Q4 2025 Arbe Robotics Ltd Earnings Call

February 26, 2026

Speaker #1: Ladies and gentlemen, thank you for standing by. Welcome to Arbe Robotics fourth quarter and full year 2025 results conference call. All participants are at present in listen-only mode.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to Arbe Robotics' Q4 and full year 2025 results conference call. All participants are at present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance, please press star zero. As a reminder, this conference is being recorded. You should have all received the company's press release by now. If you have not, please check the company's website at www.arberobotics.com or call EK Global Investor Relations. I would now hand over the call to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin?

Speaker #1: Following management's formal presentation, instructions will be given for the question-and-answer session. For operator assistance, please press star zero. As a reminder, this conference is being recorded.

Speaker #1: You should have all received the company's press release by now. If you have not, please check the company's website at www.arberrobotics.com or call EK Global Investor Relations.

Speaker #1: I would now hand over the call to Mr. Kenny Green, of EK Global Investor Relations. Mr. Green, would you like to begin?

Speaker #2: Thank you.

Kenny Green: Thank you. Good day to all of you. Welcome to Arbe's conference call to discuss the results of the Q4 and full year 2025. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements, and the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the investor relations section of the company's website. Today, we are joined by Kobi Marenko, Arbe's Co-founder and CEO, who will begin with a business update. We'll turn the call over to Karine Pinto-Flomenboim, CFO, who will review the financials, and Ram Machness, Arbe's Chief Business Officer. Finally, we will open the call up to our listeners for the question and answer session.

Speaker #3: Good day to all of you, and welcome to Arbe's conference call to discuss the results of the fourth quarter and full year 2025. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements and a safe harbor statement outlined in today's earnings release also pertains to this call.

Speaker #3: If you have not received a copy of the release, please view it in the Investor Relations section of the company's website. Today, we are joined by Kobe e Marenko, Arbe's co-founder and CEO, who will begin with a business update.

Speaker #3: Then we'll turn the call over to Ms. Karine Pinto-Flomenbaum, CFO, who will review the financials and Mr. Ram Mahness, Arbe's chief business officer. Finally, we will open the call up to our listeners for the question-and-answer session.

Speaker #3: And with that, I'd like to open it over to Kobe Marenko. Kobe, please go ahead.

Kenny Green: With that, I'd like to open it over to Kobi Marenko. Kobi, please go ahead.

Speaker #2: Thank you, Kenny. Good morning, everyone, and thank you for joining us to review Arbe's fourth quarter and full year 2025 results as well as our strategic direction and outlook for 2026.

Kobi Marenko: Thank you, Kenny. Good morning, everyone, and thank you for joining us to review Arbe's Q4 and full year 2025 results, as well as our strategic direction and outlook for 2026. Over the past few months, we conducted a full strategic review and made a number of refinements. We have broadened our focus to markets which we believe have shorter adoption cycles and clearer near-term revenue opportunities, while at the same time keeping an eye on the longer-term target of winning major OEM deals. This change in focus is because we see strong momentum in defense, homeland security, and other transportation applications beyond passenger vehicles, where we are seeing growing commercial traction.

Speaker #2: Over the past few months, we conducted a full strategic review and made a number of refinements. We have broadened our focus to market, which we believe has shorter adoption cycles and clearer near-term revenue opportunities, while at the same time keeping an eye on the longer-term target of winning major OEM deals.

Speaker #2: This change in focus is because we see strong momentum in defense, homeland security, and other transportation applications beyond passenger vehicles, where we are seeing growing commercial traction.

Speaker #2: We also took actions to improve efficiencies reducing our cost base by about 15%, enhanced our balance sheet with an institutional-led 18.5 million dollar financing that we closed a few weeks ago extending our financial runway to fully support our next phase of execution.

Kobi Marenko: We also took actions to improve efficiencies, reducing our cost base by about 15%, enhanced our balance sheet with an institutional-led $18.5 million financing that we closed a few weeks ago, extending our financial runway to fully support our next phase of execution. In this call, I want to provide more color on our strategic evolution, highlight recent commercial progress, and outline our expectations for 2026. Adoption timelines for Level 3 autonomy in Western markets remain uncertain. In contrast, Chinese OEMs, including a new win, which we recently announced, are advancing in autonomous and sensing technologies. Beyond that, we see near-term revenue opportunities that can serve as meaningful growth engine for Arbe. As a result, we decided to broaden our marketing and sales focus beyond Western automotive OEM programs.

Speaker #2: In this call, I want to provide more color on our strategic evolution, highlight recent commercial progress, and outline our expectations for 2026. Adoption timelines for Level 3 autonomy in Western markets remain uncertain.

Speaker #2: In contrast, Chinese OEMs, including a new win which we recently announced, are advancing in autonomous and sensing technology, beyond that we see near-term revenue opportunities that can serve as meaningful growth engine for Arbe.

Speaker #2: As a result, we decided to broaden our marketing and sales focus beyond Western automotive OEM programs. We are prioritizing Chinese OEMs as well as markets including defense, homeland security, robotaxi, marine safety, and smart infrastructure where our ultra-high-resolution radar provides clear differentiation.

Kobi Marenko: We are prioritizing Chinese OEM as well as markets, including defense, homeland security, robotaxi, marine safety, and smart infrastructure, where our ultra-high-resolution radar provides clear differentiation. Customers from these verticals are already placing orders. The opportunities in our pipeline tend to have shorter sales cycles. I do want to point out that Western automotive OEMs remain a long-term growth engine for Arbe, and we will still compete to be designed into Western OEM sensor suite. However, our strategy today broadens our scope and reduces our dependence on their extended timeline. As part of this strategic change, we announce today a planned leadership transition to support Arbe's next phase of execution. Ram Machness, who has served as Arbe's Chief Business Officer over the past 8 years and led our strategy, sales, product, and support functions, will assume the role of CEO as of 1 April 2026.

