Q1 2025 Mobileye Global Inc Earnings Call
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Speaker Change: Greetings and welcome to the Mobileye First Quarter 2025 Arming School. At this time, all participants aren't a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance sewing the conference.
Speaker Change: Police plus star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Galves, Mr. Galves, you may begin.
Speaker Change: Thanks, B.C. Hello, everyone, and welcome to Mobileye's first quarter, 2025, Earnings Conference Fall for the Sears Fit Ending March 29, 2025. Please note that today's discussion contains forward-looking statements based on the business environment as we currently see it.
Speaker Change: Such statements involve risk and uncertainty. Please refer to the accompanying transcripts.
Speaker Change: Research, which includes additional information on the specific factors that could cause actual results to differ materially. Additionally, on this call, we will refer to both GAP and non-GAAP figures. The reconciliation of GAP to non-GAAP financial measures is provided in our requested earnings relief.
Nimroz Nishtan: Joining us on the call today are Professor Amnon Shashua, Mobileye CEO and President, and Moran Shamash, Mobileye CFO . Also joining today for the Q&A session is Nimrod Nehushtan, Mobileye CBC of the Development and Strategy.
Thanks and now I'll turn the call over to Amnon.
Hello, everyone, and thanks for joining our learning folks.
Nimroz Nishtan: Starting with the results, Q1 was closely aligned with our expectations. [inaudible]
Nimroz Nishtan: Revenue was up 83% year-over-year compared to the unusually low Q1 of last year due to the meaning of the drop-down of inventory in Q1.
Nimroz Nishtan: Operating Margent, recovered shortly on a year-of-year basis due to the fire resume.
Nimroz Nishtan: Operating expense growth, 14% in Q1, should moderate to middle single digits on average in the balance of the year, as the current R&D infrastructure is sufficient to execute all the advanced products and programs that will come online over the next decade.
Nimroz Nishtan: Operating cash flow was, again, a highlight of $109 million in Cuba.
Nimroz Nishtan: Business Trends for our core single chip front camera, driving assist systems were fundamentally strong in Q1, both in terms of current supply demand and design winds for future photos.
Nimroz Nishtan: Volume in Q1 was 8.5 million units, and we expect Q2 to be about 7% higher, and for Q2 revenue to be approximately 7% year-over-year.
Nimroz Nishtan: After we have Volatile 2024, Q1 volumes and Q2 orders have been quite stable with some upwards variant from China again, compared to regional expectations.
Thank you very much.
Jepim. [inaudible]
Nimroz Nishtan: Turning to the macro environment, clearly global like vehicle production in 2025 has become significantly more uncertain as the industry grapples with new trade friction, the change phrase.
Nimroz Nishtan: We are fortunate that the simplicity of our supply chain, which our customers are the importers of our products, means that we should not directly procure any material power at cost. Nevertheless, we will be affected by any negative impacts to global production volumes and consumer spending resulting from these trade futures.
Nimroz Nishtan: What we know today is that Q1 results were solid, Q2 order flow is above original expectation and consistent for the last couple of months and we have seen no deterioration in forward production schedules from our customers.
Nimroz Nishtan: We also know that our original outlook included the level of conservatism that was intended to reflect the risk of macro deterioration in the second half of 2020.
Nimroz Nishtan: Given expected first half volumes, our on-analysis of the Direct Impact of Foreign Barriers.
Nimroz Nishtan: on our customers and analysis by third parties like S&P Global. We continue to see a strong potential to perform within the guidance range for full year 2025.
Nimroz Nishtan: of course there is potential for price elasticity and other economic effects on auto consumers, but this is beyond our ability to analyze at this time.
Nimroz Nishtan: Turning to the longer term, designed when activity was very brisk in this quarter. [inaudible]
Distrains,
Nimroz Nishtan: This tends to be bumpy, but if we compare to the projected future volumes achieved from design with in all of 2024, the design wins in Q1 are already at around 85% of what achieved last year.
Nimroz Nishtan: Additionally, we are seeing potential for an inflection point in the value per unit of mass market rising [inaudible]
Nimroz Nishtan: Wem is now included in the Ford Blue Coons, and this cloud-enhanced functionality will also be adopted by a Korean OEM in future programs based on a large program we won in 2021.
Nimroz Nishtan: A potentially bigger tailwind for Mobileye is the trend towards multi-camera setup, going mainstream in the coming years through more stringent future safety requirements, and also the need to provide highway hands-free driving on mass market vehicles for OEMs to remain competitive.
Nimroz Nishtan: D.Y.D. boosted that their trend was their God's Eye announcement, which was the clear message to the industry that highway
Nimroz Nishtan: Mobileye surround ADAS to the IQ stick tie in the perfect solution for that space and we announced our first design win with Baltimore again during the quarter.
Nimroz Nishtan: Technology functionality and efficiency are just as important as criteria. And we have only and we have the only offering that can support all perception, mapping, writing policy, and writing function from a single SOC on a single ECU fully upgradable over there.
Nimroz Nishtan: and this shares a common technology backbone with our more advanced product which supports cost-efficient modular product portfolio for OEMs across all legal segments.
Nimroz Nishtan: Mobileye T2, One-Spot Shop, and this really aligns with OEM Software-Defined Vehicle and Architecture
Nimroz Nishtan: We're also seeing substantial opportunities from new customers during the quarter we achieved our first design within about eight years with a particular European audience.
Nimroz Nishtan: We're also seeing traction from our imaging weather product, where the first design went outside of the drive.
Nimroz Nishtan: and product line is imminent with another European OEM. This OEM is expected to choose our imaging radar as an enabler of high-speed highway level 3 solution, which is a testament to the differentiation of this sensor and the big vote of confidence for our Shafur and Drive products in general.
Nimroz Nishtan: OEM decision making for supervision and so far remains slower than we would like, but we continue to make progress with the number of OEMs, including two topics.
Nimroz Nishtan: It's two new top 10 global audience prospects in the past few months. [inaudible]
Nimroz Nishtan: Execution on the Porsche and Audi programs remain on track and we are looking forward to provide first prototype demos of these systems in the second half of 2025.
Nimroz Nishtan: That will be the first opportunity for external audiences to experience a new high-based software and hardware in a production intensively.
Nimroz Nishtan: Mobileye Drive, Self-Driving System for Robotacty Business, Continuous Storage and Rate. We announce the next step with lift during the quarter, announcing that as the Geography for Initial
Nimroz Nishtan: Magoveni as the owner operator and lifter of the demand platform. We expect to choose and announce the vehicle OEM in the coming month.
