Earnings call transcript: Arbe Robotics Q2 2025 shows revenue beat

Arbe Robotics Ltd reported its second-quarter earnings for 2025, exceeding revenue expectations but posting a loss per share that was less severe than anticipated. The company recorded an actual EPS of -0.06, surpassing the forecasted -0.1, and reported revenues of $300,000, significantly above the projected $182,690. According to InvestingPro data, the company maintains a "Weak" overall financial health score of 0.92, though current analysis suggests the stock is trading near its Fair Value. Despite these positive results, the stock fell 6.57% in pre-market trading, reflecting investor concerns over broader financial metrics and future outlook.

Key Takeaways

• Arbe Robotics’ Q2 revenue significantly outperformed expectations.
• The company reported a smaller-than-expected loss per share.
• Stock fell 6.57% in pre-market trading despite earnings beat.
• Strategic partnerships and expansion into non-automotive markets are underway.
• Future guidance indicates continued losses but potential revenue growth.

Company Performance

Arbe Robotics showed resilience in Q2 2025 by achieving higher-than-expected revenues of $300,000, though this marked a decline from $400,000 in the same quarter last year. The company is focusing on expanding its high-resolution imaging radar technology into new markets, including defense and smart infrastructure, while maintaining its position in the automotive sector. Despite a net loss of $10.2 million, this was an improvement from the $11.7 million loss in 2024, indicating some progress in cost management.

Financial Highlights

• Revenue: $300,000, down from $400,000 YoY
• Earnings per share: -0.06, better than the forecasted -0.1
• Gross profit: Negative $200,000
• Operating expenses: $11.3 million, reduced from $11.6 million YoY
• Cash position: $26.3 million in cash and equivalents, $35.7 million in long-term deposits

Earnings vs. Forecast

Arbe Robotics reported a surprise in earnings per share, with the actual EPS of -0.06 beating the forecasted -0.1 by 40%. Revenue also surpassed expectations, reaching $300,000 compared to the $182,690 forecast, marking a 49.98% surprise. This performance indicates a positive deviation from analysts’ expectations.

Market Reaction

Despite the earnings beat, Arbe Robotics’ stock price dropped 6.57% in pre-market trading, closing at $1.28 from a previous $1.37. Technical indicators from InvestingPro show the stock’s RSI suggests oversold conditions, while the stock has declined 46% over the past six months. The stock’s movement may reflect investor concerns over the company’s ongoing losses and future guidance, which suggests continued financial challenges.

Outlook & Guidance

Looking ahead, Arbe Robotics projects annual revenue between $2 million and $5 million for 2025, with an adjusted EBITDA loss ranging from $29 million to $35 million. The company aims to secure four OEM design wins in the coming year and anticipates a revenue ramp-up starting in 2027.

Executive Commentary

CEO Kobi Morengo highlighted the company’s strategic initiatives, stating, "We expect our technology to be a key enabler in high-volume 2028 passenger vehicle platforms." He emphasized the superior performance of high-resolution radar in complex conditions and noted the unexpected growth in non-automotive markets.

Risks and Challenges

• Continued net losses and negative gross profit margins.
• Dependence on the automotive sector amidst shifting market dynamics.
• Challenges in securing OEM partnerships and design wins.
• Potential regulatory changes impacting market entry, particularly in China.
• Need for technological differentiation in a competitive landscape.

Q&A

During the earnings call, analysts inquired about the competitive landscape of imaging radar, the potential of non-automotive markets, and the OEM selection process. The company addressed these concerns by emphasizing its competitive advantages and ongoing efforts to diversify its market presence.

Full transcript - Arbe Robotics Ltd (ARBE) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by. The conference will begin shortly. Ladies and gentlemen, thank you for standing by. Welcome to the Arbat Robotics Second Quarter twenty twenty five Results Conference Call. All participants are present in listen only mode.

Following management’s formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded. You should have all received by now the company’s press release. If you have not received it, please contact our BES Investor Relations team at EK Global Investor Relations at +1 (212) 378-8040 or view it in the investor section of the company’s website, arberrobotics.com. I would now like to hand over the call to mister Ehud Helft of EK Global Investor Relations.

