Gold prices steady ahead of Fed decision; weekly weakness noted
Arbe Robotics Ltd (NASDAQ: ARBE) reported its fourth-quarter 2024 earnings, revealing a significant revenue drop and a larger-than-expected net loss. The company’s premarket stock price fell sharply following the announcement, as actual earnings per share (EPS) missed forecasts. InvestingPro data shows the company’s financial health score is rated as "WEAK," with an RSI indicating oversold territory. Get access to 13 additional exclusive ProTips and comprehensive analysis through InvestingPro.
Summary Paragraph
Arbe Robotics reported a Q4 2024 revenue of $100,000, a steep decline from $350,000 in the same quarter of the previous year. The company posted a net loss for the full year of $49.3 million, widening from $43.5 million in 2023. EPS for the quarter was -$0.11, missing the forecast of -$0.09. Following these results, Arbe Robotics’ stock experienced an 18.7% drop in premarket trading, with shares priced at $1.35.
Key Takeaways
- Q4 2024 revenue fell significantly compared to the previous year, highlighting ongoing challenges.
- The company’s stock dropped 18.7% in premarket trading after missing EPS expectations.
- Arbe Robotics continues to focus on innovation and strategic partnerships, despite financial setbacks.
Company Performance
Arbe Robotics faced a challenging 2024, with total annual revenue declining to $800,000 from $1.5 million in 2023. The company attributes this downturn to broader economic shifts affecting the automotive industry, particularly delays in the rollout of advanced driver assistance systems. InvestingPro analysis reveals concerning metrics, including a gross profit margin of -75.39% and rapid cash burn, with negative free cash flow of $29.91 million in the last twelve months. Despite these challenges, Arbe Robotics is positioning itself as a leader in high-resolution imaging radar technology, targeting both automotive and non-automotive markets. Dive deeper with InvestingPro’s comprehensive Research Report, available for over 1,400 US stocks.
Financial Highlights
- Q4 2024 Revenue: $100,000 (down from $350,000 in Q4 2023)
- Full Year 2024 Revenue: $800,000 (down from $1.5 million in 2023)
- Net Loss for Full Year 2024: $49.3 million (compared to $43.5 million in 2023)
- Cash Position: $24.6 million as of 12/31/2024
Earnings vs. Forecast
Arbe Robotics reported an EPS of -$0.11, missing the forecast of -$0.09. This represents a negative surprise of approximately 22%. The revenue of $100,000 also fell short of the forecasted $500,000, reflecting ongoing financial difficulties.
Market Reaction
Following the earnings announcement, Arbe Robotics’ stock dropped 18.7% in premarket trading, reaching $1.35. This decline positions the stock near its 52-week low of $1.395, indicating significant investor concern about the company’s financial health and future prospects. According to InvestingPro’s Fair Value analysis, the stock appears to be trading below its intrinsic value, though investors should note the high price volatility and elevated Price/Book ratio of 9.2x. Access the complete valuation analysis and more through InvestingPro’s advanced tools and metrics.
Outlook & Guidance
Looking ahead, Arbe Robotics projects 2025 revenue between $2 million and $5 million, with expectations of stronger performance towards the end of the year. The company also anticipates an adjusted EBITDA loss between $29 million and $35 million. Despite these challenges, Arbe Robotics aims to secure four design-ins with automakers in 2025 and plans additional investments of $5 million to $15 million over the next two to three years.
Executive Commentary
CEO Kobi Marenko expressed confidence in the company’s strategic direction, stating, "We are confident that our chipset will play a key role in those discussions." CFO Corinne Pinto Flomenboim acknowledged the delays in automakers’ rollout of advanced systems, noting, "Decision timelines have been extended."
Risks and Challenges
- Economic shifts leading to delays in automotive technology rollouts.
- Intense competition from established players like Continental and Valeo.
- Financial pressures due to ongoing net losses and revenue declines.
- Dependence on successful partnerships and design-ins for future growth.
Q&A
During the earnings call, analysts inquired about potential revenue drivers in China and Europe, the company’s cash position post-fundraising, and the competitive landscape. Executives addressed these concerns, highlighting their focus on strategic partnerships and technological advancements.
Full transcript - Arbe Robotics Ltd (ARBE) Q4 2024:
Conference Operator: Good morning, everyone, and welcome to the Arbei Robotics Fourth Quarter and Full Year twenty twenty four Financial Results Conference Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please also note today’s event is being recorded. At this time, I’d like to turn the floor over to Mary Segal, CEO of MSIR.
