Q3 2025 Mobileye Global Inc Earnings Call

Speaker #1: Greetings and welcome to the Mobileye three Q25 earnings call . At this time , all participants are in a listen only mode . A brief question and answer session will follow the formal presentation .

Operator: Greetings and welcome to the Mobileye Q3 2025 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Daniel Galves. Mr. Galves, you may begin.

Speaker #1: If anyone should require operator assistance during the conference , please press Star Zero on your telephone keypad . As a reminder , this conference is being recorded .

Speaker #1: It is now my pleasure to introduce your host , Dan Galves . Mr. . Galves . You may begin .

Speaker #2: Thank you . Hello everyone , and welcome to mobilize Third Quarter 2020 Earnings Conference Call for the period ending September 27th , 2025 .

Daniel Galves: Thank you. Hello everyone and welcome to Mobileye's third quarter 2025 earnings conference call for the period ending September 27, 2025. Please note that today's discussion contains forward-looking statements based on the business environment as we currently see it. Such statements involve risks and uncertainties. Please refer to the accompanying press release, which includes additional information on the specific factors that could cause actual results to differ materially. Additionally, on this call, we will refer to both GAAP and non-GAAP figures. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release. Joining us on the call today are Professor Amnon Shashua, Mobileye CEO and President, Moran Rojansky, Mobileye CFO, and Nimrod Nehushtan, Mobileye's EVP of Business Development and Strategy. Thanks, and now I'll turn the call over to Amnon.

Speaker #2: Please note that today's discussion contains forward looking statements based on the business environment , as we currently see it . Such statements involve risks and uncertainties .

Speaker #2: Please refer to the accompanying press release, which includes additional information on the specific factors that could cause actual results to differ materially.

Speaker #2: Additionally, on this call we will refer to both GAAP and non-GAAP figures. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release.

Speaker #2: Joining us on the call today are Professor Amnon Shashua , Mobileye CEO and President Meron Shemesh . Mobileye CFO and Nimrod Nehushtan mobilize , EVP of business development and strategy .

Speaker #2: Thanks . And now I'll turn the call over to Amnon .

Speaker #3: Hello , everyone , and thanks for joining our earnings call . Starting with the results , Q3 revenue of $504 million was up 4% year over year .

Amnon Shashua: Hello everyone, and thanks for joining our earnings call. Starting with the results, Q3 revenue of $504 million was up 4% year over year. The driving force was 8% IQ volume growth, significantly outpacing the 1% growth in overall vehicle production among our top 10 customers in Q3. Operating cash flow was again a highlight. We generated $167 million of operating cash flow in Q3, well above net income. On a year-to-date basis, we have generated nearly $500 million of operating cash flow, up around 150% year over year. This reflects the cash-generative nature of our business and our continued discipline in managing working capital. The core ADAS business is performing well, with volumes in a very healthy range for the last five quarters, and expected to do so again in Q4 based on our updated guidance.

Speaker #3: The driving force was 8% IQ volume growth significantly outpacing the 1% growth in overall vehicle production . Among our top ten customers in Q3 .

Speaker #3: Operating cash flow was again a highlight . We generated $167 million of operating cash flow in Q3 , well above net income on a year to date basis .

Speaker #3: We have generated nearly $500 million of operating cash flow , up around 150% year over year . This reflects the cash generative nature of our business and our continued discipline in managing working capital .

Speaker #3: The core Adas business is performing well with volumes in very healthy range for the last five quarters . And expected to do so again in Q4 .

Speaker #3: Based on our updated guidance . We again raised the midpoint of our full year outlook , this time by 2% . In terms of revenue and 11% in terms of adjusted operating income compared to our initial 2025 guidance .

Amnon Shashua: We again raised the midpoint of our full-year outlook, this time by 2% in terms of revenue and 11% in terms of adjusted operating income. Compared to our initial 2025 guidance, these increases are even more pronounced: 7% for revenue and 27% for operating income at the midpoint. Overall, we expect volumes to come in about 2 million units higher than our original guidance. This outperformance reflects a combination of stronger than expected launch activity, ADAS adoption growth, and better than expected results in China, both from our shipments to Chinese OEMs and from the performance of our top 10 Western OEM customers in China. If we adjust our inventory digestion in 2024, our 2025 volume growth is expected to outperform the production of our top 10 OEM customers globally by about 5 percentage points.

Speaker #3: These increases are even more pronounced 7% for revenue and 27% for operating income at the midpoint . Overall , we expect volumes to come in about 2 million units higher than our original guidance .

Speaker #3: This outperformance reflects a combination of stronger than expected launch activity Adas adoption , growth , and better than expected results in China , both from our shipments to Chinese OEMs and from the performance of our top ten Western OEM customers in China .

Speaker #3: If we adjust our inventory digestion in 2024 , our 2025 volume growth was expected to outperform the production of our top ten OEM customers globally by about five percentage points .

Speaker #3: We see continued momentum as excess light is generating Adas program wins at a high rate . So far this year , we already have been nominated for programs with future expected volumes well above our full year 2025 volumes .

Amnon Shashua: We see continued momentum as IQ6 light is generating ADAS program wins at a high rate. So far this year, we already have been nominated for programs, with future expected volumes well above our full-year 2025 volumes. We have added a new customer in Volvo. The growth potential in India is becoming increasingly clear as strengthening adoption trends and support the regulatory environment. Additionally, we are seeing continued traction in adding REM to front-facing camera programs, further reinforcing our base business. On the advanced product side, our position is differentiated in the fact that we are an OEM-neutral platform that is cost-efficient and scalable, with a credible technology path to eyes-off autonomy in both privately owned vehicles and robotaxis.

Speaker #3: We have added a new customer in Volvo. The growth potential in India is becoming increasingly clear as strengthening adoption trends and a supportive regulatory environment.

Speaker #3: Additionally , we are seeing continued traction in adding REM to front facing camera programs . Further reinforcing our base business on the advanced product side .

Speaker #3: Our position is differentiated in the fact that we are an OEM neutral platform that is cost efficient and scalable with a credible technology path to eyes of autonomy in both privately owned vehicles and robotaxis .

Speaker #3: All four of our advanced products surround ADAS supervision, Chauffeur, and Drive, sharing common building blocks, including the IQ6 high inference chip, substantial portions of our perception policy AI stacks, and REM crowded crowdsourcing driving intelligence, along with robust safety frameworks. The company's comprehensive data and validation infrastructure supports these efforts.

Amnon Shashua: All four of our advanced products, surround ADAS, SuperVision, Chauffeur, and Drive, share common building blocks, including the IQ6 high-inference chip, substantial portions of our perception and policy AI stacks, and the REM-crowdsourced driving intelligence and robust safety frameworks, and the company's comprehensive data and validation infrastructure. The IQ6 high-based surround ADAS systems continue to develop as the next generation of standardized driving assist on high-volume vehicle platforms. This system addresses multiple objectives in a cost-efficient package. It's designed to meet stricter late-decade safety standards, enables highway hands-free performance for lower cost than current systems, and supports OEM goals to consolidate ECUs and to integrate technology on a single SOC. We have meaningful traction with a number of OEMs and very recently received confirmation from a leading Western OEM that we are nominated for a high-volume IQ6 high-based surround ADAS program across mass market vehicles.

Speaker #3: IQ six high based surround Ada systems continue to develop as the next generation of standardized driving assist . volume vehicles , platforms . This system addresses multiple objectives in a cost efficient package .

Speaker #3: It's designed to meet stricter late decade safety standards , enables highway hands free performance for lower cost and current systems , and supports OEM goals to consolidate ECUs and to integrate technology on a single SoC .

Speaker #3: We have meaningful traction with a number of OEMs and very recently received confirmation from a leading Western OEM that we are nominated for a high-volume IQ 60-based surround ADAS program across mass market vehicles.

Speaker #3: We continue to pursue a number of promising supervision and chauffeur opportunities , although timing remains difficult to predict . The best way to ensure eventual new customers is to focus on execution of the supervision and chauffeur production programs with Volkswagen Group , where we where we are first movers near term execution includes major software on high the coming few months that embody significant innovation in AI .

Amnon Shashua: We continue to pursue a number of promising SuperVision and Chauffeur opportunities, although timing remains difficult to predict. The best way to ensure eventual new customers is to focus on execution of the SuperVision and Chauffeur production programs with Volkswagen Group, where we are first movers. Near-term execution includes major software drops in the coming few months that embody significant innovation in AI. A few weeks ago, we received the first silicon sample of our next-generation SOC, the IQ7 high, and all initial tests have been successful. IQ7 and its successor, IQ8, now in design stages, are designed for upgrading eyes-off autonomy to minds-off autonomy. Eyes-off systems is what Mobileye is bringing to production in early 2027 and also describes the current technological state of robotaxis. In both cases, there is a human, either the driver or a teleoperator, that can resolve issues when needed.

Speaker #3: A few weeks ago, we received the first silicon sample of our next generation SoC. The iQOO 7 high, and all initial tests have been successful.

Speaker #3: iQOO seven and its successor , iQOO eight , now in design stages , are designed for upgrading eyes of autonomy to minds of autonomy .

Speaker #3: Eyes of systems is what mobilizes , bringing to production in early 2027 and also describes the current technological state of robotaxis in both cases , there is a human , either the driver or a teleoperator , that can resolve issues when needed .

Speaker #3: In the mind of system , which we are targeting for 2029 and beyond , there is no human to resolve issues and therefore the driver can sleep and the robotaxi no longer needs teleoperators to intervene .

Amnon Shashua: In a minds-off system, which we are targeting for 2029 and beyond, there is no human to resolve issues, and therefore the driver can sleep, and the robotaxi no longer needs teleoperators to intervene. This transition from eyes-off to minds-off is where IQ7 is going to play a meaningful role. More details will follow in the coming months. Turning to robotaxi, our engagements are expanding through both Volkswagen and Holon in the division of Holon. Once we remove safety drivers in our first U.S. city in 2026 and secure type approval for self-driving vehicles, the Volkswagen ID.Buzz and Holon Urban Shuttle in Europe, we anticipate geographic expansion. VW and Uber in Los Angeles, Lyft and Holon in the U.S., and multiple commercialization initiatives with Volkswagen and public transport operators across Europe.

Speaker #3: This transition from eyes of to minds of is where IQ seven is going to play a meaningful role . More details will follow in the coming months .

Speaker #3: Turning to robotaxi . Our engagement are expanding through both Volkswagen and Holon , a division of Benteler . Once we remove safety drivers in our first US city in 2026 and secure type approval for self-driving vehicles under the Volkswagen ID , buzz and Holon Urban Shuttle in Europe , we anticipate geographic expansion .

Speaker #3: VW and Uber in Los Angeles, Lyft and Holon in the U.S., and multiple commercialization initiatives with Volkswagen and public transport operators across Europe.

