Mobileye Global, Inc. Class A ((MBLY)) has held its Q4 earnings call. Read on for the main highlights of the call.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Mobileye Global, Inc. Class A’s recent earnings call unveiled a blend of optimism and caution. The sentiment throughout the discussion reflected positive trends in volume growth and new business ventures, yet it also acknowledged certain setbacks, such as revenue declines and a conservative outlook for 2025. Technological advancements and customer engagement efforts were underscored as promising, though uncertainties around customer volume assumptions and market conditions pose notable risks.
EyeQ Volume Increase
Mobileye reported a significant uptick in EyeQ volume, surpassing expectations with a 9% increase compared to Q3. This growth was largely driven by heightened demand from Chinese domestic original equipment manufacturers (OEMs), marking a strong performance in this segment.
Operating Margin Improvement
The company achieved an operating margin of 21% for Q4, marking an improvement of nearly 5 percentage points from Q3. This enhancement highlights the company’s ability to maintain efficiency and profitability despite challenging market conditions.
Strong Operating Cash Flow
Despite facing declines in revenue and earnings, Mobileye maintained robust operating cash flow at $400 million, consistent with 2023 figures. This stability in cash flow is a testament to the company’s financial resilience.
New Business Wins
Mobileye secured a multimillion-unit RAM data harvesting program with a key customer and initiated collaboration with an Indian OEM on data harvesting. These new business wins signify strategic growth and expansion into new markets.
Advanced Product Development
The company is making strides in advanced product design and anticipates a steady stream of announcements in 2025. These developments are part of Mobileye’s ongoing efforts to innovate and stay ahead in the technology landscape.
Revenue and Earnings Declines
Revenue and earnings witnessed a year-over-year decline, attributed to an inventory digestion phase during the first half of 2024. This has been a challenging period, but the company remains focused on recovery.
Conservative Guidance for 2025
Guidance for 2025 was set conservatively, anticipating a deterioration in customer volumes and challenges in forecasting output from Chinese OEMs. This cautious approach reflects the uncertainties present in the market.
SuperVision Volume Assumptions
The assumed volumes for SuperVision are low, with most expected units from Polestar 4. This assumption has impacted revenue projections, highlighting the importance of accurate volume forecasting.
Potential Risks with Key Customers
Concerns were raised about Zeekr potentially opting for an in-house system, coupled with conservative assumptions on Polestar volumes due to uncertainties. These risks underline the competitive and unpredictable nature of the market.
Guidance for 2025
The forward-looking guidance for 2025 projects revenue at $1.75 billion and adjusted operating income of $217 million, indicating about 6% year-over-year revenue growth and over 10% growth in adjusted operating income. EyeQ volumes are expected between 32 million to 34 million units. Gross margins are anticipated to rise by 1.5 percentage points compared to 2024, with steady operating expenses and a consistent tax rate of approximately 20%.
In conclusion, Mobileye’s earnings call painted a picture of measured optimism. While the company celebrates advancements in volume growth and strategic partnerships, it remains cautious, particularly concerning revenue projections and customer volume assumptions. Looking ahead, the guidance for 2025 reflects a balanced approach, aiming for growth while navigating potential market risks. Investors and stakeholders will be keenly observing how Mobileye maneuvers through these challenges and opportunities.