Please go ahead.
Mary Segal, CEO of MSIR, MSIR: Thank you, operator, and everyone for joining us today. Welcome to our base conference call. 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 pertains to this call. If you have not received a copy of the release, please view it in the Investor Relations section of the company’s website. Today, we are joined by Kobi Marenko, Arbe’s Co Founder and CEO, who will begin the call with a business update.
Then we will turn the call over to Corinne Pinto Flomenboim, CFO, who will review the financials. Finally, we will open the call for the question and answer session. With that, I’d like to turn it over to Coby Marengo. Coby, please go ahead.
Kobi Marenko, Co-Founder and CEO, Arbe Robotics: Good morning, everyone, and thank you for joining us. I will begin by reviewing some of our recent business highlights. Throughout the year, we focused on driving a radar revolution by innovating and delivering cutting edge solutions that set new industry standards. Our commitment to pushing the boundaries of radar technology with our industry leading solutions remains strong. We take pride in the progress we have made in both product development and customer relationships expanding and enhancing our offerings.
Many top car manufacturers are actively selecting their radar suppliers this year and we are confident that our chipset will play a key role in those discussions. In 2024, ’1 of the top 10 global auto OEMs selected our chipset for its next generation imaging radar. Zentak, a Swedish AI and software company and Alvest T1 Sensrad have announced a joint exploration of four gs high resolution imaging radar to enhance safety in automated driving. We were thrilled to announce the collaboration with NVIDIA where together we are revolutionizing vehicle safety and autonomy. We are proud to showcase this groundbreaking technology at the CES exhibition in Las Vegas in January.
Our high resolution radar integrates with NVIDIA’s in vehicle computing platform to transform radar based space mapping. These technologies combine to redefine vehicle perception and decision making paving the way for what we believe will be safer and smarter mobility solutions. We look forward to future collaboration with NVIDIA. In September, HiReN Technology is one of our key team ones announced that it is in fact tracking of the development of an ADAS system for a Chinese auto manufacturer using our chipset effectively replacing lidar from the current system. The ADAS system is anticipated to enter serial production by Q4 twenty twenty five pending final approval from the OEM.
Additionally, in 2024, we announced a collaboration with a leading European truck manufacturer to integrate our automotive grade imaging radar technology into its next generation sensor suite. This marks a significant milestone in the manufacturer transition to an advanced implementation stage. It is important to mention that our radar technology addresses the unique challenges of the trucking market such as larger size of truck, longer breaking distances and higher impact potential. Moving on, Sensual has announced that it is signed a framework agreement worth an estimated $7,300,000 to supply 40 imaging radars powered by AOVEST technology to Tianhe transportation technology in China for vehicle world cloud integration technology. This framework agreement follows an extensive year long evaluation of our advanced chipset technology.
We believe that there are significant opportunities for growth in the non automotive market and we are happy to support Sensrad in delivering unparalleled radar solutions and driving innovation forward in such key markets. While the decision making process and development timelines are longer than initially expected, We have not received negative responses or missed any opportunities and the total addressable market continues to expand. Based on our current engagement and our ability to secure and execute contracts with leading OEMs, we estimate that by 02/1930 we can ship around 5,000,000 imaging radar chipsets to our customers. I’d like to elaborate on our successful fundraising initiatives which resulted in a total amount of nearly $17,000,000 This includes $33,000,000 raised through an Underwriting Register Direct offering, which included the exercise of a $4,000,000 over allotment option by the underwriters closed in January 2025 led by Canaccord Genuity. Dollars twenty one point five million released to the company in January 2025 from the escrow account following the conversion of convertible bonds issued on Tel Aviv Stock Exchange in 2024.
Dollars ’15 million raised in underwriting public offerings that closed in November 2024 led by Canaccord along with $500,000 raised in January 2025 from the exercise of warrants issued as part of the November 2024 offering. We are delighted to share that AWM Special Situations Fund, one of our largest shareholders, has invested in our recent fundraising round for the third time. In addition, we are happy to welcome the new investors who participated and believe in the future of Arotech. This funding provides the financial support needed to accelerate our growth, enhance the development of the next generation of our radio solutions and reinforce our market leadership. With a strong balance sheet that helps ensure our financial stability, we believe we are in a great position to grow our global presence and gain more OEM and Tier one relationships.