Speaker #3: Additionally , we continue to get closer to naming and automaker and vehicle platform to complete the Lyft more value chain that will enable preparations for commercialization in Dallas and other cities to accelerate on the robotaxi technology front , we continue to outfit more of the Id.buzz test fleet with a full IQ six hi based production hardware and have successfully completed the first closed loop testing with the Holon production vehicle .

Amnon Shashua: Additionally, we continue to get closer to naming an automaker and vehicle platform to complete the Lyft Murabeni value chain. That will enable preparations for commercialization in Dallas and other cities to accelerate. On the robotaxi technology front, we continue to outfit more of the ID.Buzz test fleet with a full IQ6 high-based production hardware and have successfully completed the first closed-loop testing with the Holon production vehicle. The MTBF performance is tracking well against the KPIs that are required to remove safety drivers in 2026 and begin commercialization. Everything continues on track. In summary, the opportunity set in front of us today is larger, broader, and more urgent than it was when we went public in 2022.

Speaker #3: The MTBF performance is tracking well against the KPIs that are required to remove safety drivers in 2026 and begin commercialization. Everything continues on track.

Speaker #3: In summary, the opportunity set in front of us today is larger, broader, and more urgent than it was when we went public in 2022.

Speaker #3: Near-term volumes remain strong . The demand for higher performance at lower cost is intensifying , and eyes of ability , whether for personal cars or robotaxis , is no longer seen as experimental science .

Amnon Shashua: Near-term volumes remain strong, the demand for higher performance at lower costs is intensifying, and eyes-off capability, whether for personal cars or robotaxis, is no longer seen as an experimental science project, but as an achievable and commercially viable reality. This is exactly where Mobileye excels. I'll now turn the call over to Moran.

Speaker #3: As experimental science , project . But as an achievable and commercially viable reality . This is exactly where Mobileye excels . I'll now turn the call over to Moran .

Speaker #4: Thank you . Amnon , and thanks for joining the call . Everyone . Before I begin , please be aware that all my comments on profitability will refer to non-GAAP measurements .

Moran Rojansky: Thank you, Amnon, and thanks for joining the call, everyone. Before I begin, please be aware that all my comments on profitability will refer to non-GAAP measurements. The primary exclusion in Mobileye's non-GAAP numbers is amortization of intangible assets, which is mainly related to Intel's acquisition of Mobileye in 2017. We also exclude stock-based compensation. Our Q3 result exceeded the color we provided on the Q2 2025 earnings call in July, with revenue up 4% year over year versus our prior outlook of roughly flat. The upside was a combination of IQ volume, which came in at 9.2 million units compared to the outlook of 8.7 to 9.3 million, and SuperVision volume, which was higher than 20,000 units in the quarter, a meaningful uptick versus Q2. Just a quick note on SuperVision. Volumes were higher than prior quarters, which should not be viewed as establishing a new higher run rate.

Speaker #4: The primary exclusion in mobilized non-GAAP numbers is amortization of intangible assets, which is mainly related to Intel's acquisition of Mobileye in 2017.

Speaker #4: We also exclude stock based compensation . Our Q3 result exceeded the color we provided on the Q2 2025 earnings call in July , with revenue up 4% year over year versus our prior outlook of roughly flat .

Speaker #4: The upside was a combination of IQ , volume , which came in at 9.2 million units compared to the outlook of 8.7 to 9.3 million .

Speaker #4: And supervision volume , which was higher than 20,000 units in the quarter . A meaningful uptick versus Q2 . Just a quick note on supervision volumes were higher than prior quarters , but should not be viewed as establishing a new , higher run rate .

Speaker #4: We now expect around 50,000 units this year . This full year number is significantly higher than our original expectations , and it would reflection of what we see as a sustainable run rate heading into next year .

Moran Rojansky: We now expect around 50,000 units this year. This full-year number is significantly higher than our original expectations, and a good reflection of what we see as a sustainable run rate heading into next year for the current first-generation programs applied to zyxer export volume and post R4. These programs remain relatively small within our overall business, and quarterly volumes can fluctuate, as they have this year. Our gross margin declined by just over 100 basis points year-over-year basis. IQ ASP was down about $0.50 year over year. This was primarily due to higher volume of Chinese OEMs, where pricing remains a significant headwind, as we've discussed before. Another factor was higher volume of ADAS programs based on IQ5, which carry lower gross margin due to higher costs. IQ5 currently represents about 10% of volume and is expected to peak to around 15% next year, creating some continued pressure.

Speaker #4: For the current first generation program , supply to Zika , export volume and poster for these programs remain relatively small within our overall business and quarterly volumes can fluctuate as they have this year .

Speaker #4: Our gross margin declined by just over 100 basis points year over year. Basis ICASSPL was down about $0.50 year over year. This was primarily due to a higher volume of Chinese OEMs.

Speaker #4: Repricing remained a significant headwind . As we've discussed before . Another factor was higher volume of Adas programs based on Ic5 , which carry lower gross margin due to higher costs .

Speaker #4: Ic5 currently represents about 10% of volume and is expected to pick to around 15% next year , creating some continued pressure beginning in 2027 , as the more profitable Ikc seeks light significantly ramps up .

Moran Rojansky: Beginning in 2027, as the more profitable IQ6 light significantly ramps up, IQ5's share will go down, providing a tailwind to margins. Operating expenses were up 4% year over year, which was a bit higher than what we expected due to timing of engineering reimbursements. We continue to expect overall non-GAAP operating expenses in 2025 to be up about 7% to just below $1 billion. As Amnon mentioned, operating cash flow was $489 million through the first three quarters of the year. This is primarily due to strong cash flow from the core business. However, we've also managed tight control over the working capital accounts, particularly our balance sheet inventory, which came down by about $100 million year to date. We are now well aligned with our six-month target for balance sheet inventory, and we expect working capital to be more cash neutral going forward.

Speaker #4: Ic5 share will go down , providing a tailwind to margins , operating expenses were up 4% year over year , which was a bit higher than what we expected due to timing of engineering reimbursement .

Speaker #4: We continue to expect overall non-GAAP operating expenses in 2025 to be up about 7% to just below $1 billion . As Amnon mentioned , operating cash flow was 489 million through the first three quarters of the year .

Speaker #4: This is primarily due to strong cash flow from the core business . However , we've also managed tight control over the working capital account , particularly our balance sheet inventory , which came down by about 100 million year to date .

Speaker #4: We are now well aligned with our six month target for balance sheet inventory , and we expect working capital to be more cash natural going forward .

Speaker #4: Turning to full year guidance , we are increasing the revenue midpoint by 2% , and the adjusted operating income midpoint by 11% . Our full year outlook is based on IQ volumes of 35 million to 35.5 million , up from 33.5 to 35.5 million earlier in the year .

Moran Rojansky: Turning to full-year guidance, we are increasing the revenue midpoint by 2% and the adjusted operating income midpoint by 11%. Our full-year outlook is based on IQ volumes of 35 million to 35.5 million, up from 33.5 million to 35.5 million. Earlier in the year, we maintained an unusually wide range to reflect macro uncertainty and ensure conservatism. With those conditions now better clarified, we have greater confidence in narrowing the range and increasing the midpoint. Given 27.3 million units year to date, the implied outlook for Q4 is 7.7 million to 8.2 million. At this point in the year, we expect that Q4 volume will end at the higher end of the guidance. We've retained a small buffer to account for any unforeseen year-end logistical issues or OEM production constraints to stay cautious.

Speaker #4: We maintained an unusually wide range to reflect macro uncertainty and ensure conservatism with those conditions now better clarified , we have greater confidence in narrowing the range and increasing the midpoint , giving 27.3 million units year to date .

Speaker #4: The implied outlook for Q4 is 7.7 to 8.2 million at this point in the year , we expect that Q4 volume will end at the higher end of the guidance .

Speaker #4: We've retained a small buffer to for any unforeseen year end logistical issues or OEM production constraints to stay cautious in terms of understanding the current run rate of volume , we think it is best to look at the full year .

Moran Rojansky: In terms of understanding the current run rate of volume, we think it is best to look at the full year. This is particularly the case in 2025, where normal seasonality was affected somewhat by tariff timing and expectations. Typically, global production is stronger in the second half than the first, but that pattern did not hold this year. The bottom line is the lower Q4 volume compared to Q3 and Q2 should not be interpreted as a trend. It simply reflects an alignment of supply and demand across the full year to ensure customers enter 2026 with lean inventories. As noted earlier, SuperVision volumes are tracking ahead of expectations, and we are modestly raising the outlook to low 50,000 units at the midpoint versus prior outlook of around 40,000 and the original outlook in the low 20,000.

Speaker #4: This is particularly the case in 2025 . Where normal seasonality was affected somewhat by tariff timing and expectations . Typically , global production is stronger in the second half than the first , but that pattern did not hold this year .

Speaker #4: Bottom line is , the lower Q4 volume compared to Q3 and Q2 should not be interpreted as a trend . It simply reflects an alignment of supply and demand across the account year to ensure customers enter 2026 with lean inventories .

Speaker #4: As noted earlier, supervision volumes are tracking ahead of expectations, and we are modestly raising the outlook to low 50,000 units at the midpoint, versus a prior outlook of around 40,000, and the original outlook in the low 20,000.

Speaker #4: We expect full-year gross margin to be right around 68%, implying a slight uptick in Q4 versus Q3. The full year is expected to be up about 30 basis points year over year.

Moran Rojansky: We expect full-year gross margin to be right around 68%, implying a slight uptick in Q4 versus Q3. The full year is expected to be up about 30 basis points year over year, pretty consistent with our July commentary. Operating expenses, as noted earlier, are expected to be up 7% year over year to just below $1 billion, in line with our original outlook. Thank you, and we will now take your questions.

Speaker #4: Pretty consistent with our July commentary . Operating expenses expenses . As noted earlier , are expected to be up 7% year over year to just below $1 billion in line with our original outlook .

Speaker #4: Thank you . And we will now take your questions .

Speaker #1: Thank you . We will now be conducting a question and answer session . If you would like to ask a question , please press star one on your telephone keypad .

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you. Our first question comes from the line of Aaron Rakers with Wells Fargo. Please go ahead.

Speaker #1: A confirmation tone will indicate your line is in the question queue . You may press star two . If you'd like to remove your question from the queue for participants using speaker equipment , it may be necessary to pick up your handset before pressing the star keys .

Speaker #1: Thank you . Our first question comes from the line of Aaron Rakers with Wells Fargo . Please go ahead .

Speaker #5: Yeah , thanks for taking the question . I guess the first question is , you know , you mentioned a Western OEM design win that you've achieved .