Speaker #2: Customers from these verticals are already placing orders and the opportunities in our pipeline tend to have shorter sales cycles. I do want to point out that Western automotive OEMs remain a long-term growth engine for Arbe, and we will still compete to be designed into Western OEM sensor suit.

Speaker #2: However, our strategy today broadened our scope and reduces our dependence on their extended timeline. As part of this strategic change, we announced today a planned leadership transition to support Arbe's next phase of execution.

Speaker #2: Ram Mahness, who has served as Arbe's chief business officer over the past eight years and led our strategy, sales, product, and support functions, will assume the role of CEO as of April 1, 2026.

Speaker #2: At the same time, I will remain fully and actively involved in the company in my new role as president of Arbe. Ram has the full confidence of our board of directors in me, bringing 30 years of experience across embedded systems, semiconductors, and the automotive industry, including 12 years in senior leadership roles at Texas Instruments.

Kobi Marenko: At the same time, I will remain fully and actively involved in the company in my new role as President of Arbe. Ram has the full confidence of our board of directors and me, bringing 30 years of experience across embedded systems, semiconductors, and the automotive industry, including 12 years in senior leadership roles at Texas Instruments. He brings a strong execution mindset, deep product and customer understanding, and proven experience scaling complex technologies from development into production and into commercialization. With Ram leading the day-to-day execution as CEO, I will focus on our long-term strategy, advance new initiatives, specifically in the defense market, develop key partnerships, and guide strategic investments to help accelerate what I see as the new phase of sustainable long-term growth. Now, I will hand over the call to Ram to say a few words.

Speaker #2: He brings a strong execution mindset, deep product and customer understanding, and proven experience scaling development into production and into execution as CEO, I will focus on our long-term strategy, advance new initiatives specifically in the defense market, develop key partnerships, and guide strategic investments to help accelerate what I see as the new phase of sustainable long-term growth.

Speaker #2: Now, I will hand over the call to Ram to say a few words.

Speaker #4: Thank you, Kobe. I deeply appreciate the trust and confidence that the board and Arbe co-founders, Kobe Marenko and Noam Arkin, have placed in me.

Ram Machness: Thank you, Kobi. I deeply appreciate the trust and confidence that the board and Arbe co-founders, Kobi Marenko and Noam Arkind, had placed in me. I would like to thank Kobi for leading Arbe from its inception and for building the strong foundation that has now enabled us to transition into serial production and move towards full commercialization. I'm excited about the opportunities ahead, and I'm committed to leveraging our strong product. I look forward to guiding Arbe for its next phase of growth and success. Back to you, Kobi.

Speaker #4: I would like to thank Kobe for leading Arbe from its inception and for building the strong foundation that has now enabled us to transition into serial production and move toward full commercialization.

Speaker #4: I'm excited about the opportunities ahead, and I'm committed to leveraging our strong products. I look forward to guiding Arbe for its next phase of growth and success.

Speaker #4: Back to you, Kobe.

Speaker #2: Thank you, Ram. Turning to recent highlights during 2025, we made solid progress, felt on the automotive front. We announced a new serial production design win with a state-owned OEM in China. Higher-end technologies, the LRR610 radar, powered by our ultra-high-definition radar chipset, was selected for a Level 4 autonomous vehicle program.

Kobi Marenko: Thank you, Ram. Turning to recent highlights, during 2025, we made solid progress. First, on the automotive front, we announced a new serial production design win with a state-owned OEM in China. HiRain Technologies LRR610 radar, powered by our ultra-high-definition radar chipset, was selected for a Level 4 autonomous vehicle program. Production vehicles are expected to reach the market starting in 2027. We see meaningful long-term potential. Second, in line with our strategy to expand beyond automotive, defense and homeland security continue to gain traction. Our Tier 1 Sensor has placed chipset orders for Fortera's autonomous vehicle program for the US Department of Defense. Fortera equips the next generation of defense unmanned ground vehicles, shaping operations in demanding environment.

Speaker #2: Production vehicles are expected to reach the market starting in 2027, and we see meaningful long-term potential. Second, in line with our strategy to expand beyond automotive, defense, and homeland security continue to gain traction.

Speaker #2: Our Tier 1 STEM flight has placed chipset orders for Fonterra's autonomous vehicle program for the US Department of War. Fonterra equips the next generation of defense unmanned ground vehicles, shaping operations in demanding environments.

Kobi Marenko: Sensor ultra-definition imaging radar, powered by the Arbe Chipset, has been integrated into the Forterra AutoDrive perception suite to improve environmental awareness, obstacle detection, and navigation in unstructured and GPS-denied conditions. In parallel, we are integrating our chipset into a leading homeland security supplier radar system to deliver joint system-level solutions for defense forces, law enforcement, perimeter security, and other homeland security applications. These collaborations significantly expand our best presence in mission-critical defense market. Third, we are seeing momentum in robotaxi applications, supporting multiple robotaxi projects already across several countries. While the addressable market is smaller than that of passenger vehicles, we see strong long-term potential. Fourth, in the marine safety space, Sensor recently secured a large follow-up order from WATCHIT for marine collision preventing system, powered by our chipset.