Speaker Change: In a completely fresh development, simultaneous to the beginning of this learning call, Volkswagen and Uber issued a joint release, announcing the two companies had agreed to integrate Mobileye, drive-enabled IT bus robot active onto the override-hailing network in Los Angeles starting in 2026.
Amnon Shashua, Moran Rojansky
Speaker Change: This is an excellent example of the ecosystem approach we are taking in this business.
which we believe has significant scale benefit. [inaudible]
Speaker Change: As we have discussed before, we are working with Volkswagen to integrate the Mobileye Drive Self Driving System into Volkswagen ID web, produced on the same assembly line as normal vehicles and that's able to be scaled up or down rapidly.
Speaker Change: In this agreement, Volkswagen's mobility are moia, will act as the fleet management system provider of the people and groupers and the grouper network will be the demand generating platform.
Speaker Change: Our ecosystem approach is capital-like for us and it puts the responsibility for each layer of this business into actors that have relevant competencies and ability to as well.
Speaker Change: Other technology fronts, our low cost, low cost, sensor set, efficient compute, and generalizable AI software, is expected to enable rapid scaling across geography that the compelling price points for the growth.
Speaker Change: Finally, we congratulate another of our Robotactive production partners, Hollon, for booking an order from Jacksonville, Transit Authority, to purchase the Hollon Urban Autonomous Shuttle, which is enacted by Mobilized Rights.
Thanks, and I will turn the call over to you mobile.
Thank you, Amnon and thanks for joining the call everyone. Thank you, everyone.
Moran: Before I begin, please be aware that all my comments on profitability will refer to NAMGAP measurement. The primate exclusion in mobilized NAMGAP numbers is a mobilization or intangible asset which is mainly related to the position of mobilized in 2017. We also exclude stop-back compensation.
Moran: and Q1 results, slightly exceeded the color we provided on the Q4 2020, 2024, earning quality in January , primarily due to modestly higher volume from Chinese OEMs and lower than expected operating expenses due to efficiencies in facilities and operations, along with some timing related items.
Moran: Revenue was up 83% year-over-year with a high-level vote due to normalized volume in Q1 2025 compared to Q1 of 2024, which was impacted by meaningful inventory digestion by a Q1 customer.
Moran: Year-over-use comparisons will be more relevant going forward as we believe the blind demand will well align in the back half of 2024.
Moran: On a sequential basis, Q1 growth margin was up slightly versus Q4 2024.
Moran: on the lower percentage of supervision revenue, while IQ boss Margin were largely unchanged.
Operating expenses were up to amount versus 2-4 as expected. [inaudible]
Moran: This is related to some of the higher payroll expenses due to lower reserve duty refunds in Q1 and slight head and roll. Higher spending on raw protective projects, higher marketing spend due to participation in industry events and other items that are largely timing related.
Moran: We continue to expect approximately 7% year-over-year growth in adjusted operating expenses in 2025 for better to $926 million in 2024.
Moran: We'd expect you to be slightly higher than Q1 and for Q3 likely be the highest quarter of the year.
Moran: We don't expect global macro issues to impact our operating expenses materially, as the majority is focused on development of technology that the poor star is banned from us. We will continue to look for opportunities for efficiency as we always do.
Moran: Let it be related to terrorists. We are fortunate that our supply chain is very simple. IQ chips for vehicle production in the U.S. are imported by our customers, not by mobile.
Moran: Therefore, we should experience no direct PNL impact from tariff payment. We also have no material guaranteed exposure on our revenue and our cost exposure to the New Israeli Shackles is largely
Moran: A bit more detail on our geographic exposure. We believe a very significant portion of our chief's applied to Europe and Asia Pacific.
Moran: are used for local consumption rather than for export to the US. Approximately 25% of our ships are shipped by our customers directly to the US, and are currently exempt from import service, and 20% to China where we believe it is used for local production.
Moran: Although terrorists on autopomponents are not directly paper by us, we will fully cooperate with our customers in the next few months to optimize their production needs and potentially make minor changes to the digital infrastructure to mitigate the overall cost.
Moran: While there is no direct impact, we of course will be exposed to any negative impact to vehicle production volume.
Moran: Grieving by supply impacts related to tariff costs on vehicles and components imported to the US, as well as potential consumer demand impacts from higher vehicle pricing or general weakening in economic conditions.
Moran: S&D, IHS, published a new forecast last week that implied global production deterioration over around 2% in the balance.
Moran: of 2025. For a specific customer exposure, this was translated to a bit below 1 million lower IQ units in the balance of 2025. But this is just one data point.
Moran: We have independently been reviewing the sector tariffs that apply to the automotive industry, vehicles and auto parts to map the potential risk.
Moran: Our baseline view is that the scenario incorporating production shutdowns of imported vehicles.
Moran: that are unprofitable under the new tariff regime in combination with the man-related impacts from higher base of pricing in general, could potentially drive 3 to 7% reduction in the volumes of our top 10
which translates to about 1.1. [inaudible]
Moran: 2.2 million unit annually. This is, of course, very difficult to predict, as the mix of sales in terms of OEMs and brands might change dramatically because of tariffs. And the potential for shifting production sites and regions could mitigate initial impact. [inaudible]
Moran: Bottom line is that prior to recent terrorist related development, our regional outlook already
and Customers.
then our customers and S&P logo.
Moran: even after the most recent forecast reduction by S&B to reflect the current refugee.
Moran: for our own sum out more negative analysis, our original expectation, remain valid. Thank you.
Moran: We will continue to monitor the situation closely, given the current complete vehicle theories, vehicle components, very scheduled to begin on May 3rd, and potential for reciprocal theories after the 90-day powers.
Moran: Turning to Q2, we expect to deliver approximately 8.7 million to 9.3 million IQ units and for our revenue
Moran: We expect Rosmargen to be at or slightly below the Q1 level and for operating expenses to visit an alleys higher in Q2 versus Q1, aligned with our previous explanations.
Thank you, and we will now take your questions. Thank you.
Moran: Thank you, we will now be conducting a question and answer session.
Speaker Change: If you would like to ask a question, please press star one on your telephone keypad. A confirmation total indicate your mind is in the question queue. You may press star two, if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to take up your hands up for pressing the star keys.
Speaker Change: Your first question, come from Joe Spak with UBS, please go ahead.
Speaker Change: Thank you, good morning everyone. I guess a couple of things, maybe just to start with the VW Uber announcement.
Speaker Change: I know it's early days but how do you envision that working? Is that you sort of selling a system? Do you think you, is there sort of like an ongoing potential payment from you or rides or how should we think about that evolving?
Speaker Change: So, the business model is such that mobileye delivering the self-driving system, which includes the ECU, the hardware, the software for the self-driving software, and the radar sensors.
