• EyeQ Volume Growth: 9% increase in Q4, up 3% from Q3.
• Operating Margin: 21%, nearly 5 points higher than Q3.
• Operating Cash Flow: $400 million for 2024, flat compared to 2023.
• Revenue Guidance for 2025: $1.75 billion at the midpoint, representing approximately 6% year-over-year growth.
• Adjusted Operating Income Guidance for 2025: $217 million, more than 10% growth year-over-year.
• EyeQ Volume Guidance for 2025: 32 million to 34 million units.
• Gross Margin Improvement: Expected to be about 1.5 points higher in 2025 compared to 2024.
• Operating Expenses for 2025: Approximately $250 million per quarter on average.
• Q1 2025 Revenue Expectation: Down about 11% versus Q4, with 25% of the full-year revenue guidance.
• Capital Expenditure for 2024: $81 million.
• Effective Tax Rate for 2025: Approximately 20%, similar to 2024.

• Warning! GuruFocus has detected 2 Warning Sign with MBLY.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Mobileye Global Inc (NASDAQ:MBLY) reported a robust operating cash flow of $400 million for 2024, consistent with 2023 despite revenue and earnings declines.
• The company experienced higher-than-expected EyeQ volume from Chinese domestic OEMs, contributing to a 9% increase in Q4.
• Mobileye Global Inc (NASDAQ:MBLY) continues to win new ADAS business with core customers and is seeing opportunities with new customers.
• The company has made significant technological advancements, particularly in AI efficiency, which are expected to enhance future product offerings.
• Mobileye Global Inc (NASDAQ:MBLY) is progressing with customer engagements that are expected to lead to a steady cadence of announcements in 2025, consistent with their strategic goals.

Negative Points

• Mobileye Global Inc (NASDAQ:MBLY) is taking a conservative approach to guidance due to uncertainties in customer forecasting, particularly with Chinese OEMs.
• There is a risk that Zeekr could choose to go with an in-house system for the Zeekr 009, which could impact Mobileye's volumes.
• The company is assuming a deterioration in Chinese OEM volumes due to low visibility, which could affect future performance.
• Operating expenses are expected to remain high, with an average of $250 million per quarter in 2025, potentially impacting profitability.
• The exact timing of advanced product design wins remains challenging to predict, which could delay expected revenue from these initiatives.

Q & A Highlights

Q: As you're talking to legacy OEMs about adopting advanced automation like SuperVision, what timelines are they considering for this kind of autonomy? Are they still viewing this as a 2027 or 2028 launch for real adoption, particularly in North America and Europe? A: During 2024, we built up with potential customers, developing vehicles with our stack and conducting extensive testing. We believe this will bear fruit in 2025, though exact timing is difficult to pinpoint. The 2027 timeframe still seems like the sweet spot for introducing these technologies, driven by a sense of urgency created by competitors like Tesla.

Q: How do you think about gross margins for 2025? A: We expect a slight increase in gross margin of 1.5% due to SuperVision being lower volume than in 2024. The EyeQ volume is expected to remain flat within the year, so there are no issues anticipated with gross margins in 2025.

Q: If you were to lose OEM contracts, what would be the reason? Is it timing, OEMs taking no action, or an in-house solution? A: We don't see a trend towards in-house development for advanced products. The main issues are related to powertrain decisions, such as sales of EVs being below expectations, causing car companies to reconsider their models. This can delay driving assist decisions, but in-house development is not a significant factor.

Q: Does price come up in OEM conversations, and is it a pushback? A: Price is always a consideration, but it is not currently an impediment to making decisions. We are optimized on price and work with customers to find the right solution. We haven't lost a program on price, and we remain aggressive and flexible in negotiations.

Q: How is Mobileye Drive technology progressing for robotaxis, and when do you expect AVs to be on roads for commercial operation? A: Our lead customer is Volkswagen, and we have additional activities with Holon and Ruter. We are targeting the end of 2026 to 2027 for removing the driver. Throughout 2025, we will replace the compute hardware to EyeQ6 and integrate imaging radars, aiming for significant milestones in closed user-group testing and commercial launch.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.