[Analyst 1]: Yeah, thanks for taking the question. I guess the first question is, you know, you mentioned a Western OEM design win that you've achieved. Can you just remind us again, is that additive to the prior kind of development engagement status that you've outlined previously? Is that reflective of the prior Western OEM that was on that list, and just anything around timing of volume contributions? I have a quick follow-up.

Speaker #5: Can you just remind us again , is that additive to the prior kind of development engagement status that you've outlined previously ? Is that the reflective of the prior Western OEM that was on that list ?

Speaker #5: And just anything around timing of volume contributions ? And I have a quick follow up .

Speaker #4: So to be clear , the .

Speaker #6: The confirmation for a nomination that Amnon referred to in his remarks is for a second Adas program . We have announced previously in the year , our first program , this is the second from a second OEM , a leading Western OEM with significant volumes with multiple vehicle models .

Amnon Shashua: To be clear, the confirmation for a nomination that Amnon referred to in his remarks is for a second surround ADAS program. We have announced previously in the year our first surround ADAS program. This is the second from a second OEM, a leading Western OEM with significant volumes, with multiple vehicle models. We expect this to be a significant portion of that OEM's vehicle lineup in the future, and we will disclose more details on this in the next few weeks.

Speaker #6: And we expect this to be a significant portion of that . OEMs vehicle lineup in the future . And we will disclose more , more details on this in the next few weeks .

Speaker #2: Yeah . And Aaron , this is Dan . You might be referring to the IR day or the Investor Day slide from last year .

[Analyst 1]: Yeah, and Aaron, this is Dan. You might be referring to the IR Day or the Investor Day slide from last year. It is one of the OEMs that was on that chart for surround ADAS. Yeah, thanks, Dan. I appreciate that. You know, talk a little bit about gross margin. You highlighted the fact that IQ5 volumes at 10% would go to 15%, and that would continue to be a headwind to gross margin. You know, as the IQ6 volumes start to ramp, how do we think about the delta or the gross margin inflection as we think about 2026 between those platforms?

Speaker #2: It is one of the OEMs that was on that chart for surrounding us .

Speaker #5: Yep . Thanks , Dan . I appreciate that . And then talk a little bit about gross margin . You highlighted the fact that ic5 volumes at 10% would go to 15 , and that would continue to be a headwind to gross margin .

Speaker #5: You know , as the IQ volume , IQ six volumes start to ramp , how do we think about the Delta or the the , the gross margin inflection as we think about 2026 , between those between those platforms ?

Speaker #4: Yeah . So just to just to highlight that ic5 volume doesn't have a lot of running programs or production programs . And we don't anticipate any new programs with Ic5 .

Moran Rojansky: Yeah, just to highlight that IQ5 volume doesn't have a lot of running programs or production programs, and we don't anticipate any new programs with IQ5. All the new launches we'd have are with IQ6 Lite. The profitability is not that different between them. It's just that it has a bit lower profitability than our IQ4. As for IQ6, that again is launching for our new programs, the profitability is, of course, the gross margin is higher than IQ5 and very similar to IQ4 that we are currently selling. It's not some significant headwind. It's just a matter of platforms.

Speaker #4: So all the new launches we have in without these six slides , the profitability is not that different between them . It's just that it has a bit lower profitability than our Q4 for IQ .

Speaker #4: That , again , is launching for a new programs . The profitability is , of course , the gross margin is higher than Ic5 and very similar to IQ .

Speaker #4: For that , we are currently selling . So it's not some , you know , significant headwind . It's just a matter of platforms or specific mix , specific vehicle lounges , mix between products .

Amnon Shashua: Specific vehicles.

Speaker #4: Sometimes some of the products projects are ramp more , some of you know it's not something you can anticipate , but it's not very dramatic in terms of gross margin fluctuations .

Moran Rojansky: Specific vehicle launches, mix between products. Sometimes some of the products ramp up more. It's not something you can anticipate, but it's not very dramatic in terms of gross margin fluctuations.

Speaker #2: Exactly . Yeah . I don't think we you know , we're going to specify like the impact , but the bottom line is ic5 like percentage of total will be the highest next year , around 15% .

[Analyst 1]: Exactly. I don't think we, you know, we're going to specify like the impact, but the bottom line is IQ5's % of total will be the highest next year, around 15%, so not too meaningful versus this year, and then start to go down.

Speaker #2: So not too meaningful versus this year . And then start to go down .

Speaker #5: Yeah . Thank you guys .

Amnon Shashua: Yeah, thank you, guys.

Speaker #7: I .

Speaker #1: Thank you . Our next question comes from the line of Edison U with Deutsche Bank . Please go ahead .

Operator: Thank you. Our next question comes from the line of Edison Yu with Deutsche Bank. Please go ahead.

Speaker #8: Hi this is Wendy on for Edison . My first question is on the for Q expectations . Just curious if there's any other factors that you factoring into the market or , you know , recently we've heard about the chip issue , whether you're thinking that into the outlook and then the second question is wondering if you can provide a bit more details around the list .

[Analyst 2]: Hi, this is Winnie Yong for Edison. My first question is on the 4Q expectations. I'm just curious if there's any other factors that you're factoring into the new market or, you know, recently we've heard about the chip issue, whether you're taking that into the outlook. The second question is, wondering if you can provide a bit more details around the Lyft and demo program, the launch time, the economics, etc. Thank you.

Speaker #8: And program . The launch time , the the economics , etc. . Thank you .

Speaker #9: Thank you , thank .

Speaker #7: You .

Speaker #2: Yeah . So I think on the Q4 volume , I think the point we're trying to make in the script is that , you know , you should look at the full year volume of kind of around 35.5 as as the right number , like when we're looking at 26 , we are a starting point is 35.5 .

[Analyst 1]: Yeah, I think on the Q4 volume, the point we're trying to make in the script is that you should look at the full-year volume of around 35.5 as the right number. When we're looking at 26, the starting point is 35.5. It's not Q4 volume times four. There's really nothing going on specifically besides seasonality was different this year due to, we think, the tariffs and trying to pull ahead some production into Q2 and Q3. This is exactly within expectations for us. It shouldn't be seen as a trend. We see the trend as around 9 million a quarter. In terms of next Spera, we have not received any indications of requests to reduce production or reduce shipments at all. In fact, if anything, it's the opposite. It's a very new situation.

Speaker #2: It's not Q4 volume times four . So there's really nothing going on specifically besides , you know , seasonality was different this year due to really we think because of the tariffs and trying to pull ahead some production into Q2 and Q3 .

Speaker #2: So this is kind of exactly within expectations for us . Shouldn't be seen as a trend . And I think that , you know , we see the trend as around 9 million a quarter .

Speaker #2: And that's there's in terms of next era , we we have not received any indications of , you know , request to reduce production , reduce shipments at all .

Speaker #2: In fact , you know , if anything , it's the opposite . It's a very new situation . We don't , you know , in talking to customers , we don't expect any material impact in Q4 .

[Analyst 1]: In talking to customers, we don't expect any material impact in Q4, but we do have a bit of margin in the guidance versus the high end to account for that if there's a bit of lower production, but we don't expect it to affect Q4.

Speaker #2: But we do have a bit of margin in the . Guidance versus the high end to account for that . If there's a bit of lower production , but we don't expect it to affect Q4 .

Speaker #6: What was the second question ? If you can repeat .

Speaker #9: It any ?

Amnon Shashua: What was the second question? If you can repeat it?

Speaker #8: Oh , it was on the list . And program . If you can talk about , you know , the evolution for that .

[Analyst 2]: It was on the Lyft and demo program. If you can talk about the evolution to that one, the launch time, and the economics. Thank you.

Speaker #8: When the launch time and the economics . Thanks .

Speaker #6: So if you refer to the lift robotaxi program , so we are working with the Lyft and Marubeni and , and a vehicle producer on a robotaxi program in the US , we disclosed the first city will be in Dallas Fort Worth .

Amnon Shashua: If you refer to the Lyft robotaxi program, we are working with Lyft and Moran Rojansky and a vehicle producer on a robotaxi program in the U.S. We disclosed the first city will be in Dallas-Fort Worth. We are now in advanced testing stages of this program, and it follows the leading program we have with Volkswagen Group for robotaxi activities in the U.S., and it's been tracking well. The launch date will be disclosed in the near future.

Speaker #6: We are now in in advanced testing stages of this of this program . And it follows the leading program we have with wagon group for robotaxi activities in the US .

Speaker #6: And it's been tracking well . And the launch date will be disclosed in the in the near future .

Speaker #2: Thanks , Winnie .

Speaker #8: Okay . Thank you .

[Analyst 1]: Thanks, Winnie.

[Analyst 2]: Perfect. Thank you.

Speaker #1: Thank you . Our next question comes from the line of Joshua Buckwalter with TD Cowen . Please go ahead .

Operator: Thank you. Our next question comes from the line of Joshua Buchalter with TD Cowen. Please go ahead.

Speaker #10: Hey guys . Thank you for taking my questions . I wanted to ask about the metric you gave about normalizing for inventory . I think you said you grew volumes 5% more than your top ten customers .

[Analyst 1]: Hey, guys. Thank you for taking my questions. I wanted to ask about the metric you gave about normalizing for inventory. I think you said you grew volumes 5% more than your top 10 customers. Is this sort of a rule of thumb we should be using of your expectations for sort of normalized unit growth in, you know, 2026 and beyond as you see the ADAS market and attach rates develop, and then we layer in ASPs more? I'd just be curious to hear if that's like sort of a normalized growth rate you think is the right level for us to benchmark to on a unit basis. Thank you.

Speaker #10: Is this sort of a rule of thumb? We should be using your expectations for sort of normalized unit growth in 2026 and beyond, as you see the ADAS market and attach rates develop.

Speaker #10: And then we layer in ASPs more . Just be curious to hear if that's sort of a normalized growth rate you think is the right level for us to benchmark to on a unit basis .

Speaker #10: Thank you .

Speaker #2: Yeah , I think the key here is that investors and analysts should focus on kind of the expected volume of our top ten customers , which are mostly legacy OEMs and has been , you know , a bit below kind of the overall vehicle production for the last few years , not meaningfully , but , you know , a bit below .

[Analyst 1]: Yeah, I think the key here is that, you know, investors and analysts should focus on kind of the expected volume of our top 10 customers, which are mostly legacy OEMs and have been, you know, a bit below kind of the overall vehicle production for the last few years, not meaningfully, but, you know, a bit below. We would expect to grow faster than in volume, you know, and revenue, we would expect to grow faster than that level because of things like ADAS adoption growth, because of things like growing share within some of those customers, because of things like emerging markets like India. This year, you know, we consider the performance pretty good. We grew, you know, about 5 percentage points faster than the top 10 OEMs, which were down 2% to 3%.

Speaker #2: And then we would expect to grow faster than in volume , and revenue . We would expect to grow faster than that level because of things like Adas , adoption growth , because of things like growing share within some of those customers , because of things like emerging markets like India .

