Q1 2025 Hesai Group Earnings Call
Please note that today's conference call is being recorded.
Speaker Change: I will now turn the call over to our first speaker today, you wanting sheet the company's head of capital markets. Please go ahead.
Thank you operator, Hello, everyone and thank you for joining Costar group's first quarter 2025 earnings conference call.
Speaker Change: Our earnings release is now available on our IR website at Investor Day was closer to Dot com as well as via Newswire services. Today, you will hear from our CEO, Dr. David Lee, who will provide an overview of our recent updates next our CFO Mr. Andrew <unk> will address our financial results before we open the call for questions before.
Speaker Change: We continue I refer you to the Safe Harbor statement in our earnings press release, which applies to this call as we will make forward looking statements. Please also note that the company will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported on a GAAP in our earnings release and SEC filings with that.
Speaker Change: I am pleased to turn over the call to our CEO Dr. David Li David. Please go ahead.
Speaker Change: Thank you Andy and thank you everyone for joining our call today.
Speaker Change: Start with an overview of this quarter's progress we begin.
Speaker Change: <unk> started 2020 Fi feuded by outstanding momentum in our Adas in the robotics segment backed by solid financial results, our shipments more than tripled year over year to nearly 200000 Lidar unit in the first quarter. Despite the impact of typical seasonal patterns.
Speaker Change: Positive growth fueled an almost 50% year over year jump in our net revenue.
Speaker Change: Thanks to sharp execution operational discipline and cost control were also able to reduce our net loss by impressive 84% year over year.
Speaker Change: Meanwhile, <unk> leadership has been recognized across the industry for the fourth consecutive year Youll intelligence, a highly respected independent retail format in Europe ranked.
Speaker Change: The number one global leader in automotive Lidar market share. According to use 2024 analysis, we rank number one is three major categories that revenue with a 33% share of the global automotive Lidar market, a 26% share of the global passenger car lidar market and a dominant.
Speaker Change: At a 61% share of the global robot taxi market.
Speaker Change: These achievements speak volumes at the pace at which we innovate scale deliver and reinforce our position at the forefront of the industry.
Speaker Change: Next.
Speaker Change: Let's dive into our latest business highlights starting with an accelerating momentum in Adas market.
Speaker Change: The 2025, Shanghai Auto show one of the world's largest and most influential event featured over 100 vehicle models with cutting edge Lidar technology.
Speaker Change: I stood out with 12 Oems at the show usually are lighter technology and among the 2025 production models, making their debuted had the highest number of model integrations.
Speaker Change: The event shows that Aldo makers are rapidly implemented intelligent driving across their lineup.
Speaker Change: And the Lidar is fast becoming a must have for elevating safety is everyday passenger cars.
Speaker Change: R. A T X lidar is the embodiment of our core beliefs safety is not optional and temperature.
Speaker Change: Never set can best until <unk>, the army and without limit until we announce yet.
Speaker Change: To be affordable Ultra compact and offer best in class performance in its pricing category ATX SP is a true champion driving the democratization of intelligent driving.
Speaker Change: The center has already secured design wins with 12 major Oems in May.
Speaker Change: We also announced its entire LCR, it's easy lineup will be integrated with our ACL lidar specialize the variance of Ats as standard configuration delivery, even sharper three D. Perception. In addition, we recently secured a major design win with the curve to integrate <unk>.
Speaker Change: Across several of its top selling models, including a standard integration in the newly launched luxury shooting breaks the dam the decrease zero-zero seven GT.
Speaker Change: At the same time.
Speaker Change: <unk> is extending its reach with extended partnerships lending.
Speaker Change: Blending new design wins with Great Wall Motors, EV brand Ora cherries, <unk>, new energy lineup and the upcoming motto from Julie Amy at the mass market.
Speaker Change: With a rapidly growing roster of leading Oems and flagship vehicles.
Speaker Change: Ex enter mass production in Q1 and made an immediate impact with close to 40000 units shipped.
Speaker Change: <unk> first quarter on the market hiring models, such as leap motors be 10 industry birth of vehicle offering the event Adas at RMB 120000 price point with lighter hardware. According to public data. The voters beaten saw over 15000 orders we did just.
Speaker Change: The first hour of its launch in March with more than 70% opting for the lighter equipped diversion reflective.
Speaker Change: Through our appeal in the mass market and.
Speaker Change: As part of our extended strategic relationship with Leap Motor was skewed a landmark order for 200000 units affect ATX, Lidar, which assessed to power a wide range of the motors production model starting in 2025.
Speaker Change: Internationally.
Speaker Change: We're also achieving breakthroughs.
Speaker Change: <unk> to our exclusive design win with a top European OEM, a multiyear program across both ICD and EV platform that extends into the next decade, we're excited to share that our business in Japan is rapidly gaining momentum we recently secured a new proof of concept.
Operator: I will now turn the call over to our first speaker today, Yuanting Shi, the company's head of capital markets. Please go ahead. Thank you, operator. Hello, everyone.
Speaker Change: <unk> development project with a top five global tier one supplier headquartered in Japan.
Yuanting Shi: Thank you for joining Hesai Group's first quarter 2025 earnings conference call. Our earnings release is now available on our IR website at investor.hesai.com, as well as via newswire services.
Speaker Change: This achievement marks the first time, they've joined our client portfolio and is a significant milestone in our global expansion, serving as a powerful endorsement to our lidar technology in Japan.
Yuanting Shi: Today, you'll hear from our CEO, Dr. David Lee, who will provide an overview of our recent updates.
Yuanting Shi: Next, our CFO, Mr. Andrew Fan, will address our financial results before we open the call for questions. Before we continue, I refer you to the safe harbor statement in our earnings press release, which applies to this call, as we'll make forward-looking statements. Please also note that the company will discuss non-GAAP measures today, which are most thoroughly explained and reconciled to the most comparable measures reported on the GAAP in our earnings release and SEC filings.
Speaker Change: <unk> has been actively driving five TLC programs with four top global Oems and tier one suppliers across Europe and Japan.
Speaker Change: Three of these programs were successfully completed in the first quarter of 295.
Speaker Change: Evaluation results from these programs will be shared with Jose busting, a deeper collaboration between both parties and further refine and enhance the market appeal of our products.
David Lee: With that, I'm pleased to turn over the call to our CEO, Dr. David Lee. David, please go ahead. Thank you, Yuanting, and thank you, everyone, for joining our call today. Let's start with an overview of this quarter's progress. We began with a strong start in 2025, suited by outstanding momentum in our ADAS and robotics segment, and backed by solid financial results. Our shipments more than tripled year over year to nearly 200,000 LiDAR units in the first quarter, despite the impact of typical seasonal patterns. Explosive growth suited an almost 50% year-over-year jump in our net revenue.
Speaker Change: While these deals do not yet cost you to design wins, the marks significant progress and we're encouraged by the positive momentum as we look ahead to the next phase of development.
Speaker Change: As domestic and international OEM demand continues to evolve across level two level three and level four platforms. We took a major step forward. This April with launch of our game changing infinity or 10 year Lidar solution on all sides.
Speaker Change: <unk> next generation automotive grade Lidar sensors. This new platform in conjunction with these sensors is available in <unk> configurations.
David Lee: Thanks to sharp execution, operational discipline, and cost control, we're also able to reduce our net loss by an impressive 84% year-over-year. Meanwhile, Hesai's leadership is being recognized across the industry. For the fourth consecutive year, UO Intelligence, a highly respected independent research firm in Europe, ranked Hesai the number one global leader in automotive lidar market share. According to UO's 2024 analysis, we ranked number one in three major categories, by revenue with a 33% share of the global automotive lidar market, a 26% share of the global passenger car lidar market, and a dominant 61% share of the global robo-taxi market.
Speaker Change: Infinity.
Speaker Change: <unk> is viewed for high level a level four autonomous systems.
Speaker Change: Achieved this by combining were <unk> 14 for the Ultra high definition main lidar with four solid state Ft X Lite are acting as a lifestyle detector offering to 360 degree coverage with a black box.
Speaker Change: Infinity I B is designed for level three conditional autonomy features one new Etfs main lidar, the worst longest range out emotive, lidar, which can detect up to 400 meters at 10% with productivity.
David Lee: These achievements speak volumes at a pace at which we innovate, scale, deliver, and reinforce our position at the forefront of the industry. Next, let's dive into our latest business highlights, starting with an accelerating momentum in ADAT market. The 2025 Shanghai Auto Show, one of the world's largest and the most influential auto events, featured over 100 vehicle models with cutting-edge LiDAR technology. Hesai stood out with 12 OEMs at the show using our LiDAR technology. And among the 2025 production models making their debut, Hesai has the highest number of model integration. The event shows that automakers are rapidly implementing intelligent driving across their lineups, and that LiDAR is fast becoming a must-have for elevating safety in everyday passenger cars.
Speaker Change: That's paired with two ft <unk> for enhanced Black box protection.
Speaker Change: Okay.
Speaker Change: And for level, two Adas applications Infinity IC brings the perfect balance of performance and cost efficiency using one compact powerful <unk> main lidar.
Speaker Change: A core feature of this new platform is a shared architecture across our 80 <unk> and Ft series features more than 85% component commonality.
Speaker Change: This means faster development lower cost and seamless scalability.
Speaker Change: These industry, leading solutions are a direct a testament to our products technical strengths and our holistic approach to satisfying customer needs.
Speaker Change: Beyond delivering superior performance, we created comprehensive solutions that integrate our cutting edge technological capabilities with cost effectiveness.
Speaker Change: As a result of these strengths we have long design wins.
David Lee: Our ATX LiDAR is the embodiment of our core belief. Safety is not optional. Never second best. And without limits. designed to be affordable, ultra-compact, and offer best-in-class performance in its pricing category, ATX has been a true champion driving the democratization of intelligence. The sensor has already secured design wins with 12 major OEMs in May. Li Auto announced its entire L-series EV lineup will be integrated with our ATL LiDAR, a specialized variant of ATX, as standard configuration, delivering even sharper 3D performance. In addition, we recently secured a major design win with Z-curve to integrate ATX across several of its top-selling models, including a standard integration in the newly launched luxury shooting brake sedan, the Z-curve 007 GT.
Speaker Change: Over 120 vehicle models across 23 Oems worldwide.
Speaker Change: Meanwhile, the broader robotics market represents tremendous opportunities and our lidar solution sits at the core of <unk> growth. According to Goldman Sachs estimates China's autonomous mobility market is assessed for explosive growth and is expected to extend it over.
Speaker Change: Next a decade from just U S dollars with $54 million in 2025 to U S dollars $47 billion by 2035.