Speaker #2: Censored ultra-definition imaging radar powered by the Arbe chipset has been integrated into the Fonterra autodrive perception suit to improve environmental awareness, obstacle detection, and navigation in unstructured and GPS-denied conditions.

Speaker #2: In parallel, we are integrating our chipset into a leading homeland security supplier radar systems to deliver joint system-level solutions for defense forces low enforcement, perimeter security, and other homeland security applications.

Speaker #2: These collaborations significantly expand Arbe's presence in mission-critical defense markets. Third, we are seeing momentum in robotaxi applications. Supporting multiple robotaxi projects already across several countries.

Speaker #2: While the addressable market is smaller than that of passenger vehicles, we see strong long-term potential. Fourth, in the marine safety space, Censored recently secured a large follow-up order from WASHI for marine collision-preventing systems powered by our chipset.

Speaker #2: The technology powers WASHI-I, a commercially available system already selected by the Azimut Benetti Group, a leading builder of luxury yachts. Fifth, we are seeing traction in smart infrastructure applications.

Kobi Marenko: The technology powers WATCHIT Eye, a commercially available system already selected by the Azimut|Benetti Group, a leading builder of luxury yachts. Fifth, we are seeing traction in smart infrastructure applications. Sensor delivered follow-on orders for Polgy imaging radars to its customer, Yiani Transportation Technology in China in December 2025. Additional smart infrastructure projects using Arbe-based radars are underway. We continue to work closely with NVIDIA to integrate our ultra-high-resolution radar into their DRIVE Hyperion platform, combining our highly detailed sensing with their advanced AI compute to support production-ready vehicle autonomy. Finally, our technology leadership was recognized with two industry awards in 2025, including the Just Auto Excellence Award and the AutoTech Breakthrough Award. Looking ahead for 2026, our focus on markets with shorter adoption cycles is expected to begin contributing to revenue this year.

Speaker #2: Censored delivered follow-on orders for POGI imaging radars to its customers Kiani Transportation Technology in China in December 2025. Additional smart infrastructure projects using Arbe-based radars are underway.

Speaker #2: We continue to work closely with NVIDIA to integrate our ultra-high-resolution radar into their drive Hyperion platform, combining our highly detailed sensing with their advanced AI compute to support production-ready vehicle autonomy.

Speaker #2: Finally, our technology leadership was recognized with two industry awards in Just Auto Excellence Award and the AutoTech Breakthrough Award. Looking ahead for 2026, our focus on markets with shorter adoption cycles is expected to begin contributing to revenue this year.

Speaker #2: I know that we remain engaged with global automotive OEMs, and while we expect to continue securing additional design wins over time similar to our recent OEM wins in China, we are no longer providing guidance on their timing.

Kobi Marenko: I know that we remain engaged with global automotive OEM, and while we expect to continue securing additional design wins over time, similar to our recent OEM wins in China, we are no longer providing guidance on their timing. In summary, we believe we are well positioned for the years ahead. We are diversifying our potential revenue base, having broadened our focus beyond passenger vehicle OEM programs and expanded into defense and other non-automotive verticals. We start 2026 with a much strengthened balance sheet and lower expenses footprint, and improved efficiency, which will expand, extend our financial runway. In a few weeks, at the beginning of Q2, I will be handing over the CEO reins to a strong pair of hands from a position of strength. Looking ahead, I believe that Arbe is increasingly well positioned for long-term and sustainable growth.

Speaker #2: In summary, we believe we are well positioned for the years ahead. We are diversifying our potential revenue base, having broadened our focus beyond passenger vehicle OEM programs and expanded into defense and other non-automotive verticals.

Speaker #2: We start 2026 with a much-strengthened balance sheet and lower expenses footprint, and improved efficiency, which will expand our financial runway. In a few weeks, at the beginning of the second quarter, I will be handling over the CEO rings to a strong pair of hands from a position of strength.

Speaker #2: Looking ahead, I believe that Arbe is increasingly well positioned for long-term and sustainable growth. I would like to turn the call over to our CFO, Karine, to go over the financials.

Kobi Marenko: I would like to turn the call over to our CFO, Karine, to go over the dimensions.

Speaker #5: Thank you, Kobe, and hello, everyone. Let me review our financial results for the fourth quarter and full year of 2025 in more detail. Revenue for the fourth quarter of 2025 totaled $0.5 million compared to $0.1 million in Q4 2024.

Karine Pinto-Flomenboim: Thank you, Kobi, and hello, everyone. Let me review our financial results for Q4 and full year 2025 in more detail. Revenue for Q4 2025 totaled $0.5 million compared to $0.1 million in Q4 2024. For the full year 2025, total revenue was $1 million compared to $0.8 million in 2024. Backlog as of today stands at $1.3 million. Gross profit for Q4 2025 was negative $0.1 million, compared to a negative $0.2 million in the same period last year. Gross annual profit for 2025 was at the same level as 2024, a negative $0.8 million. Turning to operating expenses.

Speaker #5: For the full year of 2025, total revenue was $1 million compared to $0.8 million in 2024. Backlog as of today stands at $1.3 million.

Speaker #5: Gross profit for Q4 2025 was negative $0.1 million, compared to a negative $0.2 million in the same period last year. Gross annual profit for 2025 was at the same level as 2024, a negative $0.8 million.

Speaker #5: Turning to operating expenses, total operating expenses for Q4 2025 were $11.5 million, down from $12.6 million in Q4 2024. Operating expenses for the full year of 2025 totaled $47.1 million, compared to $48.9 million in 2024.

