SERV Q2 Loss Wider Than Expected, Revenues Increase Y/Y, Stock Down

SERV’s Q2 Earnings & Revenue Discussion

The company posted a loss of 80 cents per share compared with the Zacks Consensus Estimate of a loss of 69 cents, representing an unfavorable surprise of 15.9%. The loss widened from 36 cents per share a year ago.

Revenues surged 404.4% year over year to $3.24 million but missed the Zacks Consensus Estimate of $3.54 million by 8.5%. The company said growth was supported by a diversified revenue portfolio spanning delivery, branding and software services.

Serve Robotics’ Q2 Segment Discussion

Fleet Services revenues reached $2.31 million, up 598.5% year over year from $0.33 million. The increase reflected broader deployment and diversification across delivery and branding services, with advertising accounting for nearly 50% of food delivery revenues.

Software Services revenues increased 199% to $0.93 million from $0.31 million. Total revenues also rose 8.5% sequentially from $2.98 million, although software services declined from the first quarter while fleet services advanced.

SERV's Cost Base Climbs With Expansion

SERV reported a gross loss of $8.78 million in the quarter compared with a loss of $2.86 million incurred in the year-ago quarter. Cost of revenues increased to $12.02 million from $3.50 million. Gross margin improved sequentially as the mix of higher-margin recurring revenues increased.

General & administrative expenses increased to $24.84 million from $8.08 million in the year-ago quarter. Operations expenses rose to $7.86 million from $2.12 million.

Research & development expenses increased to $20.28 million from $9.12 million, while sales and marketing expenses rose to $4.30 million from $0.46 million. SERV reported a loss from operations of $66.07 million compared with a loss of $22.64 million a year ago. Adjusted EBITDA loss widened to $44.47 million from $14.94 million.

Serve Robotics' Fleet and Partnership Progress

Daily active robots averaged 792 in the quarter, up 395% from 160 a year earlier. Daily supply hours increased 469.3% to 9,809 from 1,723, reflecting a substantially larger operating footprint across the outdoor and indoor fleets.

Revenues derived from the DoorDash partnership increased nearly 50% sequentially and exceeded management's expectations. Serve Robotics also added a delivery partnership with NoScrubs Laundry, broadening its applications beyond existing food, health care and grocery delivery operations. 

Health care revenues remained steady and in line with management's expectations. The company signed seven multiyear contract extensions with hospital customers and added two new hospitals during the first half of 2026.

SERV's Balance Sheet Retains Strong Liquidity

The company exited the quarter with cash and cash equivalents of $79.11 million, down from $106.24 million as of Dec. 31, 2025. Short-term marketable securities totaled $156.3 million, while long-term marketable securities were $5.00 million. Total liquidity stood at $240.4 million as of June 30, 2026.

Net cash used in operating activities was $84.74 million during the first six months of 2026 compared with $25.43 million a year earlier. Financing activities provided $85.33 million, primarily supported by $84.92 million in net proceeds from at-the-market common-stock offerings.

SERV Cuts Its 2026 Revenue Outlook

Serve Robotics revised its 2026 revenue guidance to $9-$10 million. The reduction reflects lower-than-expected delivery volumes through the Uber Eats partnership, including weakness experienced in the second quarter and the removal of projected demand for the second half.

The company lowered its 2026 non-GAAP operating expense outlook to $140-$150 million from $160-$170 million. Management plans to concentrate its fleet and capital behind higher-return opportunities while continuing investments in autonomous-network expansion and technology.

SERV’s Zacks Rank & Key Picks

Serve Robotics currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are NVIDIA Corporation NVDA, Broadcom Inc. AVGO and Dell Technologies Inc. DELL.

NVIDIA carries a Zacks Rank #2 (Buy) at present. It has a trailing four-quarter earnings surprise of 5.5% on average. Shares of NVDA have declined 19.8% year to date. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 EPS indicates 90.6% growth on a 106.9% revenue rise from the year-ago levels.

Broadcom currently holds a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 2.2%, on average. Shares of AVGO have gained 22.7% year to date.

The Zacks Consensus Estimate for Broadcom’s fiscal 2026 EPS implies a 72.1% rise on 66% revenue growth from the year-ago levels.

Dell currently carries a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 18.7%, on average. Shares of DELL have surged 238.7% year to date.

The Zacks Consensus Estimate for Dell’s fiscal 2027 sales and EPS indicates 82.5% and 67.6% growth, respectively, from the year-ago levels.

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