Mobileye, a leader in the development and deployment of advanced driver assistance systems (ADAS) and autonomous driving technologies, has continued to make significant strides in its mission to revolutionize the future of mobility. With a strong focus on innovation and strategic partnerships, the company has positioned itself as a key player in the rapidly evolving automotive landscape.
Business Overview
Mobileye was founded in 1999 in Israel and has since become a global leader in the ADAS and autonomous driving space. The company's comprehensive suite of purpose-built software and hardware technologies is designed to provide the capabilities needed to make the future of ADAS and autonomous driving a reality. Mobileye's solutions have been installed in approximately 800 vehicle models and its System-on-Chips (SoCs) have been deployed in approximately 170 million vehicles worldwide.The company's business model revolves around the sale of its EyeQ™ SoCs to Original Equipment Manufacturers (OEMs) through Tier 1 automotive suppliers. Mobileye also generates revenue from its SuperVision™ product, which provides eyes-on/hands-free navigation capabilities. Additionally, the company is making significant progress in developing its advanced product portfolio, including Chauffeur for consumer-owned vehicles and Drive for network-deployed driverless vehicles.
Financial Performance
In the fiscal year 2023, Mobileye reported annual revenue of $2,079,000,000 and a net loss of $27,000,000. The company's annual operating cash flow was $394,000,000, and its annual free cash flow was $296,000,000. These financial results demonstrate Mobileye's ability to generate substantial cash flow, despite the net loss, which can be attributed to the company's ongoing investments in research and development to maintain its technological leadership.For the first quarter of 2024, Mobileye reported revenue of $239 million, a significant decrease from the $458 million reported in the same period of the prior year. This decline was primarily due to a reduction in EyeQ™ SoC shipments, as Mobileye's Tier 1 customers utilized excess inventory to meet demand. The company's gross profit for the quarter was $54 million, with a gross margin of 23%, compared to $207 million and a gross margin of 45% in the first quarter of 2023.
Mobileye's operating loss for the first quarter of 2024 was $238 million, compared to an operating loss of $81 million in the same period of the prior year. The increase in operating loss was mainly driven by the decrease in revenue, partially offset by a decrease in share-based compensation and amortization expenses. The company's adjusted operating loss for the quarter was $65 million, compared to an adjusted operating income of $124 million in the first quarter of 2023.
Geographical Breakdown
Mobileye generates the majority of its revenue from sales to customers in China, South Korea, Germany, and the United States. In the first quarter of 2024, the company reported that revenue from China accounted for $86 million, or 36% of total revenue, followed by South Korea at $47 million (20%), Germany at $39 million (16%), and the United States at $18 million (8%).Revenue Breakdown and Trends
Mobileye's revenue is primarily derived from the sale of its EyeQ™ SoCs, which represented approximately 72% of total revenue in the first quarter of 2024, down from 88% in the same period of the prior year. This decrease was due to the utilization of excess inventory by Mobileye's Tier 1 customers during the quarter.Sales of the company's SuperVision™ product represented the majority of the remaining revenue in the first quarter of 2024, with volumes increasing from 25,000 units in the first quarter of 2023 to 39,000 units in the first quarter of 2024. This growth in SuperVision™ revenue was partially offset by the decline in EyeQ™ SoC sales, resulting in an overall decrease in revenue for the quarter.
Guidance and Outlook
For the full year 2024, Mobileye expects to ship between 31 million and 33 million EyeQ™ SoCs and between 175,000 and 195,000 SuperVision™ units. The company anticipates that its average system price will increase to approximately $55 in 2024, up from $53 in 2023, driven by the growth in SuperVision™ revenue.Mobileye expects its gross margin to be in the range of 67% to 68% for the remainder of 2024, based on the anticipated mix of SuperVision™ and EyeQ™ revenue. The company also expects its adjusted operating expenses to grow by approximately 25% year-over-year as it continues to invest in the development of its advanced product portfolio, including SuperVision™, Chauffeur, and Drive.
Technological Advancements and Strategic Partnerships
Mobileye has continued to push the boundaries of ADAS and autonomous driving technology. The company's latest EyeQ™ SoC, the EyeQ6 Lite, packs 4.4 times the processing power of its predecessor, the EyeQ4, into a smaller package, while supporting a wide range of safety and convenience features. This technological advancement has been a key driver of Mobileye's recent design win success, with the company securing 26 million units of future projected volume in the first quarter of 2024.In addition to its core ADAS business, Mobileye has made significant progress in its advanced product portfolio. The company's SuperVision™ system, which provides eyes-on/hands-free navigation capabilities, is currently in production with more than 200,000 systems on the road. Mobileye has also secured series production wins for its Chauffeur and Drive products, which are expected to begin scaling in 2026.
Mobileye's strategic partnerships have been instrumental in its success. The company's collaboration with Intel, its parent company, has provided access to unique and differentiating technologies, such as Intel's mmWave technologies, which support the development of Mobileye's software-defined radar. Additionally, Mobileye's partnership with STMicroelectronics, a leading supplier of automotive semiconductor devices, has enabled the co-development of six generations of the EyeQ™ SoC.
Regulatory Landscape and Market Trends
The demand for Mobileye's solutions is influenced by the impact of regulation and the ratings systems deployed by various New Car Assessment Programs (NCAPs), particularly the Euro NCAP and the U.S. NCAP. As these NCAPs continue to demand more ADAS applications, OEMs are increasingly including ADAS as a standard feature in their models to maintain or achieve the highest safety ratings.The regulatory environment for autonomous driving is also evolving, with Mobileye actively engaged in global standardization efforts, such as the IEEE 2846 industry working group, which the company leads. Mobileye's Responsibility-Sensitive Safety (RSS) framework has been a key driver in informing the company's driving policy and formalizing a driving safety concept, which is expected to facilitate the standardization of AV safety requirements worldwide.
Risks and Challenges
Mobileye faces several risks and challenges, including the potential for supply chain disruptions, shortages of raw materials, and manufacturing limitations, which could limit the company's ability to meet customer demand. The company is also substantially reliant on its sole supplier, STMicroelectronics, for the production of its EyeQ™ SoCs, which could expose Mobileye to supply chain risks.Additionally, the regulatory environment for autonomous driving remains uncertain, and any prohibitions or restrictions on the deployment of autonomous vehicles in certain areas could have a material impact on Mobileye's financial performance. The company also faces competition from in-house development efforts by some OEMs, particularly in the Chinese market, which could impact the adoption of Mobileye's solutions.