Mister Helft, would you like to begin, please?

Ehud Helft, Investor Relations, EK Global Investor Relations: Yeah. Thank you, operator. Good day to all of you, and welcome to our best conference call to discuss the results of the 2025. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward looking statements, and the safe harbor statement outlined in today’s earnings release also pertain to this call. Today, we are joined by Corby Morengo, Harvay’s cofounder and CEO, who will begin the call with a business update.

Then we’ll turn the call over to Karim Sinclair.

Kobi Morengo, Co-Founder and CEO, Arbat Robotics: Karim will open the

Ehud Helft, Investor Relations, EK Global Investor Relations: call up to our listeners for the question and answer session. With that, I’d like to turn over the call over to Kobi.

Kobi Morengo, Co-Founder and CEO, Arbat Robotics: Thank you, Ewud. Good morning to everyone, and thank you for joining us today to discuss our results and recent business development. I will begin by reviewing some of our current business highlights. We are pleased with the strategic progress we made in the in the quarter. Our main target is to win big with the large OEMs of the world.

And as each month passes, we are making progress. Arber received a strategic order for the use of its chipset in large scale data collection projects. These chipsets were shipped and will be deployed on fleet of more than 100 vehicles operated by leading automotive manufacturers. In general, there is a growing industry wide recognition among OEMs that high end imaging radar is a requirement for a safe, hands free driving capability. It is clear that high resolution radar delivers superior performance in complex and challenging conditions, filling critical perception gap and enabling safer, more reliable autonomy.

The market is moving forward solutions based on growth, sensor fusion, signaling a departure from the line of vision only approaches. As a result, we are now in imaging radar selection programs with several of the world’s leading OEMs. Magna and Hyraq, our main tier one, are competing with our chief on all of those opportunities. Furthermore, our collaboration with NVIDIA is enabling us to move strongly forward with our customer engagement. Not less important is our solid progress in nonautomotive applications.

We are scaling up chip delivery to SensRUS as they grow their customer base and increase deployment volume across a broad range of applications. We are very pleased to say that for the first time, SensRUS is delivering radars for defense applications, a growing radar applications market. This demonstrates the the versatility of our technology for broader industrial and mobility markets beyond the passenger automotive markets. We also announced we’ve signed a new comprehensive support and maintenance agreement with Sensrad under which we will receive a recurring fee to support their four g imaging radar program based on our advanced chipset technology. We continue to move ahead with the various bid processes with our target OEMs.

Some of these have progressed, and we’ve successfully advanced to the final stages of the process. At this point, we are no longer competing against a large group of suppliers. We are now one of the final few radar technologies remaining in this this stage. While the timing of this selection processes is not under our control, we are pleased with the progress we have made in recent months, and it remains our goal to achieve four OEM bid win within the core the coming years. Our initiatives are aligning with the path to OEM selection, and we anticipate that our best radar technology will serve as a key enabler for twenty twenty eight passenger vehicle platform, and we expect our revenues to begin in 2027 and ramp up in ’28 as our chipsets are used in high volume production.

While 2027 may still seem some time away for us, 2027 is around the corner, and we are already preparing accordingly. Thanks to our strong balance sheet, we have the runway to support all programs as our revenues reach the ramp up stage. Other business highlights. Island Technologies, our leading tier one supplier in China, launched the LRR six one five, a long range imaging radar system powered by our chipset. Their system offers ultra high resolution and reliable performance in all weather and lighting conditions, presenting a cost effective and scalable sensor that complements cameras and offer a cost effective alternative to LIDAR, especially in China.

Hirei is preparing to ramp production capacity to deliver tens of thousands of units annually. China’s state administration for market regulation proposed a new regulation that mandates highly advanced ADAS testing for all new level one and level two vehicle models. These requirements exceed the capabilities of the radar systems, which are currently generally available in the Chinese market. We believe Aave’s high definition radar technology can enable OEMs to enhance ADAS performance to meet these new standards once adopted, creating a significant market opportunity for us in China even in 2026. In closing, Aave is very well positioned to take advantage of the industry transition to high resolution radar.

