Mobileye Reports Strong Q2 Growth Amidst Industry Challenges

On July 24, autonomous driving technology company Mobileye Global announced that its revenue in the second quarter of this year increased by 15% year-on-year to $506 million, surpassing analysts' expectations of $480.9 million. The gross profit surged by 21% to $252 million, with a gross margin increase of 219 basis points to 50%. Operating losses narrowed by 21% year-on-year to $74 million, and net losses also narrowed by 21% to $67 million. According to non-GAAP measures, Mobileye's adjusted gross profit rose by 14% year-on-year to $347 million, with an adjusted gross margin increase of 67 basis points to 69%. Adjusted operating profit surged by 34% year-on-year to $106 million, and adjusted net profit also rose by 34% to $102 million. Mobileye noted that demand for autonomous driving chips is very strong, with expectations for a significant increase in orders as customers gradually deplete existing inventories. After two years of sluggish demand, automakers have resumed large-scale orders of autonomous driving hardware, previously affected by excess inventory due to supply chain concerns caused by the COVID-19 pandemic. Consequently, Mobileye has raised its financial outlook for the fiscal year 2025. The company now expects revenue for 2025 to be between $1.765 billion and $1.885 billion, up from the previous estimate of $1.69 billion to $1.81 billion. Operating losses are expected to be between $436 million and $512 million, lowered from an earlier forecast of $489 million to $574 million. Adjusted operating profit is expected to range from $210 million to $286 million, higher than the prior forecast of $175 million to $260 million. Mobileye CEO Amnon Shashua stated, 'The clarity in the industry supply-demand balance since late April this year has provided the basis for us to raise our full-year 2025 financial outlook. However, considering the overall uncertainty of the macroeconomic environment, we will maintain a cautious stance.' He also added that Mobileye is expected to experience a growth inflection point in 2027, as the upcoming new generation of intelligent assisted driving systems is anticipated to significantly boost revenue. Following this news, Mobileye's stock price rose approximately 6% in pre-market trading. The U.S. government's tariff policies on vehicles and parts imposed since the beginning of the year have severely impacted the global automotive industry, forcing automakers to adjust their supply chain strategies to mitigate business impacts, including some of Mobileye's customers like Porsche and Audi. However, Mobileye previously stated in April that its exposure to tariffs is relatively minor. Nonetheless, analysts warn that rising production costs faced by automakers may lead to short-term reductions in production and suppress demand for Mobileye's advanced driver assistance technologies, leaving the entire industry shrouded in uncertainty.