Speaker #2: So this year , you know , we consider the performance pretty good . We grew , you know , about five percentage points faster than the top ten OEMs , which were down 2 to 3% .

Speaker #2: And you know , we're not going to put a precise number on on what we think it should be going forward . But something in that range is probably fair .

[Analyst 1]: We're not going to put a precise number on what we think it should be going forward, but something in that range is probably fair.

Speaker #10: Got it . Thank you . Dan , I appreciate the color there . And for my follow up . So you know , it sounds like you're speaking to , you know , engagements for eyes off continuing to move forward .

Amnon Shashua: Got it. Thank you, Dan. I appreciate the color there. For my follow-up, it sounds like you're speaking to engagements for eyes-off continuing to move forward. It does seem like there's a good amount of momentum across the industry from both the robotaxi side and in consumer passenger vehicles for eyes-off features. I guess, what do you think the OEMs need to see that gets them across the line in these engagements? I guess any timeline you would expect to be able to, a reasonable timeline to expect where you think you will be able to announce some additional Chauffeur or even SuperVision wins. Thank you.

Speaker #10: And it does seem like there's a good amount of momentum across the industry from both the robotaxi side and in consumer passenger vehicles for is off features .

Speaker #10: I guess , you know , what do you think the OEMs need to see in that gets them across the line in these engagements ?

Speaker #10: And I guess any timeline you would expect to be able to , you know , a reasonable timeline to expect where you think you will be able to announce some additional chauffeur .

Speaker #10: Or even supervision wins . Thank you .

Speaker #3: I think the focus now is execution . We are with the supervision , the hardware is on the sea stage , which is very advanced from a production level .

Nimrod Nehushtan: I think the focus now is execution. We are with the SuperVision. The hardware is on the seed sample stage, which is very advanced from a production level. We have a number of meaningful software drops in the coming six months. I believe that somewhere in the first half of 2026, we'll be in a very good position of being very close to production ready with the platforms of SuperVision and Chauffeur. That should enable us to get more exposures to new programs, to new program wins. The focus of the company in that area is execution. Also, in the robotaxi with the Drive is execution. Really, 2026 is an execution year and not necessarily focusing on bringing new business, at least not in the first half of the year.

Speaker #3: We have a number of meaningful software drops in the coming six months . So I believe that somewhere in the first half of 2026 , we'll be in a very good position of being very close to production , ready with the platforms of supervision and and chauffeur , and that should enable us to to get more exposures to , to new program , to new program wins .

Speaker #3: So the focus of the company in that area is execution . Also in the robotaxi with the drivers execution . So really 2026 is an execution year .

Speaker #3: And not necessarily focusing on bringing new business , at least not in the first half of the year .

Speaker #6: If I can add color to what Alan said in the in the last year and a half , we've been working simultaneously on supervision , chauffeur and robotaxi for execution .

Amnon Shashua: If I can add the color to what Amnon said, in the last year and a half, we've been working simultaneously on SuperVision, Chauffeur, and robotaxi for execution. In the past, let's say, eight months, we've added also a surround ADAS production program for that execution process. Right now, we are on track with the original timelines of all of these programs, and we are in B sample or C sample hardware and stable platforms, which is an important achievement in order to maintain the original timeline. We are focusing on software iterations, AI innovation, and integrating the latest AI stack into these platforms. Doing so simultaneously is a significant achievement for us.

Speaker #6: In the past , let's say eight months . We've added also Adas production program for that execution process . And right now we are on track with the original timelines of all of these programs .

Speaker #6: And we are in B sample or C sample hardware and stable platforms , and which is an important achievement if in order to maintain the original timeline .

Speaker #6: And now we're focusing on software iterations, AI innovation, and integrating the latest AI stack into these platforms. Doing so simultaneously is a significant achievement for us.

Speaker #6: And we believe that now , within the next few months of showing a very mature production platform that uses production hardware with the latest AI , you know , technologies , that shows meaningful performance improvements compared to what is what exists today in the industry is the next big thing for us to show in general to our customers .

Amnon Shashua: We believe that now within the next few months of showing a very mature production platform that uses production hardware with the latest AI technologies that shows meaningful performance improvements compared to what exists today in the industry is the next big thing for us to show in general to our customers and also for new engagements. That's expected within months from today. Thank you both.

Speaker #6: But and also for new engagements , and that's expected within months from .

Speaker #9: Today .

Speaker #10: Thank you both .

Speaker #1: Our next question comes from the line of Chris McNally with Evercore ISI . Please go ahead .

Operator: Our next question comes from the line of Chris McNally with Evercore ISI. Please go ahead.

Speaker #11: Thanks so much , team . I want to dive in on the on the surrounding . Congratulations on the on the big win .

[Analyst 3]: Thanks so much, team. I wanted to dive in on the surround and congratulations on the big win. It sounds like there's a different technology path that maybe, you know, you and the industry had thought a couple of years ago where SuperVision would sort of be the kind of the walkway to higher forms of, you know, a Chauffeur and eyes-off. It sounds like given the industry has been a little bit slower on that front, maybe how much they would charge for it, etc., it seems like surround is now that technology gateway. I just would love to understand from your standpoint, it sounds like a must for the OEMs to hit 2029 regs, meaning they really can't do this with an internal solution or even the solution that you've been providing them originally with the $50 chip.

Speaker #11: It sounds like there's a different technology path that maybe you and the industry had thought a couple of years ago where supervision would sort of be the kind of the walkway to higher forms of , you know , chauffeur and , and eyes off .

Speaker #11: And it sounds like , given the industry has been a little bit slower on that front , maybe how much they would charge for , etc.

Speaker #11: . It seems like surround is now that that technology gateway and I just would love to understand from your standpoint , is it sounds like a must for the OEMs to hit 2029 regs , meaning they really can't do this with an internal solution or even the solution that you've been providing them originally with the with the $50 chip .

Speaker #11: So , you know , is this sort of a is this one of the reasons you're seeing so much traction ? Is this is the logical step up of your level two of your level two customers to to surround ?

[Analyst 3]: Is this one of the reasons you're seeing so much traction? This is the logical step up of your level two customers to surround.

Speaker #3: Okay . So I'll let the Nimrod , the first answer and then I'll complete if necessary .

Amnon Shashua: Okay, I'll let Nimrod Nehushtan first answer, and then I'll complete if necessary. Hi Chris. I think surround ADAS is a very important category for OEMs because it's not just about new user experiences, but also adhering to emerging regulations in developed markets. It's a very, very cost-optimized product segment because it's designed for high-volume vehicles and for pretty much $20,000, $30,000 vehicles and above. It requires very, very efficient design and a closed software-hardware integration. Mobileye is known to have a very efficient chip and very efficient software. We can achieve pretty much, we think, the most competitive price points for this product category. From an OEM standpoint, thinking about whether you want to buy or build a product in that category, it's not just about understanding AI or different software technologies.

Speaker #6: Hi Chris . So I think surround us is a very important category for OEMs because it's not just about new user experiences , but also adhering to emerging regulation in in developed markets .

Speaker #6: And it's a very , very cost optimized product segment because it's designed for high volume vehicles and for pretty much 20 , $30,000 vehicles and above .

Speaker #6: It requires very , very efficient design and a close software hardware integration . Mobileye is known to have a very efficient chip and very efficient software , and we can achieve pretty much we think the most competitive price point for this product category .

Speaker #6: And from an OEM standpoint , thinking about , you know , whether you want to buy or build a product in that category , it's not just about understanding AI or , you know , different software technologies .

Speaker #6: Can you get to such a level of efficiency on vehicles and vehicles that are in tens of millions per year ? If you fail , you may jeopardize your core business .

Amnon Shashua: Can you get to such a level of efficiency on vehicles that are in tens of millions per year? If you fail, you may jeopardize your core business. Sourcing an existing available solution that is very mature is the safe choice. Maybe if you're into in-house development, you can focus this on the higher end of applications and smaller volumes, maybe 1% of your cars. If it fails or is significantly delayed, there is no damage done to the core cash cow of the company. That's where we see their interest. Just yesterday, GM announced their level three eyes-off development. That is designed for a very specific vehicle category. I think they disclosed the type of vehicle, and it's a very high price point. As you all know, GM sells cars in $30,000, $40,000 also. Obviously, that solution is not appropriate for these vehicle price points.

Speaker #6: And so sourcing an existing available solution that is very mature is the safe , safe choice . And maybe if you're if you're into in-house development , you can focus this on the higher end of of applications .

Speaker #6: And smaller volumes . Maybe 1% of your cars . And then if it fails or it's significantly delayed , there is no damage done to the , you know , to the core cash cow of the company .

Speaker #6: And that's where we think we see their interest. Just yesterday, GM announced their Level 3 ease of development that is designed for a very specific vehicle category.

Speaker #6: I think they disclosed the type of vehicle and its very high price point. As you all know, GM sells cars in the $30,000 to $40,000 range.

Speaker #6: Also . Obviously that solution is not appropriate for these vehicle price points . And it may make sense for them to find a proven , reliable , trustworthy , high performing , cost efficient solution for the vast majority of volumes .

Amnon Shashua: It may make sense for them to find a proven, reliable, trustworthy, high-performing, cost-efficient solution for the vast majority of volumes while they focus on the high end.

Speaker #6: While they focus on the high end .

Speaker #3: Yeah , and I think I'll continue . I think likewise , going into level two plus with 11 cameras , our supervision , we are working very diligently on on very innovative cost reduction schemes .

Nimrod Nehushtan: I think I'll continue. Likewise, going into level two plus with 11 cameras, our SuperVision, we are working very diligently on very innovative cost reduction schemes. Looking into 2028 timeframes and beyond, we can offer significant price reduction on SuperVision. The next level that OEMs are considering are eyes-off systems. As I said before, execution is the key. If we launch an eyes-off system, and that's what we're planning to do in 2027 with Audi, that will be a kind of an inflection point. Seeing such a product at work, passing through all the regulation, the sub-certification, and regulatory approvals, passing the MTBF bar that is needed to have eyes-off, this is a significant achievement. Once we pass that bar, I think that will be a big inflection point.

Speaker #3: So looking into 2028 timeframes and beyond , we can offer significant price reduction on on supervision the next the next level that OEMs are considering are off systems .

Speaker #3: And they're , as I said before , execution is the key . If we launch an AIS off system and that's what we're planning to do in 2027 with Audi , that will be a kind of an inflection point .

Speaker #3: Seeing such a product at work , passing through all the regulation , the self-certification and regulatory approvals , passing the Mtbf bar that is needed to to have the AIS off .

Speaker #3: This is a significant achievement . Once we pass that bar , I think that will be a big inflection point .

