10-K: Mobileye Global Inc. Reports Significant Net Loss in 2024 Due to Goodwill Impairment

Mobileye's 2024 revenue decreased by 20% due to customer inventory drawdown and reduced China shipments, resulting in a substantial net loss primarily from a goodwill impairment.

Summary

• Mobileye Global Inc. reported a 20% decrease in revenue for 2024, totaling $1.7 billion, compared to $2.1 billion in 2023.
• The revenue decline is attributed to a significant drawdown of excess inventory at Tier 1 customers and reduced shipments to China.
• The company recorded a net loss of $3.09 billion in 2024, a stark contrast to the $27 million loss in 2023 and $82 million loss in 2022.
• The 2024 net loss was primarily due to a $2.695 billion non-cash impairment of goodwill recorded in the third quarter.
• Adjusted Net Income for 2024 was $205 million, compared to $659 million in 2023 and $605 million in 2022.
• As of December 28, 2024, Mobileye's solutions have been installed in approximately 1,200 vehicle models, and its System-on-Chips (SoCs) have been deployed in over 200 million vehicles.
• Approximately 29.0 million EyeQ SoCs and SuperVision systems were shipped in 2024, a decrease from 37.4 million in 2023 and 33.7 million in 2022.
• The company is actively working with more than 50 Original Equipment Manufacturers (OEMs) worldwide on the implementation of its ADAS solutions.

Sentiment

Score: 3

Explanation: The document presents a negative outlook due to significant revenue decline and a substantial net loss, primarily driven by a goodwill impairment. While there are some positive aspects, the overall financial performance is concerning.

Positives

• Mobileye's solutions have been installed in approximately 1,200 vehicle models, and its System-on-Chips (SoCs) have been deployed in over 200 million vehicles.
• The company is actively working with more than 50 Original Equipment Manufacturers (OEMs) worldwide on the implementation of its ADAS solutions.
• Mobileye collected 29.6 billion miles of road data in 2024 from approximately 3 million REM-enabled vehicles worldwide, enhancing its Road Experience Management (REM) technology.
• The company is developing next-generation active sensors such as software-defined imaging radars, which leverage AI capabilities.

Negatives

• Mobileye experienced a 20% decrease in revenue for 2024, totaling $1.7 billion, compared to $2.1 billion in 2023.
• The company reported a significant net loss of $3.09 billion in 2024, primarily due to a $2.695 billion non-cash impairment of goodwill.
• Shipments of EyeQ SoCs and SuperVision systems decreased from 37.4 million in 2023 to 29.0 million in 2024.
• Zeekr announced their decision to utilize their in-house system instead of SuperVision for at least a major portion of production for their 001 model going forward.

Risks

• The company faces intense competition in the ADAS and autonomous driving industries.
• Mobileye depends on a limited number of Tier 1 customers and OEMs for a substantial portion of its revenue.
• The company is highly dependent on the services of Professor Amnon Shashua, its President and Chief Executive Officer.
• Conditions in Israel affect Mobileye's operations and may limit its ability to produce and sell its solutions.
• The dual class structure of Mobileye's common stock concentrates voting control with Intel, limiting the ability of other stockholders to influence corporate matters.
• The company may have conflicts of interest with Intel, and may not be able to resolve such conflicts on terms favorable to Mobileye.

Future Outlook

Mobileye plans to continue developing innovative and cost-optimized solutions to deliver comprehensive capabilities for mass market adoption, focusing on its next-generation EyeQ SoC, surround computer vision, software-defined imaging radars, and Compound AI system architecture.

Industry Context

The ADAS and autonomous driving industries are highly competitive, with increasing competition from established and new technology companies, automobile manufacturers, and Tier 1 automotive suppliers. Mobileye faces competition from companies developing in-house solutions, as well as those offering software-only autonomous vehicle solutions.

Comparison to Industry Standards

• Mobileye's performance is compared to competitors like Bosch, Continental, Denso, Ambarella, Advanced Micro Devices, Arriver / Qualcomm, Black Sesame Technologies, Horizon Robotics, Huawei, NVIDIA, NXP, Renesas Electronics, and Texas Instruments.
• In the autonomous driving market, Mobileye competes with technology companies like Cruise, Motional, Waymo, Zoox, Auto X, Baidu, Deeproute.ai, Didi Chuxing, Momenta, WeRide, Sony, and Tesla.
• Moovit competes against urban mobility applications and MaaS solutions such as Alphabet, Apple, Citymapper, and Transit.

Legal Proceedings

• A putative class action, McAuliffe v. Mobileye Global Inc., et al., was filed in the United States District Court for the Southern District of New York, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
• A derivative lawsuit was filed against the members of the Mobileye Board of Directors and Intel Corporation, asserting claims for breach of fiduciary duty and unjust enrichment.
• Facet Technology Corp. sued Mobileye in the U.S. District Court for the Eastern District of Texas for allegedly infringing two patents.

Related Party Transactions

• Mobileye continues to interact with Intel as a strategic partner, collaborating on projects to pursue the growth of computing and advanced technology in the automotive sector.
• The company has entered into certain agreements with Intel and certain of its subsidiaries that provide the framework for its ongoing relationship with Intel, including the Master Transaction Agreement.
• So long as Intel beneficially owns at least 20% of Mobileye's common stock, Mobileye will sell Intel its commercially available products for internal use.
• Mobileye and Intel have cross-indemnities that generally place the financial responsibility on Mobileye for all liabilities associated with the current and historical Mobileye business and operations.
• Mobileye is party to an agreement with Intel in which (i) Mobileye grants to Intel a royalty-free, nonexclusive, nontransferable, perpetual, irrevocable, sublicensable under certain circumstances, and worldwide license under patents and patent applications owned or controlled by Mobileye, and (ii) Intel grants to Mobileye a royalty-free, nonexclusive, nontransferable, and worldwide license, sublicense, or other right, as applicable, under certain patents and patent applications of other Intel subsidiaries and certain third parties.

Stakeholder Impact

• Shareholders: The significant net loss and decrease in Adjusted Net Income may negatively impact shareholder value.
• Employees: The winding down of the Aftermarket Solutions Unit and Lidar R&D Unit resulted in workforce reductions.
• Customers: Supply chain constraints and potential disruptions could affect Mobileye's ability to meet customer demand.
• Suppliers: Mobileye's reliance on single or limited suppliers increases the risk of supply chain disruptions.

Next Steps

• Mobileye plans to continue to lead and deliver upon global regulatory and safety requirements for base ADAS features by maintaining and enhancing its vision only solution.
• The company intends to continue to grow the depth and breadth of its REM maps in order to deliver leading ADAS capabilities.
• Mobileye plans to continue to develop innovative and cost-optimized solutions to deliver comprehensive capabilities for mass market adoption to its customers.
• The company will continue to grow the depth and breadth of its substantial dataset.
• Mobileye expects, in collaboration with its customers, to add additional cities to its AMaaS offerings to showcase its industry-leading technology and to help accelerate the pace of AV adoption.

Key Dates

Keywords

Mobileye, ADAS, autonomous driving, EyeQ SoC, SuperVision, REM, goodwill impairment, revenue, net loss, Intel, OEMs, Tier 1 suppliers