Karine Pinto-Flomenboim: Total operating expenses for Q4 2025 were $11.5 million, down from $12.6 million in Q4 2024. Operating expenses for the full year of 2025 totaled $47.1 million, compared to $48.9 million in 2024. Operating expenses decreased year-over-year, primarily driven by lower share-based compensation. This reflects earlier equity grants that have now fully vested, as well as our most recent award being structured approximately half in cash and half in equity, resulting in lower equity expenses for this year. This decrease was partially offset by unfavorable foreign exchange impact and, to a lesser extent, merit-based salary increases. As a result, operating loss for Q4 2025 was $11.6 million, down from $12.8 million lost in Q4 2024.

Speaker #5: Operating expenses decreased year over year, primarily driven by lower share-based compensation. This reflects earlier equity grants and has now fully vested. As well as our most recent award being structured approximately half in cash and half in equity, resulting in lower equity expenses for this year.

Speaker #5: This decrease was partially offset by unfavorable foreign exchange impact and, to a lesser extent, merit-based salary increases. As a result, operating loss for the fourth quarter of 2025 was $11.6 million, down from $12.8 million lost in the fourth quarter of 2024.

Speaker #5: Operating loss for the full year of 2025 was $47.9 million, compared to a loss of $49.6 million in 2024. Adjusted EBITDA and non-GAAP measurement, which excludes expenses for non-cash share-based compensation, and for non-recurring items, was a loss of $9.7 million in Q4 of 2025, compared to a loss of $9 million in the fourth quarter of 2024.

Karine Pinto-Flomenboim: Operating loss for the full year of 2025 was $47.9 million, compared to a loss of $49.6 million in 2024. Adjusted EBITDA, a non-GAAP measurement, which excludes expenses for non-cash share-based compensation and for non-recurring items, was a loss of $9.7 million in Q4 of 2025, compared to a loss of $9 million in Q4 of 2024. Adjusted EBITDA for the full year of 2025 amounted to a loss of $37.6 million, resulting from the cash grant award and from the unfavorable foreign exchange impact, compared to 2024 Adjusted EBITDA loss of $33.3 million. We believe that this non-GAAP measurement is important in management's evaluation of our use of cash and planning and evaluating our cash requirements for the coming period.

Speaker #5: Adjusted EBITDA for the full year of 2025 amounted to a loss of $37.6 million resulting from the cash grant award and from the unfavorable foreign exchange impact.

Speaker #5: Compared to 2024, adjusted EBITDA loss of $33.3 million. We believe that this non-GAAP measurement is important in management's evaluation of our use of cash and planning and evaluating our cash requirements for the coming period.

Speaker #5: Net loss in the fourth quarter of 2025 was $10.2 million, compared to a net loss of $12.2 million in the fourth quarter of 2024.

Karine Pinto-Flomenboim: Net loss in Q4 2025 was $10.2 million, compared to a net loss of $12.2 million in Q4 2024. Net loss for the full year of 2025 was $45.2 million, compared to a loss of $49.3 million in 2024. Net loss in 2025 included financial income of $2.8 million, compared to a financial income of $0.3 million in 2024. Full year 2025 financial income included interest earned on deposits and gains from call option, as well as impact of changes in the warrant liability for warrants not classified as equity and the revaluation of lease liabilities. These were partially offset by foreign exchange revaluation, losses, and, to a lesser extent, issuance costs.

Speaker #5: Net loss for the full year of 2025 was $45.2 million, compared to a loss of $49.3 million in 2024. Net loss in 2025 included financial income of $2.8 million compared to a financial income of $0.3 million in 2024.

Speaker #5: Full year 2025 financial income included interest earned on deposits and gains from call option. As well as impact of changes in the warrant liability for warrants not classified as equity and the revaluation of lease liabilities.

Speaker #5: These were partially offset by foreign exchange revaluation losses and, to a lesser extent, issuance cost. Moving to our balance sheet. As of December 31, 2025, Arbe held $45 million in cash and cash equivalent and short-term bank deposits.

Karine Pinto-Flomenboim: Moving to our balance sheet. As of 31 December 2025, Arbe held $45 million in cash and cash equivalent and short-term bank deposits. During January 2026, we raised gross proceeds of $18.5 million in an underwritten public offering, thus providing a robust balance sheet, enabling an extended financial runway to fully support our next phase of execution. With respect to our guidance, to broaden our commercial business potential, we decided to expand our strategic focus beyond the Western automotive OEM programs to opportunities we believe have shorter adoption cycle and more immediate commercial potential, including defense, robotaxi, robot trucks, and off-road markets. Our expanded strategy is intended to accelerate revenue generation while maintaining engagements with global automotive OEMs as part of the company's long-term vision. Based on current market condition and customer engagements visibly, the company provides the following outlook for 2026.

Speaker #5: During January 2026, we raised gross proceeds of $18.5 million in an underwritten public offering. Thus, providing a robust balance sheet. Enabling and extended financial runway to fully support our next phase of execution.

Speaker #5: With respect to our guidance, to broaden our commercial business potential, we decided to expand our strategic focus beyond the Western automotive OEM programs to opportunities we believe have shorter adoption cycle and more immediate commercial potential, including defense, robotaxi, robo trucks, and off-road markets.

Speaker #5: Our expanded strategy is intended to accelerate revenue generation while maintaining engagements with global automotive OEMs as part of the company's long-term vision. Based on current market condition and customer engagement, visibly, the company provides the following outlook for 2026.

Speaker #5: Revenue in the range of $4 million to $6 million. Adjusted EBITDA for 2026 is projected to be a loss in the range of $28 million to $31 million, reflecting the company's strengthened balance sheet and cost reduction measures taken.