Speaker Change: So there's a one-time payment per car on these components and in addition there's a recurring license fee that is a derivative of the overall utilization of the fleet. So the more the fleet is driving, the more really we're generating. In addition to the one-time payment for the system.
Speaker Change: Volkswagen Low is to provide reduced self-driving cars with mobilized drive system installed in the manufacturing line, and Uber are the demand generator that can offer a self-driving service through their application to the consumer audience.
Speaker Change: Basically, the advantages that we have in this business model is the fact that we have a very geographically scalable technology as well as economically scalable technology. We come from a very cost efficient design to begin with.
Speaker Change: that can be easily held not just within Los Angeles, which is the first market mentioned in this announcement, but also of course, staffed towards.
Continued expansion to additional locations.
Speaker Change: and Volkswagen, who are a very high-volume vehicle manufacturer, can quickly scale the amount of robot access they're producing in manufacturing line as demand increases over time.
Speaker Change: So overall we think that there and of course Uber is a very well-renowned demand generator, probably the leading one in the U.S. globally. So we think the key ingredients necessary to become a very competitive and leading driving service in the U.S. in the next couple of years.
Thank you.
Speaker Change: Great, thanks, and then just maybe one more near-term just on the...
The two key outlook and the units you just...
Speaker Change: Indicated, I think it's stronger certainly than where the street was. I think it's above 1Q levels as well.
Thank you.
Speaker Change: I know you talked about some of your own checks and work to get comfortable with where orders are in production and inventory, but...
Speaker Change: Do you get the sense that there's a little bit of, you know, ordering ahead of maybe some uncertainty in that there's there willing to carry a little bit more, you know, inventory in the channel.
Speaker Change: So I must say we cannot indicate anything specific for two of the sense of urgency and these orders have been pretty stable as of February and
Speaker Change: Even at the beginning of this year, we kind of, in our forecast, we predicted around 8.5 in 2001, so it's 8.5 until 9 million units per quarter. That's what we are also seeing in the last three quarters.
Speaker Change: So also the second half of 2024 was between 8.5 and 9. So this is something up pretty normal for now.
Speaker Change: When we started a year, we kind of based our focus again on demand which and that indicates no inventory or access inventory at our customers. So we see orders aligned with that.
Speaker Change: We have more visibility maybe towards the end of the quarter but there is nothing specific we can we can indicate.
Yes, so just to, um...
Speaker Change: Just to summarize, if you know if there is any pull ahead in this number, it hasn't really nothing's really changed since February and it wouldn't be very material versus kind of what we're seeing in kind of end user demand.
Thanks for that, appreciate it.
Speaker Change: Thanks Joe, next question please. Joshua Buchalter with TD Count, please go ahead.
Joshua Buchalter: Thank you guys, thank you for taking my question in the drafts of the stellar results. Yeah, I wanted to maybe follow up on that previous one. I mean, the backup guide implied, you know, a pretty sub-seasonal
Joshua Buchalter: End of the year. I guess, anyway, you can walk us through how much of that is conservatism on units versus share loss by your engaged customers and maybe any sort of hair cutting that you guys are doing to account for the uncertainty. Thank you.
Thanks, Josh. This is Dan. I can take that one.
Joshua Buchalter: So, yeah, I mean, kind of the way our business works is we have kind of full visibility, you know, three months ahead, something like that, and then we...
Joshua Buchalter: Conference for the couple of quarters beyond that that can really change at any time. We haven't seen any change in the back half. You know, we, we, um,
Thank you.
Joshua Buchalter: But, you know, obviously kind of uncertainty has risen so, you know, we don't want to get ahead of our skis.
Joshua Buchalter: You know, yeah, the fact that we're going to do kind of more than 50% of the guide, you know, the full year guide in the first half is certainly a good sign and we have no reason to think necessarily that demand is going to fall in the back half, but just, you know, given the current environment we didn't really want to get ahead of ourselves. So let's go ahead and see what we're going to do.
Joshua Buchalter: We took provisions, and we took provisions that demand world will go down, that means...
Joshua Buchalter: Because we started our guides in the beginning of the year in a very conservative manner. So even if demand falls so far we feel that we meet the range of the guidance. But we're not getting any clear indication that it will fall. That's kind of the point. [inaudible]
Joshua Buchalter: No, thank you, that's been pragmatic and it makes a lot of sense. I guess I'll follow up. I guess- I guess- I guess- I guess- I guess-
Speaker Change: Engagement and Design Act. I mean, you mentioned that you had 85% of last year's design wins in the first half. I mean, your OEM customers have been, I think, slower than we all expected to move in particular with advanced ADAS products. How do you see the current environment? [inaudible]
Speaker Change: Impacting their appetite to invest in new technologies like a vehicle in either way and any more quality you could provide within the 80% or 85% of your design went here to date, any sort of directional indicators across faith aid <expletive> versus surrounding supervision chauffeur. Thank you.
Yeah, I can take that, so.
Speaker Change: What we're seeing so far is a very strong continued strong demand from our customers to source our products for future generations that comprises the majority of the 85% or the volumes that we won during Q1.
Speaker Change: and it's a mixture of SRAM data and basic data products.
Speaker Change: We are pretty much in a position of solidifying our position with our top 10 customers for years to come after these design wins.
when it comes to sourcing the dense product. [inaudible]
Speaker Change: I think it makes sense that the previous couple of months have created maybe somewhat of a delay in some of the decision making because of urgent matters that they need to address regarding tarot and I think it makes sense, but did not change is that they're understanding of. [inaudible]
Inspecity of having advanced products in the future. [inaudible]
Speaker Change: and Competition is moving forward for each OEM and just recently Tesla continued to double down on their commitment to long-term autonomous driving in their products.
Speaker Change: and, again, stressing the significance of self-driving technologies in the near future and that, of course, continues to apply a lot of pressure on OEMs to move forward.
Speaker Change: and moved through the pipeline to more advanced stages of evaluation. And we're reaching convergence with a couple of other opportunities.
Speaker Change: So we still see movement in the right direction and we're seeing also more and more interest in specifically level three eyes off driving targeting end of twenty twenty seven roughly speaking. Thank you.
Speaker Change: with big OEMs, so that is also an encouraging funded, even though at a certain time, they are still committed to the long-term plastic and intelligent driving in the future for them, and they are working with us to make progress in that front.
Thank you.
Next question, Luke Josh with Baird.
Luke Schuss: Good morning, thanks for taking the questions. First, maybe if we could just talk about what's going on in China right now and the fact that things have been trending relatively better the last couple of quarters. I know you haven't read into that too much today, but now it's just an accumulation of data points. Are you better able to tease out what's going on with those customers?
I think that our focus now in China is...