Speaker #9: Yeah ,

Speaker #6: I think that there is no no question beyond or about the fact that is off driving and later mind off driving is the ultimate value proposition for consumers .

Amnon Shashua: Yeah, I think that there is no question about the fact that eyes-off driving and later minds-off driving is the ultimate value proposition for consumers. We think that most OEMs are very interested and very bullish on this value proposition. The question is, is now the right time, given the maturity of the technology and the available system, at what cost for them to go all in with a partner? Today in the industry, outside of China, there is no other technology provider that is working closely on the entire system, hardware, software, silicon, AI, receiving approvals for testing and going through the ropes of homologation and all the necessary checkboxes other than Mobileye with Audi. All eyes are on us. Hopefully, within months, we'll show more and more evidence of the maturity of the technology getting there.

Speaker #6: And we think that most OEMs are very interested and very bullish on this vertical position . The question is , is now the right time given the maturity of the technology and the available system , at what cost for them to go all in with a partner today in the industry outside of China , there is no other technology provider that is working closely on the entire system .

Speaker #6: Hardware , software , silicon , AI , you know , receiving approvals for testing and going through the ropes of homologation and all the necessary check boxes other than Mobileye without you .

Speaker #6: And all eyes are on us and hopefully within months we'll show more and more evidence of the maturity of the technology . Getting there .

Speaker #6: And as Alan said , we believe that will be a significant inflection point for that product .

Amnon Shashua: As Amnon said, we believe that will be a significant inflection point for that product.

Speaker #11: The only clarification or summary of what you said . Super helpful . So is it logical then to to think like your first customer , which was VW , that basically your target audience ?

[Analyst 3]: Nimrod, my only clarification or summary of what you said is super helpful. Is it logical then to think like your first customer, which was Volkswagen, that basically your target audience, you know, it's not going to be 100%, but your target audience for surround is existing basic ADAS customers that now need to convert for 2029? Your second customer, as an example, upgrades ADAS into surround, and there's a future path beyond that to eyes-off.

Speaker #11: It's not going to be 100% your target audience for surround is existing basic Adas customers that now need to convert for 2029 and and so your second customer , as an example , upgrades Adas into surround .

Speaker #11: And then there's a future path beyond that to to eyes off .

Speaker #6: That's exactly the case . And that's nomination . We we disclose . It's an upgrade from slide to Q6 . Hi . That's that's essentially the the decision that that OEM made .

Amnon Shashua: That's exactly the case in that nomination we disclosed. It's an upgrade from IQ6 light to IQ6 high. That's essentially the decision that that OEM made, and that's a right summary of how we see things.

Speaker #6: And so that's the right summary of how we see .

Speaker #9: Things .

Speaker #2: Thank you Chris .

Speaker #11: Thank you very much .

Speaker #9: Team .

[Analyst 1]: Thank you, Chris.

[Analyst 3]: Thank you very much, team.

Speaker #1: Thank you . Our next question comes from the line of Mark Delaney with Goldman Sachs . Please go ahead .

Operator: Thank you. Our next question comes from the line of Mark Delaney with Goldman Sachs. Please go ahead.

Speaker #12: Hi . Yes , thank you very much for taking my questions . I'm hoping you can double click on the drive opportunity with list and Marubini .

[Analyst 3]: Yes. Thank you very much for taking my questions. I hope you can double-click on the Drive opportunity with Lyft and Moran Rojansky. I believe the company said today, I think they can name the OEM partner for that engagement soon. Should investors assume that the OEM partner is already effectively finalized, or is there still uncertainty as to which OEM Mobileye is going to partner with? If there is still uncertainty, what would the timeframe need to be to line up the OEM partner in order to meet the 2026 startup operations objective?

Speaker #12: I believe the company said today I think they can name the OEM partner for that engagement soon . So should investors assume that the OEM partner is already effectively finalized , or is there still uncertainty as to which Mobileye is going to partner with ?

Speaker #12: I believe the company said today I think they can name the OEM partner for that engagement soon . So should investors assume that the OEM partner is already effectively finalized , or is there still uncertainty as to which Mobileye is going to partner OEM And if there is still uncertainty , what would the time frame need to be to to line up the OEM partner in order to meet the 2026 start of operations ?

Speaker #12: Objective ?

Speaker #3: So there's no uncertainty who that OEM is , but it's not finalized yet . So I cannot say with 100% guarantee that it will be finalized .

Nimrod Nehushtan: There's no uncertainty who that OEM is, but it's not finalized yet. I cannot say with 100% guarantee that it will be finalized, but it looks on track and it looks good. I would say that this is in parallel to our existing activity with Volkswagen with the ID.Buzz and with the Holon platform. We have quite a lot of scale opportunity with the existing relationships we have. This is why I mentioned before that really focuses execution. Scale and business will come once execution is there. Nimrod, you want to add something?

Speaker #3: But it looks on track and it looks good . I would say that this is in parallel to our existing activity with Volkswagen , with the Id.buzz and with the Holon platform , with the Benteler .

Speaker #3: So we have we have quite a lot of scale opportunity with the existing relationships . We have . This is why I mentioned before that the really focuses execution .

Speaker #3: You know , scale and business will come once execution is , is there . The more you want to add .

Speaker #6: Just one more clarification Mark that that vehicle provider is not it's not that we will just start working with that vehicle OEM once .

Amnon Shashua: Just one more clarification, Mark. That vehicle provider is not, it's not that we will just start working with that vehicle OEM once we will finalize the agreement. In the past almost 18 months, we've been working closely between Moran Rojansky, that vehicle OEM, and Mobileye on creating multiple prototype vehicles and then working on the actual vehicle platform itself, integrating our self-driving system with the sensors. It's all pretty much, we have numerous vehicles that are equipped with all the sensors and all the compute infrastructure needed, as if it's like an ID.Buzz we do in our leading program. We are starting, we're hitting the ground running once it will be finalized and disclosed. It's a natural transition into serious, you know, serious development towards commercial launch.

Speaker #6: We will finalize the agreement . In the past , almost 18 months , we've been working closely between Marubeni , that vehicle OEM and Mobileye on creating multiple prototype vehicles and then working on the actual vehicle platform itself .

Speaker #6: Integrating our self-driving system with the sensors . And it's all pretty much we have numerous vehicles that are equipped with all the sensors and all the compute infrastructure needed , as if it's like an Id.buzz .

Speaker #6: We do in our leading program . And so we are starting , we're hitting the ground running once it will be finalized and disclosed , it's it's a it's a natural transition into serious , serious development towards commercial launch .

Speaker #2: Yeah . I would just add one more point here is that if there's a bit of wait and see on consumer owned , you know , high , high end is on and is off technology robotaxi is exactly the opposite .

[Analyst 1]: Yeah, I would just add one more point here is that, you know, if there's a bit of wait and see on consumer-owned, you know, high-end eyes-on and eyes-off technology, robotaxi is exactly the opposite. There's so much activity, but the key is removing the safety driver and starting to commercialize. That's our main priority right now. The core technology is the same no matter what the vehicle platform is. There's integration work to be done, but it's the core technology that's being worked on. Once we kind of can remove the safety driver, then we can start to commercialize and scale.

Speaker #2: There's so much activity . But the key is removing the safety driver and starting to commercialize . And that's our main priority right now .

Speaker #2: And the core technology is the same no matter what the vehicle platform is . There's integration work to be done , but you know , it's the core technology that's being worked on .

Speaker #2: And once we kind of can remove the safety driver , then we can start to commercialize and scale .

Speaker #12: That's all very helpful . My follow up question is also on on drive . But with VW and the the Id.buzz you mentioned , you're tracking to be driver out next year , can you just speak a bit more on what still needs to happen in order to to take the driver out next year and any sense of when within the year that that milestone may occur .

[Analyst 3]: That's all very helpful. My follow-up question is also on Drive with Volkswagen and the ID.Buzz. You mentioned you're tracking to be driver out next year. Can you just speak a bit more on what still needs to happen in order to take the driver out next year, and any sense of when within the year that that milestone may occur? Thanks.

Speaker #12: Thanks .

Speaker #3: Well , there are a number of milestones . One is the readiness of the vehicle that should be ready in the next next weeks , weeks or few months .

Nimrod Nehushtan: There are a number of milestones. One is the readiness of the vehicle. That should be ready in the next weeks or a few months. Second is the MTBF KPIs, which we are tracking. They are on track. We believe that in the first half of 2026, we can start removing the safety driver in one city in the U.S. and prepare for a commercial deployment later in the year and beginning of 2027.

Speaker #3: And second is the mtbf KPIs , which we are tracking that are on track . And we believe that in the first half of 2026 , we can start removing the safety .

Speaker #3: The safety driver in one city in the US . And to prepare for a commercial deployment later in the year and beginning of 2027 .

Speaker #7: Thank you .

Speaker #9: Thank you . Mark .

[Analyst 3]: Thank you.

[Analyst 1]: Thank you, Mark.

Speaker #1: Our next question comes from the line of Joe Spak with UBS . Please go ahead .

Operator: Our next question comes from the line of Joe Spak with UBS. Please go ahead.

Speaker #13: Thanks . Good morning everyone . Just going back to the surround Adas nomination . I was wondering if you guys could provide a little bit of color as to sort of what got the customer over the line , maybe a little bit of detail on the level of integration that you were doing versus maybe the automaker is dxp involved and and then just in terms of the rollout , is this a case where we need to wait for new model launches or or can this product be placed on other refreshes ?

[Analyst 1]: Thanks. Good morning, everyone. Just going back to the surround ADAS nomination, I was wondering if you guys could provide a little bit of color as to sort of what got the customer over the line, maybe a little bit of detail on the level of integration that you are doing versus maybe the automaker. Is DXP involved? In terms of the rollout, is this a case where we need to wait for new model launches, or can this product be placed on refreshes? Thank you.

Speaker #13: Thank you .

Speaker #6: I'll take this . Hi , Joe . So we we think the driving forces behind this decision to upgrade from acoustic slide to Ic6 high was about basically the standard fit sensor set for for that OEM is at minimum five cameras and five radars .

Amnon Shashua: I'll take this. Hi, Joe. We think the driving forces behind this decision to upgrade from IQ6 light to IQ6 high was about basically the standard fit sensor set for that OEM is at minimum five cameras and five radars. In the older days, some of these cameras were used just for top-view visualization when you do parking, for example, for the human driver. Just the front camera was used for ADAS, and the radars were used for ADAS. That created a very inefficient design. That OEM decided to create a more consolidated ECU architecture in which you can think of this as somewhat like simplifying the architecture and then routing all the sensors to the IQ. The IQ6 high is powerful to process all of these sensors and create a much richer sensing state and much richer user offering.

Speaker #6: And in the older days , these some of these cameras was used just for top view visualization . When you do parking , for example , for the human driver and just the front camera was used for Adas and the radars were used for Adas and that created a very inefficient design .