The progress we’ve made over the past year across OEM partnerships, tier one integration, and cross sector adoption demonstrates the maturity of our execution and the strength of our ecosystem. We have a number of catalysts coming up over the next year as we expect that the OEM we are targeting concludes the radar selection processes for the twenty twenty eight car models. Today, based by a solid financial foundation, we are positioned to lead the industry in the adoption of ultra high resolution radar, and we remain focused on unlocking long term value for our shareholders. We expect our technology to be key enabler in high volume twenty twenty eight passenger vehicle platforms with revenue growth beginning in 2027. We look forward to sharing more as we continue to move forward.

Now I’d like to turn it over to our CFO, Karim, to go over the financials.

Karim Sinclair, CFO, Arbat Robotics: Thank you, Colby, and hello, everyone. Let me review our financial results for the 2025 in more detail. Revenue for the 2025 totaled $300,000 compared to $400,000 in 2024. As of 06/30/2025, backlog stood at $500,000. Gross profit for q two twenty twenty five was negative $200,000 compared to negative point zero four reflecting the impact of fixed cost components given reduced revenue year over year and revenue mix cost.

Turning to operating expenses. Total operating expenses for q two twenty twenty five were $11,300,000, down from $11,600,000 in q two twenty twenty four. The decrease in operating expenses was primarily attributable to lower share based compensation expenses resulting from the full vesting of prior grants and to a reduced volume of new grants. This decrease was partially offset by increased bonus liability grant approved, labor cost, and unfavorable foreign exchange effects. Operating loss for the 2025 was $11,500,000 compared to $11,600,000 loss in the 2024.

Adjusted EBITDA and non GAAP measurements, which exclude expenses for noncash share based compensation and for nonrecurring items, was a loss of $8,900,000 in 2025 compared to a loss of $7,500,000 in the 2024. We believe that this non GAAP measurement is important in management’s evaluation of our use of cash and planning and evaluating our cash requirements for the coming period. Net loss in the 2025 was $10,200,000 compared to a net loss of $11,700,000 in the 2024. As of 06/30/2025, Arbet held $26,300,000 in cash and cash equivalents and short term bank deposits as well as $35,700,000 in long term bank deposits. Turning to our outlook.

We would like to reiterate what we previously said. Our best leading radar technology remains a top priority for key decision makers in the automotive industry. While broader economic shifts have led to delays in automakers rollout of advanced driver assist systems, decision timelines have been extended. Arvec continues to engage closely with industry leaders, advancing through our skewed stages and strengthening its position for adoption. We continue with our goal to pursue four design ins with automakers in the coming year.

Our very main change is overall financial expectations for 2025. We expect annual revenue to be weighted towards the end of the year in the range of $2,000,000 to $5,000,000 Continued expectations for adjusted EBITDA for 2025 to be in the range of $29,000,000 lost and $35,000,000 lost. Now we will be happy to take your questions. Operator?

Conference Operator: Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press 1. If you wish to cancel your request, please press 2. If you’re using speaker appointment, kindly lift a handset before pressing the number.

Please stand by while we poll for your questions. The first question is from George Guianarcas. Please go ahead.

George Guianarcas, Analyst: Hi, everyone. Thank you for taking my questions. I’d like to ask first about the the four design wins that you expect in the in the coming year. Curious as to, you know, how that number is has changed at all over the last few months since we last spoke and and what the competitive set looks like. It sounds like you feel like that that has tightened a little bit, and and if you could share any details around and how you feel that that set has has changed as well.

Thank you.

Kobi Morengo, Co-Founder and CEO, Arbat Robotics: Yeah. So I think that the overall, the amount of OEMs that we are working towards the with them towards winning didn’t change. What really changed is the is the environment and the understanding of every OEM that’s basically starting to develop a real let’s call it l three, hands free eyes of driving that they understand that current imaging radar low end imaging radar cannot solve the problem. And the the multi high level of channels radar that has at least more than a thousand channels, which basically is our shifted support and the the shifted of of Mobilize support are the only candidates that can really solve the problem for l three. And, basically, what we saw is that even in program that they were considering to take an official imaging radar as an option, they decided to focus and narrow the competition to this, I would say, two whole place between between the two companies.

