Arbe Robotics (ARBE) Q2 2025: OEM Radar Selection Narrows to 2 Contenders, Paving Way for 2028 Launch
Arbe Robotics advanced to the final stage in multiple OEM radar selection processes, with the field narrowing to just two viable high-end imaging radar providers. The company’s technology is increasingly seen as essential for next-generation autonomy, and non-automotive markets are emerging as a valuable near-term revenue lever. Investors should watch for formal OEM design wins and non-auto contract announcements as Arbe prepares for a 2028 passenger vehicle production ramp.
Summary
- OEM Radar Selection Narrows: Arbe now competes as one of only two high-end imaging radar suppliers in late-stage OEM processes.
- Non-Automotive Upside Emerges: Defense and smart infrastructure traction is outpacing expectations and diversifying near-term revenue.
- 2028 Platform Ramp in Focus: Arbe’s radar is positioned for adoption in 2028 vehicle platforms, with revenue inflection expected in 2027–2028.
Performance Analysis
Arbe’s Q2 2025 results reflect a business in transition from R&D focus to commercial readiness, with revenue of $0.3 million and a net loss of $10.2 million. The company’s backlog stands at $0.5 million, and operating expenses decreased slightly year over year, primarily due to lower share-based compensation. Adjusted EBITDA loss widened to $8.9 million, reflecting ongoing investments in technology and customer engagement as the company advances through OEM selection processes.
While near-term revenue remains modest, the company’s financials are structured for long-term scale, supported by $26.3 million in cash and $35.7 million in long-term deposits. Management reiterated its full-year revenue guidance of $2 million to $5 million, with a clear expectation that revenue will be weighted toward late 2025 as design wins and non-automotive contracts convert to shipments.
- Revenue Concentration Remains Low: Automotive production ramp is still two years out, keeping current revenue and backlog limited.
- Cost Controls Show Discipline: Operating expenses fell modestly even as R&D and customer engagement remain central.
- Capital Reserves Provide Runway: Cash and deposits enable sustained investment through the OEM decision cycle.
The core financial story remains one of disciplined spend and strategic patience as Arbe seeks to capture large-scale OEM production contracts and diversify with non-automotive wins.
Executive Commentary
"Our main target is to win this with the large OEMs of the world, and as each month passes, we are making progress. Our bearer sees the strategic order for the use of its chipsets in large-scale data collection projects. These chipsets will shift and will be deployed on fleets of more than 100 vehicles, operated by leading automotive manufacturers."
Kobi Morengo, Co-Founder & Chief Executive Officer
"Total operating expenses for Q2 2025 were $11.3 million down from $11.6 million in Q2 2024. The decreasing operating expenses were primarily attributable to lower share-based compensation expenses resulting from the full vesting of prior grants and to a reduced volume of new grants."
Karim Sinto, Chief Financial Officer
Strategic Positioning
1. Finalist in OEM Imaging Radar Selection
Arbe’s technology is now one of just two contenders in multiple global OEM radar selection processes, as automakers recognize that only high-resolution imaging radar can meet the requirements for Level 3 and above autonomy. The competitive field has narrowed, with OEMs leveraging Arbe’s chipsets for large-scale data collection, a precursor to full design integration. The company anticipates formal design wins for 2028 model-year platforms, with revenue impact beginning in 2027.
2. Non-Automotive Markets Accelerate
Defense and industrial applications are emerging as meaningful near-term growth drivers. Arbe’s partner SEMSRUGS is delivering radars for defense contracts and expanding into smart infrastructure, with recurring support and maintenance fees now in place. Margins in these sectors are higher than automotive, and management expects new verticals to be announced in the coming quarters, providing incremental revenue as automotive ramps.
3. Regulatory Tailwinds in China
China’s proposed ADAS (Advanced Driver Assistance Systems) regulation, which mandates more advanced radar capabilities, creates a significant opportunity for Arbe’s technology through its tier 1 partner Hirain. The LRR-615 radar, powered by Arbe’s chipset, is ready for high-volume production and positions the company to capture share as new standards are adopted in 2026 and beyond.
4. Ecosystem Partnerships and Platform Readiness
Arbe’s collaborations with leading tier 1s (Magna, Hirain) and NVIDIA, as well as its readiness to support large-scale production, are central to its go-to-market strategy. The company is focused on being a platform enabler rather than a niche supplier, with its chips designed to scale across auto and industrial use cases.
Key Considerations
This quarter marks a strategic inflection for Arbe, as the company moves from technology validation to commercial selection and begins to build a multi-vertical revenue base. The following factors will define the trajectory through 2026:
Key Considerations:
- OEM Decision Timelines Remain Uncertain: While Arbe is a finalist, automaker selection cycles are lengthy and subject to macro delays.
- Non-Auto Revenue Can Bridge the Gap: Defense and infrastructure contracts offer higher margins and near-term cash flow, though at lower volumes than automotive.
- Capital Allocation Prioritizes Longevity: Disciplined spend and healthy reserves support ongoing R&D and customer engagement.
- Regulatory Shifts Could Accelerate Adoption: New requirements in China and potentially other regions may drive earlier demand for high-end radar.
Risks
Arbe faces extended OEM decision cycles and is exposed to the risk of further delays in automotive production ramps, especially as broader economic uncertainty impacts automaker capital spending. The concentrated nature of the radar selection process means that losing key bids could materially impact long-term revenue. Competitive dynamics, especially with the other high-end radar finalist, remain a persistent risk, as does the pace of regulatory adoption in China and other markets.
Forward Outlook
For Q3 2025, Arbe guided to:
- Revenue weighted toward the back half of the year as contract milestones are achieved
- Continued disciplined operating expense management
For full-year 2025, management maintained guidance:
- Annual revenue of $2 million to $5 million, with ramp expected in late 2025
- Adjusted EBITDA loss between $29 million and $35 million
Management highlighted several factors that will shape the outlook:
- OEM radar selection decisions progressing to final stages, with Arbe among the last two contenders
- Anticipated acceleration in non-automotive contracts, particularly in defense and smart infrastructure
Takeaways
Arbe Robotics is now a finalist for next-generation automotive radar, with a clear path to high-volume production in 2028 platforms and revenue inflection in 2027.
- OEM Selection Process Tightens: Arbe’s position as one of two remaining candidates signals increasing validation and potential for large-scale design wins, but also heightens execution risk if selection is lost.
- Non-Automotive Markets Gain Urgency: Defense and smart infrastructure are providing earlier-than-expected revenue and margin upside, partially offsetting the long automotive cycle.
- Watch for Contract Announcements: Investors should monitor the pace of non-automotive deal flow and formal OEM design win disclosures as leading indicators of long-term value realization.
Conclusion
Arbe Robotics enters the second half of 2025 with a narrowed competitive field and a credible path to multi-year growth, though execution risk remains tied to OEM decision timelines and non-automotive contract conversion. The company’s strong cash position and technology validation provide a foundation, but investors must track both auto and non-auto milestones closely.
Industry Read-Through
Arbe’s progress underscores a broader industry pivot toward high-resolution imaging radar as a requirement for Level 3 autonomy and beyond, with OEMs consolidating supplier relationships to a select few. The regulatory shift in China is a leading indicator that advanced radar will become table stakes for global ADAS platforms, creating a rising tide for radar suppliers with scalable, validated technology. Non-automotive adoption, especially in defense and infrastructure, is emerging as a critical buffer for suppliers navigating the long automotive design-in cycle. For industry peers, the message is clear: only differentiated, production-ready radar platforms are likely to survive the coming consolidation.