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Date

Thursday, January 22, 2026 at 8 a.m. ET

Call participants

  • Chief Executive Officer — Amnon Shashua
  • Chief Financial Officer — Moran Shemesh
  • Executive Vice President, Business Development and Strategy — Nimrod Nehushtan
  • Chief Communications Officer — Dan Galves

Takeaways

  • Revenue -- $1.9 billion for the full year, up 15%, surpassing the high end of prior guidance.
  • Adjusted Operating Income -- $280 million, marking 45% year-over-year growth, with margin at 15%, up approximately 300 basis points versus 2024.
  • Operating Cash Flow -- Increased more than 50% year over year.
  • IQ Unit Volume -- 35.6 million shipped for the year, above the initial expectation of 32-34 million.
  • Q1 2026 Guidance -- 10 million IQ units projected, supporting around 19% year-over-year growth for the first quarter.
  • Full-Year 2026 Revenue Guidance -- $1.9 billion to $1.98 billion, indicating flat to 5% growth, with a midpoint based on slightly above 37 million IQ units shipped.
  • Gross Margin Outlook -- Expected to decline year over year due to continued IQ5-related cost savings, vehicle mix headwinds, and the impact from a dual-chip OEM program.
  • Operating Expenses -- Totaled $1.003 billion in 2025, slightly above the $995 million budget due to $7 million in nonrecurring Q4 workforce efficiency costs; 2026 guidance is approximately $1.1 billion, reflecting 10% expected growth including Menti R&D expenses and FX effects.
  • Menti Robotics Acquisition -- Mobileye completed the acquisition, citing technology synergies in AI, simulation, and vertical integration between autonomous vehicles and robotics.
  • Surround ADAS Program Wins -- Secured the first two major mass-market programs with leading global OEMs, positioning the IQ6 chip for high-volume adoption across multiple vehicle categories.
  • Volkswagen Ecosystem Expansion -- Expected robotaxi deployment volume increased to 100,000 units by 2033, with initial removal of safety drivers planned for 2026 in the Moya fleet.
  • Customer Inventory -- Tier 1 customer inventory ended 2025 at "extremely low" levels, with anticipated Q1 2026 restocking to normalize safety stock.
  • FX Headwind -- Israeli shekel appreciation increased headcount costs in USD terms, partially offset by workforce efficiency actions.
  • China OEM Volumes -- Full-year 2025 volume growth attributed to a rise in China OEM ADAS and SuperVision units, though 2026 assumes a decline of about half a million units with continued strong export trends.
  • Dual-Chip Program -- New OEM initiative requiring two IQ4 chips per vehicle adds approximately 700,000 units but lowers average selling price and gross margin per unit, while raising profit per vehicle.
  • Advanced Product Launches -- Key milestones include the phased launch of products with Volkswagen Group in 2026-2027 and ongoing adoption in high-volume segments.

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Risks

  • Gross margin projected to decline year over year due to ongoing product mix changes, dual-chip program pricing impact, and IQ5 cost savings phase-out beginning in 2027.
  • Appreciation of the Israeli shekel against the U.S. dollar led to a significant operating expense headwind, only partially mitigated by efficiency initiatives and hedging.
  • 2026 guidance assumes conservative outlook for China OEM volumes due to limited short-term order visibility and expected decline of about 500,000 units versus 2025.
  • Moran Shemesh said, "the risk is obviously heavier as deterioration, you know, gets bigger," noting hedging less favorable after 2025.

Summary

Mobileye Global Inc. (MBLY 1.84%) reported 2025 revenue and IQ unit volumes well above prior guidance, driven by unexpectedly strong ADAS and SuperVision demand, especially from China OEMs. Management cited successful mass-market design wins for the IQ6 chip, noting the strategic significance of new large-scale OEM partnerships and the growing pipeline for surround ADAS. The acquisition of Menti Robotics formalizes Mobileye's expansion into humanoid robotics, with technology synergies targeted to accelerate both AV and robotics domains.

  • Order flows in the start of 2026 indicate rising underlying demand, but management highlighted that Q1 IQ unit shipments will not represent sustained quarterly levels throughout the year.
  • Discussions with OEM customers revealed expanding engagement for surround ADAS, with adoption expected as standard fitments across major vehicle portfolios.
  • For the Moya robotaxi ecosystem, six-city deployments are targeted in 2027, with early phase volumes of a few hundred vehicles per city and scale-up contingent on operational success.
  • Menti Robotics pilots in 2026 are expected to involve tens of units, with progression to manufacturing scale and broader commercialization by 2027-2028.
  • Mobileye confirmed no meaningful revenue from advanced products, including robotaxi or Porsche/Audi programs, is expected in 2026 guidance.
  • OEM partners are contributing engineering budgets prior to commercialization in the Drive business, mitigating downside volume risk for Mobileye.
  • Mobileye's regulatory path for robotaxi driver-out operations in the U.S. relies on self-certification, while European homologation is on track to complete in 2027 with Volkswagen support.

Industry glossary

  • ADAS: Advanced Driver Assistance Systems, electronic systems that aid vehicle drivers using automated technology for increased safety and convenience.
  • SuperVision: Mobileye’s point-to-point assisted driving solution featuring enhanced operational domain and over-the-air updates, targeting highway and urban automated driving.
  • REM Maps: Road Experience Management maps, a scalable mapping infrastructure built from crowdsourced vehicle data, used to enable precise localization and navigation for automated vehicles.
  • VLM: Vision Language Model, AI components that interpret visual inputs within a semantic context to enhance scene understanding and decision-making in autonomous systems.
  • Homologation: The process whereby a vehicle, system, or technology is officially approved to comply with regulatory requirements, often necessary for market entry in Europe.
  • POC: Proof of Concept, a pilot deployment of new technology or product with a customer to validate performance in real-world conditions prior to full-scale commercialization.