In conclusion, we are pleased with the progress we have made over the past year along with the achievement of our Tier one partners and recent collaborations with key players like NVIDIA. We look forward to sharing more as we continue to move forward. Now, I’d like to turn it over to our CFO, Corinne, to go over the financials.
Corinne Pinto Flomenboim, CFO, Arbe Robotics: Thank you, Colby, and hello, everyone. Let me review our financial results for the fourth quarter and full year 2024 in more detail. Total revenue in the fourth quarter was $100,000 compared to $350,000 in the fourth quarter of twenty twenty three. For the full year of 2024, total revenue was $800,000 compared to $1,500,000 in 2023. Backlog as of 12/31/2024 is 300,000 Gross margin loss for Q4 twenty twenty four was similar to the gross margin loss in Q4 twenty twenty three at a level of $200,000 loss.
Gross margin for the full year of 2024 was $800,000 loss compared to a $0 gross margin in 2023. Year over year gross margin reduction is mainly related to a low level of revenue and to the increase in labor costs. Moving on to expenses, in Q4 twenty twenty four, we reported total operating expenses of 12,600,000 compared to $11,900,000 in Q4 twenty twenty three. Operating expenses for the full year of 2024 totaled $48,900,000 compared to $46,800,000 in 2023. The operating expenses increase was primarily a result of non cash share based compensation expenses.
In addition, the increasing production ramp up related costs, the doubtful debt provision and to a lesser extent the increase in labor costs were offset by a decrease due to the finalization of costs related to our advanced production stage and the savings in our D and O insurance. Twenty twenty twenty four compared to $8,400,000 in Q4 twenty twenty three. R and D expenses for the full year of 2024 were $35,100,000 compared to $34,100,000 in 2023. Operating loss for the fourth quarter of twenty twenty four was $12,800,000 compared to a loss of $12,100,000 in the fourth quarter of twenty twenty three. Operating loss for the full year of 2024 totaled $49,700,000 compared to $46,900,000 in 2023.
Looking at adjusted EBITDA, a non GAAP measurement, which excludes expenses for non cash share based compensation and for non reoccurring items, in Q4 of twenty twenty four was a loss of $9,000,000 compared to a loss of $8,200,000 in the fourth quarter of twenty twenty three. Adjusted EBITDA for the full year of 2024 amounted to a loss of $33,300,000 slightly below 2023 adjusted EBITDA with a loss of $32,500,000 Net loss in the fourth quarter of twenty twenty four was $12,200,000 compared to a net loss of $9,300,000 in the fourth quarter of twenty twenty three. Net loss for the full year of 2024 was $49,300,000 compared to a loss of $43,500,000 in 2023. Net loss in 2024 included financial income of $300,000 compared to our financial income of $3,400,000 in 2023. ’20 ’20 ’4 full year financial income resulted from interest deposits and warrants revaluation income, partially offset by bond financing expenses.
Moving to our balance sheet. As of 12/31/2024, Arbe had $24,600,000 in cash, cash equivalents and short term bank deposits. During January 2025, we raised gross proceeds of $54,500,000 30 3 million dollars of which related to underwritten public offering and $21,500,000 were related to the portion released from escrow due to the conversion of our convertible bonds, thus providing us with a robust balance sheet. With respect to our guidance, Arbez’s leading radar technology remains a top priority for key decision makers in the automotive industry. Recent cash infusion totaling $17,000,000 further underscore investors’ confidence in our market potential and growth trajectory.
While broader economic shifts have led to short term delay in automakers rollout of advanced driver assist systems, decision timelines have been extended. As a result, RBAC continues to engage closely with industry leaders advancing through RFQ stages and strengthening its position for adoption. We continue with our goal to pursue four design ins with automakers in 2025. ’20 ’20 ’5 annual revenue are expected to be in the range of $2,000,000 to $5,000,000 and will be weighted towards the end of the year. Adjusted EBITDA for 2025 is projected to be in the range of $29,000,000 loss to $35,000,000 loss.
Now, we will be happy to take your questions.
Conference Operator: And our first question today comes from Suji Desilva from Roth Capital. Please go ahead with your question. Hi, Coby. Hi, Kareem. Congrats on the fundings and the position here.
As we look at the ’25 revenue forecast, toward the end of
Suji Desilva, Analyst, Roth Capital: the year, which total the $1,000,000
Conference Operator: plus revenue quarters that you’re expecting to go up to 26 ramp?
Corinne Pinto Flomenboim, CFO, Arbe Robotics: Sorry, Suji, you were breaking. Can you repeat?