Luke Schuss: Supporting our Chinese OEMs on the global exports and also on the local market. And we're outperforming our initial expectation.
Luke Schuss: So roughly 20% to 30% market share is quite stable. On the advanced product, we see opportunities after we start revealing our second generation product, which is going to be based on IQ 6.
Luke Schuss: Sometimes closer to the end of the year, cannot now. So,
Our Business Development, Edelman,
Luke Schuss: But our advanced product is more focused on the Western customers and not in China, we're focused on ADA and also supporting our Western OEMs, portion Audi in their launch of Supervision, Shofur also in China in the 2026, then the 2026.
Luke Schuss: Just to give some sense on the numbers, we're China. So, um...
We started in 2024 when relatively low numbers were sold. [inaudible]
Approximately 400,000 units.
Luke Schuss: and then from the second half of 2024, we're seeing increased volume, so in the second half.
Luke Schuss: 1.2 million in it. We were still conservative at the beginning of the year with the guidance, so we were aiming approximately 500,000 units of water. And we are seeing demand more than that.
Luke Schuss: in the first and also the second quarter. So, in terms of the guidance first in the beginning of the year, it's a source of upset.
Speaker Change: All their help will thank you. And then just a quick one, the Imaging Radar Award that you believe is imminent. Are you implying that that is a potential chauffeur award as well?
Now, this particular award is just for the center itself.
Speaker Change: We have additional opportunities of the imaging radar bundled with the software product, but that is different.
University. Thank you.
It's Luke. Next question, Shreyas Patil, with Wolf Research. Please go ahead.
Shreyas Patel: Hey, thanks so much for taking the question. Maybe just back on the 2025 guidance, I think.
Shreyas Patel: Previously you had talked about an expectation of of share games or eight-ass penetration increase as embedded in in the 25 guide and I'm I'm wondering if that if you're still seeing that at the moment. . .
Speaker Change: I understand that overall the production expectations that you've embedded are still consistent with what we're seeing in production, but I'm just wondering if you're also seeing a bit of penetration increases or share gains as well.
Speaker Change: As you mentioned about the global production, at the midpoint of our guidance, we kind of now aligned with through its body process. The process was approximately seven percent.
Farah, Cookton Testaments,
As for the incremental units from new lounges.
Speaker Change: and Mobileye Share Games within our top customers. I mentioned in the January , we are expecting 1.4 million units. That looks in line with expectation and maybe even ramping up a bit faster than expected.
Speaker Change: So we're still a source of addition to units and also the China expectations which were more conservative at the beginning of the year and we're seeing an upside also for China OEM.
Speaker Change: Okay, great. And then maybe on just trying to think through the opportunity that you see here and
Speaker Change: in Mobileye Drives. The deal that announced today with Uber just comes off the heels of a similar program with Lyft.
Speaker Change: So I'm wondering if we should see this as an indication of momentum accelerating in robot
Speaker Change: and if that's the case, obviously Uber and Lyft are the two largest players in the US, but I'm wondering if there are other opportunities in the pipeline as well maybe in other markets.
In our data set.
Speaker Change: can be deployed globally in all major markets in the near future. [inaudible]
Speaker Change: So, FoxFoggan is that we're kind of leading partner, strategic partner for producing.
Speaker Change: Robotexy cars from assembly lines in scale that can be quickly ramped up according to demand. Partnering with Lyft and Uber, the two biggest mobility operators in the US is very, very important to quickly reach the pockets of millions of consumers.
Speaker Change: It's probably you can imagine, but in addition to this, we're also working on launching in Europe beyond just the US in similar time frame.
Speaker Change: Again, partnering with Volkswagen is very strong. European OEM allows us to be very one of the earliest, if not the first to launch in Europe , partnering with Holland gives us another angle of transportation in different, maybe slightly different use cases.
Speaker Change: and beyond all of those, we're also working with additional OEMs that are very interested in this business model car manufacturers to produce those four cars in their manufacturing line, partnering with Mobileye Cell Driving Technology with Mobileye Drive.
Speaker Change: and then once mobileye can bring to the table the mobility operators, it really opens the door for more OEMs that are interested in a similar model. And if we think about making a revolution of robot access, it's about scale. That's the next big thing, and the scale is not just a few hundreds of cards. [inaudible]
Speaker Change: thousands, and then tens of thousands, hundreds of thousands of cars in Europe and US. And to get there, we were partnering with the most scalable OEMs on the planet. And so that's kind of our trillion. And we do see very, very accelerated momentum in the past three to six months.
Jury, Jury,
Great, thanks.
Speaker Change: and I have to get on the call for a second, a little quick. Next question, Adam Jonas, with Morgan Stanley .
Adam Jonas: Everybody, just a couple questions. First, there's a bit of a, maybe this might sound oddball or technical, but we're hearing from some that the Gen AI has helped.
He could possibly increase the value of Dashcam.
video capture that could be really relevant.
Adam Jonas: to the ability for like an Uber and a List Leader, other ways to capture data.
Adam Jonas: Obviously, it's not the same fidelity and in the same sense or modality and connected to the computers the way your system is a very sophisticated way are.
Adam Jonas: But I was I was curious if you really if you subscribe to that that at least at some level the coefficient of value that you might apply just a aftermarket dash cam video capturing footage from around the vehicle describing around might might might have some improved value given given given.
Adam Jonas: D.A.I., Gen.A.I. revolution going on. That's the first question. Thank you.
But what we call a random 1.0?
Adam Jonas: Condensed Data to the Cloud. We have been developing a new generation of RAM, which we call
, which is based on sending pictures, still very low bandwidth but sending pictures to them.
Adam Jonas: Global, and we will have much to talk about in this.
Adam Jonas: in the coming months, or ideas about this new, about this new technology. So that there's quite a lot of progress in terms of...
Adam Jonas: What kind of data, what frequency of data, volume of data, you can start extracting from vehicles and still need also regulatory approval. There's privacy concerns and all sorts of issues there. And we're really on it with new technologies.
and then your approaches and all of that will meet.
Our 2027 launches of Shofur and Ryb and Hempel.
Okay.
Speaker Change: Basically, it's not a bullshit question, is what you're saying. No, no, no. You never have to ask questions. I disagree. Okay. And a follow-up, I'm just curious, given so much other...
Speaker Change: Activity, and other sectors outside of automotive in terms of data capture, data capture.
Speaker Change: I think you agree with the belief that anything that any machine that can be automated will be automated and cars are just one modality of many, many thousands potentially of other modalities. I'm just, I'd be interested if Mobileye is
Speaker Change: Alicating, or there's any change allocation, even if it's a small level of your R&D and advanced development work on markets outside of automotive at this time. Thank you.