Full Conference Call Transcript

Amnon Shashua: As I look back on 2025, there are a number of meaningful positives to highlight, both for our company and the industry. In a very uncertain geopolitical environment, demand for our products came in higher than expected throughout 2025, demonstrating the resilience of the auto industry and our product offerings. Results were quite strong with revenue up 15%, adjusted operating profit up 45%, and operating cash flow up more than 50%. The industry began to clarify the structure and features of the generation of ADAS for mass market vehicles.

Several forces are coming together here: demand for incremental safety, demand for convenience in the form of highway hands-off driving, and the need to consolidate the technology on a single ECU to keep the system's cost low. Mobileye's IQ6 high chip is very well positioned, and we won the first two major programs with two of the biggest fixed OEMs in the world. Waymo's commercialization provided a number of supporting proof points on consumer acceptance and demand for autonomous mobility services. This led to a major uptick in demand signals from transportation network companies and public transport groups, which led to an expansion of expected volume through our Volkswagen ecosystem to 100,000 units by 2033.

We are now one year closer to the launch of our advanced product with the Volkswagen Group. We expect the first major public milestone to be the removal of the safety drivers in Moya's robotaxi fleet in 2026. We are implementing a unique first-think, slow-think structure to our advanced products that we believe accelerates both precision and scalability. This includes novel technologies like vision language, semantic action models, and artificial community intelligence. And finally, Mobileye took a decisive step to expand its footprint into the humanoid robotics field with the acquisition of Menti Robotics.

Menti has achieved a fully vertically integrated, low-cost, highly capable robot that has a clear path to commercialization into the structured environment of industrial and logistics services field and with its distinctive technology to cater to unstructured environments like home use cases. Aside from our 2025 results, we detailed all of these areas in my CES talk on January 6. I encourage anyone with an interest in Mobileye or just physical AI in general to make sure to view that presentation. Turning to guidance, Moran will spend some time on it, but I'll address it briefly. We're encouraged by the volume growth we are expecting despite global auto production that's expected to be flattish again.

And while we don't expect the volume levels of Q1 to be sustained throughout the year, it's a strong signal for the year, and order flows for Q1 have been rising for the last month or two. Turning to technology, at CES, I talked a bit about the debate around approach, specifically this concept of data in, command out, which is a false debate. Because no legitimate actors in our field are actually doing that. There's always a need for structure and architecture, and everyone's architectures have evolved given advancements in AI over the last few years, including ours. We introduced two new innovations that are accelerating our path to precision scalable autonomous vehicles.

One is artificial community intelligence, referred to as ACI. This is a simulation concept using a self-play reinforcement learning technique that we are using to train our planning engine, also known as driving policy. This is the first-ever productization of a technique proposed in academic research. A strong motivation for ACI is that the sample complexity for planning is much higher than for perception because the multi-agent nature of driving or actions that you take will impact the actions of other road users. Therefore, the amount of data one needs to collect could be unwieldy even for large data collection fleets. As a solution, we have created simulators that can achieve one billion hours of training overnight.

Mobileye has unique advantages here since our REM maps, which cover much of the globe, can be used as a realistic and diverse baseline structure for training. The other advantage is we have developed sophisticated sim-to-wheel techniques that have the required understanding of the noise model of our perception engine when transferring the driving policy to the real world. That SIM-to-wheel technology is also very relevant to humanoid robotics and will be a key area of technology sharing between Mobileye and Menti. We also introduced a fast-think, slow-think concept that utilizes specialized vision language models to provide contextual information and to address robustness to vehicle decision-making. This is not necessarily about safety.

It's more about understanding the semantics of complex scenes. For example, a scene where a policeman signaled the road they would like to take is blocked. The safety layer ensures that they won't hit the policeman. But we also need to understand the scene, figure out we shouldn't try to overtake the policeman, but rather we should either wait or take a different route. This is what slow thinking gives. Since this is not safety-critical, the contextual information can be inputted into the system at a lower frequency than perception, which is typically analyzed at 10 frames per second. Structuring our architecture with fast-think and slow-think components saves compute and even brings the use of cloud-based compute into the picture.

As a result, we can put a very sophisticated VLM on the in-car compute but call on much, much bigger VLMs in the cloud when the situation evolves. This has a very positive effect on the mean time between intervention metrics but can also eventually lead to scalability benefits in terms of cars per teleoperator as the VLM can replace a human teleoperator in many cases. Turning briefly to our announced acquisition of Menti Robotics. Most of the AI that humans are using every day is in the digital world. The two main applications of AI in the physical world are autonomous vehicles and robotics.

It makes sense for these two expressions of physical AI to be together because there's a great deal of technology overlap. Both extensively use computer vision and control, fast, slow thinking concepts, make heavy use of VLMs, and extensive simulator techniques. Menti itself, compared to other companies we evaluated, had a superior combination of strength, including a high level of vertical integration, a pure AI approach with the ability to demonstrate high-level capabilities with no teleoperation, a design strategy that results in an optimized cost versus usefulness ratio, and above all, a distinctive AI technique to do continuous on-the-job learning from passive demonstration.

It's a really practical approach to capitalize on the most near-term industrial and logistics markets, then expand to more challenging markets over time. We believe access to Mobileye's tools, simulation, and data training infrastructure will accelerate Menti's development. And the number of technologies developed for robots, such as self-play simulation and think-to-real techniques, will also bolster Mobileye's AV development. Finally, there is potential for catalysts as we continue to demonstrate the strong capabilities of the Menti robot and execute on customer proof of concept work in the near term. I'll now turn the call over to Moran.