Conference Operator: So which programs, Karim, are you expecting to help drive $1,000,000 plus revenue quarters toward the end of the year?
Kobi Marenko, Co-Founder and CEO, Arbe Robotics: As we said, there is two or three leading projects that are in the final stages of maturing. One is Tiani, the non automotive. One is the cracks in Europe. And the third and most important one is with the higher end with the car manufacturer with the Chinese car manufacturer. All of them we expect to start shipping chips as soon as we will have the full production.
Conference Operator: Okay. That helps. Great. I guess the update on the I guess as opposed to the end 4Q, the current cash balance and the share count?
Kobi Marenko, Co-Founder and CEO, Arbe Robotics: Yes.
Corinne Pinto Flomenboim, CFO, Arbe Robotics: So what was the question? What is
Conference Operator: the current cash down?
Kobi Marenko, Co-Founder and CEO, Arbe Robotics: The current
Corinne Pinto Flomenboim, CFO, Arbe Robotics: cash down? Current, you mean now post the raising?
Conference Operator: Correct. Post the raise, yes.
Corinne Pinto Flomenboim, CFO, Arbe Robotics: So currently it’s above $70,000,000 out $73,000,000 And the current cash count is $85,700,000
Kobi Marenko, Co-Founder and CEO, Arbe Robotics: Share account. Share account. All right, great.
Conference Operator: Yes. 85.7%. Okay, got it. And then lastly, maybe, Coby, the China EV market, can you update us on the opportunity there? We know that market is doing well.
Where might you see initial traction there? Thanks.
Kobi Marenko, Co-Founder and CEO, Arbe Robotics: So I think as you said the Chinese market is especially on the EP is doing well. And I think all of the Chinese manufacturers that were focusing on launching first generation of self driving services, which is more or less advanced adaptive cruise control are now looking into achieving kind of hands free eyes of driving. And for that, they are looking for radar like an imaging radar together with the camera to solve the problem.
Conference Operator: Okay. All right. Thanks. Our next question comes from George Diona Riches from Canaccord Genuity. Please go ahead with your question.
Hi, everyone. Thank you for taking my questions. Kobe, could you just sort of describe to us a little bit of the what’s happening within the OEMs that you’re having discussions with? To what extent are they evaluating other offerings from OEMs? Or do you feel like you’re already on the strong path to converting these discussions into wins over the next call twelve months?
Thank you.
Kobi Marenko, Co-Founder and CEO, Arbe Robotics: I think so let’s divide it between China and the rest of the world. On the rest of the world, all of the evaluations are in the final stages. We are shortlisted in most of them with one competitor and some of them with two competitors. Again, it’s not that of course, it’s Magna or Tier one. And the other chips that are available in the market is NXP that is the radar is done by Continental and Valeo that chipset is done by Mobilize.
We know that we have advantage on both of them in terms of performance or price. So with Continental we have a better performance and more or less same price. With Mobilize we have same performance more or less and a huge advantage on price.
Conference Operator: Thank you. And maybe for Karim, you’ve obviously given your 2025 EBITDA outlook, can you just help us understand the glide path for OpEx to the extent you can over the next couple of few years? Thank you.
Corinne Pinto Flomenboim, CFO, Arbe Robotics: So as we mentioned, it’s between $29,000,000 to $35,000,000 guidance, which is middle range is about $32,000,000 30 3 million dollars of OpEx. We expect this to be quite similar for the next couple of years. And maybe just to add additional investments which we carry in our next generation and related cost associated with it. So additional increase in investment between $5,000,000 to $15,000,000 over those two to three years coming in addition to our ongoing OpEx expenses.
Conference Operator: Thank you very much. And ladies and gentlemen, at this time, I’m showing no additional questions. We’ll be concluding today’s question and answer session. I’d like to turn the floor back over to Arbe’s CEO, Kobi Maranco for closing remarks.
Kobi Marenko, Co-Founder and CEO, Arbe Robotics: We were so pleased to have you join us today. To our employees and partners, your continued dedication is deeply appreciated. We look forward to updating you further on Harvey’s progress in the coming months. Look out for updates as we prepare for several investor events including the ROTH Conference in Dena Point California on March 2017. We’d love to meet you in person for further discussions.
Please contact us at investorsalderobotics dot com or visit our site to schedule a meeting. Thank you all.
Conference Operator: Erl. And ladies and gentlemen, with that, we’ll conclude today’s conference call. We do thank you for attending today’s presentation. You may now disconnect your lines.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.