Mobileye (MBLY) Q4 2025: IQ Volume Surges 19% in Q1 Guide, Advanced ADAS Pipeline Accelerates
Mobileye’s Q4 call signaled a step-function in ADAS adoption, with Q1 IQ unit guidance up 19% YoY, and a robust pipeline for next-gen surround ADAS and autonomous mobility. Despite margin headwinds and muted China volumes, execution on OEM wins and the Menti Robotics acquisition sharpen the company’s edge in both automotive and physical AI, setting up a pivotal 2026-2027 product cycle.
Summary
- ADAS Pipeline Momentum: Major surround ADAS wins with two top-six OEMs drive a flywheel of new engagements.
- Robotaxi and Robotics Expansion: Volkswagen ecosystem commitment and Menti Robotics acquisition position Mobileye for multi-market scale.
- Margin and Cost Pressures: Mix shift and FX headwinds weigh on 2026 profitability even as volume outpaces OEM production.
Performance Analysis
Mobileye ended 2025 with revenue above the high end of guidance, driven by a 15% YoY increase and strong IQ chip volume that reached 35.6 million units for the year. The company’s outperformance was attributed to incremental upside in global auto production, new IQ program launches, and particularly robust demand from China OEMs, though management remains cautious on China’s 2026 outlook. Adjusted operating income grew 45% YoY, reflecting both operating leverage and a favorable product mix in advanced driver-assistance systems (ADAS).
Q4 saw a non-recurring $7 million workforce efficiency charge, but underlying demand trends remained positive with inventory at tier-one customers ending “extremely low.” Mobileye guided for 10 million IQ units in Q1 2026, up 19% YoY, but expects a normalization to slightly above 9 million units per quarter for the balance of the year. Notably, the company’s top 10 customers are expected to reduce production by 2%, yet Mobileye’s volume with these customers is projected to rise 6%, highlighting continued share gains.
- Volume Outpaces OEM Production: IQ shipments are set to grow even as auto production remains flat or declines among key customers.
- China OEMs Normalize: After a strong 2025, Mobileye expects a half-million unit decline in China, reflecting conservative visibility and export-driven demand.
- Gross Margin Compression: Higher IQ5 content and a dual-chip program dilute margins, compounded by FX-driven cost inflation.
Operating expenses will rise 10% in 2026, driven by R&D for advanced products and Menti integration, with FX headwinds from Israeli shekel appreciation partially offset by recent workforce initiatives. The company’s cash flow and margin profile remain resilient, but the guide reflects disciplined conservatism amid macro and supply chain uncertainty.
Executive Commentary
"Demand for our products came in higher than expected throughout 2025, demonstrating the resilience of the auto industry and our product offerings. Results were quite strong, with revenue up 15%, adjusted operating profit up 45% and operating cash flow up more than 50%."
Amnon Shashua, CEO & President
"2025 IQ volume was 35.6 million across the full year, which was well above our original expectations... We expect about 10 million IQ units shipped in Q1, which supports an outlook of approximately 19% year-over-year growth in the first quarter."
Moran Shemesh, CFO
Strategic Positioning
1. Surround ADAS: Flywheel Effect and OEM Conviction
Mobileye’s surround ADAS, a next-generation driver-assistance platform that consolidates safety and convenience features on a single ECU (electronic control unit), is gaining rapid traction. The company secured wins with two of the world’s top six OEMs, with these programs set for mass-market, high-volume vehicle integration. Management highlighted a “flywheel effect” as these wins drive increased engagement across the OEM base, reinforcing Mobileye’s perceived reliability and cost efficiency for large-scale deployments.
2. Autonomous Mobility: Volkswagen Ecosystem and Urban Rollouts
The Volkswagen/Moya partnership and ecosystem expansion to 100,000 robotaxi units by 2033 cements Mobileye’s role as a systems provider for large-scale autonomous fleets. The first major public milestone will be the removal of safety drivers in 2026, with initial city rollouts targeting hundreds of vehicles per location. The manufacturing capacity and funding commitment from Volkswagen positions Mobileye for rapid scale if early deployments succeed, with recurring revenue models layered atop upfront system sales.
