Robosense Technology Co., Ltd (2498) Earnings Call Transcript & Summary

Thank you, operator. Hello, everyone, and welcome to Robosense earnings conference call for the third quarter of 2025. The company's earnings results were released earlier today and are available on our IR website, www.ir.robosense.ai, the website of Hong Kong Stock Exchange, www.hkexnews.hk as well as on [ Newswire ] services. Today, you will hear from Mr. Mark Qiu, our CEO; and Mr. Kelvin Lau, our CFO, who will take you through the company's operational and financial results for the third quarter of 2025. After their prepared remarks, Mark and Kelvin will be available to answer any questions. Before we continue, please note that the discussion today may contain certain forward-looking statements, which involve known and unknown risks, uncertainities and other factors, which are beyond our control and may cause our actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In light of the risks and uncertainties, the inclusion of forward-looking statements in this discussion should not be regarded as a representation by the Board of Directors or Robosense that plans and the objectives will be achieved, and the shareholders and the investors of the company should not place undue reliance on such statements. Robosense does not assume any obligation to update any forward-looking statements, except as required under applicable law. Also, please note that some of the information to be discussed, including non-IFRS financial measures are not required by or represented in accordance with IFRS. The IFRS financial measures and information reconciling this non-IFRS financial measure to Robosense's financial results prepared in the accordance with IFRS are included in the Robosense's third quarter results announcement, which has been posted on the company's IR website at www.ir.robosense.ai and the website of Hong Kong Stock Exchange, www.hkexnews.hk. Finally, as a reminder, this conference call is being recorded, including a webcast of this conference call is available on Robosense's Investor Relations website. I will now turn the call over to Mark Qiu, the CEO of Robosense.

