Mobileye Earnings Call: Strong 2025, Cautious 2026 Outlook

Mobileye Global, Inc. Class A ((MBLY)) has held its Q4 earnings call. Read on for the main highlights of the call.

Mobileye’s Earnings Call Balances Strong 2025 Beat With Cautious 2026 Outlook

Mobileye Global, Inc. struck an overall upbeat tone on its latest earnings call, underscoring a year of strong operational execution and financial outperformance in 2025, backed by double‑digit revenue growth, sharply higher profitability, and robust cash generation. Management highlighted major product wins and a strategically important robotics acquisition as key drivers of long‑term growth, even as they acknowledged near‑term headwinds from foreign exchange, margin mix, and a deliberately conservative stance on 2026 revenue guidance. The message to investors: the core business is performing ahead of plan, and the technology roadmap is accelerating, but the company is managing expectations prudently for the coming year.

Revenue Growth Exceeds Guidance

Mobileye delivered 2025 revenue of $1.9 billion, representing a 15% year‑over‑year increase and landing slightly above the high end of prior guidance. This outperformance signals stronger‑than‑expected demand for the company’s advanced driver‑assistance systems (ADAS) and related products, while also demonstrating Mobileye’s ability to convert its large order book into realized sales. For investors, the revenue beat adds credibility to management’s execution track record, even as they dial back expectations for the pace of topline growth in 2026.

Profitability and Cash Flow Strengthen Sharply

Profitability and cash generation were standout themes on the call. Full‑year adjusted operating income climbed to $280 million, up 45% year‑over‑year, with adjusted operating margin improving to 15%, an expansion of roughly 300 basis points. Operating cash flow surged more than 50%, reflecting both higher earnings and disciplined working capital management. This combination of margin expansion and stronger cash flow gives Mobileye more flexibility to fund R&D, strategic initiatives, and potential future investments without overreliance on external capital.

IQ Volume Momentum Underpins Growth

Core IQ chip volumes were another key pillar of Mobileye’s performance. In 2025, IQ volume reached 35.6 million units, topping the company’s prior expectation of 32–34 million. Management now sees a trend of around 9 million units per quarter and expects approximately 10 million IQ units in Q1 2026, which would support about 19% year‑over‑year growth in the first quarter alone. For full‑year 2026, guidance at the midpoint assumes slightly above 37 million IQ units, indicating continued volume expansion even as overall revenue growth slows.

Next-Generation ADAS Wins Boost Long-Term Visibility

Mobileye emphasized major product design wins for its next‑generation ADAS portfolio, a critical signal for future revenue. The IQ6 high‑chip platform secured its first two major programs with two of the world’s largest automakers, including Volkswagen, marking a key milestone in Mobileye’s transition to more advanced solutions. The company also highlighted strong positioning for its Surround ADAS offering, designed for high‑volume integration across a broad set of vehicle segments. These wins help lock in multi‑year demand and support the thesis that Mobileye remains a preferred technology partner for global automakers as ADAS penetration deepens.

Robotaxi and Drive Programs Gain Traction

While not yet material to near‑term financials, Mobileye’s robotaxi and Drive initiatives are gaining strategic traction. Management pointed to partnerships and commercialization plans with Volkswagen and affiliated mobility operator Moya, as well as collaboration with Waymo, as proof points that its autonomous driving stack is commercially viable. The Volkswagen ecosystem is expected to expand to around 100,000 units by 2033, with planned robotaxi commercialization across six cities, including Los Angeles, beginning in 2027 and targeting thousands of vehicles across these launch markets. These developments reinforce Mobileye’s optionality in higher‑value autonomous applications over the longer term.

Technology Innovations Accelerate AV and Robotics Capabilities

The call underscored Mobileye’s push at the technology frontier, particularly in AI and autonomous systems. The company introduced an artificial community intelligence (ACI) framework to improve planning, sim‑to‑wheel transfer techniques to better bridge simulation and real‑world performance, and a “fast‑think/slow‑think” vision‑language model (VLM) architecture aimed at improving precision and scalability while reducing reliance on teleoperators. Together, these innovations are designed to enhance the robustness and cost efficiency of autonomous driving and robotics solutions, strengthening Mobileye’s competitive moat.

Menti Robotics Acquisition Expands into Humanoid Platforms

A major strategic move discussed on the call was the acquisition of Menti Robotics, which brings a vertically integrated humanoid robotics platform into Mobileye’s portfolio. Menti’s system features continuous passive learning capabilities and is expected to generate a high double‑digit number of customer proof‑of‑concepts in 2026, with a commercialization roadmap stretching toward 2028. Management emphasized synergies between Menti’s robotics stack and Mobileye’s existing simulation tools and VLM technology, positioning the combined entity to pursue emerging markets in industrial and service robotics.

Order Flow and Inventory Point to Potential Upside

Late‑2025 order and inventory dynamics suggest potential near‑term upside for shipments. Mobileye reported that customer order flows strengthened toward the end of the year, and that tier‑one supplier inventories finished 2025 at extremely low levels. Such lean inventory positions typically imply the need for replenishment, especially if end‑customer demand remains steady or improves, creating room for Mobileye’s IQ shipments to surprise to the upside relative to conservative guidance.

