Mobileye Discloses Third Quarter 2022 Results and Business Update

Forward-Looking Statements

Mobileye’s Business Outlook and other statements in this release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including Mobileye’s 2022 full-year guidance and descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast,” or the negative of these terms, and other similar expressions, although not all forward-looking statements contain these words. We base these forward-looking statements or projections, including Mobileye’s full-year guidance, on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at such time. You should understand that these statements are not guarantees of performance or results. The forward-looking statements and projections are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements or projections. Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements and projections.

Important factors that may materially affect such forward-looking statements and projections include the following: future business, social and environmental performance, goals and measures; our anticipated growth prospects and trends in markets and industries relevant to our business; business and investment plans; expectations about our ability to maintain or enhance our leadership position in the markets in which we participate; future consumer demand and behavior; future products and technology, and the expected availability and benefits of such products and technology; development of regulatory frameworks for current and future technology; ​projected cost and pricing trends; ​future production capacity and product supply; potential future benefits and competitive advantages associated with our technologies and architecture and the data we have accumulated; the future purchase, use and availability of products, components and services supplied by third parties, including third-party IP and manufacturing services; uncertain events or assumptions, including statements relating to our addressable markets, estimated vehicle production and market opportunity, potential production volumes associated with design wins and other characterizations of future events or circumstances; future responses to and effects of the COVID-19 pandemic; availability, uses, sufficiency and cost of capital and capital resources, including expected returns to stockholders such as dividends, and the expected timing of future dividends; tax- and accounting-related expectations.

Detailed information regarding these and other factors that could affect Mobileye’s business and results is included in Mobileye’s SEC filings, including the company’s Registration Statement (No. 333-267685) on Form S-1, particularly in the section entitled the “Risk Factors”. Copies of these filings may be obtained by visiting our Investor Relations website at ir.mobileye.com or the SEC’s website at www.sec.gov.

Third Quarter 2022 Financial Results

Mobileye Group

Condensed Combined Statements of Operations (Unaudited)

 
    Three months ended        Nine months ended 
U.S. dollars in millions, except share and per share amounts     October 1,       September 25,       October 1, September 25,
     

 

2022

 

     

 

2021

 

     

 

2022

 

 

2021

 

Revenue    

 $

450

 

     

 $

326

 

     

 $

1,304

 

 $

1,030

 

Cost of revenue    

 

233

 

     

 

173

 

     

 

682

 

 

529

 

                         
Gross profit    

 

217

 

     

 

153

 

     

 

622

 

 

501

 

Operating expenses                        
                         
Research and development, net    

 

206

 

     

 

132

 

     

 

565

 

 

390

 

Sales and marketing    

 

27

 

     

 

33

 

     

 

91

 

 

98

 

General and administrative    

 

9

 

     

 

8

 

     

 

27

 

 

26

 

                         
Total operating expenses    

 

242

 

     

 

173

 

     

 

683

 

 

514

 

Operating income (loss)    

 

(25

)

     

 

(20

)

     

 

(61

)

 

(13

)

Interest income with related party    

 

5

 

     

 

-

 

     

 

9

 

 

2

 

Interest expense with related party    

 

(11

)

     

 

-

 

     

 

(20

)

 

-

 

Other income (expense), net    

 

1

 

     

 

-

 

     

 

6

 

 

-

 

                         
Income (loss) before income taxes     

 

(30

)

     

 

(20

)

     

 

(66

)

 

(11

)

Benefit (provision) for income taxes    

 

(15

)

     

 

(6

)

     

 

(46

)

 

(11

)

                         
Net income (loss)     

 $

(45

)

     

 $

(26

)

     

 $

(112

)

 $

(22

)

Earnings (loss) per share:                        
Basic and diluted    

 $

(0.06

)

     

 $

(0.03

)

     

 $

(0.15

)

 $

(0.03

)

                         
Weighted-average number of shares  used in computation of earnings (loss) per share (in millions):                        
Basic and diluted    

 

750

 

     

 

750

 

     

 

750

 

 

750

 

 

Mobileye Group

Condensed Combined Balance Sheets (Unaudited)

 

As of

U.S. dollars in millions     October 1,     December 25,
     

2022

   

2021

Assets            
Current assets            
Cash and cash equivalents     

871

   

616

Trade account receivables, net    

222

   

155

Inventories    

105

   

97

Related party loan    

901

   

1,326

Other current assets    

63

   

76

Total current assets    

2,162

   

2,270

Non-current assets            
Property and equipment, net    

354

   

304

Intangible assets, net    

2,658

   

3,071

Goodwill    

10,895

   

10,895

Other long-term assets    

95

   

115

Total non-current assets    

14,002

   

14,385

TOTAL ASSETS    

16,164

   

16,655

Liabilities and Equity            
Current liabilities            
Accounts payable and accrued expenses    

160

   

160

Employee related accrued expenses    

75

   

102

Related party payable     

966

   

163

Dividend Note with related party    

3,520

   

Other current liabilities     

59

   

49

Total current liabilities    

4,780

   

474

Non-current liabilities            
Long-term employee benefits    

54

   

94

Deferred tax liabilities    

162

   

181

Other long-term liabilities     

8

   

17

Total non-current liabilities    

224

   

292

TOTAL LIABILITIES    

5,004

   

766

Equity            
Parent net investment    

11,178

   

15,884

Accumulated other comprehensive income (loss)    

(18)

   

5

TOTAL EQUITY     

11,160

   

15,889

TOTAL LIABILITIES AND EQUITY    

16,164

   

16,655

 

Mobileye Group

Condensed Combined Statements of Cash Flows (Unaudited)

 
  Nine months ended      Nine months ended 
U.S. dollars in millions October 1,     September 25,
 