Moran Shemesh: Thank you, Amnon, and thanks for joining the call, everyone. Before I begin, please be aware that all my comments on profitability will refer to non-GAAP measurement. The primary screen is Mobileye's non-GAAP number, which is amortization of intangible assets, mainly related to Intel's acquisition of Mobileye in 2017. We also exclude software communication. Our full year 2025 revenue of $1.9 billion slightly exceeded the high end of our prior guidance. Full-year revenue was up 15% year over year, compared to our original guidance of 6% growth at the midpoint.

It was a very good year where a combination of minor selling global production trend IQ program launches, and higher than expected ADAS and supervision volumes from China OEM led to significant growth. Full-year adjusted operating income was $280 million, up 45% year over year, and margin was 15%, up about 300 basis points versus 2024. The fourth quarter included a nonrecurring expense of $7 million related to workforce efficiency initiatives we undertook in Q4. That expense was not part of our guidance as of the October earnings call. So if you exclude that, adjusted operating income would have also been slightly above the high end of the guidance.

Like I said earlier, we saw consistent positive from our customers throughout 2025, and we've continued to see that over the last month or two during our 2026 planning process. 2025 IQ volume was 35.6 million across the full year, which was well above our original expectation of 32 to 34 million. We've seen a fairly consistent demand trend of 9 million units per quarter, with some minor fluctuations across quarters. For example, in 2025, Q2 and Q3 were higher than trend, Q1 and Q4 were a bit lower. One more point on Q4 before turning to the future.

Modest upside to the higher end of our prior guidance was related to higher than expected supervision IQ volume was consistent with the high end of our guidance of about 8.2 million. This level at the start of the quarter looked a bit below the demand trend as our customers desired to end the year within inventory. But the demand trend in Q4 ended up higher than we expected. As a result, we believe that inventory at our Tier 1 customers ended 2025 extremely low. We believe there is some level of adjusting safety stock that will occur in Q1 to get back to normal levels.

We expect about 10 million IQ units shipped in Q1, which supports an outlook of approximately 19% year-over-year growth in the first quarter. After that, customer forecasts indicate a reversion to the trend of slightly above 9 million units per quarter. Turning to the full-year guidance, we are expecting revenue in the range of $1.9 billion to $1.98 billion, representing flattish to 5% growth. The midpoint of our guidance incorporates our IQ volume of slightly above 37 million units, which again consists of 10 million units in Q1 and an assumption of a bit over 9 million per quarter in the balance of the year.

If we look specifically at our top 10 customers, we are assuming that their overall production is down 2%, but our volume with those customers is up 6% at the midpoint. This includes about 700,000 units for a new OEM program that requires two IQ4 chips per car. That program is clearly a positive and will generate higher gross profit in dollars per vehicle. But since the second chip is overpriced relative to the first, it has an impact on overall ASP and gross margin. For Chinese OEM, we are expecting a decline of about half a million units compared to 2025, which was a bit above 3 million.

We are encouraged by the significant growth in China OEM volume in 2025. It's aligned with their export volume growth, the area where our business is the strongest with those customers. We see no reason why that wouldn't continue into 2026, but prefer to remain conservative given we only have short-term visibility into order flow with China OEM. Gross margin will be down somewhat on a year-over-year basis, driven by continuation of IQ5 related cost savings. We discussed this on the October earnings call as an impact to 2025 that would continue through 2026 and then will gradually decline beginning in 2027. We also have modest vehicle mix headwind and the impact of the dual chip program mentioned above.

Turning to operating expenses, 2025 ended up at $1.003 billion. This was slightly above our original budget of $995 million, accounted for by the nonrecurring termination-related bookings in Q4 mentioned above. In 2026, we are expecting around $1.1 billion or 10% growth. The underlying growth in OpEx is approximately 5%, consisting of normal salary and benefit inflation as well as additional infrastructure to support execution of the advanced products in 2026 and 2027. On top of that, we are including Menti R&D expenses. Finally, we are experiencing a FX headwind related to the appreciation of the Israeli currency versus the US dollar. That meaningfully raises our headcount cost in dollar terms.

This is being mostly offset by the workforce efficiency initiative noted above, but not completely. To conclude, we are almost one month into 2026 and continue to see positive demand signals from our customers on the core business. As Amnon discussed, we are also seeing very good execution progress ahead of a large number of advanced product launches over the coming one to two years, as well as accelerating momentum in customer demand for next-gen higher ASP ADAS and the transformative robot activity. Thank you, and we will now take your questions.

Operator: Thank you. The floor is now open for questions. We do ask that you please limit yourself to one question and one follow-up to allow as many people the opportunity to ask as possible. Again, that's star one to register a question at this time. Our first question today is coming from George Gianarikas of Canaccord Genuity. Please go ahead.

George Gianarikas: Hi, everyone. Thank you so much for taking my questions. I'd like to ask first maybe on your view on the competitive environment, particularly in light of some announcements at CES from NVIDIA and others? Just your view on what's happening in the advanced autonomous solution space. Thank you.

Amnon Shashua: So I think that we have been we've obviously seen a lot more announcements and excitement around advanced solutions and autonomous driving in general. Also robotics. It was one of the key things at CES this year for everyone who attended. We still believe that we are closer to launching our dense products than other competitors, and this is one of our strongest advantages combined with the maturity of our technologies and the advances of our technologies. And we are, as we said, one year closer to launching a spectrum of products that spans from surround data supervision to a firm robotaxi.

And starting from '26 and through 2027, we believe this will be a major transformation for kind of positioning Mobileye in the market. It's having proven products on the field. Right now, there is a lot of demos, a lot of referral technologies and emerging technologies, and there's some, we think, noise. And, maybe simplistic description of some of these technologies and how useful they could be for a reliable system.