Karine Pinto-Flomenboim: Revenue in the range of $4 million to $6 million. Adjusted EBITDA for 2026 is projected to be a loss in the range of $28 million to $31 million, reflecting the company's strengthened balance sheet and cost reduction measures taken. This outlook reflects management's current expectation as of today and is subjected to change based on market conditions, customer adoption timelines, and other factors. Arbe expects to continue signing additional automotive OEM design wins over time beyond the recently announced design wins. However, the timing of future wins remains dependent on OEM adoption cycle, which are taking longer than previously anticipated. As a result, the company is not providing guidance on the timing of additional automotive OEM design wins. Now we will be happy to open the call for your questions. Operator?

Speaker #5: This outlook reflects management's current expectation as of today and is subjected to change based on market conditions, customer adoption timelines, and other factors. Arbe expects to continue signing additional automotive OEM design wins over time beyond the recently announced design wins.

Speaker #5: However, the timing of future wins remains dependent on OEM adoption cycle, which are taking longer than previously anticipated. As a result, the company is not providing guidance on the timing of additional automotive OEM design wins.

Speaker #5: Now we will be happy to open the call for your question. Operator, thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session.

Operator: Thank you, ladies and gentlemen. At this time, we will begin the question and answer session. If you have a question, please press the star followed by the one on your touchtone phone. If you wish to decline from the polling process, please press the star key followed by a two. Your questions will be polled in the order they are received. The first question comes from George Gianarikas of Canaccord Genuity. Go ahead, please.

Speaker #5: If you have a question, please press the star followed by the one on your touchtone phone. If you wish to decline from the polling process, please press the star followed by a two.

Speaker #5: Your questions will be polled in the order they are received. The first question comes from George Yanarikis of Canocord Genuinty. Go ahead, please.

Speaker #6: Hi, everyone. Thank you for taking my questions and welcome Ram. Congratulations.

George Gianarikas: Hi, everyone. Thank you for taking my questions and welcome Ram. Congratulations.

Speaker #7: Thank you.

Kobi Marenko: Thank you.

George Gianarikas: Maybe to start first on defense applications that appear to be gaining momentum, can you help us understand the chips per vehicle or application that you're seeing in that market and whether or not it's, you know, what kind of traction you're seeing per vehicle so far? Thank you.

Speaker #6: Maybe to start first on defense applications, it appeared to be gaining momentum. Can you help us understand the CHIPS per vehicle or application that you're seeing in that market and whether or not it's what kind of traction you're seeing per vehicle so far?

Speaker #6: Thank you.

Speaker #7: You mean on the non-automotive or you mean robotaxi?

Kobi Marenko: You mean, on the non-automotive or you mean robotaxi?

George Gianarikas: Just first, purely on defense applications. Like, is there a different structure to defense applications that means that they need more than one chip? Thank you.

Speaker #6: First, purely on defense applications. Is there a difference structure to the applications that means that they need more than one chip? Thank you.

Speaker #7: So in the defense application, there is a few verticals that we are targeting. First of all, there is a Forterra, which is basically it's very close to regular automotive because it's autonomous driving.

Kobi Marenko: In the defense application, there is a few verticals that we are targeting. First of all, there is a Forterra out there, which is basically it's very close to regular automotive because it's autonomous driving, it's off-road, it's military, it's the US Army, but it's basically very close to that. It means that it's a one radar per vehicle. We have other customers in pipeline that pursue the same opportunity. Remember that because of the low volume, the price of this chipset is much higher than automotive, and our gross margins are much better. The second vertical is the perimeter defense and drones detection. For that, we need to provide a 360-degree solution, which means it's basically four radars per unit.

Speaker #7: It's off-road. It's military. It's the US Army. But it's basically very close to that. So it means that it's a one-radar per vehicle. We have other customers in pipeline that pursue the same opportunity.

Speaker #7: But remember that because of the low volume, the price of these chips is much higher than automotive. And our gross margins are much better.

Speaker #7: The second vertical is the perimeter defense and drone detection. For that, we need to provide a 360-degree solution, which means it's basically four radars per unit.

Speaker #7: And again, since the volumes are and the prices are prices of homeland security and defense, the gross margin is going to be much, much, much better than regular automotive.

Kobi Marenko: Again, since the volumes are, and the prices are, prices of homeland security and defense, the growth margin is gonna be much, much, much better than regular automotive. Same I would say in robotaxis, so where the low volume rep, represent much better, growth margins. Of course, if you compare it to millions of units per year, this is not the same. Since anyway, the Level 3 assumptions were that the ramp up of revenues will be very low, we believe that in 2027, we will be able to reach revenues that, from Level 3, maybe we'll be there in 31 or 32.

Speaker #7: Same, I would say, in robotaxi. So the low volume represents much better gross margins. Of course, if you compare it to millions of units per year, this is not the same.

Speaker #7: But since anyway, the level three assumptions were that the ramp-up of revenues will be very low. We believe that in 2027, we will be able to reach revenues that from level three maybe will be there in 31 or 32.

Speaker #6: So maybe just to focus a little bit on robotaxi, are the opportunities that you're seeing in the market with Chinese traditional and non-traditional OEMs, or is it more Western non-traditional and traditional OEMs?

George Gianarikas: Maybe just to focus a little bit on robotaxi, are the opportunities that you're seeing in the market with Chinese traditional and non-traditional OEMs, or is it more Western non-traditional and traditional OEMs?

