Arbe Robotics (NASDAQ:ARBE) reported first-quarter financial results on Thursday. The transcript from the company's first-quarter earnings call has been provided below.

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Summary

Arbe Robotics reported Q1 2026 revenue of $0.5 million, up from $0.4 million in Q1 2025, with a backlog of $1 million as of March 31, 2026.

The company is transitioning from a chipset-focused automotive company to a supplier of complete radar solutions, expanding into markets like China and Robotaxi, and offering end-to-end radar systems.

Arbe Robotics raised $18.5 million in gross proceeds to support its growth phase, and despite a Q1 2026 net loss of $9.4 million, it has $53.6 million in cash and cash equivalents.

The company reaffirmed its 2026 guidance of $4 million to $6 million in revenue and an adjusted EBITDA loss of $28 million to $31 million.

Management highlighted strategic partnerships with Nvidia and the expansion into defense and AI applications, positioning Arbe Robotics to deliver meaningful value in the next wave of autonomy and AI.

Full Transcript

OPERATOR

Good day and welcome to the RB Robotics first quarter 2020 results conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on a touchtone phone. To withdraw your question, please press Star then two. Please note today's event is being recorded. I would now like to turn the conference over to Kenny Green of EK Investor Relations. Mr. Green, please go ahead.

Ram Mahness (Chief Executive Officer)

Thank you. Good day to all of you and welcome to our conference call to discuss results for the first quarter of 2026. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the Investor Relations section of the company's website. Today we are joined by Ram Mahness, Arbe Robotics' Chief Executive Officer who will begin with a business and strategic update Kobi Marenko, President and co Founder who will provide perspective on Arbe Robotics' long term direction and Karin Pinto Furman, Chief Financial Officer, will review the financials. Following management's formal remarks, we will open the call for the question and answer session and with that I'd like to hand the call over to Ram. Ram, please go ahead. Thank you Kenny Good morning everyone and thank you for joining us to review Arbe's first quarter 2026 results. I stepped into the CEO role in April and I see significant potential ahead for Arbe Robotics. During the first quarter we made strong progress and accelerated on the strategy we set out at the start of the year. Today I will focus on the main areas where we are making progress. Arbe is growing from a chipset focused automotive company into a supplier of complete radar solutions across automotive and increasingly into adjacent markets. This quarter we hit several commercial milestones that reflect this transition. We began shipping chips into China through our Tier one hiring. We received orders from robotaxi customers. We also received orders for data collection programs with global automakers and leading mobility players. I will now go deeper into each of these areas starting with automotive. Let's start with China, the fastest moving automotive market in the world. During the quarter we shipped the initial batch of chipsets to Hywan. These chipsets supported production of 48 by 48 channel radar, a project that we announced in December in which Hywan is developing a Level 4 autonomous vehicle solution for a Chinese automaker. In parallel, Hirain is developing new radar also based on our chipset with 24x12 channels. Designed as a lower cost system that can be used by a wider range of vehicles. This configuration complements its existing high end 48 x 48 radar system based on our chipset. With our technology, Hirain is becoming a key radar platform player in China. It can offer OEMs a path from high end radar systems that are available today in China to full 2K ultra high resolution performance. China sold 34.4 million vehicles in 2025 to a local Tier 1 RB gang's direct access to one of the world's largest and fastest moving markets for Level 2 and Level 3 deployments. Turning to mobile taxis, we received orders for our Fenix radar system from global robotaxic companies. These systems support level 4 autonomy and poor 360 degree sensing. This clearly shows that our high resolution radar delivers the performance and coverage required for Level four. More broadly, we see strong and growing interest for our automotive chipset. We are taking part in data collection programs with good global automakers and leading mobility players. We have progressed into advanced selection processes with specific Chinese and European automakers. These evaluations focus more and more on the specific use cases where cameras and lidars fall short and where imaging radar becomes the key sensor. This frankens our industry interest in our radar technology as a core sensing platform for autonomous driving program. This interest comes alongside an important shift in the automotive market. Recently, several leading OEMs have revisited their Level 3 program. We don't see this as a rejection of Eyes of Autonomy, we see it as a reset going back to the right basics of autonomy. The first generation level 3 systems had clear limitations. They were geofence, some were limited in speed, some limited to good weather only, and many never reached commercial deployment. Beside the maturity of the algorithm, we believe that one other main reason for that is related to the performance of the sensor and specifically imaging radar not providing the needed performance. Based on our discussions with many OEMs, automakers are now actively looking at the next generation EYES of platforms and looking for sensing that can support leverage use cases. This is exactly the gap our high resolution radar is designed to fill. We also wanted to understand what drivers want from the eyes of autonomy. A survey of 1,000 people across the US, Europe and Asia came with a clear message showing that drivers are willing to pay, willing to switch their car and even their brand for fully operational Level 3 Level 4 Autonomous driving consumers are ready for eyes of autonomy, but only when it is safe, smooth and reliable. That is exactly the capability that Arbe's ultra high resolution radar enabled. You are invited to our website to learn more about this survey. Before moving beyond automotive, let me briefly touch on physical AI. Because it's becoming central to where our technology plays. We are seeing how the revolution in AI and machine learning is introducing new generation of algorithms. Those algorithms and specifically Vision Language Action Model are transforming how intelligent systems sense, understand and interact with the physical world. In automotive it drives nothing but a breakthrough progress for level three and level four capabilities and beyond automotive it opens a wide opportunity across robotics, logistics and other autonomous systems. These physical AI systems are only as good as as the real world data they receive, especially in safety critical environments such as vehicles. This is where our best fits. Our radar provides dense sensing, long range, low latency and consistent performance in all weather. This is exactly the type of machine understandable input that AI driven autonomy needs. During the quarter, Nvidia announced its expanded the Global Drive Hyperion ecosystem to accelerate the road to full autonomy and cited AAVE as part of its platform. Our ongoing work with Nvidia on radar based free space mapping and AI driven automotive capabilities is one example of how we are placing AAVE at the center of this major shift. Now let's look beyond automotive where our technology is opening meaningful new opportunities. The first important development is that ABE has began selling complete end to end radar systems in addition to selling chipsets. This allows us to address markets where consumers want a full radar solution and where sales cycles are much shorter. We already started shipping these systems to players across defense, homeland security, transportation applications, perimeter security, physical AI and several other applications. To support this, we have also set up dedicated production lines to scale system manufacturing. Taken together, these milestones show that our leadership in automotive radar can extend into perception critical market. We are expanding our reach, broadening our opportunities and significantly increasing our total addressable market. With that, I'll turn the call over to our President and co founder Kobi Marengo.