Speaker Change: China is clearly on track to become the world's largest autonomous mobility market.
Speaker Change: Recent months, we've been at the forefront of a new wave of robo taxi breakthroughs across China and beyond.
Speaker Change: As the mainline player we're pining mass produce the next generation fleet for Baidu Apollo go DD Pone AI.
Speaker Change: Some of which.
David Lee: At the same time, ATX is expanding its reach with extended partnerships, lending new design wings with Great Wall Motors EV brand Aura, Cherish iCar, new energy lineup, and an upcoming model from Geely, aiming at the mass market. With a rapidly growing roster of leading OEMs and flagship vehicles, ATX entered mass production in Q1 and made an immediate impact with close to 40,000 units shipped in its very first quarter on the market. Powering models such as Leap Motors' D10, the industry's first vehicle offering advanced ATX at the R&D 120,000 price point with LiDAR hardware. According to public data, Leap Motors' B10 saw over 15,000 orders within just the first hour of its launch in March, with more than 70% opting for the LiDAR-equipped version, reflecting its strong appeal in the mass market.
Speaker Change: Already extended onto the global stage today, we're proud to be the world's largest light our supplier for robot taxis.
Speaker Change: We're also thrilled to be accelerating for autonomy across both long haul and last mile Logistics recently, we signed new agreement to bring our ultra high definition <unk> <unk> sensors to cargo bots level for global truck fleet at.
Speaker Change: The same time, we partner with those dosages to.
Speaker Change: To scale its last mile delivery options operations, and the neo leap CCT to deploy its elm at level four vehicles.
Speaker Change: As level four autonomy moved into commercial deployment, we're proud to be the lighter partner, helping customers scale smarter safer and faster.
Speaker Change: Beyond transportation Lidar is unlocking a world of new possibilities, each bringing fresh opportunities to re imagine the everyday and drive incremental revenue and profit.
David Lee: As part of our expanded strategic relationship with Leap Motor, we've secured a landmark order for 200,000 units of Hesai's ATX LiDAR, which is set to power a wide range of Leap Motor's production models starting in 2025.
Speaker Change: We believe that every robot needs lidar as a <unk> sensor for precise positioning mapping navigation and protection pick our GT Lidar for example, it's been chosen for the next generation robotics, lamar's, delivering superior accuracy stability and efficient.
David Lee: Internationally were also achieving break. In addition to our exclusive design wing with a top European OEM, a multi-year program across both ICT and EV platforms that extends into the next decade, we're excited to share that our business in Japan is rapidly gaining momentum. We recently secured a new proof of concept POC development project with a top five global tier one supplier headquartered in Japan. This achievement marks the first time they've joined our client portfolio and is a significant milestone in our global expansion, serving as a powerful endorsement to our LiDAR technology in Japan. Hesai has been actively driving five GOC programs with four top global OEMs and Tier 1 suppliers across Europe and Japan.
Speaker Change: Fee over traditional Archie Kay and the camera based systems, especially in signal challenge or visually complex environments.
Speaker Change: We also recently expanded our partnership with a leading smart home Robotics company in China.
Speaker Change: Over the next 12 months, we expect to provide 300000 GT units to this customer generating meaningful revenue, while helping transform everyday consumer products in intelligence lighter driven capabilities.
Speaker Change: In summary, Q, what has laid a powerful foundation for what promises to be another transformative year for her side, we stand at a pivotal moment.
Speaker Change: We're breakthrough technology needs a real market readiness.
Speaker Change: With our unmatched technology leadership and the scalable production.
David Lee: Three of these programs were successfully completed in the first quarter of 2025. Evaluation results from these programs will be shared with Hesai, fostering a deeper collaboration between both parties and further refine and enhance the market appeal of a product. While these POCs do not yet constitute full design wings, they mark significant progress, and we're encouraged by the positive momentum as we look ahead to the next phase of development. As domestic and international OEM demand continues to evolve across level 2, level 3, and level 4 platforms, we took a major step forward this April with launch of our game-changing Infinity Eye, or Chen Li, LiDAR solution.
Speaker Change: We're leading in the industry to shape the future of mobility.
Speaker Change: And we're doing it alongside customers who share our mission.
Speaker Change: To make advanced perception at safety accessible for all.
Andrew: Before I hand over to Andrew I want to share some exciting news in early may.
Andrew: The U S District Court the district of Delaware has officially dismissed ulcers patent infringement case against us with no conditions.
Speaker Change: No financial settlement.
Speaker Change: No injunctive relief.
Speaker Change: Brink and <unk>.
Speaker Change: And to all existing IP actions against us and it reaffirms the integrity of our technology.
Speaker Change: A powerful validation of the strength of our IP portfolio and the years of R&D that out.
David Lee: Alongside three next-generation automotive-grade LiDAR This new platform, in conjunction with these sensors, is available in three configurations. Infinity IA is due for high level, level four autonomous systems. We achieved this by combining four AT1440 ultra high definition main LIDARs with four solid state FTX LIDARs acting as a blind spot detector, offering true 360 degree coverage without blind spot. Infinity IB is designed for Level 3 Conditional Autonomy. It features one new ETX main LiDAR, the world's longest-range automotive LiDAR, which can detect up to 400 meters at 10% reset. that paired with two FTX LIDARs for enhanced blind spot perception.
Speaker Change: We are proud that our innovations have not only with Stuart legal scrutiny.
Speaker Change: But have also prevailed.
Speaker Change: Deep passion for technology, and wavering commitment to R&D and.
Speaker Change: <unk> to give us a real edge.
Speaker Change: And no vehicle tactics can change that.
Andrew: With that I will now turn the call over to <unk> to share more details on our financial performance and outlook. Andrew. Please go ahead.
Andrew: Thank you, David and Hello, everyone.
Andrew: No go through our operating and financial figures for the first quarter of 2025 for further details beyond what I cover on this call today I encourage listeners to refer to our earnings release.
David Lee: And for level 2A of applications, Infinity IC brings the perfect balance of performance and cost efficiency using one compact yet powerful ADS mainliner. A core feature of this new platform is a shared architecture across our AT, ET, and the FT series that features more than 85% component commonality. This means faster development, lower cost, and seamless scalability. These industry-leading solutions are a direct attestment to our product's technical strength and our holistic approach to satisfying customer needs. Beyond delivering superior performance, we created comprehensive solutions that integrate our cutting-edge technological capabilities with cost-effectiveness. As a result of these strengths, we have one design win.
Andrew: Our Q1 results highlight strong sustained momentum total revenues saw a 46% year over year, reaching RMB $525 3 million or U S dollars $72 4 million.
Andrew: This impressive growth was fueled by exceptional shipment performance nearly 200000 units were delivered during the quarter more than triple the volume from the same period last year, notably this marks our third consecutive quarter of over 150% year over year shipment.
Andrew: No.
Andrew: A clear reflection of closed 13 market demand and the strength of our operational execution.
Andrew: The surge in shipments was driven primarily by the rapid adoption of our ACX Lidar among Oems.
Andrew: With large scale mass production commencing in Q1.
Andrew: At the same time, our <unk> Lidar gained strong momentum with 45000 units shipped in the first quarter alone driving our robotics lidar shipments to nearly 50000 units in the first quarter of 2000 classifieds with over 600% year.
David Lee: over 120 vehicle models across 23 OEMs worldwide. Meanwhile, the broader robotics market represents tremendous opportunities, and our LiDAR solution sits at the core of this growth. According to Goldman Sachs estimates, China's autonomous mobility market is set for explosive growth and is expected to expand over the next decade from just US dollars 54 million in 2025 to US dollars 47 billion by 2030. China is clearly on track to become the world's largest autonomous mobility market. In recent months, we've been at the forefront of a new wave of robot taxi breakthroughs across China and beyond. As the main LiDAR supplier, we're powering mass-produced next-generation fleets from Baidu, Apollo Go, Didi, Pony AI, WeWrite, some of which have already expanded onto the global stage.
Andrew: Over a year of growth.
Andrew: Meanwhile, our gross margins due to healthy at 42% in Q1, and we cut operating expenses by 9% year over year, reflecting the strength of our disciplined cost management.
Andrew: As a result, we narrowed our first quarter net loss by 84% year over year to Renminbi 70.
Andrew: $5 million or U S dollar at $2 4 million, while remaining non-GAAP profitable for the quarter a performance that was significantly stronger than our earlier guidance and especially notable given that Q1 is typically a seasonally slower periods.
Andrew: Looking ahead, we are encouraged by the strong momentum with built in Q1, and we remain confident in our outlook for the rest of the year.
David Lee: Today, we're proud to be the world's largest LiDAR supplier for RoboTAX. We're also thrilled to be accelerating with L4 autonomy across both long-haul and last-mile logistics. Recently, we signed a new agreement to bring our ultra high definition 18-1440 sensor to CargoBot's level 4 robot truck. At the same time, we partnered with Zelos, Jiushi Zhineng, to scale its last mile delivery operations and the Neolix Qingshiqi to deploy its on-demand level 4B. As level 4 autonomy moves into commercial deployment, we're proud to be the lighter parter, helping customers scale smarter, safer, and faster. Beyond transportation, LiDAR is unlocking a world of new possibilities, each bringing fresh opportunities to reimagine the everyday and drive incremental revenue and profit.
Andrew: For Q2, we are expecting net revenues of between RMB $680 million or U S. Dollar $93 7 million and the renminbi sell a $120 million or U S dollar $99 2 million.
Andrew: Would be a 48% to 57% increase year over year.
Andrew: This forecast.
Andrew: <unk> takes into account the current tariff environment as well as some expected short term shifts in customer demand to Q3, mainly from U S bound robotics lidar shipments.
Andrew: These considerations, we are projecting total shipments of over 300000 units in the second quarter, a substantial increase of almost 250% year over year.
Andrew: Even more encouraging we expect it to reach GAAP breakeven in Q2, and they remain firmly on track to hit our full year profitability targets. Despite the navigating a dynamic tariff environment.
David Lee: We believe that every robot needs LiDAR as a core 3D sensor for precise positioning, mapping, navigation, and perception. Take our JT LiDAR, for example. It's been chosen for the next generation robotic lawnmowers, delivering superior accuracy, stability, and efficiency over traditional RTK and camera-based systems, especially in signal-challenged or visually complex environments. We also recently expanded our partnership with a leading smart home robotics company in China. Over the next 12 months, we expect to provide 300,000 JT units to this customer, generating meaningful revenue while helping transform everyday consumer products in intelligent, LIDAR-driven capabilities.