There is a recent announcement by NVIDIA, but their open-source model, Alfa Romeo, that they announced and supposedly given others the ability to I mean, we'll maybe, want to say a word about this, but we don't see that as something that changes kind of our positioning in the market.

George Gianarikas: Thank you. And maybe I can ask a follow-up on Menti specifically. I mean, you mentioned yourself that there were a significant amount of startups and competitors at CES in the humanoid space. I'm just maybe a synopsis, a brief bullet point or two as to what the differentiation from Menti will be as you try to attack the marketplace and commercialize the product? Thank you.

Amnon Shashua: I think the other startups mostly in China, but a lot of startups in the area of the humanoid. Many of the demonstrations that you see out there are teleoperated. Now to win this game, you need to have a fully autonomous control of the robot. From perception to action to understanding the theme, having an AI stack that can control the robot's economically, and this is what Menti has been demonstrating quite consistently over the past year, year and a half.

And as you see, as I show the number of clips, Menti is also fully vertically integrated with the design of the actuators, the gear, the AI itself, all the software components, the electronics, which is crucial if you want to have an end-to-end system. Another I would say, distinctive element is the ability to do continuous learning. So Menti has developed an AI technology that allows the robot to passively view a human performing the task and imitate that task in a very, very short period of time without having any equipment, no VR goggles or special suits. Just passively observing a given performing the task.

This is, I think, very important as we move from structured to unstructured environments like home use. So taking everything together, we have here a company that is both thinking practical about what is going to be the first domain launch, which is structured environments like fulfillment centers, assembly plants, retail. And also developing the technology for the next deployment for unstructured environments like home use. Fully vertically integrated, very strong in AI components, whether it's reinforcement learning, simulation, or simply very strong, very interesting overlap. It's not technology overlap with Mobileye. It can go both ways to synergies.

So, overall, this is a very good step for Mobileye to take decisive steps towards owning physical AI in its full scope.

Nimrod Nehushtan: If I may add to this, I think to kind of differentiate between the different actors, Menti is, as we know, probably the only western humanoid robot company that is actively engaging with customers on proof of concepts and pilots that involve pure AI operations with no remote operation. It shows something about the advancements of the use of robots in a setting that a customer is willing to evaluate and deploy in a kind of a non-sterile setting. Unlike maybe some hype videos that show something on a liquid clip, this is an actual testing environment. This is a different stage of maturity and having engagement with potential customers.

And we believe that through integrating Mobileye's technologies, we have obviously strong strength in computer vision, in AI using cameras, and using sensor fusion, and designing face systems for safety and reliability and how to integrate systems in a very cost-efficient manner and efficient compute. All of these will help them even accelerate the progress they made so far.

George Gianarikas: Thank you. Thank you, George. Next question, please.

Operator: Thank you. The next question is coming from Mark Delaney of Goldman Sachs. Please go ahead.

Mark Delaney: Yes. Good morning and good afternoon. Thank you very much for taking questions. For Surround ADAS, the company has already reported on some strong momentum. You spoke about the two big OEMs that have already committed and given series production awards. As you look at the opportunity set for 2026, could you give a bit more details on the number of OEMs you're engaged with for surround ADAS and how many might be able to convert into awards this year?

Nimrod Nehushtan: So I think the important point about Surround ADAS is that this is the product that addresses a very clear pinpoint for customers. And for OEMs, I mean. In the sense that it simplifies the system. It reduces cost. It provides advanced functionality it needs. Future regulation. It ticks most of the boxes that OEMs want to tick for the high-volume vehicle segment in the upcoming years. Therefore, the first OEM that we announced with Volkswagen was kind of a starting a trend that created a flywheel effect of more and more OEMs being interested.

Now having announced the second design win with, you know, two out of the top six OEMs in the planet in major markets adopting this and launching this in a few years. This has definitely created a stronger realization amongst other OEMs that this has to happen for them also. At least to some degree. We've seen an increase in the amount of engagements we have. I don't want to predict timing and, you know, in quantities, but we're definitely encouraged by the increase in different engagements we have with multiple OEMs across our customer base.

And we also believe that we have inherent advantages for this product category because it requires a very reliable system performance, very high safety standards, advanced functionalities like, you know, hands-free driving in primary and so on, but also be extremely cost-efficient. And just to give you some sense, these two programs we won are going to be integrated in the kind of a standard fit across the highest volume vehicle categories for these two OEMs. So every dollar counts.

And the implications for the OEMs to adopt this product means how much conviction they have that they need such a product for, you know, it's not a balloon project in a small amount of vehicles, you know, that if fails and, you know, nothing happened. If this project is delayed, for example, this is obviously affecting the entire vehicle portfolio. So it shows about the confidence that Mobileye has and how much conviction they have in this product. And it's definitely an encouraging sign.

Mark Delaney: Thanks. My other question was on Menti. Given the announcement and engagements that you've had with potential future customers and industry participants, can you help us better understand to what extent it's catalyzed additional interest in partnering with Menti Robotics, including opportunities to have your humanoid robots in factory and commercial environments to gather data? And, you know, as you think about that 2028 commercialization target you shared at CES, how important is that data collection and gathering for hitting that time frame? Thank you.

Nimrod Nehushtan: I think it's a very interesting question. We've had since two weeks since the announcement at CES, and we have received the reach out from a significant number of customers asking about our interest and readiness to support on-site pilot and concepts and kind of starting from our industrialization partners that want to contribute in manufacturing and components because they understand we do the full robot. Starting from that and really, you know, trying to attract us to work with them for manufacturing and for all of our industrial partners, whether it's tier one, OEMs, and others that want to see how they can, you know, work with Mobileye integrating robots into their logistics centers, warehouses, manufacturing lines.