Kobi Marengo

Thank you Ron and good morning everyone. Stepping into the President role, my focus is on Arbe Robotics' long term strategy, our strategic partnerships and guiding investments that accelerate AAWE's next phase of growth and commercialization. During the first quarter we strengthened our balance sheet and we closed an underwritten registered direct offering that raised $18.5 million in gross proceeds. This gave us the financial flexibility to invest in Arbe Robotics' current phase of fast growth. What gives me a great deal of confidence is what this quarter demonstrates. Arbe Robotics' technology platform is broader and can focus on multiple end markets as well as automotive. The same ultra high resolution radar that we built for automotive can be and is now beginning to be adopted much more broadly. We see increased interest and potential and in some cases initial system sales in homeland security and smart infrastructure as RAM already mentioned. And finally, the rise of physical AI together with the OEM's demand for better autonomy solutions plays directly to our strengths. High definition, long range, all condition, environment sensing. RAM has recently stepped into the CEO role with strong execution focus, deep product knowledge and the commercial understanding that is needed. And this will take Arbe from where we are today to Scaled Radar Systems company across many markets. I have worked closely with RAM over many years and I have full confidence in his abilities as well as that of the entire team to bring AURBE to the next phase. I am more excited than ever about Arbe Robotics' potential over the coming quarters and years. With that, let me turn the call over to Corinne to review the financials.

Karin Pinto Furman

Thank you Kobi and hello everyone. Let me review our financial results for the first quarter of 2026 in more detail. Revenue for the first quarter of 2026 totaled $$0.5 million compared to $$0.4 million in Q1 2025. Backlog as of March 31, 20202026 is $$1 million. Gross profit for Q1 2026 was a negative $0.$1 million compared to a negative $0.3 million in the same period last year. Turning to operating expenses, total operating expenses for Q1 2026 were $11.2 million, down from $$13 million.$1 million in Q1 of 2025. The decrease in operating expenses was primarily driven by lower share based compensation expenses, reflecting earlier grants that are now fully vested along with last year's award being structured with half in cash and half in equity. The decrease was also related to the Q1 25 takeout expenses which are reduced as we advance toward productization. This decrease in operating expenses was partially offset by the weakening of the US Dollar mainly against the Israeli Shekel and to a lesser extent by labor based provisions and a merit increase. Operating loss for the first quarter of 2026 was $11.3 million compared to an operating loss of $$13 million.4 million in the first quarter of 2025. As previously announced, during the quarter we implemented cost reduction measures that are expected to reduce our ongoing operating expenses by approximately 15%, with the full impact expected to take Effect Starting during Q2 adjusted EBITDA, a non GAAP measurement which excludes expenses for non cash shared based compensation and for non reoccurring items was a loss of $9.9 million in Q1 of 2026 compared to a loss of $9.7 million in the first quarter of 2025. We believe that this non GAAP measurement is important in management's evaluation of our use of cash and in planning and evaluating our cash requirements for the coming period. Net loss for the first quarter of 2026 was $9.4 million compared to a net loss of $13 million in the first quarter of 2025. Net loss in Q1 2026 included $1.9 million in financial income compared to $$0.5 million of financial expenses in Q1 of 2025. As of March 31, 2026, Arbe held $$53.6 million in cash and cash equivalents and short term bank deposits deposits Turning to our outlook, we are reaffirming the 2026 guidance we provided in February 26th. We continue to expect full year revenue in the range of $4 million to $6 million and an adjusted EBITDA loss in the range of $28 million to $3$1 million loss. Now we will be happy to take your questions.

