Mobileye cites ‘excess inventory at our customers’ for Q1 guidance

The company stated, “As a result of our standard planning process for the upcoming year, including discussions with our Tier 1 customers to determine potential orders for 2024, we have become aware of excess inventory at our customers, which we believe to be 6-7 million units of EyeQ SoCs. Based on our discussions, we understand that much of this excess inventory reflects decisions by Tier 1 customers to build inventory in the Basic ADAS category due to supply chain constraints in 2021 and 2022 and a desire to avoid part shortages, as well as lower than-expected production at certain OEM’s during 2023. As supply chain concerns have eased, we expect that our customers will use the vast majority of this excess inventory in the first quarter of the year. As a result, we expect that first quarter 2024 revenue will be significantly below first quarter 2023 revenues and that we will see revenue normalized during the remainder of 2024. In FY2024 we expect total revenue in the range of $1,830 – $1,960 million. This is underpinned by expected EyeQ shipments of 31 – 33 million units (as compared to approximately 37m units in 2023) and SuperVision shipments of 175k – 195k units (as compared to approximately 100k units in 2023). We currently expect Q1 revenue to be down approximately 50%, as compared to the $458 million revenue generated in the first quarter of 2023. We also currently believe that revenue over the balance of the year will be impacted by inventory drawdowns to a much lesser extent. As a result, we expect revenue for Q2 through Q4 2024 on a combined basis to be roughly flat to up mid single-digits as compared to the same period in 2023, and we expect inventory at our customers to be at normal levels by the end of 2024. We anticipate that the lower-than-expected volumes in the EyeQ SoC business will have a temporary impact on our profitability. Similar to revenue, we expect Q1 profit levels to be significantly below the subsequent quarters. We expect Q1 2024 Operating Loss to be in the range of $257 to $242 million. Excluding amortization of intangible assets and stock-based compensation, we expect Adjusted Operating Loss in the range of $80 to $65 million in the first quarter of 2023. We expect FY2024 Operating Loss to be in the range of $468 to $378 million. We expect Adjusted Operating Income in the range of $270 – $360 million.”