Speaker #6: And that OEM decided to create a more consolidated ECU architecture , in which you can you can think of this as somewhat of a simplified architecture .

Speaker #6: And then routing all the sensors to the IQ and the IQ six . Hi , is powerful to process all of these sensors and create a much richer sensing state and much richer user offering .

Speaker #6: For example , hands free driving in highways supporting all of the most cutting edge advanced Adas requirements . In the Ncap . And so on .

Amnon Shashua: For example, hands-free driving in highways, supporting all of the most cutting-edge advanced ADAS requirements in NCAP and so on, as we've mentioned. It's about the system simplification, consolidating efforts, and routing all the sensors that already exist in the car to a more powerful chip that can process them more intelligently and offer better user experiences. The added cost for that OEM was very reasonable compared to the added value, as you know, as evidenced by their decision. It's not like a 10 times more expensive chip. In order to get that value, as we've disclosed in the past, it's two to three times more expensive for that, you know, silicon component, generally speaking. I think it makes it, as they said it, it makes too much sense not to make this transition.

Speaker #6: As we've mentioned . So it's about the system simplification , consolidating efforts and routing all sensors that already exist in the car to to more powerful chip that can process them more intelligently and offer better user experiences .

Speaker #6: The added cost for that OEM was very reasonable compared to the added value . As as evidence , you know , by by their decision .

Speaker #6: So it's not like a ten times ten times more expensive chip in order to get that value . It's a as we've disclosed in the past , it's 2 to 3 times more expensive for for that silicon component .

Speaker #6: Generally speaking . So I think it's it makes as they said it , it makes too much sense not to make this transition .

Speaker #6: We are also discussing about potential future . That's with other OEMs potential future consolidations like with parking applications and driver monitoring system and Adas and hands free driving .

Amnon Shashua: We're also discussing, you know, potential future, that's with other OEMs, but potential future consolidations like with parking applications and driver monitoring system and ADAS and hands-free driving all can be processed and provided by Mobileye on the IQ6 high chip with a very attractive cost. I think that's a compelling proposition for OEMs. Regarding your question about vehicle launches, it's a new architecture. In parallel, we work on other, let's say, more existing architectures as well. It's a combination of the two.

Speaker #6: All can be processed and provided by Mobileye on the chip with a very attractive cost . And I think that's a compelling proposition for OEMs .

Speaker #6: And regarding your question about vehicle launches , it's a it's a new architecture . And in parallel , we work on on other , let's say , more existing architectures as well .

Speaker #6: So it's a combination of the .

Speaker #9: Two .

Speaker #7: Okay .

Speaker #13: Thank you for that . And then I guess just as a follow up , I think . You know , in a prior update , there , were , you know , maybe 3 or 4 other sort of , you know , advanced engagements around about surround .

[Analyst 1]: Thank you for that. I guess just as a follow-up, in a prior update, there were maybe three or four other sort of advanced engagements around surround. I was wondering if you could just get an update there, and maybe, going off of some of the commentary on Chris's question, have you seen more initial maybe SuperVision engagements move more towards surround in the near term?

Speaker #13: I was if you could just get an update there . You know , and maybe , you know , going off of some of the commentary on Chris's question , like , have you seen sort of more , you know , initial maybe supervision engagements move more towards surround in the near term .

Speaker #6: So I wouldn't say it's it's supervision engagements moving towards around . It's more about base Adas engagements expanding to surround from what we're seeing , the first two design wins around Adas are examples of OEMs with high volumes that sell cars at relatively low , you know , vehicle price points that have in the past sourced a front camera solution .

Amnon Shashua: I wouldn't say it's SuperVision engagements moving towards surround. It's more about base ADAS engagements expanding to surround from what we're seeing. The first two design wins we have for surround ADAS are examples of OEMs with high volumes that sell cars at relatively low, you know, vehicle price points that have in the past sourced a front camera solution and in these examples decided to source a surround ADAS solution for the same vehicle category. I think that's the evidence that we're basing our, you know, assessment on. Yeah, we have a lot of engagement. Mobileye works with pretty much all of the OEMs on a recurring basis on what we have to offer. We see a lot of interest. I think we will, you know, we prefer to disclose when we have nominations and it's concrete like we did today.

Speaker #6: And these examples decided to source data solution for the same vehicle category . So I think that's the evidence that we're basing our our , you know , assessment on .

Speaker #6: And yeah , we have a lot of engagements in Mobileye works with pretty much all of the OEMs on a recurring basis on what we have to offer .

Speaker #6: And we see a lot of interest . And I think we will we will prefer to disclose when we have nominations . And it's concrete like we did today , but we we remain confident in the strength of our outlook .

Amnon Shashua: We remain confident in, you know, the strength of our outlook.

Speaker #13: Thanks .

Speaker #2: Thanks .

Speaker #9: Joe .

[Analyst 1]: Thanks. Thanks, Joe.

Speaker #1: Our next question comes from the line of Shreyas Patil with Wolfe Research . Please go ahead .

Operator: Our next question comes from the line of Shreyas Patil with Wolfe Research. Please go ahead.

Speaker #10: Hi .

Speaker #14: Thanks a lot for for taking my question . Maybe just to to follow up on on the earlier one , how do you think about the the competitive landscape when it comes to surround Adas ?

[Analyst 1]: Hi, thanks a lot for taking my question. Maybe just to follow up on the earlier one. How do you think about the competitive landscape when it comes to surround ADAS? I think there are three or four other major suppliers that are trying to win awards here as well. Maybe just to give a little bit of background on the bidding process that went into securing this award, this second award that you just announced.

Speaker #14: I think there are 3 or 4 other major suppliers that are that are trying to win awards here as well . And maybe just to to give a little bit of background on the the bidding process that that went into securing this award .

Speaker #14: The second award that you just announced .

Speaker #3: We're talking about a very highly competitive in terms of cost , cost optimized product . So all the high performance chips that you hear that their price point is not relevant for such a for such a product .

Nimrod Nehushtan: We're talking about a very highly competitive, in terms of cost, cost-optimized product. All the high-performance chips that you hear, the price point is not relevant for such a product. Our chip, the IQ6 high, is both the core chip for our AV. For example, in SuperVision, we have two of those chips. In Drive, we have four of those chips, in Chauffeur, three. One chip is highly cost-optimized, and we can meet the cost desires of OEMs with our system on chip that can process all those multiple sensors, five, six, or seven cameras, and five radars and ultrasonic, and so forth. We're talking about a game in which cost is highly, highly critical. We have first-mover advantage. We were the first to receive nomination with the Volkswagen Group on surround ADAS. The new win of today shows that we are successful in leveraging our first-mover advantage.

Speaker #3: Our IQ six high is both a the core chip for our Avi . For example , in supervision we have two of those chips and drive .

Speaker #3: We have four of those chips and chauffeur three . But one chip is highly cost optimized . And we can meet the cost desires of OEMs with with our system on chip that can process all those multiple sensors .

Speaker #3: Five , 6 or 7 cameras and five radars and ultrasonic and so forth . So we're talking about a game in which cost is is highly , highly critical .

Speaker #3: So we have first mover advantage . So we were the first to receive nomination with the Volkswagen Group on on surround Adas . And the new win of today shows that we are successful in leveraging our first mover advantage .

Speaker #3: So it's all about here cost and performance . But cost is critical because we're talking about high volume vehicle categories . . So it's not that there is no competition , but we do have first mover advantage .

Nimrod Nehushtan: It's all about here cost and performance, but cost is critical because we're talking about high-volume vehicle categories. It's not that there is no competition, but we do have first-mover advantage, and we are showing that we can leverage that. Yes, Nimrod, go ahead.

Speaker #3: And we are showing that we can leverage that to go .

Speaker #9: Ahead .

Speaker #6: Another aspect of efficiency that that we are that should be considered beyond just the price , our IQ six high chip does not have does not have any limitation in deploying pretty much all of the state of the art AI architectures , while being very efficient in power consumption .

Amnon Shashua: Another aspect of efficiency that we are that should be considered beyond just the price, our IQ6 high chip does not have any limitation in deploying pretty much all of the state-of-the-art AI architectures. While being very efficient in power consumption, this allows us to offer a solution that is passive cooled, for example, and does not require liquid cooling. This is a small technical detail, but for the OEMs, it's a big difference in overall system cost and the complexity of the system. Combustion engine vehicles may not have liquid cooling available, for example. Other competitors are trying to rely on more, because the underlying product requires sophisticated processing of sensors and create and using some of the AI technologies, other competitors may try to use a high-performance chip for that product category. Beyond just the price disadvantage, it also complicates the overall system.

Speaker #6: This offers us this allows us to offer a solution that is passive . For example , and does not require liquid cooling . Now , this is a small technical detail , but for the OEMs it's a big difference in overall system cost .

Speaker #6: In the complexity of the system , combustion engine vehicles may not have liquid cooling available . For example , other competitors are trying to rely on more because because the underlying product requires sophisticated processing of sensors and and using some of the AI technologies other competitors may try to use a high performance chip for that product category .

Speaker #6: And beyond just the price disadvantage , it also complicates the overall system . So this is another element that is hard to compete with .

Amnon Shashua: This is another element that is hard to compete with, the low power consumption of our chip without compromising performance.

Speaker #6: The low power consumption of our chip without compromising performance .

Speaker #9: Yeah .

Speaker #3: I'll just give it color in terms of performance of the IQ six , high , our internal benchmarks running on both convolutional nets and vision net transformers show that we are on par .

Nimrod Nehushtan: Yeah, I'll just give a color in terms of performance of the IQ6 high. Our internal benchmarks running on both convolutional nets and vision net transformers show that we are on par and in many cases better than the Orin X, which is now, you know, the choice of competition when OEMs are considering level two plus systems, but at a price point which is less than 25% of it. This gives us a great advantage. On one hand, we have a high-performance chip, which is on par with the latest high-performance chips in the automotive industry. On the other hand, with a cost structure and power consumption constraints that are way, way more appealing.

Speaker #3: And in many cases better than the Or in ECS , which is now , you know , the choice of a competition when when OEMs are considering a level two plus systems , but at the price point , which is less than 25% of .

Speaker #9: It .

Speaker #3: So this gives us a great advantage . On one hand , we have a high performance chip , which is on par with the latest latest high performance chips in automotive and automotive industry .

Speaker #3: On the hand with a with a cost structure and the power consumption constraints that are way , way more appealing .

Speaker #14: Okay , thanks . That's really helpful . And then maybe Amnon , I think last quarter you talked about drive potentially becoming a more material revenue contributor by 2027 .