Speaker Change: Yes, I'll say yes, but I cannot expand further. We are exploring, but we're still at the exploration stage of looking at additional growth engines.
and Physical AISP.
Thank you, Adam.
Speaker Change: Next question, Antoine Chkaiban, with new three research piece double head. [inaudible]
Anton Schaibman: Hi, good afternoon, thanks for taking my question. I'd like you to follow up on the announcement with the lift.
Speaker Change: to the Bitmobile iPodder with X-T in Dallas in 2026. I was wondering. [inaudible]
Speaker Change: How do you expect the rollout to play out? It seems that the goal is to eventually deploy thousands of vehicles across multiple cities, so any color you can provide and the economics of the deal and the pace of deployment, the shape of the ramp would be very helpful. Thank you.
Speaker Change: Yeah, maybe I would address the general roll-up of our robot taxi seats without addressing this specific project. There is only so much we can expand on this project at this stage.
Speaker Change: General Lee, where we are working in a few stages, we start with the development of the testing stages in which we deploy dozens of vehicles driving around the designated area.
Speaker Change: Repeatedly, and of course there's a combination of offline and online validation processes that are necessary to make sure that the quality of service is at the right the highest level possible of course making sure that we can.
Speaker Change: Meet the safety standards, the meet and between interventions in this designated area. Afterwards, there is a certain stage of pilot program.
Speaker Change: in which we're using safety drivers at the start, but still opening the doors for users to experience the service and getting feedback from that, that's still the magnitude of stealing the dozens. Then it gradually expands to maybe a small hundred vehicles. Let's go.
Speaker Change: After that, there is an early stage of driverless connectivity, and then it becomes a full commercial service.
Speaker Change: and this process can take a few months or it can take maybe a year or so of walking through the
Speaker Change: through the different stages of the activity. We have already been working on the U.S.
Speaker Change: certainly cities in the past two years for early testing and 2025 is a really important year for us in the Robotics development because we are. Thank you very much.
Speaker Change: expanding the scale significantly of mobile-like drive systems driving in the US in different cities and really becoming seeing more statistic data, for more statistic analysis of our performance and
Speaker Change: very impressive results in improvement towards the goal and getting to these launches. And we'll talk about the economic.
Speaker Change: and then when it comes to the economics again, just to make sure it's clear.
Speaker Change: Mobileye's product is the ECU, and the ECU is the hardware and the software. We get a payment one time for that for a car. And then there is a recurring license fee for the operation of each and every robot at the vehicle, according to its availability and usage.
Speaker Change: So the more, you can think of it as a percentage of every dollar per mile that consumers pay for still driving system with Mobileye's, that he's enabled by Mobileye Trot.
Speaker Change: Great, thanks a lot for a detailed answer and maybe a quick follow-up. So on the cloud and hence, Ada's announcement with the Korean OEM, can you maybe provide some color on the volumes? This could represent the timing and shape of the ramp and you remind us the overall design win status for cloud and hence.
Speaker Change: Yes, so normally cloud-and-hand data is integrated within high-volume projects. So it's a front-camera-based system that is now uploading data and downloading data from a WAN database.
Speaker Change: and that is very important for us because the rent database uses is using us not just to improve the quality of our base data's product but also to...
It's kind of the backbone for our advanced part.
Speaker Change: Supervision, Surround Data, Supervision, Schoepfer, and Drott. So our strategy is to have an ecosystem of OEMs that are contributing data and benefiting from the data of multiple OEMs, and then having a very, very good coverage and refresh rate globally that's all of the OEMs that are in this ecosystem can enjoy. Thank you very much.
Speaker Change: for the different products. So adding more high volume OEMs to the SQL system is essential, of course, to these purposes. And the roll-out is within the near future.
Let's take a note, go beyond them. [inaudible]
Thank you, Antoine.
Next question, Mark Delaney, Goldman Sachs,
Mark Delaney: Yes, thank you very much for taking my questions. For Mobileye Drive, I think both the Uber and Lyft Agreements target operations beginning in 2026. Can you speak to how development is going to meet that time frame? And taking a step back and thinking about Drive more holistically, it's been a small contributor to the company's revenue, but as you think out of 2026 and 2027, do you think Mobileye Drive revenue is going to become a meaningful part of Mobileye's overall financials?
Mark Delaney: We have shifted all the hardware to the I26I a few months ago.
EGC, you call the drive 64. 4.
Mark Delaney: and it's the meeting of our target for end of the 2026 launch of the driverless robot action. So we are on target there with the statistics of driving. We have been driving in Europe and in Austin, Texas.
Mark Delaney: with many dozens of vehicles and multiple types. In terms of revenue,
Mark Delaney: The contract we have talked about tens of thousands of vehicles.
Mark Delaney: and spread over till the end of the decade. So we are talking about a meaningful revenue coming out of this business and in the last few months, the potential for more than what we have
So, it could be somewhere around.
Mark Delaney: 5-figure, 6-figure in terms of the volume of cars to the end of the decade, so it could be very meaningful.
and Moran Rojansky.
Mark Delaney: and when we think about the potential, so today there is only a small fraction of the percent of mouth driven by people in the US that is autonomous.
Mark Delaney: and although it becomes more and more pervasive and more cities, we'll throw in others that are...
Mark Delaney: and claiming to learn such services for still scratching the surface. As we envisioned the next few years towards end of the decade, we believe this number will significantly grow, and we believe that we will be one of the maybe two or three enablers for that.
Mark Delaney: It's realistic to have only two or three and not 20 or 30 in that stage and the volumes to facilitate for the demand in the US and Europe for mobility services in the tens of thousands, hundreds of thousands, potentially millions of vehicles. This is why partnering with OEMs that can scale is so important.
Mark Delaney: This is a very helpful thing. So, my other question was on the consumer vehicle part of the business. You mentioned in the prepared comments that potential new awards with a supervision and show for, I think you said are going somewhat slower than you'd have liked. Why do you think that is and? [inaudible]
Mark Delaney: Maybe help us better understand as you think about the opportunity set with the supervision and chauffeur, you talked about 5 OEMs, being in more advanced stages of evaluation at your last investor day, are those five all still active or have there been any changes there? Thank you.
and others.
Mark Delaney: The past two to three months have been very turbulent for the industry in general. That probably served a significant role in taking more time to make this decision.
Mark Delaney: We still have a lot of confidence in the engagements we have. We see progress made, we're moving through the ropes of the different stages and getting to concrete stages, receiving official RFQs and getting to negotiation statuses.
Mark Delaney: We're getting closer to convergence with several of these opportunities that we mentioned in the IRD. So I think overall we still have a lot of confidence we have in supervision as far remains as high as it's been. We just need to be patient and make sure that we're doing the right things with the audience. And...