Andrew: As the global environment continues to evolve we will remain proactive refining our strategies to ensure minimal disruption to our long term growth path. We are confident that our products remain highly competitive even in a tariff impacted landscape and a cost adjustments are needed.
Andrew: It will take a measured approach to pricing always focused on delivering strong value to our customers.
Andrew: At the same time, we are prioritizing long term resilience with strong momentum behind our overseas manufacturing plants to swiftly, Michigan to geopolitical risks and better serve our global customers in May we signed a lease for our new factory in Southeast Asia.
Andrew: A decisive first step forwards.
David Lee: In summary, Q1 has laid a powerful foundation for what promises to be another transformative year for Hesai. We stand at its pivotal moment. where breakthrough technology needs a real market. with our unmatched technology leadership and scalable production. were leading in the industry to shape the future of mobility. and we're doing it alongside customers who share our mission. to make advanced perception and safety accessible for all.
Andrew: To conclude Q1 represents an exceptional start to 2025 with outstanding performance across revenue shipments margins and cost management, we have laid a solid foundation and our confidence in our ability to sustain this positive momentum in the coming quarters.
Andrew: This concludes our prepared remarks today, operator, we are now ready to take questions.
Andrew: Thank you. Thank you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.
David Lee: Before I hand it over to Andrew, I want to share some exciting news in early May. The U.S. District Court for District of Delaware has officially dismissed Alter's patent infringement case against us. with no condition. No financial settlement and no injunctive. This brings an end to all existing IT actions against us and it reaffirms the integrity of our technology. a powerful validation of the strength of our IP portfolio and the years of R&D that power. We are proud that our innovations have not only withstood legal scrutiny, but have also prevailed. Our deep passion for technology and our unwavering commitment to R&D continue to give us a real edge.
Andrew: If you wish to cancel your request please press star two.
Andrew: If you're on a speakerphone please pick up the handset to ask your question.
Speaker Change: For the benefit of all participants on today's call. If you wish to ask a question to the management team in Chinese. Please immediately repeat your question in English for the sake of clarity. Please ask one question at a time management will respond and then feel free to follow up with your next question.
Peter <unk>: Your first question comes from Peter <unk> from Goldman Sachs. Please go ahead.
Peter <unk>: Hi, Thanks management for taking my question and congrats on the strong result, and strong guidance. So my question is mainly regarding our full year guidance. Since we have seen I think starting from the beginning of the year, we have seen a very strong <unk>.
Peter <unk>: Great for Lidar from both premium Oems as well as mass market ones. So wondering if we're still maintaining our annual shipment guidance for 112 to $1 5 million or do we see more upside from there and also in related are in are related to that as E.
David Lee: and no legal tactics can change.
Andrew Fan: With that, I will now turn the call over to Andrew to share more details on our financial performance and outlook. Andrew, please go ahead. Thank you, David. And hello, everyone. I will now go through our operating and financial figures for the first quarter of 2025.
Peter <unk>: Adas Lidar portion becomes a larger for our.
Peter <unk>: Entire portfolio, how do we see the trajectory for our gross margin and where it could 2025 total company gross margin ends up.
Andrew Fan: For further details beyond what I covered on this call today, I encourage listeners to refer to our earnings release. Our Q1 results highlight a strong, sustained momentum. Total revenue soared 46% year-over-year, reaching RMB525.3 million, or US$72.4 million. This impressive growth was fueled by exceptional shipment performance. Nearly 200,000 units were delivered during the quarter, more than triple the volume from the same period last year. Notably, this marks our third consecutive quarter of over 150% year-over-year shipment growth, a clear reflection of both surging market demand and the strength of our operational execution. The surge in shipments was driven primarily by the rapid adoption of our ATX LiDAR among OES.
Speaker Change: Yeah. That's my main question. Thanks.
Peter <unk>: Tina Thanks for the question, let me take this first.
Speaker Change: Regarding our 2025 full year guidance, despite the evolving tariff environment I think we are still.
Speaker Change: Maintaining our plenty of twenty-five revenue guidance as it may be three to $3 5 billion.
Speaker Change: The total shipment remained at the one two to $1 5 million.
Speaker Change: And the 40% in gross margin was 200 to 350 minutes GAAP net profit for 'twenty upon nearby.
Speaker Change: So we maintain our plenty plenty five for your guidance.
Speaker Change: <unk>.
Speaker Change: I would also like to share some information about our Q2 guidance.
Speaker Change: In the upcoming quarter.
Speaker Change: In the current quarter, our revenue is expected to reach about 680 to 720 million renminbi.
Andrew Fan: with large-scale mass production commencing in Q1. At the same time, our JT LiDAR gained strong momentum with 45,000 units shipped in the first quarter alone, driving our robotics LiDAR shipments to nearly 50,000 units in the first quarter of 2025, with over 600% year-over-year growth. Meanwhile, our gross margin stood healthy at 42% in Q1, and we cut operating expenses by 9% year-over-year, reflecting the strength of our disciplined cost management. As a result, we narrowed our first quarter net loss by 84% year-over-year to RMB75 billion. while remaining non-gap profitable for the quarter, a performance that was significantly stronger than our earlier guidance, and especially notable given that Q1 is typically a seasonally slower period.
Speaker Change: Strong year over year growth of about 48% to 57%.
Speaker Change: Driven by the rapid adoption of Lidar in passing.
Speaker Change: Vehicles in China.
Speaker Change: This forecast conservatively takes into account the current tariff environment as well as some expected a short term shifts in customer demand into Q3, mainly from the U S bound of robotics, a lighter shipments.
Speaker Change: In Q1, we shipped about nearly 200000 units in total up over 200% year over year, we expect the shipments to continue accelerating through the year with <unk>.
Speaker Change: Shipments, reaching over 300000 units.
Speaker Change: The ATX Lidar, which has the market price at around $200 entered mass production in Q1 and is ramping up shipments in Q2 expected to account for about 50% to 60% of total deliveries in Q2.
Speaker Change: With all these ATX lidar shipments in consideration our GP margin.
Andrew Fan: Looking ahead, we are encouraged by the strong momentum we've built in Q1 and we remain confident in our outlook for the rest of the year. For Q2, we are expecting net revenues of between RMB680 million or US$93.7 million and RMB720 million or US$99.2 million, which would be a 48% to 57% increase year-over-year. This forecast conservatively takes into account the current tariff environment as well as some expected short-term shifts in customer demand to Q3, mainly from U.S.-bound robotics LiDAR shift. Despite these considerations, we are projecting total shipments of over 300,000 units in the second quarter, a substantial increase of almost 250% year-over-year.
Speaker Change: It is expected to remain healthy at around 40% as you can tell from our Q1 gross profit margin.
Speaker Change: With the <unk> are ramping up our.
Speaker Change: Quarter over quarter margin.
Speaker Change: Still enjoy the a moderate improvement therefore, we are still very positive about reaching the full year.
Speaker Change: Gross profit margin.
Speaker Change: Yes.
Speaker Change: On the bottom line. Despite the typical seasonality in Q1, we achieved a non-GAAP profitability and significantly narrowed our GAAP net loss by 84% four kilowatts.
Speaker Change: Well above our previous guidance.
Speaker Change: We anticipate a further quarter over quarter improvement in Q2, reaching breakeven point or GAAP level.
Speaker Change: That's my.
Tina: Responses to the questions of Tina.
Andrew Fan: Even more encouraging, we expected to reach gap breakeven in Q2 and remain firmly on track to hit our full-year profitability targets, despite navigating a dynamic tariff environment.
Speaker Change: Hopefully that can address.
Speaker Change: You just mentioned.
Speaker Change: Yes, that's very clear thanks, Andrew.
Jesse: Thank you. Your next question comes from Jesse <unk> from Bank of America. Please go ahead.
Andrew Fan: As the global environment continues to evolve, we will remain proactive, refining our strategies to ensure minimal disruption to our long-term growth path. We are confident that our products remain highly competitive, even in a tariff-impacted And if cost adjustments are needed, we will take a measured approach to pricing, always focused on delivering strong value to our customers.
Jesse: Oh, Hi data engine management team. Thank you for taking my question. My first question is regarding to the Adas Lidar AC trained as we currently supplies accent, well APL and assisting ETP products clients and then after we migrate to 80 140.
Jesse: And also <unk> and even potentially next year for the oversea clients, how do you foresee.
Andrew Fan: At the same time, we are prioritizing long-term resilience with strong momentum behind our overseas manufacturing plan. to swiftly mitigate geopolitical risks and better serve our global customers. In May, we signed a lease for our new factory in Southeast Asia. a decisive first step forward.
Jesse: He does fly out used to be trained.
Jesse: Okay.
Speaker Change: Thank you Jason.
Speaker Change: Regarding we are starting from Q1 since our product mix has started to shift to meaningfully with the ramp up of the ATX mass production.
Speaker Change: Our blended average asps will be naturally brought down but it doesn't tell the full story, it's more helpful to look at the Asps.
Andrew Fan: To conclude, Q1 represents an exceptional start to 2025 with outstanding performance across revenue, shipments, margins and cost management. We have laid a solid foundation and our confidence in our ability to sustain this positive momentum in the coming course.
Speaker Change: Volume trends by products.
Speaker Change: For 2025, we have about three variations of the 80 series in production.
Speaker Change: First our ATP Lidar will see a moderate ASP decline in the low teens year over year, reaching around $350 in year 2025.
Andrew Fan: This concludes our prepared remarks today.
Operator: Operator, we are now ready to take questions. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question.
Speaker Change: <unk> is expected to account for a low six figure shipment volume in 2025.
Speaker Change: Production scheduled to conclude by end of this year.
Speaker Change: Then we will have the ultra high performance a key light up build for <unk> III application L. Three applications, which carries a higher ASP of about $500, but is being shipped in relatively smaller volume. This year, we expect a large scale shipments.
Operator: For the benefit of all participants on today's call, if you wish to ask your question to the management team in Chinese, please immediately repeat your question in English. For the sake of clarity and order, please ask one question at a time. Management will respond and then feel free to follow up with your next question.
Tina Hou: Your first question comes from Tina Hou from Goldman Sachs, please go ahead. Hi. Thanks, management, for taking my question, and congrats on the strong result and strong guidance. So, my question is mainly regarding our full-year guidance. Since we have seen, I think, starting from the beginning of the year, we have seen a very strong take rate for LiDAR from both premium OEMs as well as mass-market ones. So, wondering if we're still maintaining our annual shipment guidance for 1.2 to 1.5 million, or do we see more upside from there? And also, related to that, as the ADAS LiDAR portion becomes larger for our entire portfolio, how do we see the trajectory for our growth margin, and where could 2025 total company growth margin end up?
