Mobileye, the autonomous vehicle technology company led by CEO Amnon Shashua, has closed one of the most difficult years in its history, reporting a 23% decline in fourth-quarter revenue to $490 million. The company also posted an operating loss of $86 million and a net loss of 9 cents per share, leading to a sharp drop in its stock price in pre-market trading in New York.
Despite the poor performance, Mobileye reported a non-GAAP profit of 13 cents per share after excluding write-offs and accounting expenses, a figure that aligns with analysts' forecasts, but still marks a significant downturn compared to the same period in the previous year.
Annual Revenue Plummets 20%
For the full year of 2024, Mobileye recorded a 20% drop in revenue, totaling $1.65 billion, compared to $2.06 billion in 2023. The company’s net loss for the year amounted to a staggering $3 billion, a significant portion of which—$2.6 billion—was attributed to a massive write-off in the third quarter. This write-off resulted from the discrepancy in valuation between Mobileye's sale to Intel and its current valuation on Wall Street.
Over the past 12 months, Mobileye's stock has fallen 40%, now trading at a market value of $12 billion, well below the $15 billion valuation it had at the time of its second offering and the Intel acquisition.
Cash Flow and Liquidity Remain Strong
On a positive note, Mobileye’s operations generated a healthy cash flow of $400 million, slightly above 2023 levels. The company ended 2024 with $1.4 billion in cash balances, offering some cushion amid the operational and financial challenges.
2025 Outlook: Modest Recovery
Looking ahead, Mobileye has provided a cautious forecast for 2025, projecting revenue between $1.7 billion and $1.8 billion, signaling a modest recovery from the significant decline in 2024 but still far below the company's performance in 2023. The company also expects an operating loss of between $489 million and $574 million, with adjusted operating profit ranging between $175 million and $260 million.
Investors had hoped for a more optimistic outlook, especially after a prolonged period of declining revenues and increasing losses. As a result, Mobileye’s stock price continued to fall in pre-market trading.
Struggles in China and Strategic Shifts
Mobileye's difficulties stem primarily from disruptions in the Chinese automotive market, a key growth area for the company. The Chinese market has slowed, impacting both domestic sales and exports, and European Union tariffs on Chinese electric vehicles have added further pressure.
The company is also grappling with increased competition from tech giants like Nvidia and Qualcomm, while facing challenges from foreign component manufacturers, some of whom are Mobileye’s OEM partners.
In response to these challenges, Mobileye has taken a number of efficiency measures, including the closure of its Lidar division, which had been seen as a promising technology for autonomous vehicles. Lidar sensor prices have dropped significantly, and advances in AI have raised questions about their continued necessity. Mobileye is now focusing on imaging radar as a critical component alongside cameras for autonomous driving.
Workforce Reductions and Organizational Changes
As part of its restructuring, Mobileye has reduced its workforce. Following the closure of the lidar division, which employed 60 workers, the company has laid off a total of 130 employees, including 90 in Israel. The current workforce now stands at 3,500 employees.
CEO’s Cautious Approach to 2025 Forecast
Amnon Shashua, founder and CEO of Mobileye, explained that the company took an overly cautious approach with its 2025 forecast. "If we had used the numbers and indications we’re receiving from business partners, we could have provided a forecast closer to market expectations. However, given the uncertainty in the Chinese market, we preferred to err on the side of caution to avoid revising our outlook mid-year," he said.
Future Prospects and Strategic Partnerships
Despite the challenges, Mobileye remains hopeful about securing several OEM partnership agreements in the coming year, which could help boost revenue. However, the company’s cautious outlook reflects the unpredictable nature of the Chinese automotive market, which has been further complicated by trade tariffs and slower economic growth.
Mobileye’s 2024 performance highlights the complexities of operating in the rapidly evolving autonomous vehicle space, especially in a turbulent global market. The company’s efforts to streamline operations and recalibrate its focus on AI and radar technologies indicate its strategy to adapt to changing industry dynamics. Whether this will be enough to stabilize its financial position in the coming year remains to be seen.