Mark Delaney: You know, many things can happen in the next week, so we don't think we should be predicting when things will happen, but it's realistic to converge.
Mark Delaney: And I think in the last couple of months there have been two new engagements that we did not anticipate that the capital must be back in December .
Mark Delaney: and they are very meaningful in terms of the breadth, both supervision and the answer for, so I think...
Mark Delaney: 0.25 is going to be a good year for those that advance their further. [inaudible]
Thank you, Mark.
Next question, Aaron Rakers with Wells Fargo.
Bye.
Speaker Change: You know, thinking about chauffeur and supervision, I think in total there were seven kind of moving possibly to the right. I guess just to be clear, those seven still exist, maybe it's taking a little bit longer and now you add two. Thank you.
Speaker Change: New OEM to that list, just kind of thinking about that progression of those OEM opportunities. Is that fair?
Speaker Change: Yeah, so I think that what has changed is that the nature of the discussion might might change the flags are still there. So in some cases it's been
Speaker Change: Expanding the discussion from a single product line to multiple product lines that have been in three of these engagement.
Speaker Change: I think the most consistent trend is that there is a growing interest in level three eyes off products that are targeting N27, early 28 SOPs. It seems to be now a very, very strategic product for several big OEMs.
Speaker Change: That was maybe not as evidence in their discussions in the IRD. Okay?
Speaker Change: and in some cases maybe we have moved from a high flame to low flame discussion.
Speaker Change: May be in one particular case, but in general we still have the theme.
Speaker Change: Long-term confidence that this business is building. Our focus right now is partnering with OEMs that will allow us to scale our next-gen product based on I-6.
Speaker Change: which we are now developing and we have a lot of confidence in our ability to do so.
Speaker Change: Perfect. And then as a quick follow-up, thinking about the Uber and Lyft relationship and the one-time payment, I also know back at the last day, you highlighted kind of a chart that showed, you know, blended ASP going from $55 to upwards of $200 by the end of, call it, late-deck-aid.
Speaker Change: How do we cross that relative to the Uber and Lyft opportunity versus that 200, any context of that one-time ASP opportunity with those engagements?
Speaker Change: Yeah, I think that chart is referred to is does not take into account the commercial potential of the mobile drive partnership with the lift Uber that we just announced.
Speaker Change: and it's a pure upside to that. So I think that in most of the analysis we showed about future revenue growth.
Speaker Change: We took an extremely conservative assessment of drive progression, so in previous numbers that we shared it was not respected.
I'm focused on the ESC
Speaker Change: Sorry, I just did a comment. This chart was focused on how will the consumer car, passenger car look like? So today it's $55, that's what the chart said.
Speaker Change: So today, for that OEM, a passenger car is worth roughly $55 from Mobileye and with a gradual adoption of more advanced products that are designed for passenger cars that number can grow from $55 to roughly $200 plus dollars. It did not reflect any robot acting business.
Speaker Change: What we said about the robot taxi business, what we said about the robot taxi business in the past is kind of the upfront cost is in the...
Five figures, plus, you know, like... [inaudible]
Speaker Change: with Healthy Margin, with Healthy Margin, so it's a completely different business model because you're talking about generating revenue per mile, you know, across, you know, hundreds of thousands of miles of vehicles, so that, and you're talking about replacing...
You know, human driver, which can cost, you know.
Thank you.
Thank you, Aaron.
Next question, Gary, Mobley with Move Capital, please go ahead.
Thanks for speaking in my question.
Gary Mobley: The European OEM that you mentioned in your press release that you haven't done business with since 2016, what drove that re-engagement, and is this a redundant application for their internal chip or just any sort of color you can give on that? [inaudible]
Yeah, go out.
You know
Gary Mobley: It's going as detailed as possible given the nature of this business. It is not a redundant product. It is to practically resource-mobilized solution as their ADA solution.
in Future Project. So...
Gary Mobley: It's basically going back to a mobileye solution after almost nine years of not having mutual design wins.
Gary Mobley: which we see as another testament of our product advantages and position in the market as a market leader in these segments. And we don't know all these details but we can assume that it's mostly about the performance versus cost. So, we are going to get this to happen.
Speaker Change: Temple. Just a quick follow-up. Are you reaffirming your non-GAB gross margin for basically your 25 of 150 basis point improvements over the prior year?
Speaker Change: So, we are still anticipating an increasing growth margin, the mix of supervision and IQ is different in 2025, yet we are still expecting an upside of the problem.
100 basis points in 2025 versus 2024.
Speaker Change: Yeah, I think China volumes are a little bit lower margin for us, so as the China volume is kind of outperformed a bit, that leads to like a little bit less up-died than the increase than we were expecting, but very small.
Thank you very much.
Thank you very much. Thank you. Next question, Addison Yu, with Doycey Bank, please go ahead.
Addison Yu: Thank you for taking our question. One is coming back on Robotexy. How do you think about the performance threshold for drives in the US deployments? [inaudible]
Addison Yu: Obviously now you have Uber as well. Is there some level where you need to kind of prove or do you need to feel comfortable with that it will achieve before you can really get these deployments wrapping up?
We have clear metrics with our customers.
Addison Yu: that shows superior to human level performance, and we are on track to meeting those metrics.
and there is a constant mutual evaluation of the performance.
Addison Yu: from the development stage, and we're seeing that there is strong progression towards this target, and this is the basis of taking the decision to take the next step and go into the commercial deployment stage.
Speaker Change: Gotcha. And is it the same threshold for both the two deployments or are there actually nuances depending on who you're working with Uber or Lyft?
No, that's the same threshold.
Speaker Change: Okay, and just one quick one, from a liability perspective, has that been kind of hashed out who is kind of liable for, or yeah, who is sort of liable of anything kind of if there's an accident or something that would hashed out already or is that TBD?
Speaker Change: So that's these aspects are behind them. They're going into the deep. [inaudible]
Okay, thank you.
Speaker Change: Next question, Tom Narayan, with RBC, please go ahead.
Tom Narayan: Yeah, thanks for taking the question. The first one has to do with Surround ADS versus Supervision. It looks like we have, yes, Surround ADS with the VW Mass Market Brands.
Tom Narayan: Supervision for the VW Premium brands. Obviously, we noticed some of the premium OEMs Mercedes BMW trying to develop their own autonomy. Just, how do we think about supervision going forward given this? [inaudible]
Tom Narayan: Potential Headwind, is it that maybe we should be contemplating surround ADAS being the kind of bigger category winner for you guys as opposed to supervision? Or do you just see a migration as the mass market players over time and migrate towards supervision from surround ADAS? [inaudible]
Tom Narayan: We see Surround Adas as the next level of Adas, so the migration is from front-facing camera to Surround Adas, and this is driven by
Tom Narayan: Increased regulatory requirement on the future aid of the systems both in Europe and in the US.