The need is definitely there, and for them, it made perfect sense. I think one of the encouraging signs that we've seen is that already at CES, we've had meetings with OEMs. And in most of these meetings, it came up as, you know, let's take a follow-up and schedule when we can actually talk about a plan to deploy this in our environment. I think that the fact that Mobileye comes out of this business and they trust the, you know, the standards of the company. And that they have a need for longer-term, you know, finding solutions for human labor is becoming a bigger and bigger problem for them.

Especially in developed countries, this gives them an easier path to evaluate a new technology with a partner they trust. As opposed to working with a startup, you know, in humanoids that, you know, who knows what you can get from them and whether or not they can deliver. And, definitely, we're leveraging these relationships. So we definitely think of this as an area to continue to develop in the next few months.

Amnon Shashua: Thank you.

Dan Galves: Thank you, Mark. Next question, please.

Operator: Our next question is coming from Chris McNally of Evercore ISI. Please go ahead.

John Zager: Good morning. This is John Zager on for Chris McNally. Thanks for taking the questions. Amnon, you've made this sandwich analogy for ADAS and AV demand. Basically, with high demand for a surround at the low end. Or drive at the high end. If we could focus on just drive for the time being, you guys announced VW Moya, one of the two big partners, Marubeni and an unnamed OEM. But the forecast is for a fleet of 100,000 AVs by 2033, obviously, a bit of a ways away. So my question, can we get a sense for what the near-term demand for your drive system might be for just, like, the next two to three years, 2027-2028?

Or on phase one for a growing, on the growing list of cities?

Amnon Shashua: Well, we announced together with Moya six cities to expand to six cities in 2027, and that includes Los Angeles, together with Uber. We have another high-volume program with the Holland that will come six months later, have also its expansion. As the CEO of ADMT on stage mentioned that they foresee about 100,000 vehicles in the next eight years. The exact numbers of the rollout will depend on the success of 2027. And deployment of the first six cities. But we are talking about thousands of vehicles at this point.

Nimrod Nehushtan: Just to add to this, I think, you know, it's maybe somewhat challenging to understand what it means, 100,000, because it sounds like a big number. I think what we're taking away from this, what it means is that Volkswagen has in place the manufacturing capacity to produce as many vehicles as needed. The 100,000, if we're successful in 2026 and '27, and then in '28, which we have high confidence in our chances. That 100,000 can also be a small number in hindsight. The manufacturing capacity they have and the funding they've, you know, pulled into this in the past few years to build everything needed to produce robotaxis in scale eventually, it's Volkswagen.

So they can produce 10,000 per year, 50,000 per year, 75,000 per year. When the demand will be there. And the demand from, you know, from mobility operators, CNCs, municipalities is far greater than, you know, tens of thousands per year globally. Once the technology gets to this maturity level and allows quick economic and geographic expansion, which, you know, we believe we have clear advantages in. Then, you know, the numbers will the demand will not be a problem. And we have a partner that can scale and give the supply the best extent possible.

John Zager: Understood. And just should we think about, like, the volume for a phase one launch? And, like, should that be, like, a thousand to, like, 1,500, like, Waymo in San Francisco?

Nimrod Nehushtan: Think of it as a few hundreds of vehicles per city as a good testing as a good measuring stick. You know, just also seeing how Waymo rollout that roughly the numbers they've had. In some cities, it's 200. Some cities, it's close to 500. That's a sufficient number to kind of facilitate for the mobility demand in that city and also to build a meaningful business. And that's also roughly what we're planning.

John Zager: And thanks, John. Just one last follow-up. Do the AV customers pay for anything before the purchase of the $45,000 drive content, like R&D in advance? Or do you get any protection if their volumes are less than planned?

Nimrod Nehushtan: Without going into the details of our contract, we are receiving we're delivering samples and engineering samples throughout the year. There's an engineering budget that covers the direct engineering cost and development cost. So there is definitely a good amount of investment well before the commercialization. So we do I think we have high confidence in our chances of getting to driverless, I think we're not that concerned about the downside potential.

John Zager: Okay. Thank you so much.

Operator: Please go ahead. Thank you. The next question is coming from Joseph Spak of UBS.

Joseph Spak: Thanks. Hello, everyone. Just to maybe talk about a couple of, you know, more near-term things. You know, obviously, memory has become a larger issue and concern in the automotive industry. And I know or I believe you don't really buy a lot of that memory directly, but, clearly, it is used in the modules at your tier one customers to assemble to sort of ship on to the OEMs. So I'm just curious, you know, what you're hearing from your customers and the supply chain as to and whether this is really a pricing issue? Is it an availability issue? Is there any sort of volume risk embedded in your outlook?

And because if it's even if it's a pricing issue, I guess, you see any risk of decontenting?

Nimrod Nehushtan: So, as you said, Joe, we're not, let's say the exposure that we have is not direct because we're not purchasing a lot of these units. It's mostly indirect through the fact that our tier one customers are purchasing memory components. We've been doing in the past few months, and we have been actively working on this I think, well, before it was public knowledge that this dynamic is developing. Is to create kind of maximizing our supply of these components and working with multiple vendors. Ensure that we have enough flexibility to kind of mitigate the direct cost impact from specific vendors.

And that we will be able to ensure that vehicle manufacturing will not be impacted by these fluctuations. And we haven't I think that, like we did last year, our forecast for this year is maybe opting for the conservative side. You can see the difference between Q1 and other quarters. It does bake in some level of, you know, understanding that there is some volatility in the industry, so we wanted to be on the more conservative side. But we haven't seen any, like, let's say, direct evidence or indication that there is an imminent change to volume as a consequence.

