Executive Summary / Key Takeaways

• Mobileye Global Inc. ($MBLY) demonstrated robust financial performance in Q3 2025, with revenue growth driven by EyeQ™ volume and strong operating cash flow generation, underscoring the efficiency of its core ADAS business.
• The company's technological prowess, particularly with its EyeQ6 High SoC, offers a compelling cost-performance advantage over competitors, positioning it to capture significant market share in next-generation ADAS and autonomous driving.
• Strategic partnerships with automotive giants like Volkswagen , Uber , and Lyft are accelerating Mobileye Drive's robotaxi commercialization, with driver-out operations targeted for 2026 and substantial revenue contributions expected from 2027.
• Mobileye is actively developing EyeQ7 and EyeQ8 SoCs, aiming to transition from "eyes-off" to "minds-off" autonomy by 2029, a long-term vision that could redefine the autonomous vehicle landscape.
• Despite a conservative near-term outlook accounting for macroeconomic uncertainties and geopolitical risks, Mobileye's strong design win momentum and expanding product portfolio signal significant long-term growth potential.

The Visionary Architect of Autonomous Driving

Mobileye Global Inc. stands as a pioneering force in the advanced driver-assistance systems (ADAS) and autonomous driving (AV) industry. Founded in 1999, the company has consistently expanded its offerings, establishing itself as a leader in solutions that enhance road safety and revolutionize the driving experience. Mobileye's overarching strategy is built on an OEM-neutral, cost-efficient, and scalable platform, leveraging a common technology backbone across its diverse product portfolio. This approach positions Mobileye to capitalize on the accelerating industry trends of increased ADAS adoption and the eventual mass deployment of autonomous vehicles, driven by stricter regulatory requirements and growing consumer demand for safety and convenience.

The industry landscape is rapidly evolving, with global NCAP ratings continuously pushing for more sophisticated ADAS applications like automatic emergency braking. This creates a compelling market for safety features, which OEMs increasingly integrate as standard. Mobileye's verifiable solutions are well-positioned to benefit from these increasing safety regulations worldwide. The company's solutions are already installed in approximately 1200 vehicle models, with its EyeQ™ SoCs deployed in about 230 million vehicles, and it actively collaborates with over 50 OEMs globally.

A Legacy Forged in Innovation

Mobileye's journey began with a singular focus on computer vision technology for ADAS. After an initial public offering in 2014, Intel Corporation (INTC) acquired Mobileye in 2017 for $15.30 billion, providing access to unique technologies and leveraging Intel's global policy development strengths. The 2020 acquisition of Moovit further diversified its capabilities into mobility-as-a-service. While the company faced supply chain challenges in 2021-2022 and managed excess customer inventory in early 2024, it has demonstrated resilience, successfully increasing EyeQ™ SoC inventory and adapting to market dynamics. A recent secondary offering in July 2025 resulted in Mobileye's tax deconsolidation from Intel's U.S. domestic income tax return, marking another step in its evolution. These historical developments have collectively shaped Mobileye's current strategic emphasis on an integrated, efficient, and partner-centric approach to autonomous driving.

Technological Edge: The EyeQ Ecosystem and Beyond

At the heart of Mobileye's competitive advantage lies its proprietary EyeQ™ System-on-Chip (SoC) family and a comprehensive suite of purpose-built software and hardware technologies. This core technology enables a scalable ECU architecture, supporting a wide range of ADAS solutions up to full autonomous driving, while meeting stringent cost and power efficiency requirements.

The EyeQ6 High SoC, for instance, demonstrates performance on par with, and in many cases superior to, competing high-performance chips like NVIDIA 's Orin-X when running critical AI programs such as convolutional networks and vision transformers. Crucially, this performance is achieved at a price point less than 25% of the Orin-X. This significant cost advantage, coupled with power efficiency that allows for passive cooling, makes Mobileye's solutions highly appealing to OEMs for mass-market vehicle integration. The company's approach to AI training is also highly efficient, utilizing purpose-built transformer architectures that are significantly more efficient than standard designs, reducing the need for brute-force compute investments.

Mobileye's R&D roadmap extends to the next-generation EyeQ7 and EyeQ8 SoCs. The first silicon sample of EyeQ7 High has been successful, and EyeQ8 is currently in the design stages. These future chips are designed to facilitate the transition from "eyes-off" autonomy (where a human driver or teleoperator can intervene) to "minds-off" autonomy (where no human intervention is required), targeting deployment from 2029 onwards. This ambitious goal underscores Mobileye's commitment to pushing the boundaries of autonomous driving.

