Mobileye Global Inc. (MBLY Quick QuoteMBLY - Free Report) closed 2025 on a stronger footing than expected, even as short-term pressures weighed on its quarterly numbers. The company remains a key enabler of advanced driver assistance systems and autonomous driving, with deep relationships across global automakers.

While fourth-quarter results reflected softer volumes and margin pressure, the full-year performance and forward pipeline tell a more constructive story. As Mobileye steps into 2026, the focus shifts from recovery to execution, especially around advanced ADAS, robotaxis and its expanding role in physical AI.

Q4 and 2025 Earnings Snapshot

Mobileye reported adjusted earnings per share of 6 cents for the fourth quarter of 2025, matching expectations but falling from 13 cents a year earlier. Revenues came in at $446 million, slightly ahead of estimates but down from $490 million in the prior-year quarter. The year-over-year decline was mainly due to an 11% drop in EyeQ system-on-chip volumes.

Margins also came under pressure in the quarter. Gross margin fell by nearly 390 basis points due to lower revenues, higher per-unit EyeQ costs and an unfavorable product mix. Operating income declined further as expenses remained elevated.

However, the full-year picture was still encouraging. Mobileye’s 2025 revenues grew 15% to $1.89 billion, adjusted operating profit rose 45% to $280 million, and operating cash flow increased by more than 50% to $602 million.

EyeQ unit shipments were 35.6 million for the year, well above the company’s earlier expectations of 32-34 million. This stronger volume performance underscored resilient demand for Mobileye’s core ADAS offerings, particularly as customer inventories remained extremely lean.

The balance sheet also strengthened meaningfully. Cash and cash equivalents rose to $1.83 billion by the end of 2025, providing ample flexibility to invest in advanced technologies and strategic acquisitions.

2026 Outlook

For 2026, Mobileye expects revenues in the range of $1.9-$1.98 billion, modestly above the $1.89 billion generated in 2025. Gross margin is expected to decline year over year due to vehicle mix, EyeQ5-related cost pressure, and the impact of a dual-chip OEM program that lowers average selling prices.

Adjusted operating income is guided between $170 million and $220 million, reflecting ongoing cost pressures. Operating expenses are expected to rise to around $1.1 billion in 2026, representing roughly 10% growth. Underlying expense growth is closer to 5%, driven by wage inflation and infrastructure investments needed to support advanced product launches in 2026 and 2027. Additional costs will come from Mentee Robotics R&D and foreign exchange headwinds linked to the strengthening Israeli shekel.

The company expects EyeQ volumes to edge higher to just above 37 million units. About 10 million units are projected for the first quarter alone, implying roughly 19% year-over-year growth in the first quarter. Volumes are then expected to normalize to a little over 9 million units per quarter for the remainder of the year.

EyeQ6 and Robotaxis Anchor MBLY’s Next Growth Phase

Mobileye has entered 2026 with strong strategic momentum. A major highlight is the EyeQ6 High chip, which has already secured the first two large-scale programs with leading global OEMs. These wins position the chip for mass-market adoption across multiple vehicle segments and price points.

One of these wins is a high-volume Surround ADAS program with a major U.S. OEM, which will deploy the EyeQ6 High processor and Mobileye’s full software stack across a wide range of vehicles within a software-defined architecture. Combined expected volumes from Mobileye’s first two Surround ADAS customers now total around 19 million units, with additional OEM engagements likely to convert during 2026.

Mobileye’s deepening partnership with Volkswagen (VWAGY Quick QuoteVWAGY - Free Report) remains a key strategic positive, strengthening its position in large-scale autonomous mobility programs. Volkswagen Autonomous Mobility has laid out an expanded plan to launch commercial robotaxi services in six cities by the end of 2027 and scale the fleet to more than 100,000 vehicles by 2033. For Mobileye, a key milestone is expected in 2026, when Volkswagen’s MOIA robotaxi fleet plans to remove safety drivers, marking a shift from pilot testing to early commercial operations.

Notably, Mobileye’s long-term revenue visibility continues to improve. Its eight-year expected automotive revenue pipeline reached $24.5 billion at the end of 2025, up 42% from the prior update at the end of 2022. Growth reflects repeat ADAS wins with all top-10 customers, the addition of new OEMs, and expanding adoption of advanced solutions within the Volkswagen ecosystem.

The acquisition of Mentee Robotics, expected to be closed in the first quarter of 2026, adds a new dimension to the story. This move extends Mobileye’s reach beyond automotive autonomy into humanoid robotics. Management views this as a natural extension of its physical AI capabilities, leveraging shared engineering, safety frameworks and AI model development.

Investor Takeaway

Several tailwinds support Mobileye’s outlook for 2026. Customer inventory levels ended 2025 at very low levels, which should support near-term restocking. Demand for advanced ADAS and Surround ADAS is also rising as automakers roll out more software-defined vehicles. At the same time, progress on EyeQ6 adoption, robotaxi commercialization with Volkswagen, and the company’s expansion into robotics will be important in shaping investor confidence. A growing long-term order pipeline adds support to the strategic story.

However, challenges remain. Mobileye continues to face foreign exchange pressure, ongoing cost and pricing headwinds tied to older EyeQ5 programs, and supply chain risks related to memory availability and pricing. China volumes are also expected to decline modestly in 2026.

Even so, these pressures appear manageable against the company’s strengthening product portfolio and growing order visibility. If execution stays on track, 2026 could mark a shift toward more sustainable long-term growth for Mobileye.