Mobileye Q2 Earnings Surpass Expectations on R&D Incentive Grant

MBLY's Shipment Growth Meets Pricing Pressure

EyeQ and SuperVision revenues totaled $485 million compared with $481 million in the year-ago quarter. The number of systems shipped increased from 9.7 million, reflecting higher customer demand.

Average system price declined to $48.50 from $49.70. Mobileye attributed the pressure mainly to higher-than-expected export volumes from China-based automakers, which carry lower EyeQ average selling prices.

Mobileye's Margins Reflect Product Mix

GAAP gross profit declined 7% to $235 million, while gross margin contracted to 46% from 50%. The lower EyeQ average selling price and a larger share of SuperVision revenues weighed on profitability because SuperVision includes more hardware content.

Adjusted gross profit fell 4% to $333 million. Adjusted gross margin narrowed 303 basis points to 66%, showing that shipment growth did not fully offset the less favorable pricing and product mix.

MBLY Benefits From the New R&D Law

Adjusted operating income climbed 46% to $155 million, lifting adjusted operating margin to 31% from 21%. The improvement primarily reflected the R&D incentive grant recognized in the quarter for the entire first half of 2026.

Mobileye recorded roughly $110 million on a GAAP basis and $93 million on a non-GAAP basis as an offset to second-quarter R&D expenses. The law applies from the beginning of 2026 and has no scheduled expiration date.

Mobileye Advances ADAS and Robotaxi Programs

The company added a high-volume Cloud-Enhanced ADAS design win with Stellantis. Gross profit per unit for the program is expected to be roughly in line with Surround ADAS and more than twice Mobileye's current average base ADAS profitability.

Robotaxi preparations with Volkswagen Group's MOIA remained on track. MOIA began public user testing in Hamburg with safety drivers, while Mobileye advanced vendor discussions and Moovit applications for its planned vertically integrated mobility service.

MBLY's GAAP Results Continue to Improve

The GAAP operating loss narrowed to $30 million from $74 million, while operating margin improved to negative 6% from negative 15%. Net loss narrowed to $21 million from $67 million, and GAAP loss per share narrowed to 3 cents from 8 cents.

Mobileye Maintains Strong Liquidity

Operating cash flow totaled $210 million in the first six months of 2026, while capital expenditures were $51 million. The company repurchased $24 million of shares through the end of the second quarter under its $250 million authorization.

As of June 27, 2026, Mobileye had $1.31 billion in cash and cash equivalents, down from $1.84 billion as of Dec. 27, 2025. Inventories declined to $310 million from $327 million at the end of 2025, while accounts receivable increased to $208 million from $131 million.

MBLY Raises Its 2026 Outlook

MBLY now expects 2026 revenues of $1.97-$2.02 billion, up from the prior range of $1.94-$2.02 billion. The new midpoint is $20 million higher and implies year-over-year growth of 4-7%.

Adjusted operating income is projected at $365-$425 million, sharply above the previous estimated range of $185-$235 million. The revision mainly reflects an expected non-GAAP R&D grant benefit of $180-$200 million for the year.

MBLY currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Releases From Auto Space

General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.

Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. 

Genuine Parts GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research