Speaker Change: Eight of these high performance Lidar to ramp up starting 2026.
Speaker Change: Lastly.
Speaker Change: Our ATX Lidar most cost efficient compact version with the market price at $200 is starting to mass production in Q1 and has already adopted has been adopted as a standard feature for many popular car models for.
Speaker Change: For large volume orders customer the customers typically receive a modest discount of the market priced a common practice across the supply chain industry.
Speaker Change: While the ATX brings down the blended asps.
Speaker Change: It opens up a much larger volume potential we project to ATX to shift.
Speaker Change: In the high <unk> range, possibly up to 1 million units in year 2025.
Speaker Change: As president at present, we do not anticipate a new market products pricing another half of the ATX for the foreseeable future.
Andrew Fan: Yeah, that's my main question. Thanks. Tina, thanks for the question.
Andrew Fan: Let me take this first. Regarding our 2025 full-year guidance, despite the evolving tariff environment, I think we are still maintaining our 2025 revenue guidance at $3 to $3.5 billion. The total shipment remains at $1.2 to $1.5 million. And the 40% in gross margin with $200 to $350 million gap net profits for 2025.
Speaker Change: <unk> will remain flat.
Speaker Change: Flagship long range from lighter offering high cost performances.
Speaker Change: Overall, while the mix is shifting we believe light our content per vehicle will remain stable in the long run given its irreplaceable safety and the functional value.
Speaker Change: With the adoption of <unk> driving the need for multiple lidar units per vehicle to enable full 360 degrees coverage, we expect a lidar content per vehicle to stay in the range of 500 to $1000.
Andrew Fan: So we maintain our 2025 full-year guidance unchanged.
Andrew Fan: I would also like to share some information about our Q2 guidance. In the upcoming quarter, in the current quarter, our revenue is expected to reach about 680 to 720 million RMB, strong year-over-year growth of about 48% to 57%, driven by the rapid adoption of LiDAR in passenger vehicles in China. This forecast conservatively takes into account the current tariff environment, as well as some expected short-term shifts in customer demand to Q3, mainly from the U.S.-bound robotics LiDAR shipment. In Q1, we shipped about nearly 200,000 units in total, up over 200% year-over-year. We expect the shipments to continue accelerating through the year, with 2Q shipments reaching over 300,000 units.
Jesse: Jesse that's my.
Jesse: Answer to your question.
Jesse: Thank you Andrew and then I have a second question regarding our capacity and Capex. So.
Jesse: Earlier in the last conference call, we mentioned that too.
Jesse: Towards end of this year, we will be expanding our capacity in domestically two 2 million units.
Speaker Change: So could you share some progress on that capacity expansion and then on top of that you also mentioned that we just find a lease in South East Asia, and then what's kind of like Capex will look like for the southeast.
Speaker Change: Pasty and also.
Jesse: That total production units and potential capability from oversea plants. Thank you.
Jesse: Okay.
Jesse: As of now as you just mentioned.
Jesse: We have.
Jesse: About 2 million production capacity that either by end of this year.
Jesse: To give you an update of that we are.
Andrew Fan: The ATX LiDAR, which has a market price at around $200, entered mass production in Q1 and is ramping up shipment in Q2, expected to account for about 50-60% of total deliveries in Q2. With all these ATX LiDAR shipments in consideration, our GP margin is expected to remain healthy at around 40%. As you can tell from our Q1 gross profit margin, with the ATX ramping up, our quarter over quarter margin still enjoyed a moderate improvement. Therefore, we are still very positive about reaching the full year gross profit margin target. On the bottom line, despite the typical seasonality in Q1, we achieved a non-gap profitability and significantly narrowed our gap net loss by 84% for Q1.
Jesse: Building up new production lines, starting from Q1, which will begin mass production in Q3. Therefore, these 2 million production capacity is being installed.
Jesse: On track also on top of that we have more production lines in the planning stage.
Jesse: Mike.
Jesse: Starts.
Speaker Change: Building up in this year and it typically takes us four to five months to set up a new production line in China, our operations are very lean and efficient.
Jesse: Meanwhile, I would also want to comment on our overseas expansion plans.
Jesse: We are making good progress on our overseas manufacturing plants.
Jesse: Plants, which are a key part of strengthening our long term resilience under the current geopolitical environment.
Jesse: Better manage their risk and support our global customers more effectively we have signed the lease contract.
Andrew Fan: Well above our previous guidance, we anticipate a further quarter-over-quarter improvement in Q2, reaching break-even point on a gap level.
Jesse: For our new overseas factories in May.
Jesse: Making a key step forward, we plan to break ground later this year and expect the facility to be up and running by late 2026 or early 2027.
Tina Hou: That's my responses to the questions of Tina. Hopefully that can address the questions just mentioned. That's very clear, thank you. Thank you.
Jesse: To support the demand of our overseas customers, our highly automated production technology enables us to set up an overseas production line with controlled and efficient Capex to summarize we expect that our 2020.
Jessie Lo: Your next question comes from Jessie Lo from Bank of America. Please go ahead. Hi David, Andrew and management team. Thank you for taking my question.
Jessie Lo: My first question is regarding to the ADAS LiDAR ASV train. As we currently supply ATX or ATL and also existing ATP products to our clients and then after we migrate to AT1440 and also ET and even potentially like next year for the overseas clients, how do you foresee this ADAS LiDAR ASV train?
Jesse: Hi, paybacks should be around 30 to 50 million U S dollar in total.
Jesse: Hi, I think.
David: David go ahead.
Jesse: Yeah. This is David.
Jesse: What gives you some insight on the ASP.
Jesse: So.
Jesse: There are really two ways to.
Jesse: Uh huh.
Andrew Fan: Thank you, Jason. Regarding starting from Q1, since our product mix has started to shift meaningfully with the ramp up of ATX mass production, our blended or average ASP will be naturally brought down. But it doesn't tell the full story. It's more helpful to look at the ASP volume trends by product. For 2025, we have three variations of the AT series in production. First, our ATP LiDAR will see a moderate ASP decline in the low teens year-over-year, reaching around $350 in year 2025. The ATP is expected to account for a low six-figure shipment volume in 2025, with production scheduled to conclude by end of this year.
Jesse: To reduce or improve.
Jesse: Our cost structure.
Jesse: Products like the <unk>.
Jesse: Well I think it's by design.
Jesse: Really the integrated circuits or Asics.
Jesse: Really the innovation.
Jesse: Each generation.
Jesse: Obviously, what design that roughly two years ahead of the shipment.
Jesse: In the domestic market.
Jesse: When we look at it and said, Okay, we think about the volume.
Jesse: Think about it where we should reach at the price.
Jesse: And we sort of reverse that well into the cost structure.
Speaker Change: And by that time, we already factor in how many were expected to ship for the lifetime of the products at least for the first two or three years. So that's why if you look at the results of the ESP.
Speaker Change: Very predictable.
Speaker Change: <unk>.
Speaker Change: So with above $500.
Andrew Fan: Then we will have the ultra-high-performance AT LiDAR built for L3 applications, which carries a higher ASP of about $500, but is being shipped in relatively smaller volume this year. We expect a large-scale shipment of eight of these high-performance LiDAR to ramp up starting 2026. Lastly, our ATX LiDAR, most cost-efficient compact version with a market price at $200. It started mass production in Q1 and has already been adopted as a standard feature for many popular car models. For large volume orders, customers typically receive a modest discount of the market price, a common practice across the supply chain industry.
Speaker Change: Slowly decline, but we.
Speaker Change: Within the expectation because we already designed cost structure base around that.
Speaker Change: The second reason is that.
Speaker Change: It's still the economies of scale.
Speaker Change: As you can see the T X and <unk> product.
Speaker Change: Well, we're shipping this year the volume it's much higher than the ATP. So and then it will grow to another level next year.
Speaker Change: Very high certainty, that's where we see a slow decline of the ASP Similarly with products like Etfs, but you.
Speaker Change: You will be able to expect.
Speaker Change: A decline that's all going to the range of female.
Speaker Change: Simply because if you look at the original design the architecture of such a product it will have slow decline on ASP, but it doesn't have the room to.
Speaker Change: To continue to the 50% level that isn't goodbye.
Andrew Fan: While the ATX brings down the blended ASP, it opens up much larger volume potential. We project ATX to shift in the high six digits range, possibly up to a million units in year 2025. At present, we do not anticipate a new market products pricing another half of the ATX. For the foreseeable future, the ATX will remain Hesai's flagship long range front lighter, offering high cost performance. Overall, while the mix is shifting, we believe LiDAR content per vehicle will remain stable in the long run, given its irreplaceable safety and the functional value. With the adoption of L3 driving the need for multiple LiDAR units per vehicle to enable full 360 degrees coverage, we expect the LiDAR content per vehicle to stay in the range of $500 to $1,000.
Speaker Change: So thats, how we see.
Speaker Change: Price will change down the road.
Speaker Change: Thank you David. Thank you Andrew This is super helpful. That's all for me. Thank you.
Speaker Change: Thank you. Your next question comes from Tim <unk> from Morgan Stanley. Please go ahead.
Tim: Alright, David enter in management, Thanks for taking my question.
Speaker Change: Two question. The first one is about the competition.
Speaker Change: Because we noticed that one.
Speaker Change: Besides local by their peers.
Speaker Change: Reportedly winning the project.
Speaker Change: The brands like Xiaomi and late motor.
Speaker Change: I think that both Hillary.
Speaker Change: This is key coins.
Speaker Change: We mentioned teen concerned about.
Speaker Change: In short order Reshef hose.
Speaker Change: I think your company is to be the sole supplier to just top notch car makers like Xiaomi and what's the implication to our holders and to the potential price competition. That's my first question. Thank you.
Andrew Fan: Jesse, that's my response to a question. Thank you, Andrew.
Andrew Fan: And then I have a second question regarding our capacity and CAPACS. So earlier in last conference call, we mentioned that towards end of this year, we will be expanding our capacity and domestically to 2 million units. So could you share some of the progress on that capacity expansion? And then on top of that, you also mentioned that we just found a lease in Southeast Asia. And then what's current CAPACS will look like for the Southeast Asia capacity and also the total production units and potential profitability from this overseas plant?
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Thank you chip.
Speaker Change: We do not want to comment on market speculation because.
Speaker Change: Ultimately orders and the official announcements.
Speaker Change: Speak for themselves.
Speaker Change: Light our industry has been a very competitive arena.
Speaker Change: Since its inception and currently only a few players possess massive production capabilities.
Speaker Change: <unk> products have earned a strong reputation for.