Beyond its SoCs, Mobileye's imaging radar is a strategic sensor, offering high resolution and dynamic range crucial for eyes-off systems. A recent design win for this imaging radar with a European OEM for a highway Level 3 solution attests to its differentiation. The company also leverages its Road Experience Management (REM) technology for crowdsourced driving intelligence. With over 7 million vehicles globally uploading data, REM is vital for data harvesting, improving AI training, and forming the backbone for advanced products. Mobileye's use of both photorealistic simulation for edge cases and a synthetic simulator (Artificial Community Intelligence - ACI) for driving policy training further enhances its development efficiency, running billions of simulated miles overnight. These technological differentiators collectively form a robust competitive moat, enabling Mobileye to offer higher-value systems at lower costs, thereby enhancing its market positioning and long-term growth strategy.

Strategic Expansion: From Assisted Driving to Autonomous Fleets

Mobileye's strategy involves a multi-pronged approach to autonomous driving, spanning from advanced ADAS to full robotaxi services. This comprehensive portfolio allows the company to engage with OEMs across various vehicle segments and autonomy levels.

The company is seeing significant momentum in Surround ADAS, which is evolving as the next generation of standardized driving assist for high-volume vehicle platforms. This system is designed to meet stricter late-decade safety standards and enable highway hands-free performance at a lower cost than current systems. Mobileye recently secured a nomination from a leading Western OEM for a high-volume EyeQ6 High-based Surround ADAS program across mass-market vehicles, marking its second such program with a second OEM. This represents an upgrade from EyeQ6 Lite to EyeQ6 High, demonstrating the appeal of Mobileye's integrated and cost-efficient solutions.

While OEM decision-making for SuperVision (eyes-on/hands-off) and Chauffeur (eyes-off/hands-off for consumer vehicles) has been slower than desired, Mobileye continues to make progress. The Porsche and Audi programs for these advanced systems remain on track for a 2027 start of production (SOP), with first prototype demos expected in the second half of 2025. These programs are crucial strategic assets, showcasing Mobileye's ability to transform core technologies into scalable products and providing critical proof points for other potential customers.

In the Mobileye Drive (Robotaxi) segment, the company is accelerating its efforts through a capital-light, ecosystem-based approach. Key partnerships include Volkswagen (for the ID.BUZZ robotaxi, with MOIA as fleet manager and Uber as the demand platform in Los Angeles starting 2026), and a program with Lyft and Marubeni (MARUY) in Dallas-Fort Worth, with an OEM partner expected to be named soon. Mobileye is on track to remove safety drivers in its first U.S. city in 2026, with commercialization expected to drive significant revenue from 2027 onwards. The economics of the robotaxi business comprise both a one-time fee per vehicle and a recurring revenue share based on utilization, offering substantial long-term revenue potential.

Financial Performance: Resilience and Growth

Mobileye's financial performance in Q3 2025 and year-to-date reflects a business demonstrating resilience and growth, particularly in its core ADAS segment. For the three months ended September 27, 2025, revenue increased by 4% year-over-year to $504 million, primarily driven by an 8% increase in EyeQ™ SoC volume, which significantly outpaced the 1% growth in overall vehicle production among its top 10 customers. For the nine months ended September 27, 2025, revenue surged by 24% year-over-year to $1.448 billion, largely attributed to a 37% increase in EyeQ™ SoC revenue as Tier 1 customers normalized excess inventory from the first half of 2024.

Profitability metrics show mixed trends but an overall improvement. Gross profit increased by 3% in Q3 2025 and a robust 40% year-to-date. However, the Q3 2025 gross margin slightly decreased to 48% from 49% in the prior year period. This was primarily due to a modest reduction in EyeQ™ Average Selling Price (ASP), influenced by higher volumes in China (which typically carry lower ASPs) and a different mix of EyeQ™ products sold. EyeQ™ ASP was down approximately $0.50 year-over-year in Q3 2025, also impacted by an increase in EyeQ5 ADAS programs that have lower gross margins. EyeQ5 volumes are expected to peak at around 15% of total volume next year, potentially creating some continued margin pressure. Conversely, the year-to-date gross margin increased to 48% from 43% in the prior year, driven by a lower impact of amortization of intangible assets as a percentage of revenue and a higher percentage of revenue attributable to EyeQ™ SoCs.

Operating expenses increased by 4% year-over-year in Q3 2025, slightly above expectations due to the timing of engineering reimbursements. Despite this, net income for Q3 2025 was $96 million, a significant recovery from a $2715 million net loss in Q3 2024, primarily due to the absence of a goodwill impairment loss recognized in the prior year.

Mobileye's liquidity remains strong, with operating cash flow a consistent highlight. The company generated $167 million in operating cash flow in Q3 2025, and nearly $500 million year-to-date, representing a 150% increase year-over-year. This reflects the cash-generative nature of the business and disciplined working capital management, including a reduction of balance sheet inventory by approximately $100 million year-to-date. Net cash used in financing activities for the nine months ended September 27, 2025, included a $100 million repurchase of common stock from Intel. Mobileye believes it has sufficient funding to meet its business requirements for the foreseeable future, primarily relying on operating cash flows.