The only two companies today that has a real imaging radar, high end imaging radar that can solve the problem for l three, as I mentioned, is both. The the other things that we are seeing is that when OEMs beginning the data collection with our radar, scope with stone, with magnet radar based on our chipset or with high end radar based on our chipset, they see that for a bit of a lower end application, what will what is called l two plus, l two plus plus, which is only entry driving, imaging radar can actually solve the problem, and they are looking to expand the selection also to do to to those kinds of applications. So I think, overall, I don’t see today a customer in the market that will say that imaging rate high end imaging radar is not marked for from entry ISO application. The fact that there is a very few amount of competitors in this market, I think, put us in a in a very good position to be the leading in this market.

George Guianarcas, Analyst: Is it possible for one OEM to pick multiple vendors for

Kobi Morengo, Co-Founder and CEO, Arbat Robotics: their imaging radar? Really. Not really. Not really. I think that, first of all, the data collection, because we are today in a world of full AI stuff, you need to to train to to have a data collection.

In order to have an effective data collection, we are talking about millions, not not even millions, millions of kilometers of driving, even miles, not just kilometers. So you need 10 or even 100 cars that are driving towards for a year to collect the data and to train the algorithm. So to to go with two radars on the same application makes no sense. It’s possible to select a different rad radar for a three stack and a different rate of four and two plus plus stack. But I don’t see an OEM selecting two rate of four and three.

Got it. And maybe just

George Guianarcas, Analyst: as as a final follow-up. You mentioned in your release potential for nonautomotive growth. You list a couple of applications, including defense sector and smart infrastructure. Can you sort of expand upon that a little bit if possible? What other nonautomotive applications are you seeing potential traction with over the next few years?

Thank you.

Kobi Morengo, Co-Founder and CEO, Arbat Robotics: Yeah. So first of all, defense, I think, is a growing sector in the last two, three years. It’s of course, it comes from the different side of it from detection from border protection to autonomous trucks that move the supply to the to to the troops or so on. So detection of drones that are attacking and so on. So there is, I think, a a strong demand on the defense side for a low price radar.

It’s not, you know, the month of the of the big industries of general are building today. Radar just cost millions of dollars. There is an need for radar in a thousand, 2,000, $3,000. Of course, it’s not in the volume of automotive, but the margins are are better. Smart infrastructure, as you mentioned, is is is good.

I think there is a few other verticals that we already seen the traction that we cannot yet announce. We believe that we will have also, we will be able to announce things that of the growing in September or October after the summer vacation. But we feel that the nonautomotive market is growing right now better than we expected, and we will be able to see their nice revenues shorter than in automotive. Of course, it’s not in the volume of automotive, but it’s still we see it now as a a strategic leg to the company.

George Guianarcas, Analyst: Thank you.

Conference Operator: If there are any additional questions, please press 1. If you wish to cancel the request, please press 2. Please stand by while we poll for more questions. This concludes the question and answer session. Before I ask Mr.

Kobi Morenco to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available by tomorrow on our website, arbeirobotics.com. Mister Morenko, would you like to make your concluding statement? Yes.

Kobi Morengo, Co-Founder and CEO, Arbat Robotics: On behalf of the management of Arbez, I would like to thank you, our shareholders, for your continued interest and long term support of our business. To our employees and partners, your continued dedication is deeply appreciated. In the coming months, we will be meeting with investors and

Conference Operator: You got cut off in the last sentence.

Kobi Morengo, Co-Founder and CEO, Arbat Robotics: Kobe? Contact us at investors@aubairrobotics.com to schedule a meeting. And with that, we end our call. Have a good day.

Conference Operator: Thank you. This concludes our best second quarter twenty twenty five results conference call. Thank you for your participation. You may go ahead and

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