Speaker Change: The performance quality and reliability over time.
Speaker Change: Notably we have observed a consistent consistent trains of our Adas customers switch from our competitors, which underscores close is a robust competitive edge I would say winning contract doesn't mean mass.
Andrew Fan: Okay. So as of now, as you just mentioned, we have about 2 million production capacity guided by end of this year. To give you an update of that, we are building up new production lines starting from Q1, which will begin mass production in Q3. Therefore, this 2 million production capacity is being installed on track. Also, on top of that, we have more production lines in the planning stage, which might start building up in this year. And it typically takes us four to five months to set up a new production line in China. Our operations are very lean and efficient.
Speaker Change: Mass production and doesn't mean.
Speaker Change: They can generate a meaningful revenue from these contracts.
Speaker Change: Strategically we chose to collaborate with high quality promising clients to ensure reasonable pricing and maintain healthy financials, our customer bases comprise top tier Oems, reflecting our commitment to quality partners.
Speaker Change: Like the Internet industry. The Lidar sector requires long term perspective, our goal is to build a sustainable industry avoiding short term gains after the expenses of a long term viability achieve.
Andrew Fan: Meanwhile, I would also want to comment on our overseas expansion plans. We are making good progress on our overseas manufacturing plants, which are a key part of strengthening our long-term resilience under the current geopolitical environment. To better manage the risk and support our global customers more effectively, we have signed the lease contract for our new overseas factories in May, making a key step forward. We plan to break ground later this year and expect the facility to be up and running by late 2026 or early 2027 to support the demand of our overseas customers. Our highly automated production technology enables us to set up an overseas production line with controlled and efficient KPECs.
Speaker Change: Achieving a win win scenario with our clients is our ultimate object.
Speaker Change: Alright.
David: This is David.
Speaker Change: Kind of off air for Andrew to to ask Andrew to comment on competitors, especially in ECM. So maybe offer some of my my.
Speaker Change: Market information.
Speaker Change: I imagine you are aware of that would you.
Speaker Change: So I think it's a.
Speaker Change: Speculations always may be and it's difficult for existing vendor like us to prove it's a negative.
Speaker Change: I think it's every customer's best interest to continue to understand what's available on the market and they do.
Speaker Change: Everyone does that its just a common practice.
Speaker Change: But in the end you have to provide your unique.
Speaker Change: Value proposition for.
Speaker Change: Your quality of your performance on the pricing of a comparable especially when you already are a incumbent player for Oems.
Andrew Fan: To summarize, we expected that our 2025 KPECs should be around 30 to 50 million U.S. dollars in total.
Speaker Change: Okay, and then in terms of the data compatibility and also their vehicles are designed around your sensor.
David Lee: Bye.
David Lee: David, go ahead. Yeah, this is David. I want to give you some insight on the ASB. So there are really two ways to... to reduce or improve the cost structure of our products. The first one, I think it's by design. It's really the integrated circuit, the ASICs, and it's really the innovation. So for each generation, obviously we designed that roughly two years ahead of the shipment and then for domestic market. And the way we look at it is that, okay, we think about the volume, we think about where we should reach at the price, and we sort of reverse that back into the cost structure.
Speaker Change: There is a.
Speaker Change: Pretty high bar for a second vendor to be able to step in and especially during the phase where everybody is rushing to upgrade their products too.
Speaker Change: Smaller better.
Speaker Change: Yes.
Speaker Change: So the ticket to the next level so.
Speaker Change: We're actually are aware of it.
Speaker Change: You should refer to the announcement of the OEM to know whats vertical.
Speaker Change: I will not make.
Speaker Change: It makes decisions or speculations based on rumors.
Speaker Change: Great. Thank you very much for sure. The details my second question is about the new products. During the presentation I think Dave you also mentioned about new solutions the Infinity II.
Speaker Change: So just wanted together with a little bit more callers about.
Speaker Change: When do you think the shipments or mass production will start in a potential client clearings and of course, the other content with a much higher but could you have the rough idea about.
David Lee: And by that time, we already factored in how many were expected to ship for the lifetime of the product, at least for the first two or three years. So that's why if you look at the results of the ASP, it's very predictable. It starts with above $500 and slowly declines, but it's within the expectation because we already designed the cost structure based around that. The second reason is that it's still the economies of scale. As you can see, the ATX and ATL product, what we're shipping this year, the volume is much higher than ATX. So and then it will grow to another level next year with very high certainty.
Speaker Change: The rough range of debt added content and the margin side there is the new solution.
Speaker Change: My second question. Thank you.
Speaker Change: Okay, I'll first to provide a.
Speaker Change: Our response to the question about our launch of the Infinity II.
Speaker Change: I'm very proud to be the first to provider of a full stack.
Speaker Change: <unk> L to al for Lidar solutions, we have seen very encouraging feedback from our OEM customers.
Speaker Change: The launch of our new Infinity II.
Speaker Change: One of its key strengths is its flexibility if entity I E. B and three are built on a shared architecture, but tailored to different customer needs and our system setups.
David Lee: That's where we see slow decline of the ASP, similarly with products like ETX, but you will not be able to expect a decline that's falling to the range of halving that. Simply because if you look at the original design architecture of such a product, it will have slow decline on ASP, but it doesn't have the room to continue to the 50% level. That isn't design. So that's how we see the price will change down the road.
Speaker Change: Depending on the Oems vehicle platform and the software stack each configuration can support anything from <unk>, all the way to al for autonomous driving all of our primary lidar sensors deliver outstanding performance, but each is optimized for specific.
Speaker Change: <unk> technical priorities.
Speaker Change: One for 40 Bose the worlds highest angular resolution delivering ouch high definition image level point clouds.
Andrew Fan: Thank you, David. Thank you, Andrew. This is super helpful.
Andrew Fan: That's all.
Speaker Change: The Etfs, which is a core part of our Infinity IP solutions is engineered for superior ranging capabilities offering best in class detection distances.
Tim Hsiao: Your next question comes from Tim Hsiao from Morgan Stanley. Please go ahead. Hi David, Andrew, and management team. Thanks for taking my question. I've got two questions. The first one is about the competition because we noticed that one of Hesai's local provider peers is reportedly winning the project from the brands like Xiaomi and LeapMotor, which I think both are Hesai's key clients. So with management team concerned about the potential order reshuffles, I think your company used to be the sole supplier to the top-notch car EV makers like Xiaomi, and what's the implication to our orders and the potential price competition?
Speaker Change: Both <unk> 140, and <unk>, a high performance light us each priced above $500.
Speaker Change: The ATX, which is a core component for infinity IC priced around the $200 represents our cost effective solutions, combining compact design was robust performances.
Speaker Change: Joyce among them it depends on the specific autonomous driving capabilities of our customers. All three models I E 80, 140, Etfs and ATX are suitable for <unk> to al for applications and have all secure the series production design wins this year.
Andrew Fan: That's my first question. Thank you. Okay, thank you Tim.
Speaker Change: <unk> wins are a strong validation of the infinity II solutions capability and technical differentiation across our <unk> portfolio and as we repetitively.
Andrew Fan: We do not want to comment on our market speculations because ultimately orders and official announcements speak for themselves. The LiDAR industry has been a very competitive arena since its inception and currently only a few players possess massive production capabilities. Hesai's products have earned a strong reputation for the performance, quality and reliability over time. Notably, we have observed a consistent trend of our ADAS customers switched from our competitors, which underscores Hesai's robust competitive edge. I would say a winning contract doesn't mean mass production and doesn't mean they can generate a meaningful revenue from this contract. Strategically, we chose to collaborate with high-quality, promising clients to ensure reasonable pricing and maintain healthy financials.
Speaker Change: Pervades, our message to the market, though we have.
Speaker Change: Different.
Speaker Change: Rice range.
Speaker Change: <unk> for our different products, but what we designed the <unk>.
Speaker Change: Rising the architecture of the product and also the cost of components of the product, we always aim a healthy and a relatively stable gross margin targets. Therefore, as you can tell from our historical gross profit margin performances I would.
Speaker Change: Like I assure you that the gross profit margin will not fluctuate.
Speaker Change: Significantly in the future.
Speaker Change: Due to the change of product mix with these new products launching.
Speaker Change: Great. Thank you very much for sharing order and it sounds like information and congratulations on the solid result, again. Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you.
Andrew Fan: Our customer bases comprise top-tier OEMs, reflecting our commitment to quality partners. Unlike the internet industry, the LIDAR sector requires long-term perspective. Our goal is to build a sustainable industry, avoiding short-term gains at the expenses of long-term viability. Achieving a win-win scenario with our clients is our ultimate object.
Speaker Change: Next question that comes from being really Queen from Gateway.
Speaker Change: <unk>. Please go ahead.
Speaker Change: Our management team.
Speaker Change: <unk> from <unk> Securities. Thank you for taking my question and congratulations on the strong Jonathan's guidance. So my question is about the tariffs could you. Please share some details about the impact of cats on pricing supply chain, it's a chat and Hartford. There is this problem. Thank you.
David Lee: Hi, this is David. I think it's kind of unfair for Andrew to ask Andrew to comment on competitors, especially Xeon. So maybe I'll offer some of my market information. I'm actually unaware of that, which you mentioned. I think it's a... The speculation always may be, and it's difficult for an existing vendor like us to prove the negative. I think it's in every customer's best interest to continue to understand what's available on the market. And they do. Everyone does that. It's just a common practice. But in the end, you have to provide your unique value proposition for your quality, your performance, and your pricing as a combo, especially when you already are an incumbent player for OEMs. There's a lot of inertia in it in terms of the data compatibility, and also their vehicles are designed around your sensor.
Speaker Change: Okay.
Speaker Change: We have a.
Speaker Change: Closely monitoring the situations.
Speaker Change: A tariff which is changing on a daily basis and have conducted a thorough analysis of the potential impact.
Speaker Change: While the tariffs do introduce certain cost of considerations, we believe that the impact on our overall business will be limited.
Speaker Change: For three primary reasons first our direct exposure is very limited the U S market is projected to accounted for only 10% of our total revenue in year 2025.
Speaker Change: Secondly, only a 5% of our total revenue or 50% of the revenue from our U S is under the so called the DDP terms are delivered the duty paid models, where we as the seller bear the cost of tariffs.
Speaker Change: And suddenly our continued focus on operational efficiency and cost control and also our market position give us the flexibility to effectively manager external challenges like those and we have a relatively strong market position.
David Lee: So, there is a pretty high bar for a second vendor to be able to step in, especially during the phase where everybody is rushing to upgrade their products to the smaller, better sensor to take it to the next level. So, the answer is we're actually aware of it. In the end, you should refer to the announcement of the OEM to know what's really going on, and I will not just make decisions or speculations based on...