[Analyst 1]: Okay, thanks. That's really helpful. Maybe Amnon, I think last quarter you talked about Drive potentially becoming a more material revenue contributor by 2027. Wondering if maybe you can expand on that a little bit. You've talked about in the past about a relatively high upfront revenue stream, maybe $40,000 to $45,000. How should we think about the rate at which you can bring that down, especially as robotaxi operators are looking to bring down vehicle costs to improve overall unit economics?

Speaker #14: Wondering if maybe you can expand on that a little bit. And you've talked about in the past about a relatively high upfront revenue stream, maybe $40,000 to $45,000.

Speaker #14: How should we think about the rate at which you can bring that down , especially as robotaxi operators are looking to bring down vehicle costs to improve overall unit economics ?

Speaker #3: Our economics from every robotaxi is comprised of both one time fee and and revenue sharing on on price per per mile . And over time we will kind of change the equation .

Nimrod Nehushtan: Our economics from every robotaxi is comprised of both a one-time fee and revenue sharing on price per mile. Over time, we will kind of change the equation, maybe reduce the one-time fee, increase the cost per mile. We will have recurring revenue and also the one-time fee of the system. With robotaxi, it's really just execution because the current contracts that we have with the existing partners talk about many tens of thousands of vehicles at the end of the decade. To give you a proportion, today's very, very successful Waymo is based on 3,000 vehicles. It is really just a matter of execution. If we execute, if we execute our plan of removing the driver during the first half of 2026, prepare this for commercialization beginning of 2027, the volume is there and in very, very big numbers.

Speaker #3: Maybe reduce the one time fee , increase the cost for cost per mile . So we both will have a recurring revenue . And also the one time fee of of of the system with robotaxi .

Speaker #3: It's really just execution because the current contracts that , that we have with the existing existing partners , they talk about many tens of thousands of vehicles in the end of the of the decade , just to give you proportion .

Speaker #3: Today's very , very successful Waymo is based on 3000 vehicles . So it's really just a matter of execution . If we execute , if we execute our plan , if we're moving the driver .

Speaker #3: During the first half of 2026 , prepare this for commercial commercialization . Beginning of 2027 , the volume is there . And in very , very big numbers .

Speaker #3: .

Speaker #2: And in terms of the upfront cost , we have , we have the room to switch around upfront costs versus recurring revenue , because , you know , we have low costs in general .

[Analyst 1]: In terms of the upfront cost, we have the room to switch around upfront cost versus recurring revenue because we have low costs in general. We can stay profitable on the upfront cost down quite a bit and kind of replace that with more recurring revenue.

Speaker #2: So we can stay profitable on the upfront cost , you down quite a bit and kind of replace that with more recurring revenue .

Speaker #14: Okay , great . Thanks .

Speaker #9: Thanks .

[Analyst 3]: Okay, great. That's really helpful.

[Analyst 1]: Thanks, Shreyas.

[Analyst 3]: Thanks.

Speaker #1: Thank you . Our next question comes from the line of Luke Young with Baird . Please go ahead .

Operator: Thank you. Our next question comes from the line of Luke Young with Baird. Please go ahead.

Speaker #15: Good morning . Thanks for taking the questions . I want to stick with robotaxi . We've talked a lot about US robotaxi and driver out this morning hoping we could get an update on progress towards driver out in Europe as well , especially relative to the different regulatory homologation there .

[Analyst 3]: Good morning. Thanks for taking the questions. I want to stick with robotaxi. We've talked a lot about U.S. robotaxi and driver out this morning. Hoping we could get an update on progress towards driver out in Europe as well, especially relative to the different regulatory homologation there, and just maybe Europe versus U.S. dynamics in general right now for Mobileye. Thank you.

Speaker #15: And just maybe Europe versus US dynamics in general . Right now for for Mobileye . Thank you .

Speaker #6: Yeah . So there are differences between Europe and the US . US is mostly self process which we're doing . And we have today close to 100 vehicles driving in the three locations in the US for testing and working with additional carmakers or additional robotaxi platforms .

Amnon Shashua: Yeah, so there are differences between Europe and the U.S. The U.S. is mostly a self-certification process, which we're doing. We have today close to 100 vehicles driving in three locations in the U.S. for testing and working with additional carmakers or additional robotaxi platforms, as mentioned, on extending that further. In Europe, we have an equivalent, let's say, volume of vehicles. The process for launching commercially is more about a homologation and engaging with regulatory bodies in advance before you can commercially launch. We are doing this process alongside Volkswagen Group that are directly engaging with the German government. Just to add color on this, in the last IAA conference in Munich, we had a chance to meet the German Chancellor who visited the Mobileye booth. He also participated in a test drive with our ID.Buzz vehicle in Hamburg. He was very impressed. He made remarks.

Speaker #6: As mentioned on expanding that further in Europe , we have we have an equivalent , let's say , volume of vehicles . The process for launching commercially is around is more about a homologation and engaging with regulatory bodies in advance before you can commercially launch .

Speaker #6: We are doing this process alongside folks that are directly engaging with the German government , government , just to add color on this , in the last IAEA conference in Munich , we had a chance to meet the German Chancellor , who visited the Mobileye booth , and he also participated in a test drive with our Id.buzz vehicle in Hamburg .

Speaker #6: And he was very impressed . He made remarks . It was covered all over the German media and he made a very interesting remark about how Germany wants to be the leading country in Europe for autonomous driving , that he believes the time is now , that there are funds by the German government that should be allocated to accelerate this as much as possible , and he was very happy by to see the successful collaboration between Volkswagen and Mobileye on this .

Amnon Shashua: It was covered all over the German media. He made a very interesting remark about how Germany wants to be the leading country in Europe for autonomous driving, that he believes the time is now, that there are funds by the German government that should be allocated to accelerate this as much as possible. He was very happy to see the successful collaboration between Volkswagen and Mobileye on this. It's all covered in the German news, so there is nothing confidential in what I just said. We think that we have good tailwind to engage with the German government specifically. We plan to launch first in Germany. Munich, Hamburg, and Berlin are the first three cities. We have good support, good alignment working with Volkswagen on that. We think it raises the entry barrier for other competitors when they want to enter the European market.

Speaker #6: And it's all covered in the German news . So there is nothing confidential in what I just said . And we think that we have good tailwinds to engage with the German government specifically , and we plan to launch first in Germany , in Munich , in Hamburg and Berlin are the first three cities , and we have good support , good alignment , working with Volkswagen on that .

Speaker #6: We think it raises the entry barrier for for other competitors when they want to enter the European market . So it's it's I think , again , as a first mover advantage by collaborating with an OEM like Volkswagen that has good ties with the German government .

Amnon Shashua: I think, again, as a first-mover advantage, by collaborating with an OEM like Volkswagen that has good ties with the German government, it really helps us in this situation.

Speaker #6: It's really helps us in this situation .

Speaker #15: Thanks for that . And then for my follow up , Amnon , you mentioned just a wrinkle in terms of more OEMs adding REM to front facing programs .

[Analyst 3]: Thanks for that. For my follow-up, Amnon, you mentioned just a wrinkle in terms of more OEMs adding REM to front-facing programs. Just curious your thoughts on that. Is it mainly around increasing the data collection? Could it be maybe a precursor of something in terms of future advanced product engagements with those customers as well?

Speaker #15: Just curious , your thoughts on that . Is it mainly around increasing the data collection ? Could it be maybe a precursor of something in terms of future advanced product engagements with those customers as well ?

Speaker #9: Yeah , so .

Speaker #3: It's both for data collection , what we call harvesting . We have more OEMs using REM for for harvesting . And that's a precursor to also using REM for hands free driving .

Nimrod Nehushtan: Yeah, so it's both for data collection, what we call harvesting. We have more OEMs using REM for harvesting, and that's a precursor to also using REM for hands-free driving. Maybe Nimrod, you want to add more color?

Speaker #3: Maybe the more you want to add more .

Speaker #9: Color .

Speaker #6: We we recently signed with with a new OEM for for REM . One of the bigger OEMs in the world that has significant volumes .

Amnon Shashua: Yeah, we recently signed with a new OEM for REM, one of the bigger OEMs in the world that has significant volumes, and that's designed to provide significant volumes for harvesting globally and also use the REM database to improve the performance of the front-facing camera. For us today, the strategic value is mostly about expanding the OEM pool that uploads data. This data is important for us not just to use REM database exclusively as one of our modes, as we mentioned many times in the past, but also we use this very elegantly in our AI training and development. That's something that maybe we'll share more details on in the future. It is a very significant competitive advantage. Expanding by being able to offer much better performance with not significant price increase to OEMs for front cameras, getting more data from multiple OEMs in millions.

Speaker #6: And that's designed to provide significant volumes for harvesting globally . And also use the REM database to improve the performance of the front facing camera .

Speaker #6: It is for us today , the strategic value is mostly about expanding the OEM pool that uploads data . This data is important for us , not just , you know , to use REM database explicitly as as one of our modes .

Speaker #6: As we mentioned many times in the past, it’s important to note that we use this very elegantly in our AI training and development. That’s something that maybe we’ll share more details on in the future.

Speaker #6: But it is a very significant competitive advantage . And expanding by by being able to offer much better performance with not significant price increase .

Speaker #6: OEMs . And for front cameras , getting more data from multiple OEMs in millions . I think today we have more than 7 million vehicles globally uploading data , more than 2 million vehicles in the US alone .

Amnon Shashua: I think today we have more than 7 million vehicles globally uploading data, more than 2 million vehicles in the U.S. alone. Europe is a similar number, also in Japan and Korea and soon in India and so on. It's really a good global coverage that is also diverse in terms of the type of OEM, type of vehicles, number of OEMs. We feel very comfortable with the strength of harvesting.

Speaker #6: Europe is a similar number . Also in Japan and Korea , and soon in India and so on . So we're it's really a good global coverage that is also diverse in terms of the type of OEM type of vehicles .

Speaker #6: A number of OEMs . So we feel very comfortable with the the strength of harvesting .

Speaker #9: Food .

Speaker #15: Thank you for that. I'll leave it there.

Speaker #2: Thank you .

[Analyst 3]: Thank you for that. I'll leave it there.

Speaker #9: Luke .

Speaker #1: Thank you . Our next question comes from the line of Dan Levy with Barclays . Please go ahead .

[Analyst 1]: Thank you, Luke.

Operator: Thank you. Our next question comes from the line of Dan Levy with Barclays. Please go ahead.

Speaker #16: Hi . Thank you for taking the questions . I wanted to just follow up on the prior question first . And on the driver out specifically in the US for some of the programs you had .

[Analyst 3]: Hi, thank you for taking the questions. Wanted to just follow up on the prior question first and on the driver-out, specifically in the U.S. for some of the programs you had. I know you said it was a self-certification process, but maybe you can just go into maybe what are some of the gating factors that you need to see from a technical side to get comfortable to actually pull the driver? What is the expected timing on driver-out?

