Mobileye Global Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 30, 2024; comparable period ended April 1, 2023. Amounts are U.S. dollars unless otherwise stated. Mobileye develops advanced driver assistance systems (ADAS) and autonomous driving technology. Intel held approximately 88.3% of outstanding common stock and 98.7% of voting power at quarter-end.
Financial performance and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $239 million | $458 million |
| Gross profit / margin | $54 million / 23% | $207 million / 45% |
| Operating income (loss) | $(238) million | $(81) million |
| Net income (loss) | $(218) million; $(0.27) per share | $(79) million; $(0.10) per share |
| Adjusted operating income (loss), non-GAAP | $(65) million | $124 million |
| Adjusted net income (loss), non-GAAP | $(55) million | $115 million |
| Cash from operating activities | $40 million | $171 million |
| Capital expenditures | $22 million | $26 million |
At March 30, cash and cash equivalents were $1.223 billion; cash, cash equivalents and restricted cash totaled $1.238 billion. Current assets were $1.931 billion versus current liabilities of $329 million. Total liabilities were $579 million. The filing reports no borrowings; lease liabilities were $55 million and bank guarantees totaled approximately $12 million. Inventory was $456 million, up from $391 million at year-end 2023.
Material changes and operating drivers
- Revenue fell 48% year over year, primarily as Tier 1 customers drew down excess inventory rather than taking new EyeQ SoC shipments. EyeQ revenue declined $233 million, including a 56% reduction in volume; SuperVision-related revenue increased $14 million.
- Systems shipped fell to approximately 3.6 million from 8.1 million. EyeQ SoCs accounted for approximately 72% of revenue, compared with 88% a year earlier. Average system price increased approximately 13%, mainly due to a higher share of SuperVision revenue.
- Gross margin contracted to 23% from 45%. The company cited product mix, greater amortization impact relative to revenue, and higher EyeQ SoC costs versus the lower-cost inventory held at the start of 2023.
- Operating cash flow declined by $131 million, principally reflecting the larger net loss. Accounts receivable fell to $120 million from $357 million at year-end, while inventory increased.
- Revenue is concentrated: four customers each contributed 14%–20% of Q1 revenue. China revenue was $86 million, down from $159 million; U.S. revenue was $18 million, down from $80 million.
Outlook, commentary, risks and unusual items
- Management estimates customers used the vast majority of excess inventory in Q1 and expects orders to normalize during the remainder of 2024, but states there is no guarantee. No quantitative revenue or earnings guidance is provided in the filing text.
- Management expects 2024 capital expenditures to be slightly above 2023, mainly for equipment supporting next-generation products. It expects near-term R&D expense to increase, including as a percentage of revenue, and long-term R&D investment to continue.
- On March 18, Mobileye announced it would wind down its Aftermarket Solutions Unit as demand and the addressable market for retrofitted ADAS declined. The plan includes more than 100 employee reductions and approximately $4 million of termination costs recognized in Q1.
- Supply-chain exposure remains significant: Mobileye buys all EyeQ SoCs from a single supplier and relies on limited suppliers for other components. Customer production changes, renewed shortages, and customer concentration could adversely affect results.
- Conflict in Israel had not materially affected operations or financial results to date; approximately 4% of employees had been called to reserve duty as of May 1. Management expects no material short-term impact but notes the situation could escalate.
- A securities class action and a patent infringement action were filed in January 2024; a derivative action was filed in April. The company intends to defend the matters and recorded no provision for them as of March 30.
- Mobileye and Intel are negotiating changes to their LiDAR collaboration after Mobileye chose a different LiDAR technology; final commercial terms remain subject to negotiation. In April, the compensation committee approved $26.6 million of RSUs, totaling 967,000 units, vesting over three years.
- Management stated disclosure controls were effective and there were no material changes to internal control over financial reporting during the quarter.
Most important facts for investors to verify
- Whether customer inventory drawdown is substantially complete and orders normalize as management expects.
- How revenue, shipments, gross margin and operating cash flow trend as volumes recover and product mix changes.
- Customer concentration, automaker production levels, and the resilience of the single-source EyeQ supply chain.
- Progress and costs associated with the aftermarket wind-down, next-generation products, and planned capital spending.
- Developments in the disclosed legal matters, Israel-related operating conditions, and negotiations over the Intel LiDAR agreement.
- Non-GAAP results alongside GAAP losses; the company excludes acquisition-related amortization and share-based compensation from certain non-GAAP measures.