Kobi Marenko: It's with the robotaxi players that are not OEMs. We don't think that the OEMs will control the robotaxi business. We believe that it's the players that are not the OEMs. We know those players, you know, from Waymo to Nuro to Cruise, all of those, we believe gonna be the leaders in this market. I don't think it's a market of OEMs.

Speaker #7: It's with the robotaxi players that are not OEMs. We don't see we don't think that the OEMs will control the robotaxi business. We believe that if the players that are not the are not the OEMs.

Speaker #7: We know those players. From Waymo to Nuro to AV Ride, all of those, we believe are going to be the leaders in this market.

Speaker #7: I don't think it's a market of OEMs.

Speaker #6: Right. And is the interest you're seeing with OEMs that are non-Chinese in the robotaxi market?

George Gianarikas: Right. Is the interest you're seeing with OEMs that are non-Chinese in the robotaxi market?

Speaker #7: Not really. I think the Western OEMs accept, of course, the Tesla lost their appetite for robotaxi.

Kobi Marenko: Not really. I think the Western OEMs, except, of course, the Tesla, lost their appetite for robotaxi.

Speaker #6: Understood. And maybe just to I just want to clarify what you said about the robotaxi revenue potentials. That's something that you see maybe ramping from a revenue perspective in 2027, or did you say later this decade?

George Gianarikas: Understood. I just want to clarify what you said about the robotaxi revenue potential. Is that something that you see maybe, ramping from a revenue perspective in 2027, or did you say later this decade?

Speaker #7: The robotaxi, we're re going to see revenues already in 2026. And we're going to see a ramp-up in, we believe, in 2026 to 2027, 2028.

Kobi Marenko: The robotaxi, we're going to see revenues already in 2026, and we're going to see a ramp up in, we believe in 2026, 2027, and 2028.

George Gianarikas: Okay. Then maybe last question from me with regard to the robo trucking, the autonomous trucking opportunity. How should we think about that and the potential for wins there and revenue ramp? Thank you.

Speaker #6: Okay. And then maybe last question from me with regard to the robo-trucking, the autonomous trucking opportunity. How should we think about that and the potential for wins there and revenue ramp?

Speaker #6: Thank you.

Speaker #7: Yeah. It's the same. So we have a we're already announced a truck customer. And yes, we believe that there's when you were saying when we were saying robotaxi, we take the robo trucks as well.

Kobi Marenko: Yeah, it's the same. Where we have, we already announced the truck customer. Yes, we believe that when we are saying to robotaxi, we take the robot trucks as well.

Speaker #6: Understood. Thank you very much.

George Gianarikas: Understood. Thank you very much.

Speaker #8: The next question comes from Suji De Silva of Roth Capital. Go ahead, please.

Operator: The next question comes from Suji Desilva of ROTH Capital. Go ahead, please.

Speaker #9: Hi, Colby and Karine. And Ram, best of luck in the new role. So you talked about the non-auto opportunity. Can you talk about the sales cycle there and how much shorter it is versus passenger auto and how long you've been pursuing that market?

Suji Desilva: Hi, Kobi, Karine, and Ram. Best of luck in the new role. You talked about the non-auto opportunity. Can you talk about the sales cycle there and how much shorter it is versus passenger auto, and how long you've been pursuing that market? Sounds like you already have some traction there.

Speaker #9: It sounds like you already have some traction there.

Speaker #7: So first, thank you for joining us. Even from London, so we began this shift around end of Q3 last year, when we saw that the delays in the level three and the volumes in the appetite of the OEMs is getting a bit lower than expected.

Kobi Marenko: First, thank you for joining us, even from London. We began this shift around end of Q3 last year, when we saw that the delays in the laboratory and the volumes, and the appetite of the OEM is getting a bit lower than expected. Where we see here a sales cycle that is much shorter, I would say, six months from first meeting of a client, to at least a meaningful order. In the midterm, there is of course, order for one to 10 to 20 units for evaluation, and then, from six months, we can get a meaningful order, which is hundreds or even more than type of units.

Speaker #7: So we see here a sales cycle that is much shorter. I would say six months from first meeting of a client to at least a meaningful order.

Speaker #7: In the midterm, there is, of course, orders for one to 10 to 20 units for evaluation. And then from six months, we can get a meaningful order.

Speaker #7: Which is hundreds or even more than that of units.

Speaker #9: Okay. And it sounds like on this call, Colby, that you're formalizing this effort, or at least communicating it was formally. What steps were you taking internally to deploy kind of people internally to target these non-passenger auto opportunities?

Suji Desilva: Okay. It sounds like on this call, Kobi, that you're formalizing this effort or at least communicating it as formally. What steps will you take internally to deploy kind of people internally to target these non-passenger auto opportunities?

Speaker #7: So first of all, we have dedicated sales operations for that. You're going to see our marketing efforts and the conferences that we are taking this year are all shifted to include also non-automotive.

Kobi Marenko: First of all, we have dedicated sales operations for that. You're gonna see our marketing oil efforts and the conferences that we are taking this year, they are all shifted to include also non-automotive. Also from the inside organization, we, of course, did what is needed in terms of, in order to support it, because the support here is much more complicated. Every customer has his own demands and his own variations. We are incorporating here also with Sensor, and there is some customers that we need to support directly. All of that, it seems that we are doing.

Speaker #7: And also, from the inside organization, we, of course, did what is needed in terms in order to support it because the supporter is much more complicated.

Speaker #7: Every customer that is on demand and is on variations, we are incorporating here also with Sentra and there is some customers that we need to support directly.

Speaker #7: All of that is things that we are doing.