Operator

Operator thank you. We will now begin the question and answer session. To ask a question, you may press Star than one on your telephone keypad. To withdraw yourself from cue, please press Star than two. Once again, that's Star than one if you have a question and our first question today comes from George Gianarcus with Canacord Genuity. Please go ahead.

George Gianarcus (Analyst at Canaccord Genuity)

Hi everyone, thank you for taking my questions. I was wondering if you can go into a little bit more detail around the traction you're seeing in defense related applications, drones, etc. Thank you.

Ram Mahness (Chief Executive Officer)

So thank you George for the question. So basically around the defense there are a few applications that our radar can function. The first is is not so different from our automotive applications. So it's autonomous vehicles, whether they are supply tracks or even armored vehicles, all of them want to drive safe, especially off road in environments that are full of dust, rain, fog and all of the main problems that the radar is the best sensor for that. And for that we already have a client, the American army that bought from us hundreds of units and we see another we believe that we will get another order for that as well. Second application is defense, defending perimeter. Whether it's from human beings that trying to get into this area of a perimeter that we want to defend, or even drones that can attack or you know, throw some supply or drugs to those areas. And we definitely see this as something that it's application that our radar can supply. But on top of it there is, I would say that those are the two main initiations that we are in, but there is few other smaller applications that the radar, especially our radar, can help with. And you know, if a year ago we were not even considering those markets, today we are focusing on that and I'm trying to, we are trying to do business development with all of the leading players with the big names of the defense industry as well as the new players. Also this market is going through a real transformation. The players that were there 10 years ago, like the Lockheed Martin of this world, are also changing as well as there is a new emerging players that taking their market share and we are trying to work with the old players as well as with the new players and provide our solution.

George Gianarcus (Analyst at Canaccord Genuity)

Thank you. And maybe just as a follow up, you obviously mentioned the Nvidia reference design. I'm wondering what the conversations have been like. How much additional traction or how has that changed any of the conversations you're having with OEMs and other partners in terms of deploying your imaging radar alongside Nvidia?

Ram Mahness (Chief Executive Officer)

Thank you. Yes, I think that this question refers a lot on who are the players that really can potentially bring autonomous vehicle stack, the autonomous vehicle software stack to the market? Because eventually autonomous driving is all about software, all about algorithms and machine learning. And for sure, Nvidia is the top player in the market today on that. So this is very important from all perspective of all the OEMs, either they selected Nvidia or even if they didn't select yet, I think they are all looking at what's going on in the industry and who has the potential to get the autonomous vehicle stack to the finish line and really provide a reliable and sustainable solution to the consumer. So eventually you want to get into your car in the morning and drive safely to work and let the car drive it for you so you can do something else and buy your time back by using the autonomous vehicle feature of your car. And there is a race right now. Many players are working towards that for sure. Nvidia is probably the strongest, strongest player there. So it's very, very important for everyone what's going on with the Nvidia platform and the Nvidia autonomous vehicle stack. For sure there are other players as well also some OEMs are trying to build their own homegrown stack. So there are these players as well. But everybody is looking at what the others are doing and there is definitely a clear race right now on that. I think that it's really important to see the progress that we've seen recently on the algorithm level and the breakthrough that we all see in our everyday life in deep learning and AI and AI. This comes also into place with the autonomous vehicle software. And we'll see this coming into the market pretty soon, starting with China and moving forward with the Western world. Thank you so much.

Operator

Thank you. And as a reminder, if you'd like to ask a question, Please press star then 1. Our next question comes from Casey Ryan at Amurex. Please go ahead.