Speaker Change: And.
Speaker Change: Against our customers. Moreover, we have several.
Speaker Change: Levers, including adjusting the pricing strategies.
Speaker Change: And the efficiency gains, which will help absorb or offset these tariff related costs.
Speaker Change: When we provide also when we provided our profitability outlook in our last earnings call, which is.
Tim Hsiao: Thank you very much for sharing the details.
Tim Hsiao: My second question is about the new products, because during the presentation, I think David also mentioned about the new solutions, the Infinity Eye. So just want to get a little bit more colors about when do you think the shipments or mass production will start and the potential coin rings. And of course, the value content would be much higher, but we have the rough idea about the rough range of the value content and the margin.
Speaker Change: March this year, we had already assumed a 45% tariff as our base case scenarios.
Speaker Change: We have seen some customers frontloaded or reschedule that their orders due to the uncertainty around future policy changes, especially after.
Speaker Change: April but depending on the current shipment and delivery schedules.
David Lee: So this is the new solution. Yeah, that's my second question.
Speaker Change: This.
Speaker Change: A shift of some of our revenue from Q2 to Q3. That's also part of the reason why our Q2 guidance is presented as a range for the full year, we are keeping our revenue guidance unchanged as it at maybe a three to three 5 billion we haven't seen.
David Lee: Okay, I'll first provide a response to the question about our launch of the Infinity Eye. We are very proud to be the first provider of a full stack of L2 to L4 LiDAR solutions. We have seen very encouraging feedback from our OEM customers since the launch of our new Infinity Eye. One of its key strengths is its flexibility. Infinity Eye A, B, and 3 are built on a shared architecture, but are tailored to different customer needs and a system setup. Depending on the OEM's vehicle platform and software stack, each configuration can support anything from L2 all the way to L4 autonomous driving.
Speaker Change: Our major customers canceling their orders due to this.
Speaker Change: Tariff changes.
Speaker Change: The full year.
Speaker Change: Targets, our gross margin target remains healthy around the 40% and we expect that the current impacts from tariffs on our full year gross margin and profitability to be immaterial.
Speaker Change: Yes.
Speaker Change: Okay. Thanks for sharing that's very clear and helpful.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Warner.
Speaker Change: Also up to the.
David Lee: All of our primary LiDAR sensors deliver outstanding performance, but each is optimized for specific technical priorities. The AT1440 boasts the world's highest angular resolution, delivering ultra-high definition, image-level point cloud. The ETX, which is a core part of our Infinity IB solutions, is engineered for superior ranging capabilities, offering best-in-class detection distance. Both AT1440 and ETX are high-performance lighters, each priced above $500. The ATX, which is a core component for Affinity IC, priced around $200, represents our cost-effective solutions, combining compact design with robust performance. The choice among them depends on the specific autonomous driving capabilities of our customers.
Speaker Change: The tariff topic.
Speaker Change: So first is obviously a small percentage of our revenue today already from the U S and there are really two types of customers.
Speaker Change: They face the terrorists.
Speaker Change:
Speaker Change: A small part.
Speaker Change: We'll treat this as a when there was really high and victory.
Speaker Change: Acceptable.
Speaker Change: They just false.
Speaker Change: They're not canceling it because they couldnt find it.
Speaker Change: Now that said they were pausing for some time until they came back down to where is it now.
Speaker Change: Other part is.
Speaker Change: Actually from a loading more because they realize that.
Speaker Change: There is risk of down the road that it could go back up again or facing other challenges and they definitely don't see.
Speaker Change: Easier solutions, just a switchover at all.
Speaker Change: So they actually try to buy more.
Speaker Change: <unk>.
Speaker Change: Sure.
Speaker Change: What's the price there, okay and they feel like it's a reasonable number especially now.
David Lee: All three models, i.e. AT1440, ETX, and ATX, are suitable for L2 to L4 applications and have all secured the series production design wins. These design wins are a strong validation of the Infinity Eye solutions adaptability and the technical differentiation across our LIDAR portfolio. And as we repetitively convey a message to the market, though we have different price ranges for our different products, but when we design the pricing, the architecture of the product, and also the cost components of the product, we always aim a healthy and a relatively stable gross margin target. Therefore, as you can tell from our historical gross profit margin performances, I would assure you that the gross profit margin will not fluctuate significantly in the future due to the change of product mix with these new products launching.
Speaker Change: Just wanted to make sure the continuity of their supply chain is guarantee so.
Speaker Change: That's why we also see some of the customers, placing them that's called that for lack of better word revenge orders.
Speaker Change: So we see both type of customers.
Speaker Change: Thank you. Your next question comes from Jay <unk> from Bernstein. Please go ahead.
Jay: Thank you gentlemen for taking my question. My first question is regarding our new AD product ATM to ATX, we noticed that our key clients in the Alto <unk> newly launched a model or integrate heater Jose ATR lineup, which is customized.
Speaker Change: The Russian based on <unk>.
Speaker Change: Look the other OEM customers onto.
Speaker Change: <unk> standardized <unk>.
Speaker Change: So our focus that is the difference between <unk> and <unk> in telecom and T.
Speaker Change: Comp and gross margin and in future is standardized the ATM.
Speaker Change: Uh huh.
Speaker Change: Screen solutions for OEM customers more Oems. So we don't follow the volatility to adopt a specialized away. Thank you.
Tim Hsiao: Great, thank you very much for sharing all the insightful information and congratulations on the solid result again. Thank you.
Speaker Change: So okay.
Bingrui Kui: Your next question comes from Bingrui Kui from Gotai Haiong. Please go ahead.
Speaker Change: The.
Speaker Change: Yes.
Speaker Change: Give some of the background of this product.
Speaker Change: A variant.
Bingrui Kui: Our management team, this is Bingrui from Guotai Haitong Securities. Thank you for taking my question and congratulations on the strong results and guidance. So my question is about the tariff. Could you please share some details about the impact of Trump tariff on pricing, supply chain, etc., and how to deal with this problem? Thank you. Okay, we have closely monitoring the situations of a tariff, which is changing on a daily basis, and have conducted a thorough analysis of the potential impact. While the tariffs do introduce certain cost considerations, we believe that their impact on our overall business will be limited for three primary reasons.
Speaker Change: It's an enhanced and advanced the version with enhanced resolution and.
Speaker Change: A few other things the main idea behind that is that.
Speaker Change: Well, we wanted to keep the standard red platform.
Speaker Change: Sure.
Speaker Change: Terrific customer like V. Also they are very particular about this.
Speaker Change: Ossific specific events functions of that lidar, because that's what they see as needed.
Speaker Change: As they develop their <unk> platform.
Speaker Change: It's a customized version for the.
Speaker Change: To best match the requirements of their software.
Speaker Change: Ideal world maybe every customer.
Speaker Change: Have something a little differently than others want but in Rialto specific case.
Andrew Fan: First, our direct exposure is very limited. The U.S. market is projected to account for only 10% of our total revenue in year 2025. Secondly, only 5% of our total revenue or 50% of the revenue from the U.S. is under the so-called DDP terms or Delivered Duty Paid models, where we as the seller bear the cost of tariff. And thirdly, our continued focus on operational efficiency and cost control and also our market position give us the flexibility to effectively manage external challenges like those. And we have a relatively strong market position. against our customers. Moreover, we have several levers, including adjusting the pricing strategies and efficiency gains, which will help absorb or offset these tariff-related costs.
Speaker Change: Have a very particular.
Speaker Change: Garment that's above the standard <unk>, and we were able to meet that and so thats the nature of such a product.
Speaker Change: We don't have additional information on the price or the.
Speaker Change: The gross margin, but it remains largely in line with the typical platform.
Speaker Change: Okay got it and my second question is related to the robo taxi lighter, but recently, we see that.
Speaker Change: Baidu DB Pawnee.
Speaker Change: Our SaaS product <unk> to replace the traditional mechanical lidar constant reduction just wondering they use it as a lighter by these other outdoor players is that transactional temporary solution.
Speaker Change: For the taxi industry. Looking ahead is that we aren't there developers and specialized product series.
Speaker Change: <unk> will continue to stay on SMA lineup to the eligible players. Thank you.
Andrew Fan: When we provided our profitability outlook in our last earnings call, which is March this year, we had already assumed a 45% tariff as our base case scenario. We have seen some customers front-loaded or rescheduled their orders due to the uncertainty around future policy changes, especially after April. But depending on the current shipment and the delivery schedules, this may shift some of our revenue from Q2 to Q3. That's also part of the reason why our Q2 guidance is presented as a range.
Speaker Change: Okay.
Speaker Change: I'm glad that you asked this question has a close eye is the largest robo taxi lidar supplier globally, who is 60% to 70% market share. Our main lidar products are widely used by all the top robo taxi players in China and outside China.
Speaker Change: Historically, a robot taxi operators have used mechanical spinning light us for small fleet testing and operations.
Speaker Change: However, recent trains in China indicate an urgent need for scalability in the robo taxi fleets.
Speaker Change: Adopting our flagship Adas lidar on robo taxi, our customers achieve a better balance between price and the performance of the sensors, enabling faster fleet growth and helping them become closer to.
Andrew Fan: For the full year, we are keeping our revenue guidance unchanged at maybe $3 to $3.5 billion. We haven't seen our major customers cancelling their orders due to these tariff changes. For the full-year target, our gross margin target remains healthy, around 40%, and we expect the current impact from tariffs on our full-year gross margin and profitability to be immaterial. OK, thanks for sharing. That's very clear and helpful. Yeah, I want to...
Speaker Change: Profitability.
Speaker Change: As a result, we are expecting to receive a significantly larger light on orders for use in a robo taxi for the years to come historically on the robot taxi siding, China, we expect that Thats, a moving from smaller scale high priced mechanical lidar to larger scale Adas Lidar.
Speaker Change: Will boost our revenue and gross profit in the long run as a robo taxi business grows in China.
Speaker Change: Meanwhile, <unk>.
David Lee: also add to the the tariff topic. So first is obviously a small percentage of our revenue today already from the U.S. and there are really two types of customers when they face the tariffs. a small part will treat this as a when it was really high and they treat this not acceptable so they just false They're not canceling because they couldn't find an alternative, but they were pausing for some time until they came back down to where it is now. The other part is... Actually from loading more, because they realize that there is risk down the road, that it could go back up again or facing other challenges.
Speaker Change: Global Robo taxi companies continue to rely on mechanical spinning light us to ensure the highest the sophistication of their <unk> solutions.