Speaker #9: Great. And then last question, Colby. Can you talk about the difference, perhaps, in the competitive landscape of this non-passenger auto market, or is it similar to the auto market?

Suji Desilva: Great. Last question, Kobi. Can you talk about the difference perhaps in the competitive landscape of this non-passenger auto market, or is it similar to the auto market? Any color there would be helpful. Thanks.

Speaker #9: Any color there would be helpful. Thanks.

Speaker #7: So it's different between a robotaxi and the robo trucks where we basically I think meeting the same competitors. As in automotive, then in the other verticals like different and like marine and so on, on the different side, there is not a solution right now in 77 gigahertz that is competing with us.

Kobi Marenko: It's different between, let's say, robotaxi and the robotruck, where we basically, I think, meeting the same competitors as in automotive. In the other verticals, like defense and like marine and so on the defense side, there is not a solution right now in 77 GHz that is competing with us, that can really support what we are offering. There is a 24 GHz radar, Echodyne, and Matrix Radar are players in this market. We believe that first of all, there is a large demand right now. There is room for everyone, and there is a lot of advantage for the 77 GHz coming from the price and also the weather.

Speaker #7: That can really support what we are offering. There is a 24 gigahertz radar, Ecodyne. And the matrix radar are players in this market. But we believe that, first of all, there is a large demand right now.

Speaker #7: There is room for everyone. And there is a lot of advantage for the 77 gigahertz coming from the price. And also, the weather. 24 gigahertz is a spectrum that is has problems in humidity.

Kobi Marenko: 24 GHz is a spectrum that has problems in the humidity and rain. It's not as resilient as 77, and in those applications, of course, it's critical.

Speaker #7: And rain. It's not as resilient as 77. And in those applications, of course, it's critical.

Speaker #9: Okay. Thanks, Colby. Thanks, everyone.

Suji Desilva: Okay, thanks, Kobi. Thanks, everyone.

Speaker #8: The next question comes from Casey Ryan of West Park Capital. Go ahead, please.

Operator: The next question comes from Casey Ryan of WestPark Capital. Go ahead, please.

Speaker #10: Yeah. Thank you. Good morning. This is exciting update. Can I ask a quick few modeling questions? So the four to six million in guidance sounds like that's all going to be all non-automotive is sort of the expectation today.

Casey Ryan: Yeah, thank you. Good morning. This is exciting update. Can I ask a quick few modeling questions? The $4 to 6 million in guidance sounds like that's looking to be all non-automotive is sort of the expectation today. Or is there some automotive built into that $4 to 6 revenue guide?

Speaker #10: Or is there some automotive built into that four to six revenue guide?

Karine Pinto-Flomenboim: We've mentioned it's mainly non-auto.

Speaker #11: So we've mentioned it's mainly non-auto. And we did mention so higher-end, which is also included. Which is auto.

Karine Pinto-Flomenboim: We've mentioned it's mainly non-auto.

Casey Ryan: Mm-hmm.

Karine Pinto-Flomenboim: we did mention HiRain Technologies.

Kobi Marenko: Which is also?

Karine Pinto-Flomenboim: Which is also.

Speaker #10: Okay. Okay. That's helpful. And then just quickly on the OPEX numbers, do you believe Q4 numbers will be consistent, roughly, across 26? Or do you think that number will come down further?

Casey Ryan: Okay. Okay, that's helpful. Just quickly on the OpEx numbers, do you believe Q4 numbers will be consistent roughly across 26? Do you think that number will come down further? What are your thoughts just about direction, not giving out specific numbers?

Speaker #10: What are your thoughts just about direction, not giving out specific numbers?

Karine Pinto-Flomenboim: Sure. As we mentioned, we did do restructuring in order for the company to continue its runway. I assume that Adjusted EBITDA that we guided reflects this new course of expenses. It will go down slightly.

Speaker #11: mentioned, we did do a restructuring in order for the company to continue its runway. So I assume that just in EBITDA that we guided reflects this new course of expenses.

Speaker #11: So it will go down slightly. In order to enable us.

Casey Ryan: Okay.

Karine Pinto-Flomenboim: in order to able us.

Speaker #10: Okay. Yeah. Great. Those two points are helpful. And then sort of broadly, defense is very exciting sector. And so are smart cities and all these sort of physical AI and markets.

Casey Ryan: Okay. Yeah, great. Those two points are helpful. Then sort of broadly, defense is very exciting sector and so are smart cities and all these sort of physical AI end markets. Is your product a candidate for things that are retrofits instead of new builds? Saying maybe existing military vehicles being equipped with autonomy or upgraded in some fashion to sort of consume advanced technologies like your chipset.

Speaker #10: Is your product a candidate for things that are retrofits instead of new builds? So saying maybe existing military vehicles being equipped with autonomy or upgraded in some fashion to sort of consume advanced technologies like your chipset?

Speaker #7: Sure. This is—it's like the robotaxi and like the robo trucks. Basically, the platform itself can get the radar in a later stage.

Kobi Marenko: Sure. This is the it's like the robotaxi and like the robotruck. Basically, the platform itself, can get the radar in a later stage, so it's aftermarket like, so of course we can support retrofit as well.

Speaker #7: So it's aftermarket like so, of course, we can support retrofit as well.

Speaker #10: Okay. That's actually pretty exciting.

Casey Ryan: Okay. That's actually pretty exciting.

Kobi Marenko: Now we need a big RFP for a retrofit of almost vehicle that is already deployed in thousands of units.