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Thank you, Mark. Now I would like to take you through the third quarter of 2025 results financial highlights. Our total revenue was RMB 407.1 million for the third quarter of 2025, representing a slight decrease of 0.2% from RMB 407.9 million for the same period of 2024. Our revenue from the sales of products was RMB 387.1 million for the third quarter of 2025, representing a slight increase of 0.6% from RMB 384.8 million for the same period of 2024. The modest growth was driven by a sharp increase in sales of LiDAR products for robotics and others, which offset the decline in sales of LiDAR products for ADAS applications. The total number of our LiDAR products sold increased to approximately 185,600 units in the third quarter of 2025 from approximately 138,500 units in the same period of 2024, representing a year-on-year increase of 34%. In the third quarter of 2025, our revenue generated from sales of LiDAR products for ADAS applications reduced to RMB 244.7 million from RMB 329.5 million in the same period of 2024, representing a year-on-year reduction of 25.7%. However, the number of LiDAR products sold for ADAS application increased to approximately 150,100 units in the third quarter of 2025 from approximately 131,300 units in the same period of 2024, representing a year-on-year increase of 14.3%. The reduction of revenue from sales of LiDAR products for ADAS application was mainly due to the decrease in average unit price of products for ADAS application to approximately RMB 1,600 per unit in the third quarter of 2025 from approximately RMB 2,500 per unit in the same period of 2024. The decrease in the average unit price of product for ADAS applications was mainly because the sales volume of our lower-priced MX series products has been increased in the third quarter of 2025. Our revenue generated from sales of product for robotics and others increased from RMB 55.3 million in the third quarter of 2024 to RMB 142.4 million in the same period of 2025, representing a year-on-year growth of 157.8%. The total number of LiDAR products sold for robotics and others increased to approximately 35,500 units in the third quarter of 2025 from approximately 7,200 units in the same period of 2024, representing a year-on-year increase of 393.1%, primarily attributable to the increase in demand from robotic customers for our new E1R and Airy LiDAR products as well as for our mechanical LiDAR products such as Helios and Bpearl series in the third quarter of 2025. The average unit price of product decreased to approximately RMB 4,000 per unit in the third quarter of 2025 from approximately RMB 7,700 per unit in the same period of 2024, primarily because the unit price of our new E1R and Airy products were lower than that of those mechanical LiDAR products in the third quarter of 2025. Our revenue from the sales of solutions was RMB 11.9 million for the third quarter of 2025, representing a decrease of 45.9% from RMB 22.1 million in the same period of 2024. Despite a decline in the of delivered solution projects to 27 projects in the third quarter of 2025 from 119 projects in the same period of 2024, the average selling price per project increased to approximately RMB 442,400 in the third quarter of 2025 from approximately RMB 185,500 in the same period of 2024, primarily attributable to the increase in demand from customers for more customized perception-related solutions in the third quarter of 2025. Our cost of sales was RMB 309.7 million for the third quarter of 2025, representing a decrease of 8% of RMB 336.7 million for same period of 2024. The year-on-year decrease was mainly attributable to the decrease in raw material procurement cost and the adoption of our in-house developed SOC processing chips. We recorded a gross profit of RMB 97.4 million for the third quarter of 2025, representing an increase of approximately 36.8% from RMB 71.2 million for the same period of 2024. Our gross margin improved to 23.9% for the third quarter of 2025 from 17.5% for the same period of 2024. Our overall gross margin was largely affected by the changes in the sales contribution from different product categories. The increase in overall gross margin was mainly attributable to the gross margin improvement of our -- of both our LiDAR product for ADAS applications and LiDAR products for robotic and others. For our LiDAR products for ADAS applications, we reported a gross profit of RMB 44.3 million in the third quarter of 2025 as compared to a gross profit of RMB 46.5 million in the same period of 2024. The slight decrease in gross profit was mainly attributable to the decrease in revenue from sales of LiDAR products for ADAS applications. However, the gross profit margin for this product category improved to 18.1% in the third quarter of 2025 from 14.1% in the same period of 2024. The improvement of the gross profit margin was primarily attributable to the decrease in raw material procurement costs and the adoption of our in-house developed SOC processing chips, which have lower cost as compared to the FPGA acquired from third-party suppliers. For our sales of LiDAR products for robotics and others, the gross profit increased to RMB 53 million in the third quarter of 2025 from RMB 19.1 million in the same period of 2024, representing a year-on-year increase of 176.8%. Such increase was mainly attributable to the significant increase in revenue from sales of LiDAR products for robotics and others. The gross profit margin for this product category increased to 37.2% in the third quarter of 2025 from 34.6% in the same period of 2024. This was primarily attributable to the reduction of raw material procurement cost and production overheads resulting from the increase in scale of production. For our provision of LiDAR perception solutions, we recorded a gross profit of RMB 7.9 million and RMB 13.2 million in the third quarter of 2025 and 2024, respectively. Such decrease was mainly attributable to the decrease in revenue from the provision of LiDAR perception solution. However, the gross profit margin for this product category increased to 66.4% in the third quarter of 2025 from 59.6% in the same period of 2024. This was primarily attributable to the increase in average selling price per project in the third quarter of 2025. Our R&D expenses were RMB 179.7 million for the third quarter of 2025, representing an increase of 18.5% from RMB 151.7 million for the same period of 2024. The year-on-year increase was mainly due to, number one, the higher employee benefit expenses resulting from the increase in share-based compensation. And number two, the increase in raw material consumable expenses and design and development expenses incurred in developing new and more advanced products. Our R&D expenses, excluding share-based compensation as a percentage of revenue increased to 37.6% in the third quarter of the 2025 from 34.9% in the same period of 2024. Our sales and marketing expenses were RMB 34.9 million for the third quarter of 2025, representing an increase of 32% from RMB 26.4 million for the same period of 2024. The year-on-year increase was really due to, number one, the higher employee benefit expenses, which was mainly attributable to the increase in employee remuneration package and share-based compensation. And number two, the increase in business development and promotional activities as the number of customer and relevant business activities have been increased. Our sales and marketing expenses excluding share-based compensation as a percentage of revenue increased to 7.7% in the third quarter of 2025 from 5% to 9% (sic) [ 5.9% ] in the same period of 2024. Our G&A expenses were RMB 47.9 million for the third quarter of 2025, representing an increase of 31.6% from RMB 36.4 million for the same period of 2024. The year-on-year increase was mainly due to the higher employee benefit expenses, which were mainly attributable to increase in employee remuneration package, severance payments and share-based compensation. Our G&A expenses excluding share-based compensation as a percentage of revenue increased to 10.5% in the third quarter of 2025 from 8.5% in the same period of 2024. Our net loss was RMB 100 million for the third quarter of 2025, representing an increase of 20.2% from a net loss of RMB 83.2 million for the same period of 2024. All right. This concludes my financial highlights section. Operator, we are ready for questions.

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