But we will keep close monitoring on this as it develops, and we're doing everything in our powers with our tier one partners to create the availability of these components.

Joseph Spak: Okay. Thank you. The second question, just on you know, you mentioned some of the appreciation of the shekel, and I know you get very helpful exposure in your 10 Qs on what a change in that currency can do to your cost base. But I believe also, like, at this time, a year ago or, you know, earlier in '25, you made a comment on one of the calls about how a lot of the costs on the shekel were hedged. So did something change with the hedging strategy? Like, maybe you could just sort of update us on sort of why it's a little bit maybe more of an issue now than you thought a year ago.

Moran Shemesh: Yeah. So I will start with 2025. So we have a hedging plan that basically, you know, caused that we can meet our OpEx expectation for 2025. So for example, for this 2025, the rate that we had in our financials was, like, 5 or 6% favorable than the average market rate. So and these are, you know, transactions that we made in the beginning of 2025. But as the appreciation of the shekel continues into 2026, and we're talking about, I think, 10 or 12% in the last year, we still have hedging in place for 2026, so we are more than 50% hedged on our payroll expenses at a favorable rate.

But the risk is obviously heavier as deterioration, you know, gets bigger. But we still can't into account in our guidance. So we took into account some, you know, further hedging, but it will be at a less favorable rate. The fact that we are already more than 50% hedged, I think we're in a good place in terms of the rate, but it's still the year-on-year impact because it's a significant impact. It's worth mentioning.

Joseph Spak: Okay. Thank you. That's helpful. Appreciate it.

Amnon Shashua: Thank you, Joe. Thank you. Next question, please.

Operator: The next question is coming from Aaron Rakers of Wells Fargo. Please go ahead.

Aaron Rakers: Yes. Thanks for taking the question. I want to kind of double click on the Porsche and VW and the Audi kind of programs. I'm curious as you kind of thought about your guidance for this year, I think the initial expectation was maybe early volumes on Porsche. Late this year. Just me an update on where we stand on some of those programs and how we should think about volumes appreciating that, I think, 2026 in the past has been more characterized as an execution year.

Amnon Shashua: Right. 2026 is an execution year. The supervision on Porsche and Audi should start in Q1 next year, Q1, May 2027. There was some pushback of deadlines unrelated to 2027. Do I have something more?

Nimrod Nehushtan: Okay. And just to say that you didn't really change the plans of the project. It's just a one-month change between December 2026 to February 2027. So it's not really material. It's and we think made clear in previous calls as well that we do not expect meaningful volumes in these programs in 2026.

Aaron Rakers: Right. Appreciate that. And then as a quick follow-up, in the prepared comments, you talked about inventory levels that your customers, your major OEMs being fairly lean. I know you've guided 10 million IQ units this quarter. I'm just curious, can you kind of go a little bit deeper on what you're seeing as far as the inventory levels your customers are holding? And do you expect any replenishment when you gave the unit expectation for this year? Or is it more lean inventories continue? I'm just curious to how you kind of bake that into your guidance. Thank you.

Moran Shemesh: Yes. So I think for what we're seeing, I mentioned it also in the remarks, we are seeing increased demand in terms of order flow 2025 and then higher than expectation, 2026 is, you know, constantly increasing in terms of production. But what happened specifically in Q4 was also that the orders were relatively low in the first place. As December is a slow month in ordering. It's a short month with holidays, etcetera. It was low, and then production level came up even higher. So it basically means that, you know, we believe the inventory levels that our customers are, you know, not reaching their inventory target at the end of 2025.

So they are tighter than usual, and had some impact on Q1. But, again, we're also seeing very good demand. The 2026 production levels are going up. But, yeah, Q1 does have some impact. Of Q4 low volume combined with heavier or bigger demand.

Aaron Rakers: Yep. Thank you.

Amnon Shashua: Thank you, Aaron.

Operator: Thank you. The next question is coming from Edison Yu of Deutsche Bank. Please go ahead.

Edison Yu: Hi, thank you for taking our questions. I want to follow-up on Menti. Can you give us a sense of what are the next steps with some of these customers you're talking with? I know you mentioned proof of concept. Are you going to basically ship maybe a few units? And then if that turns out well, you'll ship, you know, 30, 40 and then much more. How do we think about those kind of next steps to commercialization?

Amnon Shashua: I believe that 2026 is going to be maybe high tens of units in terms of the POC. 2027 should be more, and 2028 should be even further. 2027 to go up until the into production with the production partner. So 2026 is tens of units. What we would like also is to have in addition to the POCs, also, to produce small units for the sake of Mobileye to start experimenting with the robots not only Menti themselves. But, again, it's going to be a high double-digit number of robots in 2026.

Nimrod Nehushtan: And just maybe just to add from the viewpoint of the customers in these pilots, the purpose is to start with a smaller amount of robots that perform specific tasks that they're kind of outlining, and you just go to the logistics center, for example, and there are a few shelves with boxes, and human beings today are moving boxes according to their, you know, their instructions and so forth. And basically, they want to see how robots can perform over a certain period of time, what's the precision, you know, reliability, durability, maintenance, and so on? And, you know, gradually afterwards, expand this to more and more tasks and in larger volumes.

You know, we are talking about companies that employ tens of thousands of employees today in these types of positions. So I think, again, going to be a question of supply, and that's why it's so important to have a manufacturing partner, as Amnon said, that already in '27 is able to produce robots in a serious production manner, which is important both for cost and also for scale of volume.

