today very strong with Indian OEMs—the two major Indian OEMs. The recent announcement on Surround ADAS with Mahindra reflects the strength and leadership position we have, and also that the Indian market is not necessarily just for entry solutions but also for more advanced higher-ASP products as there is more demand by Indian consumers for advanced functionalities. In Mahindra’s case, for example, ADAS has been ranked as one of the key reasons for Mahindra's increased sales year on year. They have been growing very fast and their customers vote for ADAS as one of the reasons for it.

We believe that there is strong demand by consumers, there is going to be a regulatory push, and just the sheer size of the population suggests that it can be an organic growth opportunity, and we are very well positioned—not just with Mahindra, also others that are selling into the Indian market.

Operator: We have reached the end of our question and answer session. I would now like to turn the floor back over to Mr. Galves for closing comments.

Daniel V. Galves: Thanks a lot, Maria, and to the Mobileye Global Inc. management team, and thanks, everyone, for joining the call. We will talk to you next quarter. Thank you.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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