Speaker Change: Take this for example from the earnings we are the exclusive supplier to a top global to Robo taxi player and they are fleet has already racked up nearly a million autonomous miles in 2020 for now they are gearing up for a bigger expansion in 2025 scaling their self driving fleet.
Speaker Change: In a big way all powered by our Panda series Light us.
Speaker Change: With a robo taxi market are rapidly advancing toward larger scale commercialization, our technology plays a crucial role in enabling safe and reliable autonomous driving.
Speaker Change: Driving autonomous transportation.
Speaker Change: Also when our ACX.
David Lee: And they definitely don't see a easier solution just to switch over at all. So they actually try to buy more. And at the price they're okay. And they feel like it's a reasonable number especially now, and they just wanted to make sure the continuity of their supply chain is guaranteed. So that's why we also see some of the customers placing, let's call that for lack of a better word, revenge orders. as we see post-temporary. Thank you.
Speaker Change: 128, or <unk> type of lidar to be deployed in the robo taxi.
Speaker Change: These are asset based semi solid state designed provides a more cost efficient solution.
Speaker Change: However, due to its 120 degrees horizontal field of view.
Speaker Change: <unk> actually typically require three to four units of our <unk> series lineup to achieve 360 degrees perception also advanced.
Speaker Change: Algorithm approach.
Speaker Change: So that's my response to.
Speaker Change: Your question hopefully that can cover that.
Jia Liu: Your next question comes from Jia Liu from BOCI. Please go ahead. Thank you, management, for taking my question.
Speaker Change: Okay. Thank you very helpful. Thank you David and Andrew.
Jia Liu: My first question is regarding our new ADAS product, ATL and ATX. We noticed that our key client, Li Auto's newly launched models, all integrated Hesai's ATL LiDAR, which is a customized version based on ATX. But most other OEM customers all choose the standardized ATX version. So for Hesai, is there any difference between ATL and ATX in terms of SP, cost, and growth margin?
John: Thank you. Your next question comes from John <unk> from Pareto Securities. Please go ahead.
John: Hi, Andrew.
John: Thanks for taking my questions. My first question is about the global market.
John: Meanwhile, we delivered lighthouse to the global Oems.
John: What sort of impact of volume for the next one or two years and the Holdco estimates the income from the global Oems. This year. Thank you.
David Lee: And in future, is standardized ATX will remain as a mainstream solution for OEM customers, or more OEMs will follow Li Auto to adopt a specialized one? Thank you. So, okay, I'll give the... Yeah, I'll just give some of the background of this product. It's a variant, but it's an enhanced and advanced version with enhanced resolution and a few other things. The main idea behind that is that, well, we wanted to keep the standardized platform for a specific customer like Li Auto. They're very particular about. specific advanced functions of the LiDAR because that's what they see as needed as they develop their ADMAX platform.
John: Okay.
John: He has been actively.
John: The discussion and the cooperation with the with our global customers.
John: Recently, we have actively driving five POC programs with our four top global Oems and tier one.
John: Suppliers across Europe, and the Japan, including the most recent the POC awarded in Q1 by a top five global.
John: <unk> supplier headquartered in Japan.
John: While these POC.
John: Contracts are not yet.
John: Full design wins, they play a critical role in the decision making process.
John: Mmm typically defined final product specifications based on POC outcomes and use this phase two validates and co develop surrounding components as a result suppliers engaged earlier in the POC stage are strategically positioned and they may have.
David Lee: So in a way, it's a customized version for them to best match the requirements of their software. In the ideal world, maybe every customer has something a little differently than others want. But in Lialto's specific case, we have a very particular requirement that's above the standard ATX. And we were able to meet that. And so that's the nature of such a product. And we don't have additional information on the price or the growth margin. But it remains largely in line with the typical platform. OK, got it.
John: No chance of securing the design wing once the OEM issue.
John: Our F Q.
John: We have a secure that design win partnerships with five global Oems for through their Jv's and most importantly, and exclusive design win with a top European OEM as we announced last quarter.
John: This long term deal extends into the next decade across both their ice's and EV vehicle platforms, representing the largest global program in the automotive Lidar industry.
John: Where we refer to the largest global program, it's signifies not only our collaboration with this leading global OEM, but also the extensive worldwide rich of our shipments spanning China and a numerous other international markets.
David Lee: And my second question is related to the Robotaxi LiDAR. Recently, we see that Baidu, Didi, Pony all adopt our ADAS product AT series to replace the traditional mechanic LiDAR for cost reduction. Just wondering the usage of ADAS LiDAR by these L4 players, the transitional temporary solution for Robotaxi industry?
John: Our quality and performance have become our named cards and our ability to deliver a comprehensive solution.
John: Bundling, both long and short range light us makes us the go to partner for global Oems.
David Lee: Looking ahead, will Hesai will develop the specialized product series for Robotaxi, or will continue to sell ADAS LiDAR to these L4 players? Thank you.
John: The market potential is just massive global.
John: Global light our penetration is nearly zero today, but as both IC and <unk> started to adopt Adas and the Lidar we are unlocking an additional thought.
David Lee: Okay, I'm glad that you asked this question as Hesai is the largest Robotaxi LiDAR supplier globally with 60 to 70 percent market share. Our main LiDAR products are widely used by all the top Robotaxi players in China and outside China. Historically, robo-taxi operators have used mechanical spinning LIDARs for small fleet testing and operations. However, recent trends in China indicate an urgent need for scalability in the robo-taxi fleets. By adopting our flagship ADAS LiDAR on robo-taxi, our customers achieve a better balance between price and performance of the sensors, enabling faster fleet growth and helping them become closer to profitability.
John: $30 billion to $60 billion market in the overseas market in the long run driven by 60 million overseas vehicles at a 500 to one 1000 dollar lidar content per car as we estimated.
John: That's my question to your that's my response to a question John.
Speaker Change: Thank you that's very helpful. Thank you.
John: All my questions.
CEA Hong: Thank you. Your next question comes from CEA Hong from SP.
Speaker Change: P J B I. Please go ahead.
John: Okay.
John: Good morning management team.
John: My question is going to be on.
Speaker Change: And I've got just one question about our dual listing plan as Marc and humor, saying that of course that has confidentially filed for Hong Kong listing how do we respond to this.
David Lee: As a result, we are expecting to receive significantly larger LiDAR orders for use in our Robotaxi for the years to come. Historically, on the Robotaxi side in China, we expected that moving from smaller scale, high-priced mechanical LiDARs to larger scale ADAS LiDARs will boost our revenue and gross profit in the long run as the Robotaxi business grows in China.
John:
John: Okay. Thank you for asking this spectrum this question.
John: Regarding the market speculation about our dual listing playing in Hong Kong I have no comment on that.
John: That said, we periodically evaluate evaluate all possible and available options, including listing on other stocks is changes to protect our investors interest and sustain our growth trajectory.
David Lee: Meanwhile, global robotaxi companies continue to rely on mechanical spinning lighters to ensure the highest sophistication of their AD solutions. Take this for example from the earnings. We are the exclusive supplier to a top global robotaxi player and their fleet has already racked up nearly a million autonomous miles in 2024. Now they are gearing up for a bigger expansion in 2025, scaling their self-driving fleets in a big way, all powered by our Panda series lighters. With the robo-taxi market rapidly advancing towards large-scale commercialization, our technology plays a crucial role in enabling safe and reliable autonomous transportation.
John: Assured our commitment to the company's long term success in our capital markets remains steadfast.
Speaker Change: I guess the reason why you asked this question on where the market is so focused on this is related to the market rumors about a potential delisting of China <unk> from you.
John: U S market, but based on the advice of our SEC compliance cancers. There is no legal or factual basis on the current NASDAQ listing rules or past precedent that support the delisting of course.
John: Any government bodies.
John: To date, we have received no inquiries no investigations, nor communications from NASDAQ concerning the potential delisting or similar.
David Lee: Also, when our ATX, AT128 or ATX type of LiDAR to be deployed in the RoboTaxi, these ASIC-based semi-solid state design provides a more cost-efficient solution. However, due to its 120 degrees horizontal field of view, RoboTaxi typically requires three to four units of our AT series LiDAR to achieve 360 degrees perception. Also, advanced algorithm approach.
John: Actions based on the currently available information, we do not find any concrete legal at risk of being delisted from NASDAQ at this time.
John: We are fully compliant with all the regulatory requirements from nasdaq's.
John: Market.
John: Yeah.
John: People will respond to a <unk>.
John: The initial sell in of the Powerpoint is confidential.
David Lee: So that's my response to your question. Hopefully, that can cover that. Okay, thank you. Very helpful. Thank you, David and Andrew.
John: Okay.
John: Okay.
John: That's very helpful. Thank you.
John: Thank you Amy.
Speaker Change: Thank you. Your next question comes from Joanna <unk> from CMV I. Please go ahead.
Zhang Yu: Your next question comes from Zhang Yu from Huatai Securities. Please go ahead. Hi, David, Andrew, Yuanting. Thanks for taking my questions. My first question is about the global market. When will we deliver LiDARs to the global OEMs? And what's the impact of volume for the next one or two years? And how to estimate the NRE income from the global OEMs this year? Thank you.
Speaker Change: Hi.
Speaker Change: Thanks for taking my question and congrats.
Speaker Change: And so I have a question regarding <unk> could you. Please share with US you will review on impact on wider industry development.
Speaker Change: The abstract for showing thinking opinion. Thank you.
Speaker Change: I'll take it on any of your questions.
Speaker Change:
Speaker Change: Yes, I think it's very important Hello can you hear me.
Speaker Change: Oh, yeah, yeah. Thank you.
Speaker Change: Yeah, I think it's a.
David Lee: Okay, Hesai has been actively discussing and cooperating with our global customers. Recently, we have been actively driving five POC programs with four top global OEMs and Tier 1 suppliers across Europe and Japan, including the most recent POC awarded in Q1 by a top five global Tier 1 supplier headquartered in Japan. While these POC contracts are not yet full design wins, they play a critical role in the decision-making process. OEMs typically define final product specifications based on POC outcomes and use this phase to validate and co-develop surrounding components. As a result, suppliers engaged earlier in the POC stage are strategically positioned and may have a higher chance of securing the design win once the OEM issues a formal RFQ.
Speaker Change: It's taking such a technology to the next level.
Speaker Change: Historically the idea is if you buy a car with a lidar you'll have a few more function.
Speaker Change: Some type of L. A.
Speaker Change: And people always say no I feel very comfortable driving their own car or I feel like I'm safer than the car driving itself, so that's where lidar.
Speaker Change: And then starting from last year, AEP take us to a new domain in which.