Speaker #16: I know you said it was a self-certification process , but maybe you can just go into maybe what are some of the gating factors that you need to see from a technical side to get comfortable to actually pull the driver ?

Speaker #16: And what is the expected timing on driver out ?

Speaker #3: In terms of expected timing , we said it's going to be the first half of 2026 . In one city in the in the US , in terms of the technical milestones , you know , we have a very elaborated safety program .

Nimrod Nehushtan: In terms of the expected timing, we said it's going to be the first half of 2026 in one city in the U.S. In terms of the technical milestones, you know, we have a very elaborated safety program. It's called the PGF that we talked about in the past IR meetings and at the CES. We made that public also in terms of an academic paper that we published around it. Also, in terms of mileage driven in order to prove to ourselves what is the MTBF. Together with the ADMT, which is the daughter company of Volkswagen, who is responsible for this program, we have agreed on MTBF milestones per type of accident. It's not just one number. There are a number of different types of accidents. What is the MTBF?

Speaker #3: It's called the PGF that we talked about in the past . IR meetings and at the CES , and we made that public also in terms of a academic paper that we published around it , and also in terms of mileage driven in order to prove to ourselves what is the mtbf .

Speaker #3: So together with the . Admt , which is the daughter company of Volkswagen , with responsible for this program , we have agreed on on Mtbf milestones per type of accident .

Speaker #3: So it's not just one number , but .

Speaker #9: A .

Speaker #3: Number of different types of accidents . What is the mtbf and we're tracking those numbers and the trajectory that we see gives us confidence that we can achieve that by the first half of 2026 .

Nimrod Nehushtan: We're tracking those numbers, and the trajectory that we see gives us confidence that we can achieve that by the first half of 2026.

Speaker #16: Great . Thank you . As a follow up on Tesla's call last night , Elon talked quite a bit about efforts with AI .

[Analyst 3]: Great. Thank you. As a follow-up, on Tesla's call last night, Elon talked quite a bit about efforts with AI5, their AI5 chip, and all of the efforts in design and the strength of the performance, really emphasizing this, I think, as a key advantage. I think you've talked about this on the call here and more broadly, but as it relates to IQ6 and eventually IQ7, can you maybe just remind us to what extent the engagements with customers are looking at the strength of your SOC design, how that stacks up versus some of the other players? For those that are maybe SOC-agnostic, bring your own silicon, to what extent you're seeing customers actually leaning into your solution because of the SOC?

Speaker #16: There . AI five chip and you know , all of the efforts in design and you know , the strength of the performance , really emphasizing this , I think as a key advantage .

Speaker #16: So , you know , and I think you've talked about this on the call here and more broadly , but as it relates to IC six and eventually IC seven .

Speaker #16: Can you maybe just remind us to what extent the engagements with customers are looking at the strength of your SoC design , how that stacks up versus some of the other players ?

Speaker #16: And for those that are maybe SoC agnostic, you know, bring your own silicon, to what extent are you seeing customers actually leaning into your solution because of the SoC?

Speaker #9: Well , I think the .

Speaker #3: First question that you need to that you need to ask is , why do you need more compute ? And Tesla's approach and mobilize approach are are different .

Nimrod Nehushtan: I think the first question that you need to ask is, why do you need more compute? Tesla's approach and Mobileye's approach are different. Tesla is relying on a single sensor modality, which is just cameras, only cameras. Therefore, there are these bias variants in machine learning. You want to lower the variance. You need more and more data and more and more compute in order to bring the variance down to a point in which the MTBF is high enough. The MTBF of Tesla's FSDs, just based on the public record of the FSD tracker, is orders of magnitude away from the bar that you need to pass in order to be unsupervised. Therefore, the requirement of significantly more compute and significantly more data is very, very intense, and hence the AI5. Mobileye's approach relies also on redundancy.

Speaker #3: Tesla is relying on a single sensor modality , which is cameras only . Cameras . And therefore there are this bias variance in machine learning .

Speaker #3: You want to lower the variance . You need more and more data and more and more compute in order to bring the variance down to a point in which the mtbf is high enough and the mtbf of Tesla's SSDs , just based on the public record of the FSD tracker , is orders of magnitude away from the bar that you need to pass in order to be unsupervised .

Speaker #3: Therefore , the requirement of significant more compute and significant more data is very , very intense . And hence the AI five mobilize approach relies also on redundancy .

Speaker #3: So we are doubling down on vision on cameras and bringing , you know , the camera processing mtbf to be very high . But we are also relying on imaging radars , relying also on a front facing ladder for , for eyes .

Nimrod Nehushtan: We are doubling down on computer vision, on cameras, and bringing the camera processing MTBF to be very high. We are also relying on imaging radars, relying also on a front-facing LADAR for eyes-off. When you have redundancy, it's a different equation. This is our PGF framework for fusing redundant subsystems. In our context, the question is, if with IQ6 high, we are going to launch eyes-off at a very, very cost-optimized platform, right? The Chauffeur has three IQ6, and it's very, very high. It's highly cost-optimized. The Drive for IQ6, it's highly cost-optimized, especially compared to platforms of robotaxis of today. The question is, why do we need more compute, right? To replace the IQ6 with IQ7, was that going to reduce for what purpose? Is this to reduce price? Not necessarily. In our view, you need more compute to move from eyes-off to minds-off.

Speaker #3: So when you have redundancy it's a different equation . And this is our PDF framework for for creating a perfusing redundant subsystems . So computer so then in our context the question is if with IQ six high we are going to launch AIS off at a at a very , very cost optimized platform .

Speaker #9: Right .

Speaker #3: The chauffeur has three IQ , six . And it's very very high . It's highly cost . Cost optimized . The drive for IQ six .

Speaker #3: It's highly cost optimized , especially compared to platforms of robotaxis of of today . So then the question is why do we need more compute to replace the IQ six with IQ seven .

Speaker #3: Was that going to reduce . For what purpose is this to reduce price . Not necessarily . So in our view you need more compute to move from AIS off to mines off .

Speaker #3: And this is something that the industry are not talking about at all . All the talk is around . Eyes off . What is the bar to reach an AIS off a system ?

Nimrod Nehushtan: This is something that the industry is not talking about at all. All the talk is around eyes-off. What is the bar to reach an eyes-off system? We are thinking of 2029 and above on minds-off. Minds-off means that you need an AI that has very, very strong scene understanding capabilities. Maybe it can work at slower frame rates. It doesn't have to be, let's say, at 10 frames per second. Maybe it can be a slower frame rate. It doesn't have to be replaced, the safety mechanism. In our view, the IQ7 and IQ8 and all the additional compute comes on top of IQ6 and does not replace it. It's a different concept. It's not that we have an IQ6 generation and now we're replacing the IQ6 with the IQ7 generation and then we'll replace the IQ7 generation with IQ8.

Speaker #3: We are we are thinking of 2029 and above on on mind off and mind off means that you need an AI that has very , very strong scene understanding capabilities .

Speaker #3: Maybe it can work at slower frame rates . It doesn't have to be , let's say a ten frames per second . Maybe it can be slower frame rate and it doesn't have to , doesn't have to be doesn't have to replace the safety mechanism .

Speaker #3: So in our view, the IQ 7 and IQ 8, and all the additional compute, come on top of IQ 6 and do not replace it.

Speaker #9: It .

Speaker #3: So it's a different concept . It's not that we have an IQ six generation and now we're replacing IQ six with Ic7 generation .

Speaker #3: And then we'll replace IQ seven generation with IQ eight . Actually does not make sense when you are thinking about AIS off systems , because the the validation process that is required to remove the driver is is huge .

Nimrod Nehushtan: Actually, it does not make sense when you are thinking about eyes-off systems because the validation process that is required to remove the driver is huge. It's huge, right? You did all this validation process and now you are replacing your chip and you have to do all this validation process again. It doesn't make sense. We have a completely different view of where compute is needed, where the added compute is needed.

Speaker #3: It's huge, right? So now you did all this validation process, and now you are replacing your chip, and you have to do all this validation process again. It doesn't make sense.

Speaker #3: So this so we have a completely different view of where compute is needed , where the added compute is is .

Speaker #9: Needed .

Speaker #2: Thank you . This will be our last question .

[Analyst 1]: Thank you. Kate, this will be our last question.

Speaker #1: Okay . Our final question is coming from Colin Rusch with Oppenheimer and Company . Please go ahead .

Operator: Okay, our final question is coming from Colin Rush with Oppenheimer and Company. Please go ahead.

Speaker #17: Thanks so much guys . You I just have a quick one around the cadence of your own chip design . Given some of the tools that we're seeing out there in the potential for accelerated time , are you seeing meaningful opportunities in terms of accelerating some of those development timelines and and really being able to validate some of these more simplified designs that you guys are talking about ?

[Analyst 3]: Thanks so much, guys. I just have a quick one around the cadence of your own chip design. Given some of the tools that we're seeing out there and the potential for accelerated timeframes, are you seeing meaningful opportunities in terms of accelerating some of those development timelines and really being able to validate some of these more simplified designs that you guys are talking about?

Speaker #3: Our our chip portfolio covers both a very , very low end , like IC six light and the very high end . So IC six high , which is in production is equivalent to say or in ECS in terms of when looking at running programs like convolutional net .

Nimrod Nehushtan: Our chip portfolio covers both the very, very low end, like IQ6 Light, and the very high end. IQ6 High, which is in production, is equivalent to, say, Orin X in terms of when looking at running programs like convolutional net, ResNet, VisionNet, transformers, and the like. IQ7 would compare to Thor in terms of its strength. IQ8, which is now in the design stages and will be ready for 2029 production, is going to be three, four times stronger. IQ7 and IQ8 are responsible for the minds-off. It's not for the eyes-off; we are set. We have the IQ6. We don't need to replace IQ6 with a more powerful chip to reach eyes-off capability or to reach a robotaxi with teleoperators in the back office. The idea in robotaxi is to remove the teleoperators. This is why we want minds-off.

Nimrod Nehushtan: The idea with consumer-operated cars is to enable the driver to sleep while using the system. This is where we need more compute. The cadence is once every two years. This is the cadence, which is sufficient for the speed of where the industry is going and where technology is going.

[Analyst 1]: Colin, thanks for the question. I don't think we have time for a follow-up. I want to respect everyone's time.

Nimrod Nehushtan: Thank you.

[Analyst 1]: Thank you.

Operator: Thank you. This now concludes our question and answer session. I would like to turn the floor back over to management, Daniel Galves, for closing comments.

Thank you. This now, concludes our question and answer session. I would like to turn the floor. Back over to management, Dan galves for closing comments.

[Analyst 1]: Thanks, everyone, and looking forward to the Q4 call in January. Thank you. Have a good day.

Thanks, everyone. And looking forward to the Q4 call in January. Thank you.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.

Have a good day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference, you may disconnect your lines and have a wonderful day.