Mobileye Raises 2026 Operating Income Outlook to $420 Million Despite Revenue Decline
Key Facts
Mobileye raised its 2026 adjusted operating income guidance to a range of $380 million to $420 million, compared with previous guidance of $365 million to $425 million, following its third-quarter results. The company attributed the guidance revision mainly to higher-than-expected deliveries of its SuperVision system and the pass-through of elevated memory costs during the quarter. But passing through those costs added about $7 million to revenue with no gross margin, according to the company. Mobileye said SuperVision deliveries exceeded its expectations, though that did not offset the effect of a decline in the system’s average selling price. The average price fell 5%, with sales mix and SuperVision volumes affecting performance.
Profitability improved year over year, while the company continued to post a loss under generally accepted accounting principles (GAAP). Net loss narrowed to $67 million in the third quarter from $96 million a year earlier. Adjusted net income, by contrast, rose 25% to $95 million, compared with $76 million in the same period last year. Adjusted diluted earnings per share were $0.11, versus $0.09 a year earlier, while the company posted a GAAP diluted loss of $0.08 per share, compared with a loss of $0.12. The figures show how the company’s result differs depending on the accounting basis, as adjusted earnings per share do not represent GAAP profit.
Operationally, the GAAP operating loss narrowed to $82 million from $109 million in the third quarter of 2025. Adjusted operating income rose 20% to $89 million, compared with $74 million a year earlier. The GAAP gross margin increased to 53% from 48%, but the adjusted gross margin fell to 64% from 67%. The margins’ differing directions point to a mixed picture between GAAP and adjusted measures during the quarter. Adding memory costs to revenue without a gross margin also limits their effect on gross profitability, according to the company’s explanation.
Mobileye attributed the 5% decline in the system’s average selling price mainly to a larger share of exports by Chinese automakers, which carry less software content and lower pricing, and to lower SuperVision volumes. Higher EyeQ volumes partly offset this effect, the company said. In the first nine months of 2026, EyeQ shipments rose 11% compared with the same period a year earlier. This came as estimated global vehicle production fell 1% over the same period. The comparison shows EyeQ shipment growth outpacing the global production trend, even as product mix and average-price pressures emerged during the quarter.
On liquidity, the company said it generated $303 million in net cash from operating activities during the nine months ended September 26, 2026. Cash and cash equivalents, marketable securities and deposits totaled $1.5 billion on that date. It also said the benefit associated with the research and development tax credit, recorded in 2026, is not expected to begin generating cash receipts before 2028. The company said collection begins about two years after the benefit is recognized in accounting. This timing places the expected cash collection in 2028, after the benefit was recorded in the accounts during 2026.
On the market, Globes reported that Mobileye shares were weakening after the results, and suggested this may be linked to the lack of an announced successor to Chief Executive Amnon Shashua. In July, the company announced that Shashua had informed the board of his intention to step down once a successor was appointed, and that the board would conduct a comprehensive search for a new chief executive. Mobileye had not announced a successor at the time of Globes’ report. Amid pressure on the shares, Investing.com reported that RBC Capital downgraded Mobileye to “Underperform” from “Sector Perform” and cut its price target to $5 from $7. RBC linked its concerns to the risk of advanced driver-assistance systems being replaced and to Volkswagen’s role in premium products.