3. Robotics Adjacency: Menti Acquisition and Physical AI Synergy
The acquisition of Menti Robotics, a vertically integrated humanoid robotics firm, marks a decisive move into industrial and logistics automation. Menti’s differentiators include full-stack autonomy (no teleoperation), passive demonstration learning, and cost-optimized design for both structured (warehouses) and unstructured (home) environments. Mobileye’s simulation, mapping, and computer vision tools are expected to accelerate Menti’s path to commercialization, with pilot deployments in the “high tens” of units planned for 2026 and higher-volume production in 2027.
4. Technology Architecture: Fast Think, Slow Think, and AI Innovation
Mobileye’s technology stack now incorporates “fast think, slow think” architecture, leveraging vision-language models (VLMs) and artificial community intelligence (ACI) for scalable, context-aware autonomy. This approach enables robust scene understanding and reduces compute cost by offloading non-critical reasoning to the cloud, while simulation-driven reinforcement learning shortens the path to safe, scalable AV and robotics deployments.
Key Considerations
Mobileye’s 2025 results and 2026 outlook reflect a business in transition from ADAS leadership to broader physical AI opportunities. The company is executing on a multi-pronged strategy, but faces cost and margin pressures as it invests for the next wave of growth.
Key Considerations:
- OEM Share Gains Against Flat Production: Mobileye’s volume growth outpaces auto market trends, signaling competitive displacement in core ADAS.
- Margin Dilution from Mix and Dual-Chip Programs: Higher IQ5 content and a dual-chip bridge for regulatory compliance lower average selling price (ASP) and gross margin per unit.
- FX and Cost Inflation: Israeli shekel appreciation increases dollar-denominated costs, partially offset by workforce streamlining and hedging.
- China Demand Caution: After outsized 2025 growth, Mobileye guides for a moderate pullback in China OEM volumes, citing visibility limits and export-driven exposure.
- Advanced Product Launches Set for 2027: Major revenue inflections from Porsche, Audi, and robotaxi programs are not expected until 2027, with 2026 characterized as an execution year.
Risks
Mobileye’s 2026 margin outlook is pressured by product mix, ongoing IQ5 cost headwinds, and FX volatility, with gross margin expected to decline YoY. The company’s reliance on key OEM programs and conservative China volume assumptions introduce uncertainty, while supply chain issues (notably memory) remain a watchpoint. Regulatory timelines and competitive intensity in both ADAS and robotics could delay or dilute the impact of advanced product launches.
Forward Outlook
For Q1 2026, Mobileye guided to:
- IQ unit shipments of approximately 10 million, up 19% YoY
- Revenue normalization to slightly above 9 million units per quarter for the remainder of the year
For full-year 2026, management maintained guidance:
- Revenue of $1.9 billion to $1.98 billion, or flattish to 5% growth
- Operating expenses up 10%, with Menti R&D and inflation as key drivers
Management highlighted:
- Surround ADAS program wins and ongoing OEM engagements as a growth engine
- Advanced product launches (supervision, chauffeur, robotaxi) expected to drive inflection beginning in 2027
Takeaways
Mobileye’s Q4 and full-year 2025 results confirm the company’s ADAS leadership and set the stage for a multi-year transition into autonomous mobility and robotics.
- ADAS Volume Leadership: Mobileye is securing share gains even as underlying auto production stalls, with surround ADAS adoption broadening across global OEMs.
- Execution on Advanced Programs: The company’s roadmap for robotaxi, supervision, and humanoid robotics is on track, but major revenue contributions are weighted to 2027 and beyond.
- Margin and Cost Watchpoints: Investors should monitor gross margin trends, FX impacts, and the ramp of advanced R&D as the business pivots to higher-value, but more complex, offerings.
Conclusion
Mobileye delivered a year of volume and revenue outperformance, but faces a transition year in 2026 as it invests in next-gen ADAS and robotics. The company’s ability to execute on its advanced product pipeline and manage cost pressures will define its trajectory as a leader in physical AI.
Industry Read-Through
Mobileye’s results highlight accelerating adoption of consolidated ADAS architectures and the growing importance of cost-efficient, scalable autonomous solutions for mass-market vehicles. OEMs are shifting from pilot projects to high-volume deployments, raising the bar for technical maturity and cost structure. The Menti Robotics acquisition signals a convergence of automotive and robotics AI, with technology and operational synergies likely to shape both sectors. Competitors in ADAS, AV, and robotics must now demonstrate not just technical prowess, but also the ability to scale commercially and integrate across domains.