2022

   

2021

CASH FLOWS FROM OPERATING ACTIVITIES        
Net income (loss) 

(112)

   

(22)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation of property and equipment

17

   

12

Share-based compensation

112

   

73

Amortization of intangible assets

413

   

368

Other

35

   

(27)

Changes in operating assets and liabilities:      
Decrease (increase) in trade accounts receivables

(67)

   

(57)

Decrease (increase) in other current assets 

28

   

(4)

Decrease (increase) in inventories

(8)

   

30

Increase (decrease) in account payables and accrued expenses

22

   

31

Increase (decrease) in employee-related accrued expenses and long term benefits

(67)

   

20

Increase (decrease) in other current-liabilities

10

   

15

Decrease (increase) in other long term assets

15

   

(1)

Increase (decrease) in long-term liabilities

(3)

   

Net cash provided by operating activities

395

   

438

CASH FLOWS FROM INVESTING ACTIVITIES        
Purchase of property and equipment

(79)

   

(98)

Repayments of loan due from related party

734

   

Issuance of loan to related party

(336)

   

(390)

Net cash provided by (used in) investing  activities

319

   

(488)

CASH FLOWS FROM FINANCING ACTIVITIES        
Net transfers from Parent

99

   

69

Dividend paid

(336)

   

Share-based compensation recharge

(200)

   

Deferred offering costs

(14)

   

Changes in withholding tax related to employee stock plans

   

(2)

Net cash provided by (used in) financing activities

(451)

   

67

Effect of foreign exchange rate changes on cash and cash equivalents

(6)

   

Increase in cash, cash equivalents and restricted cash

257

   

17

Balance of cash, cash equivalents and restricted cash, at beginning of year

625

   

93

Balance of cash, cash equivalents and restricted cash, at end of period

882

   

110

 

Mobileye Group

Reconciliation of GAAP Gross Profit and Gross Margin to Non-GAAP Adjusted Gross Profit and Adjusted Gross Margin (Unaudited) 3

 
  Three Months Ended   Nine Months Ended
U.S. dollars in millions October 1,   September 25,   October 1, September 25,
 

2022

 

2021

 

2022

2021

   

% of

   

% of

   

% of

 

% of

 

Amount

Revenue

 

Amount

Revenue

 

Amount

Revenue

Amount

Revenue

Gross profit 

$

217

48

%

 

$

153

47

%

 

$

622

48

%

$

501

49

%

Add: Amortization of acquired intangible assets

 

115

26

%

 

 

100

31

%

 

 

355

27

%

 

300

29

%

Add: Share-based compensation expense

 

-

-

 

 

 

-

-

 

 

 

-

-

 

 

-

-

 

Adjusted Gross Profit 

 $

332

74

%

 

 $

253

78

%

 

 $

977

75

%

 $

801

78

%

 

3 Adjusted gross margin is calculated as adjusted gross profit as a percentage of revenue

 

Mobileye Group Reconciliation of GAAP Operating Income and Operating Margin to Non-GAAP Adjusted Operating Income and Operating Margin (Unaudited) 4

 
  Three Months Ended   Nine Months Ended
U.S. dollars in millions October 1,   September 25,   October 1,   September 25,
 

 2022

 

 2021

 

 2022

 

 2021

   

% of

   

% of

   

% of

   

% of

 

Amount

Revenue

 

Amount

Revenue

 

Amount

Revenue

 

Amount

Revenue

Operating income (loss) 

 $

(25

)

-6

%

 

 $

(20

)

-6

%

 

 $

(61

)

-5

%

 

 $

(13

)

-1

%

Add: Amortization of acquired intangible assets

 

131

 

29

%

 

 

123

 

38

%

 

 

413

 

32

%

 

 

368

 

36

%

Add: Expenses related to the IPO 

 

1

 

0

%

 

 

-

 

0

%

 

 

4

 

0

%

 

 

-

 

0

%

Add: Share-based compensation expense

 

36

 

8

%

 

 

24

 

7

%

 

 

112

 

9

%

 

 

73

 

7

%

Adjusted Operating Income 

 $

143

 

32

%

 

 $

127

 

39

%

 

 $

468

 

36

%

 

 $

428

 

42

%

 

4 Adjusted operating margin is calculated as adjusted operating income as a percentage of revenue

 

Mobileye Group

Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income (Unaudited)

 

Three Months Ended

Nine Months Ended

U.S. dollars in millions

October 1,

September 25,

October 1,

September 25,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 $

(45

)

 

 $

(26

)

 

 $

(112

)

 

 $

(22

)

Add: Amortization of acquired intangible assets

 

131

 

 

 

123

 

 

 

413

 

 

 

368

 

Add: Expenses related to the IPO 

 

1

 

 

 

-

 

 

 

4

 

 

 

-

 

Add: Share-based compensation expense

 

36

 

 

 

24

 

 

 

112

 

 

 

73

 

Less: Income tax effects

 

(9

)

 

 

(14

)

 

 

(27

)

 

 

(42

)

Adjusted Net Income

 $

114

 

 

 $

107

 

 

 $

390

 

 

 $

377

 

 

Supplemental Information (Unaudited) – Average System Price

           
 

Q3 2021

 

Q4 2021

 

Q1 2022

 

Q2 2022

 

Q3 2022

EyeQ and SuperVision revenue (U.S. dollars in millions)  

$

         308

 

$

         337

 

$

         378

 

$

         441

 

$

         432

Number of systems shipped (in millions)  

 

            6.7

 

 

            7.0

 

 

            7.4

 

 

            8.5

 

 

            8.2

Average system price (U.S. dollars)  

$

        45.7

 

$

        48.3

 

$

        51.0

 

$

        52.0

 

$

        53.0


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