Tom Narayan: The 2028 and 2029 regimes are very challenging and require multiple cameras, you know, front-facing camera would not be, would not be enough. So the surround ADA, it's really the new ADA.
Tom Narayan: Supervision has the same shares the same sensor set in terms of cameras with a short-floor and
Tom Narayan: So, supervision is the next step going from eyes on to eyes off in a hand-free driving that can drive everywhere, urban and highway.
Supervision has also added advantage of generating data.
Tom Narayan: So, because it's the same sensor set, you can start with a supervision system, use that, and the data generator, for example, uploading events, uploading, you write all sorts of probe functions.
Tom Narayan: and you upload the data, you use that data to go further and develop the Level 3 and Level 4. So there is a...
Tom Narayan: There is a space for supervision and the Holy Grail is level 3. So far it's really the, if you look at where things should converge to in terms of consumer cars, it's level 3 and then later expanding the LDD to level 4.
Speaker Change: Okay, just to clarify, so you're not seeing a change in how you guys see the adoption being maybe more towards surrounding that first supervision. Rather, it's just a migration.
Speaker Change: No, the way we analyze this is by evaluating the vehicle models with different price points for each product category. So it's
Amnon Shashua, Moran Rojansky
Speaker Change: Okay, my follow-up has to do with, I guess, the commentary on the test learning call earlier this week.
on general AI versus kind of sensor-based map. [inaudible]
Speaker Change: Mapping. I know you guys have talked a lot about this. We heard a lot about this at the...
Speaker Change: at the investor day, but they reference specifically their FSD rollout in China.
Speaker Change: and how it has progressed in their words very quickly without knowing the country's specific dynamics, driving dynamic habits, etc. Just curious to how you think about maybe their commentary on the general AI approach camera versus.
Alternative. Thanks.
Speaker Change: We are all using AI now that I think we should stop all this hiding
Speaker Change: Everyone is using a eye, everyone is using gen A eye, so all these heights. [inaudible]
Speaker Change: I think we should stop there. But to the point, there's a lot that simulators.
Attractive Light,
are completely different than what you see in the West. There is a traffic lights are digital where you have a camera.
Speaker Change: at every place, and we cannot send data from China outside of China, but we replicated this in a stimulator, and then we use the stimulators in order to train our system, and we use stimulators a lot.
Speaker Change: to compensate, to mitigate the fact that we cannot use data in China. And this is kind of standard techniques. Everyone is using it. And I think we should do a high thing thing. Really.
Thank you.
Thank you, Tom.
Speaker Change: Thank you, I would like to turn the floor over to Dan for closing the mark.
Alt-Jazz
Speaker Change: Kirsten Michael Snow 20 Oh since you've found me You've still not slept I hope I never wake up
Speaker Change: Hello everyone and welcome to Mobileye's first quarter, 2025, earning confidence fall for the year at the end of March 29th, 2025.
Speaker Change: 35. Please note that today's discussion contains forward-looking statements based on the business environment as we currently see it. Such statements involve risks and uncertainties. Please refer to the accompanying questions.
Speaker Change: Service, which includes additional information on the specific factors that could cause actual results to differ materially. Additionally, on this call, we will refer to both GAP and non-GAAP figures. A reconciliation of GAP to non-GAAP financial measures is provided in our posted earnings relief.
Speaker Change: Joining us on the call today are Professor Amnon Shashua, Mobileye CEO and President, and Moran Shamash, Mobileye CFO . Also joining today for the Q&A session is Nimrod Nehushtan, Mobileye CBC of the Development and Strategy.
Thanks, and now I'll turn the call over to Amnon.
Hello, everyone, and thanks for joining our earnings poll.
Amnon Shashua: Starting with the results, Q1 was closely aligned with our expectations.
Amnon Shashua: Revenue was up 83% year-over-year compared to the unusually low Q1 of last year due to the meaningfully that drove some of the inventory in Q1 from here.
Amnon Shashua: Operating Margent, recovered shortly on the year of a year's basis due to the fire resume.
Amnon Shashua: Operating expense growth, 14% in Q1, should moderate to middle single digits on average in the balance of the year, as the current R&D infrastructure is sufficient to execute all the advanced products and programs that will come online over the next episode.
Amnon Shashua: Operating cash flow was again a highlight as $109 million in Cuba.
Amnon Shashua: Business Trends for our core single chip front camera, driving assist systems were fundamentally strong in Q1, both in terms of current supply demand and design winds for future photos.
Amnon Shashua: Volume in Q1 was 8.5 million units, and we expect Q2 to be about 7% fire, and for Q2 revenue to be up approximately 7% year over year.
Amnon Shashua: After we have Volatile 2024, Q1 Volumes and Q2 Ordered has been quite stable with some upwards
Jit, Jit. [inaudible]
Amnon Shashua: Turning to the macro-environment, clearly global-like vehicle production in 0.25 has become significantly more uncertain as the industry grapples with new trade friction, the change-free-
Amnon Shashua: We are fortunate that the simplicity of our supply chain, which our customers are the importers of our products, means that we should not directly include any material periscope.
Amnon Shashua: Nevertheless, will be affected by any negative impacts to global production volumes and consumer spending resulting from these trade functions.
Amnon Shashua: What we know today is that Q1 results were solid due to the border flow, is above original expectation, and consistent for the last couple of months, and we have seen no deterioration in forward production schedules from our customers.
Amnon Shashua: We also know that our regional outlook included the level of conservatism that was intended to reflect the risk of macro deterioration in the second half of 2020.
Amnon Shashua: Given expected first half volumes, our on-analysis of the direct impact of foreign barriers.
Amnon Shashua: On our customers and analysis by third parties like SNP Global, we continue to see a strong potential to perform within the guidance range for full year 2025.
Amnon Shashua: Of course, there is potential for price elasticity and other economic effects on auto consumers, but this is beyond our ability to analyze at this time.
Amnon Shashua: Turning to the longer tour, designed when activity was very brisk in this quarter.
Distrains,
Amnon Shashua: This tends to be bumpy, but if we compare to the projected future volumes achieved from design within all of 2024, the design wins in Q1 are already at around 85% of what achieved last
Amnon Shashua: Additionally, we are seeing potential for an inflection point in the value for units of mass market rising
Amnon Shashua: Wem is now included in the Ford Blue Coons, and this cloud-enhanced functionality will also be adopted by a Korean OEM in future programs based on a large program we won in 2021.