Competitive Dynamics: Outmaneuvering Rivals

Mobileye operates in a highly competitive landscape, but its OEM-neutral platform and technological efficiency provide distinct advantages. Compared to NVIDIA (NVDA), Mobileye's EyeQ6 High SoC offers comparable or superior performance for Level 2+ systems at a significantly lower price point (less than 25% of Orin-X) and with greater power efficiency, enabling passive cooling. This cost-performance leadership is a critical differentiator for mass-market adoption.

Against vertically integrated players like Tesla (TSLA), Mobileye emphasizes a redundant sensing approach, combining cameras with imaging radar and front-facing LiDAR for eyes-off systems. This contrasts with Tesla's camera-only strategy, which requires immense compute and data to overcome inherent limitations. Mobileye's focus on achieving extremely high mean time between failure (MTBF) KPIs for unsupervised driving sets a higher safety bar than publicly observed Tesla FSD performance. Furthermore, Mobileye's system boasts roughly 20% lower power consumption compared to Waymo's, indicating a more economically scalable solution for robotaxis.

Mobileye's strategy of partnering with OEMs, rather than competing as a vehicle manufacturer, allows it to serve a broad market. While some OEMs explore in-house development, Mobileye observes no significant trend in Western economies for such advanced products, often citing the complexity and cost. The company's "first mover advantage" in Surround ADAS, evidenced by recent high-volume design wins, further solidifies its market position. Mobileye's comprehensive, end-to-end ADAS and autonomous solutions, coupled with its deep expertise and established partnerships, make it a preferred technology provider for automakers seeking reliable, cost-efficient, and scalable solutions for the future of mobility.

Outlook and Strategic Trajectory

Mobileye has raised the midpoint of its full-year 2025 outlook, increasing revenue guidance by 2% and adjusted operating income by 11% compared to prior expectations. This reflects stronger-than-expected launch activity, ADAS adoption growth, and better performance in China. The company now anticipates full-year EyeQ™ volumes of 35 million to 35.5 million units and SuperVision™ volumes in the low 50,000-unit range. Full-year gross margin is expected to be around 68%, a slight uptick from Q3 and approximately 30 basis points higher year-over-year, primarily due to the mix of products. Operating expenses are projected to increase by about 7% year-over-year to just under $1 billion, consistent with the company's original outlook, as the current R&D infrastructure is deemed sufficient for executing advanced product programs without substantial future increases.

Looking ahead, 2027 is anticipated to be an inflection year for revenue, driven by the ramp-up of SuperVision™ (including programs with Porsche (POAHY) and Audi), Chauffeur, and Mobileye Drive. The company expects to remove safety drivers in its first U.S. city in 2026, with robotaxi commercialization poised to become a significant revenue contributor from 2027 onwards. The long-term vision extends to "minds-off" autonomy by 2029 and beyond, powered by the next-generation EyeQ7 and EyeQ8 SoCs. Mobileye's continued momentum in ADAS program wins, particularly with EyeQ6 Lite, and expanding REM data harvesting initiatives, further reinforce its growth trajectory.

Risks and Considerations

While Mobileye's outlook is strong, investors should consider several risks. Geopolitical conflicts in Israel and the broader region, though not materially impacting operations to date, remain a factor that could affect future expectations. Volatility in global automotive production, trade policies, and tariffs also pose risks. While Mobileye is not directly exposed to tariff costs, any negative impact on vehicle production volumes or consumer demand could indirectly affect its revenue. The pace of OEM decision-making for advanced products like SuperVision™ and Chauffeur has been slower than desired, potentially delaying revenue ramps for these solutions. Additionally, SuperVision™ volumes can fluctuate, and the company's guidance for 2025 assumes a conservative run rate for current programs.

Conclusion

Mobileye Global Inc. is firmly established as a leader in the rapidly evolving ADAS and autonomous driving sectors. Its core investment thesis is underpinned by a powerful combination of pioneering technology, strategic partnerships, and a disciplined approach to financial management. The company's EyeQ™ SoC ecosystem, particularly the EyeQ6 High, provides a compelling cost-performance advantage that is driving significant design wins and market penetration in next-generation ADAS. Furthermore, Mobileye's ecosystem-based strategy for robotaxi deployment, exemplified by its collaborations with Volkswagen (VWAGY), Uber (UBER), and Lyft (LYFT), positions it for substantial revenue growth as driverless operations scale from 2026. The long-term vision of transitioning to "minds-off" autonomy with future EyeQ™ generations highlights Mobileye's commitment to continuous innovation and its potential to shape the future of mobility. Despite macroeconomic and geopolitical uncertainties, Mobileye's robust execution, technological leadership, and expanding product portfolio suggest a compelling trajectory for investors seeking exposure to the autonomous revolution.