Mobileye Global Inc (NASDAQ: MBLY), a leading provider of advanced driver-assistance systems (ADAS) and autonomous driving technologies, reported its fiscal third-quarter 2024 earnings on Thursday, revealing a mixed bag of results. While the company surpassed analysts’ expectations on both revenue and earnings per share, its overall revenue declined year-over-year.
The company reported revenue of $486.00 million, a decrease of 8% compared to the same period last year. Despite the decline, this figure exceeded analysts’ consensus estimate of $472.14 million. Mobileye’s adjusted earnings per share (EPS) also came in above expectations, reaching $0.10 compared to the analyst consensus of $0.09. This positive performance propelled the stock upwards in premarket trading.
However, the company’s financial report also revealed some challenges. Revenue from EyeQ and SuperVision, two of Mobileye’s key product lines, declined to $457 million from $507 million a year ago. The average system price also slipped to $53.3 from $53.8 in the previous year, indicating a potential price competition in the market. Additionally, the number of systems shipped fell to 8.6 million from 9.4 million a year ago.
The report highlighted a significant drop in the company’s gross margin, which declined by 256 basis points to 49%. Adjusted gross margin also decreased by 95 basis points to 68%, primarily due to the increased revenue contribution from SuperVision. This decline in margins directly impacted the company’s adjusted operating margin, which contracted from 34% to 16% year-over-year.
Furthermore, Mobileye took a substantial $2.7 billion goodwill impairment charge during the quarter. This charge stems from Intel’s acquisition of Mobileye in 2017 and reflects the current market valuation of the company. Despite these headwinds, Mobileye holds a strong cash position, reporting $1.29 billion in cash and equivalents as of September 28, 2024. The company also generated $126 million in operating cash flow during the third quarter.
Looking ahead, Mobileye revised its revenue outlook for fiscal year 2024 to $1.62 billion to $1.66 billion, compared to its prior guidance of $1.60 billion to $1.68 billion. This revised outlook still surpasses analysts’ estimates of $1.65 billion. The company also adjusted its adjusted operating income guidance to $163 million to $190 million, compared to its previous forecast of $152 million to $201 million.
“We continue to focus on our core strategic objectives for the next two years, which include maintaining and growing our ADAS position outside of domestic China, deepening the relationship with our top 10 customers through advanced product design wins, and executing our EyeQTM6-based set of advanced products that leverage historic Mobileye competitive advantages augmented by novel AI approaches,” said Mobileye President and CEO Prof. Amnon Shashua, highlighting the company’s commitment to future growth.
Overall, Mobileye’s third-quarter results present a mixed picture. While the company exceeded earnings expectations, its revenue decline and significant goodwill impairment charge raise concerns. However, Mobileye remains optimistic about its future prospects and is actively pursuing strategies to expand its market share and enhance its product portfolio. The company’s stock performance in the coming weeks will depend on investors’ assessment of these factors and their confidence in Mobileye’s ability to navigate these challenges and achieve its growth goals.