Edison Yu: Understood. Appreciate the color. A follow-up on Robotaxi. Obviously, a lot of excitement coming out of CES. Has your view on owning more of the, should we say, ecosystem change at all? And that's just in the context of you obviously have a lot of parties involved. Could that kind of hinder the speed of deployment or some of the logistical aspects? And obviously, would require capital, but I think that's not that big of an issue anymore. Thanks.

Amnon Shashua: I think the current arrangement we have with Volkswagen and Moya is really optimized for the speed of the volume of the deployment. So going right now more vertically integrated is not going to increase the volume of the deployment. This is something perhaps to be considered towards the end of the decade or further than that. I think what we have in place is really optimal to where Mobileye is at. Mobileye will be producing the self-driving system as a tier one, taking responsibility not only for the electronics but also for the sensors, of course, the software stack and all the validation. And the revenue per vehicle plus recurring revenue per mile is very, very attractive.

The focus is execution now.

Edison Yu: Thank you very much.

Amnon Shashua: Thank you, Edison.

Operator: Thank you. The next question is coming from Tom Narayan of RBC Capital Markets. Please go ahead.

Tom Narayan: Thanks a lot, guys. The first one I have is on the '26, I guess, adjusted operating expenses. I think you guys said it's up $100 million. And I know that FX was mentioned, some other issues. But then the one that I'm wondering if that's the biggest piece of it is the Menti R&D or maybe it's consolidating Menti if it's operating at a loss. Just curious how we should think about the OpEx going higher, what's really, you know, the biggest driver of that? Then I've got a follow-up.

Moran Shemesh: Yeah. Okay. So I think I've mentioned that we have incorporated Menti R&D into our guidance. So the guidance includes in terms of operating expenses, mainly 5% of regular inflation, enhancement or something then. And the additional portion is the Menti R&D. So these are the significant two items. I also mentioned we have also a headwind from the FX rate, but that is mostly offset by the efficiencies initiatives we did in Q4. Hope that answered your question.

Amnon Shashua: Just to follow-up. I mean, I think that's pretty clear. But just to follow-up, like, you know, we do expect to have normal OpEx inflation per year of around 5%. This relates to, you know, salary and benefit inflation as well as kind of additional infrastructure support for the AV activities and the advanced product activities. That's normal. On top of that, this year, we are assuming consolidation of the Menti R&D expenses. We talked about that as somewhere in the, you know, lower single digits, but, you know, probably think, you know, towards, you know, 4% type of thing.

And additionally, we do have this FX headwind, which is mostly offset by the workforce initiative we did in the fourth quarter, but not completely. So that should give you a decent walk from 2025 to 2026.

Nimrod Nehushtan: Yeah. I think you described it quite accurately.

Amnon Shashua: But take into account that, also, growing in terms of being a tier one in a tier one net position with our programs with Porsche and Audi and drive. And sometimes you need to make adjustments in terms of increasing the headcount. Again, this is nonmaterial compared to the overall OpEx of the product. But it adds a few percentage. So take the walk through that you mentioned was quite accurate. And accurate, you know, view percentage of growth that we need to account for when we are taking a tier one position and investing heavily into the future.

So two years ago, now we calculated our OpEx growth, but we cannot be precise to the single percent in an area which is experiencing rapid growth.

Tom Narayan: Got it. And for a follow-up on Menti, and this I know this is very early to this question. But, I mean, look. We're seeing the market reaction to the potential news out of, you know, from Hyundai with Boston Dynamics and the credit that Hyundai is getting. Is this something you guys might think about in the maybe the distant future? I don't know about trying to crystallize the value? Right now, there's so much appetite where, you know, the capital market certainly. This something you could consider, I mean, monetizing Menti in some way? Or do you believe that, you know, together and is a combined entity that, you know, that's how you kind of view the business?

Amnon Shashua: Well, I think that the market is taking some time to internalize the use of the acquisition. Or the use of Mobileye entering into humanoid. I do believe that in some, you know, near future, this would create the dividend the like of what happened between Hyundai and Boston Dynamics. Now Menti has all the potential to make big steps forward, has demonstrated quite a mature technology. As the clips that I have shown and the clips that they have on their website. And then together with Mobileye, they can make rapid steps forward. Now whether we're going to see this dividend in a month or whether we're going to see this in a year, I don't know.

But it has the potential to catalyze the same benefit that Hyundai is receiving from Samsung.

Tom Narayan: Got it. Thank you.

Nimrod Nehushtan: Thanks, Tom.

Operator: The next question is coming from Colin Rusch of Oppenheimer. Thanks so much, guys. Can you talk a little bit about the near-term pricing dynamics on IQ? Just curious, how much movement there really is as you see some of these larger volumes move through in the first part of the year and how we should think about that trending to the balance?

Nimrod Nehushtan: So maybe if you refer to the IQ prices, but to make sure I'm volume. Volume or prices? I didn't get the question.

Colin Rusch: I'm concerned about, you know, pricing, you know, as you ship the higher volume here and then, you know, how that the pricing trends for the balance of the year as you normalize that.

Nimrod Nehushtan: Yep. So the pricing is every year is affected by the mix of IQs. And as you know, the IQs have different generations with different software features and software packages. This has somewhat of a different price, but overall, on average, there's no, let's say, meaningful change. The prices. There is a different mix this year compared to last year. Last year, as Moran said in her remarks, but we see higher volumes of IQ5 based ADAS product and IQ5 has somewhat of a higher cost, but still, it's the best product with, you know, meaningful volumes this year compared to last year. So this does have some impact, but it's all natural mix.

Moran Shemesh: And also the second chip that I mentioned, the second chip that I mentioned combined the fact that the second chip is a lower price than the first one. So it's higher gross profit per vehicle. But lower ASP. I think that the combined natural mix with Nimrod mentioned and the second chip impacts is approximately, like, 80¢ or so. Year on year.