Gross Margin Pressure and Mix Headwinds Ahead

Despite the strong profitability in 2025, Mobileye guided to some gross margin compression in 2026. The company expects margins to be pressured by ongoing generational cost savings dynamics around IQ5, vehicle mix headwinds, and the impact of a dual‑chip program. While these factors may weigh on reported gross margin percentages, management noted that certain mix shifts still increase total gross profit dollars per vehicle, even if per‑chip metrics look weaker. Investors should therefore focus on profit dollars and overall earnings power, rather than percentage margins alone.

Conservative 2026 Revenue Outlook

Management’s 2026 revenue guidance of $1.9–$1.98 billion implies flat to roughly 5% year‑over‑year growth, a notably more cautious posture relative to the 15% growth just delivered in 2025. This conservatism reflects several moving parts: macro uncertainty, China volume softness, FX headwinds, and margin mix considerations, along with an explicit decision not to bake in aggressive assumptions from newer autonomous and robotaxi programs. The stance appears designed to set a realistic base case after a strong year, leaving room for upside if demand and program ramps track toward the high end of expectations.

FX Headwinds from Shekel Appreciation

Foreign exchange emerged as a meaningful near‑term headwind. The appreciation of the Israeli shekel, estimated around 10–12% over the year, has pushed up Mobileye’s payroll and headcount costs when measured in U.S. dollars. While the company has hedged more than half of its 2026 FX exposure and is implementing workforce efficiency measures to offset some of the pressure, management still expects a tangible drag from currency on operating expenses and margins relative to 2025.

Nonrecurring Costs and Operational Efficiency

The company also flagged temporary, nonrecurring costs tied to workforce optimization. In Q4 2025, Mobileye incurred a $7 million one‑time expense related to workforce efficiency initiatives and terminations, which modestly weighed on quarterly results. These actions, however, are part of a broader push to improve productivity and help counteract inflation, FX pressures, and rising R&D needs, particularly those associated with the Menti acquisition.

China Volume Uncertainty Weighs on Outlook

China remains a source of uncertainty. Mobileye expects volumes from Chinese OEM customers to decline by about 0.5 million units in 2026 compared with 2025, when volumes were slightly above 3 million units. Management emphasized that short‑term visibility into China order flow is limited, reflecting a more volatile local demand environment and intense competitive dynamics. This softer China outlook is one of the factors contributing to the company’s cautious 2026 revenue guidance.

Dual-Chip Program: Higher Profit per Car, Lower ASP per Chip

A new OEM program that uses two IQ4 chips per vehicle is set to affect Mobileye’s reported mix and pricing metrics. While each of these vehicles will generate more gross profit dollars for Mobileye, the requirement for two chips per car dilutes the average selling price and gross margin on a per‑chip basis. Management estimated the mix impact at around $0.80 year‑on‑year per vehicle on ASP and gross margin metrics. For investors, this underscores the importance of looking beyond top‑line ASP trends to underlying profit per vehicle and program economics.

Supply-Chain Risk from Memory Volatility

Mobileye also flagged supply‑chain risk related to memory components, which have become a broader concern across the automotive sector. Although Mobileye is indirectly exposed through its tier‑one suppliers rather than buying the memory itself, volatility in memory availability or pricing could influence production timing or cost structure. The company is actively monitoring these conditions and working with partners to mitigate potential disruptions, but acknowledged that this remains a variable to watch.

Advanced Products Not Yet Material to 2026

Despite growing momentum in advanced products—such as Drive, robotaxi platforms, and supervision features for premium brands—Mobileye was clear that these offerings are not expected to contribute meaningfully to 2026 results. Some program timelines have shifted modestly into early 2027, so the company has not built aggressive revenue from these initiatives into its near‑term guidance. For investors, this means that the 2026 outlook is primarily driven by the core IQ and ADAS business, with upside potential as advanced programs eventually ramp.

Guidance: Solid Core Growth with Managed Expectations

For 2026, Mobileye reiterated revenue guidance of $1.90–$1.98 billion, signaling flat to low single‑digit growth on top of a strong 2025 base. IQ unit volume is forecast to rise to slightly above 37 million for the year, with about 10 million units in Q1 and a bit over 9 million per quarter thereafter, supporting roughly 19% year‑over‑year IQ shipment growth in the first quarter. The guidance assumes production at the company’s top 10 customers declines around 2%, while Mobileye’s volumes with those customers increase about 6% at the midpoint, including roughly 700,000 units from the dual‑IQ4 program. Management expects somewhat lower gross margins due to mix and generational cost dynamics, and operating expenses to rise to about $1.1 billion—roughly 10% higher than 2025—reflecting underlying inflation and incremental R&D tied to Menti, partly offset by workforce efficiencies and FX hedges covering more than half of 2026 exposure. Framed against 2025’s $1.9 billion in revenue, $280 million in adjusted operating income, 15% adjusted margin, and a more than 50% jump in operating cash flow, the 2026 targets represent a consolidation year rather than an acceleration phase.

Mobileye’s latest earnings call painted the picture of a company executing strongly today while carefully navigating the near‑term macro and industry headwinds. Robust 2025 results, rising IQ volumes, and major next‑gen ADAS wins underscore the health of the core business, while robotaxi, AI, and humanoid robotics initiatives broaden the long‑term opportunity set. At the same time, management is candid about pressures from FX, China softness, margin mix, and increased investment needs, choosing to guide conservatively for 2026. For investors, the key takeaway is that Mobileye’s structural growth drivers remain intact, and the company is using a year of strong results to invest in the technologies and platforms that could power its next leg of expansion.