Mobileye Global Inc.

Greetings and welcome to the MobileEye first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Gauss. Mr. Gauss, you may begin.

Thanks, Stacey. Hello, everyone, and welcome to Mobilize First Quarter 2025 Earnings Conference Call for the period ending March 29, 2025. Please note that today's discussion contains forward-looking statements based on the business environment as we currently see it. Such statements involve risks and uncertainties. Please refer to the accompanying press release, which includes additional information on the specific factors that could cause actual results to differ materially. Additionally, on this call, we will refer to both GAAP and non-GAAP figures. The reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release. Joining us on the call today are Professor Amnon Shashua, Mobilized CEO and President, and Moran Shamesh, Mobilized CFO. Also joining today for the Q&A session is Nimrod Nuchtan, Mobilized EVP of Business Development and Strategy. Thanks, and now I'll turn the call over to Amnon.

Hello, everyone, and thanks for joining our earnings call. Starting with the results, Q1 was closely aligned with our expectations. Revenue was up 83% year-over-year compared to the unusually low Q1 of last year, due to the meaningfully drawdown of inventory in Q1 2020. Operating margins recovered sharply on a year-over-year basis due to the high revenue. Operating expense growth, 14% in Q1, should moderate to middle single digits on average in the balance of the year, as the current R&D infrastructure is sufficient to execute all the advanced products and programs that will come online over the next several years. Operating cash flow was again a highlight at $109 million in Q1. Business trends for our core single-chip front camera driving assistance systems were fundamentally strong in Q1, both in terms of current supply demand and design wins for future programs. Volume in Q1 was 8.5 million units, and we expect Q2 volume to be about 7% higher, and for Q2 revenue to be up approximately 7% year over year. After a volatile 2024, Q1 volumes and Q2 orders have been quite stable, with some upward variance from China OEMs compared to our original expectations. Turning to the macro environments, Clearly, global light vehicle production in 2025 has become significantly more uncertain as the industry grapples with new trade frictions that change frequently. We are fortunate that the simplicity of our supply chain, in which our customers are the importers of our products, means that we should not directly incur any material target costs. Nevertheless, we will be affected by any negative impacts to global production volumes and consumer spending resulting from these trade frictions. What we know today is that Q1 results were solid due to order flow is above original expectations and consistent for the last couple of months, and we have seen no deterioration in forward production schedules from our customers. We also know that our original outlook included a level of conservatism that was intended to reflect the risk of macro deterioration in the second half of 2025. Given expected first half volumes, our own analysis of the direct impact of current tariffs on our customers and analysis by third parties like S&P Global, we continue to see a strong potential to perform within the guidance range for full year 2025. Of course, there is potential for price elasticity and other economic effects on auto consumers, but this is beyond our ability to analyze at this time. Turning to the longer term, design wind activity was very brisk in this quarter. This tends to be bumpy, but if we compare it to the projected future volumes achieved from design winds in all of 2024, the design winds in Q1 are already at around 85% of what we achieved last year. Additionally, we are seeing potential for an inflection point in the value per unit of mass market driving assistance. REM is now included in the fourth blue cruise, And this cloud-enhanced functionality will also be adopted by a Korean OEM in future programs based on a large program we won in Q1. A potentially bigger tailwind for Mobileye is the trend towards a multi-camera setup going mainstream in the coming years due to more stringent future safety requirements and also the need to provide highway hands-free driving on mass market vehicles for OEMs to remain competitive. BYD boosted that their trend with their God's Eye announcement, which was a clear message to the industry that highway hands-free driving will likely be a standard feature on mainstream vehicles in the coming years. Mobilized surround ADAS through the IQ6 High is the perfect solution for that space, and we announced our first design win with Volkswagen during the quarter. Technology functionality and efficiency are just as important as criteria. And we have the only offering that can support all perception, mapping, driving policy, and driving function from a single SOC on a single ECU, fully upgradable over the air. And this shares a common technology backbone with our more advanced product, which supports cost-efficient modular product portfolio for OEMs across all vehicle segments. Mobilized through one-stop shop, and this really aligns with OEM software-defined vehicles and architecture consolidation goals. We're also seeing substantial opportunities from new customers. During the quarter, we achieved our first design win in about eight years with a particular European OEM. We're also seeing traction from our imaging radar product, where the first design win outside of the drive and product line is imminent with another European OEM. This OEM is expected to choose our imaging radar as an enabler of high-speed highway level 3 solutions which is a testament to the differentiation of the sensor and the big vote of confidence to our chauffeur and drive products in general. OEM decision-making for supervision and chauffeur remains slower than we would like, but we continue to make progress with a number of OEMs, including two new top 10 global OEMs prospects in the past few months. Execution on the Porsche and Audi programs remain on track, and we're looking forward to provide first prototype demos of these systems in the second half of 2025. That will be the first opportunity for external audiences to experience the new i26 high-based software and hardware in a production-intensive vehicle. Our Mobileye self-driving system for robot taxi business continues to accelerate. We announced the next step with Lyft during the quarter, announcing Dallas as the geography for initial operation, Marubeni as the owner-operator, and Lyft as the demand platform. we expect to choose and announce the vehicle OEM in the coming months. In a completely fresh development, simultaneous to the beginning of this learning call, Volkswagen and Uber issued a joint release announcing the two companies have agreed to integrate Mobileye drive-enabled ID.Bus robotaxis onto the UberRide hailing network in Los Angeles starting in 2026. This is an excellent example of the ecosystem approach we are taking in this business, which we believe has significant scale benefits. As we have discussed before, we are working with Volkswagen to integrate the mobilized self-driving system into Volkswagen ID.1, produced on the same assembly line as normal vehicles, and that's able to be scaled up or down rapidly. In this agreement, Volkswagen's mobility arm, Moya, will act as the fleet management system provider of the vehicles, and the Uber network will be the demand-generating platform. Our ecosystem approach is capital light for us, and it puts the responsibility for each layer of this business into actors that have relevant competencies and the ability to add them. On the technology front, our low-cost sensor set, efficient compute, and generalizable AI software is expected to enable rapid scaling across geographies that are compelling price points for the both. Finally, we congratulate another of our Robotaxi production partners, Holon, for booking an order from Jacksonville Transit Authority to purchase the Holland Urban Autonomous Shuttle, which is enabled by Mobileye Drive. Thanks, and I will turn the call over to Moran.