Casey Ryan (Analyst at Amurex)

Hello, good evening everyone. Thanks for the terrific update. I had a couple questions. Would you care to describe. It sounds like you have multiple robo taxi opportunities. Is there a regional tilt to those or are they global, meaning North America, Europe, China, or are they focused in one region?

Ram Mahness (Chief Executive Officer)

So the opportunities that we see right now are coming from North America and we see also in China. So the mainstays are North America and China.

Casey Ryan (Analyst at Amurex)

Okay, that's terrific. And then when you talk about supplying sort of the like full radar system versus a chipset, can you talk about maybe what the revenue differential or sort of the pricing differential is between those two? You know, as we think about unit growth in both products.

Ram Mahness (Chief Executive Officer)

Yes. So if we look at it, there are several factors that influence the change and significantly increase in the average unit price (AUP) in the average unit price. When we talk about specifically the non automotive, the non private automotive, two factors. One is the fact that we are selling a complete system, not just the chipset, and that obviously drives the average unit price up, but also the volumes are much lower. So when we work On a Level 3 project with an OEM, the volumes are really high. Okay. But then the negotiation power and the economy scale drives the average unit price (AUP) down. When you talk here about those projects, if it's a robotaxi, robotruck, commercial vehicles, defense applications, the volumes are significantly lower on one hand side, but the average unit price (AUP) is significantly higher because of the, because there is no economy of scale to the level that you have in the automotive industry. So we see a significantly higher average unit price (AUP) in the business of the radars or the complete system compared. Compared to the automotive chipset. Okay, and then, and then just sort of, you know, a small thing. But do you think ultimately long term the gross margins for both product lines are similar or do you think, you know, sort of, sort of the, the complete radar system might be lower long term? Yes. So usually the gross margins, if you look at the mid scale project on systems, are a bit Lower than when you talk about chipsets. They are a bit lower. That's always expected. Because when we charge for chipsets, we charge for the differentiation that we do. Okay. When you charge for system, you charge also for the mechanics for the passive or other components that are there, basically. So when you look just the code margin. Okay. They might be the profit though the dollar profit per system is significantly higher. Yeah. Okay. Okay. When you look percentage wise. Yes, it's lower. When you look at the absolute dollar value, it's higher. And of course worth mentioning the volumes which are significantly different between systems and chipsets.

Casey Ryan (Analyst at Amurex)

Yeah, no, understood. That's terrific. And then just one last question for me, maybe Karine, on the backlog, are we to take that as being kind of a 12 month backlog number or shorter or longer?

Karin Pinto Furman

No, this is 12 months, correct.

Casey Ryan (Analyst at Amurex)

Oh, okay, terrific. Thank you. And yeah, and like maybe to clarify for myself, that 1 million, it's fair to think would be consumed in 26 or are you saying it's kind of 12 months from the end of Q1? Basically

Karin Pinto Furman

it's 12 months from the end of 2026, but I assume all of it will be in 26, despite how.

Casey Ryan (Analyst at Amurex)

Oh, okay, perfect. Understood. Thank you. It's a very positive update. I'll get out of the queue and let others ask questions.

Karin Pinto Furman

Thank you.

Operator

Thank you. And our next question today comes from Matthew Gilenko at Maxim Group. Please go ahead.

Matthew Gilenko (Analyst at Maxim Group)

Hey, thanks for taking my question. I'm curious what the cost was to stand up full production line for radar and I guess given your current capacity there, do you expect that's sufficient to meet what you have in the pipeline for defense and AI applications? Or do you expect you'll need to add the capacity over time?

Ram Mahness (Chief Executive Officer)

So we built our production line to supply the current capacity that is needed, which we assume going to be hundreds of systems per month, thousands of systems per year. The investment is not so dramatic. It will be on the low side of the hundreds of thousands of dollars, not more than that. And we have the ability to increase this capacity as time goes by and as the demand grows during the coming quarters. And we also started discussions with some contact manufacturers for expanding this production line further down the road. Excellent. Thank you. Thank you. And that does conclude our question and answer session for today. I'd like to turn the conference back over to Mr. Mockness CEO for any closing remarks. On behalf of the entire management team of Arbe, I would like to thank you, our shareholders, for your continued interest and long term support of our business. This quarter marks the start of a new chapter for Arbe, a chapter focused on turning our technology leadership into commercial scale across many markets. We have our first system level order, growing robotaxi traction and expanding Chinese market opportunities through hiring and a clear position at the center of the next wave of autonomy and physical AI. Based on all of this, we believe Arbe is well placed to deliver meaningful value. We look forward to updating you on our progress next quarter and I personally look forward to taking on the CEO role to bring Arbe to the next level in its development. And with that, we end our call. Have a good day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.