Amnon Shashua: But just to clarify, this second chip or the card has two IQ4 chips, this is a one-off thing. It's not that we see a trend having two IQ chips in the car with one of the IQ chips with the at the discounted price. This is what we call a bridge. This is a bridge towards IQ6, IQ6 light. The carmaker wanted to meet a certain regulatory environment that IQ4 alone could not meet. Therefore, a second IQ4 was added. But, again, this is a one-off. We don't expect it to be a trend.

Colin Rusch: Okay. Perfect. Thanks, guys. And as you think about, you know, doing the driver out demonstration here later this year, you know, can you talk about the regulatory process and any bottlenecks or hurdles that are still remaining here, things that are of concern that you guys are focused on, getting ready to do that demonstration?

Amnon Shashua: Well, in the US, it's self-certification. We have stringent KPIs in terms of meantime between February. That we are meeting towards going driverless. Outside of the US, there's homologation. And as we mentioned together with Volkswagen, homologation will occur in 2027 outside of the US.

Colin Rusch: But nothing on a regional basis or city that you guys are concerned about?

Moran Shemesh: No. We see. And, actually, the homologation in Europe will have a stronger tailwind given that the vehicles are produced by Volkswagen level four vehicles, and our cooperation together with AT&T and Moya and both of them, will allow us to go to the homologation in a much easier way than if we were doing it alone.

Nimrod Nehushtan: And this is a significant entry barrier to the European market. It involves a lot of activities and direct engagements with the regulatory bodies that we are, you know, already doing with Volkswagen. So getting this approval in '27, as Amnon mentioned, will also separate us in the European market from others.

Dan Galves: It's an important point. And just to clarify on the timing of homologation, we're saying that it will be completed in 2027. And start in 2026. And the six cities, commercialized in 2027 that Volkswagen talked about includes some European cities, which is gonna require the homologation process to be completed.

Colin Rusch: Thanks so much, guys. Appreciate the color there.

Operator: Thank you. We are asking remaining analysts to please ask your question and your follow-up at the same time. Our next question is coming from Joshua Buchalter of TD Cowen. Please go ahead.

Joshua Buchalter: Hey, guys. Thanks for taking my questions. Guess both at once. I guess to start, highlighted the potential for conversions on surround ADAS this year, but you haven't made the same comments about supervision and chauffeur. Are those, you know, maybe you can provide an update there. Are you guys, you know, deemphasizing that in your go-to-market and conversations with customers? And then for my follow-up that's, you know, on a completely unrelated topic, Amnon, you've touched on this in the CES presentation, but I was hoping you could provide some more details about, you know, specifically how your IQ roadmap is gonna accelerate Menti's time to market?

And perhaps as important, how much software development is needed to move further into robotics, you know, given IQ's design specifically for autos. Thank you.

Nimrod Nehushtan: So we have multiple engagements also on supervision chauffeur. So there's definitely an active engagement there with the market. To put things in perspective, our relationship with Volkswagen Group with the different brands on these products started maybe in 2021. And it took us a couple of years to kind of cross all the items that need that is needed. And we are also focused now on opportunities that have a meaningful business potential. As opposed to, you know, smaller scientific projects some OEMs are trying to explore. Maybe in some cases, it's in-house development data that they're doing, and they want to allocate one car in the future and see if it works.

And we're trying to focus on opportunities that present significant volumes, multiple vehicle models, you know, with complete timelines so that we can, you know, we can scale the products. We're not looking for the, you know, first opportunity. We want to kind of scale, and we have several of those. I don't want to predict timing, but we are encouraged by the activities there. Amnon, I think the enrollment period, if we feel of it.

Amnon Shashua: Too early to talk about IQ chips on, you know, the robots. We think this is a longer-term, this is a longer horizon issue. Currently, the robots are based on NVIDIA chips, and we see that we're very proud of that relationship. And we see that going on for the near for the foreseeable future. Now when we go into really high-volume production where every cent counts, then I think IQ8, IQ9 could be quite relevant. But it's not in the foreseeable future.

Joshua Buchalter: Okay. Thank you both.

Operator: Thank you. We're showing time for one final questioner. Our last question is coming from Samik Chatterjee of JPMorgan. Please go ahead.

MP: Hi. Thank you for taking my question. This is MP on for Samik Chatterjee. My first one would be, like, since you said that Porsche and Audi programs are now pushed out to Q1 2027, will drive or robotaxi be the biggest swing factor for 2026 revenues? And on that itself, like, updated thoughts on the monetization for Drive in terms of upfront revenues versus recurring consumption-based revenues? And for my follow-up, I wanted to ask on the second Surrounded Ads customer. You said that you there could be a potential decision for the second architecture with this customer. That's it. Thank you.

Dan Galves: MP, the answer to your first question is that there we did not expect any meaningful impact from the advanced products in 2026. We've been saying that for the last several quarters. So there's no change related to what you did what you talked about.

Nimrod Nehushtan: And we did not account for drive revenue in 2026 guidance. So there is no it's not in the guidance. Regarding the second question on the second design with the surround data, in one queue. So if that happens, like, will that potentially double your pipeline with that customer?

Nimrod Nehushtan: The discussions are obviously ongoing, and, you know, we are making good progress. And again, don't want to go into predicting time, but we continue to work on this, and it's progressing. Thank you, MP.

Operator: Thank you. At this time, I would like to turn the floor back over to Mr. Galves for closing comments.

Dan Galves: Thanks, everyone, for tuning into our earnings call, and we'll talk to you next quarter. Thank you very much.

Operator: Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.