Speaker #7: In a big RFP for a retrofit of our old vehicle that is already deployed in thousands of units.

Speaker #10: Right. And do you think that there's interest in movement in sort of doing retrofits?

Casey Ryan: Right. Do you think that there's interest in movement in sort of doing retrofits?

Speaker #7: Yeah. Sure. Sure. Sure. There is new I think the our ability to provide drone detection in tactical forces is really appreciated by the customers.

Kobi Marenko: Yeah, sure. Sure. I think the our ability to provide drone detection in tactical forces is really appreciated by the customers. This is all a retrofit.

Speaker #7: And this is all a retrofit.

Casey Ryan: Okay. Yeah, that's actually pretty exciting because that is faster to market as well, but also fairly large, right? Upgrading all the existing could be a pretty exciting opportunity. Just last question around defense. Are other defense forces candidates for you as well with your customers who could presumably build products for, you know, Western European forces as well, beyond the US?

Speaker #10: Okay. Yeah. That's actually pretty exciting because that is faster to market as well. But also, fairly large, right? Upgrading all the existing could be a pretty exciting opportunity.

Speaker #10: And then just last question around defense. Are other defense forces candidates for you as well? With your customers, who could presumably build product for Western European forces as well?

Speaker #10: Beyond the US.

Speaker #7: Yeah. Sure. Beyond US and Israel, of course, we are looking also into Western Europe armies as well.

Kobi Marenko: Yeah, sure. Beyond US and Israeli, of course, we are looking also into Western Europe, armies as well.

Speaker #10: Okay. Okay. And then sort of the last question. Sort of the sort of slow down a little bit in automotive. Is there any connection to sort of the pacing of, say, EVs versus ICE in terms of the powertrain?

Casey Ryan: Okay. Then sort of the last question, sort of the slow down a little bit in automotive. Is there any connection to sort of the pacing of, say, EVs versus ICE in terms of the powertrain, you know, thoughts around OEMs, or are there other factors at play around moving to L3 and L4, and those types of things?

Speaker #10: Thoughts around OEMs. Or are there other factors at play around moving to L3 and L4? And those types of things?

Speaker #7: I think it's connected and not connected. So, of course, the fact that the OEMs invested a lot in EV and the EV basically is the slowing down.

Kobi Marenko: I think, it's connected and not connected. Of course, the fact that the OEMs invested a lot in EV, and the EV basically, is the slowing down, this has caused the OEMs for a huge write-off in tens of billions of dollars. Of course, this is, forces them to reduce the headcount and to cut expenses, this is all delaying their R&D for the Level 3.

Speaker #7: This is causing the OEMs to take huge write-offs in terms of billions of dollars. And, of course, this forces them to reduce headcount and cut expenses.

Speaker #7: And this is all delaying their R&D for the level three. So it's not because the fact that the EV is not there. It's because of the fact that the EV caused them major losses.

Casey Ryan: I see.

Kobi Marenko: It's not because the fact that the EV is not there, it's because of the fact that the EV caused them major losses.

Speaker #10: Got it. That's actually very helpful. It makes a lot of sense. Well, sort of beyond that sort of short-term slowdown, it feels like a pretty exciting outlook for 26 with new markets and then hopefully progress in automotive as we have the 27.

Casey Ryan: Got it. That's actually very helpful and makes a lot of sense. Well, sort of beyond that sort of short-term slowdown, it feels like a pretty exciting outlook for 2026 with new markets and then, you know, hopefully progress in automotive as we have the 2027. That's it for me. Thank you for those answers and discussion points.

Speaker #10: So that's it for me. Thank you for those answers and discussion points.

Speaker #7: Thanks.

Karine Pinto-Flomenboim: Thanks.

Speaker #8: If there are any additional questions, please press the star key followed by the one on your touchtone phone. If you wish to cancel your request, please press the star key followed by a two.

Operator: If there are any additional questions, please press the star key followed by the one on your touchtone phone. If you wish to cancel your request, please press the star key followed by a two. There are no further questions at this time. Mr. Marenco, would you like to make your concluding statement?

Speaker #8: There are no further questions at this time. Mr. Marenko, would you like to make your concluding statement?

Speaker #7: Yeah. On behalf of the management of Albea, I would like to thank you, our shareholders, for your continued interest and long-term support of our business.

Kobi Marenko: On behalf of the management of Arbe, I would like to thank you, our shareholders, for your continued interest and long-term support of our business. Before I leave, I want to say that I have totally enjoyed serving as Arbe CEO, and I am proud of our achievements. Over the years, we have built a strong technology foundation, achieved important milestones, and positioned the company for its next phase of growth. While we have accomplished a great deal, there is still much more ahead, and I am excited to hand over the CEO reins to Ram in the near future. I have full confidence in Ram's leadership and look forward to working closely with him as President of Arbe, as we continue to execute on our strategy and build long-term value. With that, we will end our call. Have a good day.

Speaker #7: Before I leave, I want to say that I have thoroughly enjoyed serving as our CEO, and I am proud of our achievements. Over the year, we have built a strong technology foundation, achieved important milestones, and positioned the company for its next phase of growth.

Speaker #7: While we have accomplished a great deal, there is still much more ahead, and I am excited to hand over the CEO reins to Ram in the near future.

Speaker #7: I have full confidence in Ram's leadership and look forward to working closely with him as president of Albe as we continue to execute on our strategy and build long-term value.

Speaker #7: And with that, we will end our call. Have a good day.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Q4 2025 Arbe Robotics Ltd Earnings Call

Request a DemoDemo

ARBE

Arbe Robotics

Earnings