Speaker Change: It will trigger no matter you turn it on or not.
Speaker Change: A risk essentially it becomes a.
Speaker Change: Future of invisible airbags, and it's even better than they are but because obviously it can stop a crash before it crashes.
Speaker Change: No.
Speaker Change: The entire.
Speaker Change: Penetration of AEP with Lidar became much faster.
Speaker Change: Previous round.
Speaker Change: Did that and this is where we see the entire light our industry or the Adas the industry is now.
Speaker Change: Rushing to have most of the vehicles to have 100% take rate for lidar.
David Lee: We have secured the design wing partnerships with five global OEMs, four through their JVs, and most importantly, an exclusive design wing with the top European OEM, as we announced in last quarter. This long-term deal extends into the next decade across both their ICE and EV vehicle platforms, representing the largest global program in the automotive LIDAR industry. When we refer to the largest global program, it signifies not only our collaboration with this leading global OEM, but also the extensive worldwide reach of our shipments, spanning China and numerous other international markets. Our quality and performance have become our name card and our ability to deliver a comprehensive solution.
Speaker Change: Almost everybody is doing that because now you buy a car you don't want people to see get to worry about not having a lidar and now we're also seeing.
Speaker Change: A lot of the discussion at the regulatory level because.
Speaker Change: Clearly.
Speaker Change: Having advanced Adas function with the ability to detect.
Speaker Change: In complex environment is a must and most people agree.
Speaker Change: <unk> is critical.
Speaker Change: Part of such efforts so that's why.
Speaker Change: You see the penetration rate is a quickly growing going up and now the marketing for different Oems are focusing on not only the computation, but also the lidar.
Speaker Change: Many many car launches today world.
Speaker Change: Explicitly.
Zhang Yu: Bundling both long and short-range LIDARs makes us the go-to partner for global OEMs. The market potential is just massive. Global LiDAR penetration is nearly zero today. But as both ICE and EVs started to adopt ADAS and LiDAR, we are unlocking an additional. 30 to 60 billion dollars market in the overseas market in the long run driven by 60 million overseas vehicles at a 500 to $1,000 LIDAR content per car as we estimated. That's my question to your, that's my response to a question, Zhang Yu. Thank you. It's very helpful for me. Thank you. That's all my questions.
Speaker Change: The page about our lidar adoption in their car because no one wants to be not super cool.
Speaker Change: Okay got it.
Speaker Change: That's really helpful and my second question.
Speaker Change: So can management share with us your outlook for.
Speaker Change: Operating efficiency improvements in the coming years, well and also earn it and I think regarding all the main floor and your capex. Thank you so much.
Speaker Change: Okay. Let me answer this question.
Speaker Change: The second question first the Cape Alex I have.
Speaker Change: Got it that we expect our full year capex will be around $30 million to $50 million.
Speaker Change: In the car of the year.
Speaker Change: For the Opex.
Speaker Change: non-GAAP basis, we our old packaging year 'twenty 'twenty four is about $1 billion and.
Zhang Yu: Thank you.
Xia Huang: Your next question comes from Xia Huang from SBDBI. Please go ahead. Good morning, management team. Thanks for taking my question. This is Xiya from SPDBI. And I've got just one question about our dual listing plan as market rumor saying that Hesai has confidentially filed for Hong Kong listing. How do we respond to this?
Speaker Change: About 65% of the Opex is R&D and 15% goes to sales and marketing and the rest other G&A.
Speaker Change: In 2025, we actually guided that we are going to we expect that we're going to achieve a $100 million savings in the GAAP basis Opex. We are committed to taking expenses management to the next level, ensuring even better efficiency.
Andrew Fan: Okay, thank you for asking this question. Regarding the market speculation about our due listing plan in Hong Kong, I have no comment on that. That said, we periodically evaluate all possible and available options, including listing on other stock exchanges, to protect our investors' interest and sustain our growth trajectory. Rest assured, our commitment to the company's long-term success in the capital markets remains steadfast. I guess the reason why you ask this question or the market is so focused on this is related to the market rumors about potential delisting of China ADRs from US market. But based on the advice of our SEC compliance counselors, there is no legal or factual basis on the current NASDAQ listing rules or past precedents that support the delisting of Hesai from any government bodies.
Speaker Change: And the financial discipline.
Speaker Change: As you can tell from our Q1 results our opex declined by about 9% on a quarter over quarter basis, which is in line or even slightly better than the.
Speaker Change: The full year.
Speaker Change: Cost saving targets.
Speaker Change: Our head count for year 2025.
Speaker Change: Currently it's about 50%.
Speaker Change: Two for R&D staff.
Speaker Change: 15% for production and the remaining is the sales and marketing and <unk>.
Speaker Change: G&A I'm ready related employees.
Speaker Change: Also I would like to highlight the importance of the operating leverage we have spent over a decade building a strong and stable organization structure, which is what we called a large mid platform with a lean front and this allows us to scale our business.
Speaker Change: Without significantly increasing R&D expenses, while our revenue and gross profit.
Andrew Fan: To date, we have received no inquiries, no investigations, nor communications from NASDAQ concerning the potential delisting or similar actions. Based on the currently available information, we do not find any concrete legal risk of being delisted from NASDAQ. At this time, we are fully compliant with all the regulatory requirements from NASDAQ market.
Speaker Change: Growth. Therefore, we expect our R&D investments to remain relatively stable on the absolute amount.
Speaker Change: Even as our revenue and gross profit continue to grow at a solid pace.
Speaker Change: Internationally, our Adas business is still in the early stage and contributes a relatively modest share of total revenue as of today at the end of the at the same time, we are allocating some of the R&D resources to support our global programs.
Andrew Fan: Yeah, I don't know if people will respond to a confidential felling, but the higher point is it's confidential. That's very helpful. Thank you, Davey, and thank you, Amy. Thank you.
Speaker Change: Our robotics segment most of the costs are tied up to our global sales network on the product side, we are benefiting from our platform based the development. So we are not starting from scratch each application of robotics, which help us.
Speaker Change: Scale more efficiently.
Joanna Ma: Your next question comes from Joanna Ma from CNBI. Please go ahead. Thank you all for taking my question and commenting on my video.
Speaker Change: Yes, that's my.
Speaker Change: Answer to the question you just raised.
Speaker Change: Okay got it that's really helpful. Thank you, maybe thinking engine and congrats again.
Joanna Ma: I have a question regarding, could you please share with us your review on impact on LiDAR industry development for our latest AEBF draft for soliciting opinions, thank you. I'll take it on the AUD question. Yeah I think it's very important. Hello, can you hear me? Oh, yeah. Yeah, thank you. Yeah, I think it's taking such a technology to the next level. Historically, the idea is if you buy a car with a LiDAR, you have a few more functions. some type of NOA, blah, blah, blah. And people can always say, no, I feel very comfortable driving my own car, or I feel like I'm safer than the car driving itself.
Speaker Change: Thank you as there are no further questions I'd like to now turn the conference back over to the company for closing remarks.
Speaker Change: Thank you once again for joining us today, if you have any further questions. Please feel free to contact our IR team. This concludes today's call and we look forward to speaking to you again next quarter. Thank you goodbye.
Speaker Change: This concludes today's conference call you May now disconnect. Your line. Thank you.
David Lee: So that's where LiDAR was about. And then starting from last year, AEB take us to a new domain in which it will trigger, no matter you turn it on or not, if it sees a risk. Essentially, it becomes the future of the invisible airbag. It's even better than airbag, because obviously it can stop a crash before a crash. So the entire penetration of AEB with LiDAR became much faster than the previous round. for that reason. And this is what we see. The entire LIDAR industry, or the ADAS industry, is now rushing to have most of the vehicles have 100% take rate for LIDARs.
David Lee: Almost everybody is doing that, because now you buy a car, you don't want people to worry about not having a LIDAR. And now we're also seeing a lot of the discussion at the regulatory level, because clearly having an advanced ADAS function with ability to detect in complex environment is a must. And most people agree, LIDAR is a critical part of such an effort. So that's why you see the penetration rate is quickly going up. And now the marketing for different OEMs are focusing on not only the computation, but also the LIDAR. Many, many car launches today will solicitly a page about LiDAR adoption in their car because no one wants to be not future-proof.
David Lee: Okay, Bonnie, that's really helpful.
Andrew Fan: And my second question, also, can you share with us your outlook on the room for operating efficiency improvement in the coming years? Well, and also, are there any update regarding the outlook for your new capex? Thank you so much. Okay, let me answer this question. The second question first, the KPACs, I have guaranteed that we expect our full-year KPACs will be around 30 to 50 million US dollars in the current year. For the OPECs, on a non-GAAP basis, our OPECs in 2024 is about 1 billion, and about 65% of the OPECs is R&D, and 15% goes to sales and marketing, and the rest are the G&A.
Andrew Fan: In 2025, we actually guided that we are going to, we expect that we are going to achieve a, let me be, a hundred million savings in the GAAP basis OPECs. We are committed to taking expenses management to the next level, ensuring even better efficiency and the financial discipline. As you can tell from our Q1 results, our OPECs declined by about 9% on a quarter-over-quarter basis, which is in line or even slightly better than the full-year cost-saving target. Our headcount for year 2025 currently is about 50% for R&D staff, 15% for production, and the remaining is the sales and marketing and G&A related employees.
Andrew Fan: Also, I would like to highlight the importance of the operating leverage. We have spent over a decade building a strong and a stable organization structure, which is what we call a large mid-platform with a lean front end. This allows us to scale our business without significantly increasing R&D expenses, while our revenue and gross profit grows. Therefore, we expect our R&D investments to remain relatively stable on the absolute amount, even as our revenue and gross profit continue to grow at a solid pace. Internationally, our ADAS business is still in the early stage and contributes a relatively modest share of total revenue as of today.
Andrew Fan: At the same time, we are allocating some of the R&D resources to support our global programs. In our robotic segment, most of the costs are tied up to our global sales network. On the product side, we are benefiting from our platform-based development. So we are not starting from scratch in each application of robotics, which help us scale more efficiently. Yeah, that's my answers to the question you just raised. Okay, got it. That's really helpful. Thank you, baby. Thank you, Andrew.
Andrew Fan: And congrats again.
Andrew Fan: Thank you.
Operator: As there are no further questions, I'd like to now turn the conference back over to the company for closing remarks. Thank you once again for joining us today.
Operator: If you have any further questions, please feel free to contact our IR team.
Operator: This concludes today's call, and we look forward to speaking to you again next quarter.
Operator: Thank you and goodbye.
Operator: This concludes today's conference call.
You may now disconnect your line. Thank you.