Amnon Shashua: The potentially bigger tailwind for Mobileye is the trend towards multi-camera setup, going mainstream in the coming years to use the more stringent future safety requirement, and also the need to provide highway hand-spray driving on mass-market vehicles for OEMs to remain competitive.
Amnon Shashua: D.Y.D. boosted that their trends with their God's eye announcement, which was a clear message to the industry, the highway hand streets, but they were likely to enter a feature on mainstream vehicles in the coming days.
Amnon Shashua: Mobileye surround ADAS through the IQ stick tie is the perfect solution for that space and we announced our first design win with Baltimore again during the quarter.
Amnon Shashua: Technology functionality and efficiency are just as important as right here. And we have only and we have the only offering that can support all perception, mapping, writing policy and writing function from a single SOC on a single ECU fully upgradable over there.
Amnon Shashua: and this shares a common technology backbone with our more advanced product which supports cost-efficient modular product portfolio for OEMs across all legal segments.
Amnon Shashua: Mobileye Techo, One-Spot Shop, and this really aligns with OEM Software-Defined Vehicle and Architecture
Amnon Shashua: We also think substantial opportunities from new customers during the quarter we achieved our first design within about eight years with a particular European audience.
Amnon Shashua: We're also seeing traction from our imaging weather product where the first design went outside of the drive.
Amnon Shashua: and product line is imminent with another European OEM. This OEM is expected to choose our imaging radar as an enabler of high-speed highway level 3 solution, which is a testament to the differentiation of the sensor and the big vote of confidence or support and drive product
Amnon Shashua: OEM decision-making for supervision and so forth remains slower than we would like, but we continue to make progress with the number of OEMs, including two top
Amnon Shashua: It's two new top 10 global audience prospects in the past few months.
Amnon Shashua: Execution on the Porsche and Audi programs remain on track, and we're looking forward to provide first prototype demos of these systems in the second half of 2025.
Amnon Shashua: That will be the first opportunity for external audiences to experience a new high-based software and hardware in a production intensive.
Amnon Shashua: Mobileye Drive, self-driving system for robot acting business continues to accelerate. We announce the next step with lift during the quarter, announcing that as the geography for initial operation. Thank you very much.
Amnon Shashua: Maruveni as the owner operator and lifters the demand platform. We expect to choose and announce the vehicle OEM in the coming month.
and a completely fresh development.
Amnon Shashua: simultaneous to the beginning of this burning call, Volkswagen and Uber issued a joint release announcing the two companies have agreed to integrate Mobileye Drive-enabled IT bus robot activities onto the override-hailing network in Los Angeles starting in 2026.
Speaker Change: Business is an excellent example of the ecosystem of products we are taking in this business, which we believe has significant scale benefit. As we have discussed before, we are working with Volkswagen to integrate the Mobileye Drive Self-Triving System into Volkswagen ID blood.
Speaker Change: Produced on the same assembly line as normal vehicles, and that's able to be scaled up or down rapidly. In this agreement, Volkswagen's mobility or moya will act as the fleet management system provider of the vehicles and the Uber network will be the demand-generating platform.
Speaker Change: Our ecosystem approach is capital-like for us, and it puts the responsibility for each layer of this business into actors that have relevant competencies and ability to as well.
Speaker Change: Other technology fronts, our low cost, low cost, sensor set, efficient compute and generalizable AI software is expected to enable rapid scaling across geography that the compelling price points for the growth.
Speaker Change: Finally, we congratulate another of our robust active production partners, Hollon, for booking an order from Jacksonville Transit Authority to purchase the Hollon Urban Autonomous Shuttle, which is an 80-by-mobilized ride.
Thanks, and I will turn the call over to the mobile.
Thank you, Amnon, and thanks for joining the call everyone. Thank you, everyone.
Moran Shamesh: Before I begin, please be aware that all my comments on profitability will refer to NAMGAP measurement. The primate exclusion in mobilized NAMGAP numbers is a monetization of intangible assets, which is mainly related to Intel's acquisition of Mobilize in 2017. We also exclude stomach compensation.
Moran Shamesh: Q1 results, slightly exceeded the color we provided on the Q4 2020, 2024, earning for in-general, primarily due to modestly higher volume from Chinese OEM and lower than expected operating expensive due to efficiencies in facilities and operations along with some timing related items.
Moran Shamesh: Revenue was up 83% year-over-year with a high-level growth due to normalized volume in Q1 2025, compared to Q1 of 2024, which was impacted by meaningful inventory digestion by a Q1 customer.
Moran Shamesh: Year-over-use comparisons will be more relevant going forward as we believe the blind demand will well align in the back half of 2024.
Moran Shamesh: On a sequential basis, 2-1 growth margin with up-slide leverages 2-4, 2024. [inaudible]
Moran Shamesh: on the lower percentage of supervision revenue, while IQ boss Margin were largely unchanged.
Operating expenses were up to amount, versus 2-4 as expected. [inaudible]
Moran Shamesh: This is related to some of the higher payroll expenses due to lower reserve duty refunds in Q1 and slight headhand rolls. Higher spending on raw protective projects, higher marketing spend due to participation in industry events and other items that are largely timing related.
Moran Shamesh: We continue to expect approximately 7% year-over-year growth in adjusted operating expenses in 2025 compared to 926 million in 2024.
Moran Shamesh: We'd expect you to be slightly higher than Q1 and for Q3 likely be the highest quarter of the year.
Moran Shamesh: We don't expect global macro issues to impact our operating expenses materially, as the majority is focused on the development of technology that the poorest are advanced products. We will continue to look for opportunities for efficiency as we always do.
Moran Shamesh: Petitulates to terrorists. We are fortunate that our support chain is very simple. IQ chips for vehicle production in the U.S. are imported by our customers, not by mobile. Thank you very much.
Moran Shamesh: Therefore, we should experience no direct P&L impact from tariff payment. We also have no material care and the exposure on our revenue and our request exposure to the New Israeli Shackles is largely
Moran Shamesh: A bit more detail on our geographic exposure. We believe a very significant portion of our chiefs applied to Europe and Asia Pacific.
Moran Shamesh: are used for local consumption rather than for export to the US. Approximately 25% of our ships are shipped by our customers directly to the US, and are currently exempt from import tariffs. And 20% to China, where we believe it is used for local production. .
Moran Shamesh: Although terrorists on auto components are not arrested paper by us, we will fully cooperate with our customers in the next few months to optimize their production needs and potentially make minor changes to the digital infrastructure to mitigate the overall cost.
Moran Shamesh: While there is no direct impact, we of course will be exposed to any negative impact to vehicle production volume.
Moran Shamesh: Living by supply impacts related to tariff costs on vehicles and components imported to the US as well as potential consumer demand impacts from higher vehicle pricing or general weakening in economic conditions.