Hesai Group Q1 2025 Earnings Report

Hesai Group EPS Results

• Actual EPS: -$0.02
• Consensus EPS: -$0.13
• Beat/Miss: Beat by +$0.11
• One Year Ago EPS: N/A

Hesai Group Revenue Results

• Actual Revenue: $72.39 million
• Expected Revenue: $532.16 million
• Beat/Miss: Missed by -$459.77 million
• YoY Revenue Growth: N/A

Hesai Group Announcement Details

• Quarter: Q1 2025
• Date: 5/26/2025
• Time: After Market Closes
• Conference Call Date: Monday, May 26, 2025
• Conference Call Time: 9:00PM ET

Hesai Group (NASDAQ:HSAI), through with its subsidiaries, engages in the development, manufacture, and sale of three-dimensional light detection and ranging solutions (LiDAR). Its LiDAR products are used in passenger and commercial vehicles with advanced driver assistance systems; autonomous passenger and freight mobility services; and other applications, such as delivery robots, street sweeping robots, and logistics robots in restricted areas. Hesai Group was founded in 2014 and is based in Shanghai, China.

Hesai Group Q1 2025 Earnings Call Transcript

Key Takeaways

• Hesai delivered a strong Q1 with shipments tripling to nearly 200,000 LiDAR units, net revenue rising by ~50% year‐over‐year, and net loss narrowing by 84%.
• U-tom Intelligence ranked Hesai the #1 global automotive LiDAR provider for the fourth consecutive year, with a 33% share of the automotive LiDAR market and 61% in robotaxi.
• The ATX LiDAR entered mass production in Q1, shipped ~40,000 units, secured design wins with 12 OEMs, and landed a landmark order for 200,000 units from Leap Motor.
• For Q2, Hesai forecasts revenue of RMB 680–720 million (+48–57% YoY), total shipments over 300,000 units, and expects to achieve GAAP breakeven.
• Hesai has limited exposure to U.S. tariffs (10% of 2025 revenue), has factored a 45% tariff into guidance, and is mitigating geopolitical risks via cost controls and a new Southeast Asia factory lease.

Presentation

[Operator]

Hello, ladies and gentlemen. Thank you for standing by. Welcome to Hirsai Group's First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. Please note that today's conference call is being recorded.

[Operator]

I will now turn the call over to our first speaker today, Yuan Ting Shi, the company's Head of Capital Markets. Please go ahead.

[Yuanting Shi, Head of Capital Market at Hesai Group]

Thank you, operator. Hello, everyone. Thank you for joining HeSai Group's first quarter twenty twenty five earnings conference call. Our earnings release is now available on our IR website at investor.hefeta.com as well as via newswire services. Today, you'll hear from our CEO, Doctor.

[Yuanting Shi, Head of Capital Market at Hesai Group]

David Li, who will provide an overview of our recent updates. Next, our CFO, Mr. Andrew Fan, will address our financial results before we open the call for questions. Before we continue, I refer you to the Safe Harbor statement in our earnings press release, which applies to this call as we will make forward looking statements. Please also note that the company will discuss non GAAP measures today, which are most thoroughly explained and reconciled to the most comparable measures reported on the GAAP in our earnings release and SEC filings.

[Yuanting Shi, Head of Capital Market at Hesai Group]

With that, I'm pleased to turn over the call to our CEO, Doctor. David Li. David, please go ahead.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Thank you, Yuan Ti, and thank you, everyone, for joining our call today. Let's start with an overview of this quarter's progress. We began with a strong start in 2025, fueled by outstanding momentum in our ADAS and robotics segment and backed by solid financial results. Our shipments more than tripled year over year to nearly 200,000 LiDAR units in the first quarter despite the impact of typical seasonal patterns. This explosive growth suited an almost 50% year over year jump in our net revenue.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Thanks to sharp execution, operational discipline and cost control, we're also able to reduce our net loss by impressive 84% year over year. Meanwhile, Hussai's leadership is being recognized across the industry. For the fourth consecutive year, UO Intelligence, a highly respected independent research firm in Europe, ranked HASAI the number one global leader in automotive LIDAR market share. According to Youth twenty twenty four analyses, we ranked number one in three major categories by revenue with a 33% share of global automotive LIDAR market, a 26% share of the global passenger car LIDAR market, and a dominant 61% share of the global robotaxi market. These achievements speak volumes at the pace at which we innovate, scale, deliver and reinforce our position at the forefront of the industry.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Next, let's dive into our latest business highlights, starting with an accelerating momentum in the ADAS market. The twenty twenty five Shanghai Auto Show, one of the world's largest and the most influential auto event, featured over 100 vehicle models with cutting edge LiDAR technology. Hussai stood out with 12 OEMs at the show using LiDAR technology, and among the twenty twenty five production models making their debut, Hussai had the highest number of model integrations. The event shows that automakers are rapidly implementing intelligent driving across their lineups, and that LiDAR is fast becoming a must have for elevating safety in everyday passenger cars. Our ATX LiDAR is the embodiment of our core belief.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Safety is not optional Never second best, and without limit, Designed to be affordable, ultra compact, and offer best in class performance in its pricing category, ATX has been a true champion driving the democratization of intelligent driving. The sensor has already secured design wins with 12 major OEMs. In May, LIATO announced its entire L Series EV lineup will be integrated with our ATL LiDAR, a specialized variant of ATX, as standard configuration, delivering even sharper three d perception. In addition, we recently secured a major design win with Zeeker to integrate ATX across several of its top selling models, including a standard integration in the newly launched luxury shooting brake sedan, the Zeeker seven GT. At the same time, ATX is expanding its reach with extended partnerships, lending new design wins with Great Wall Motors EV brand Aura, Cherry's iCar new energy lineup, and an upcoming model from Geely aiming at the mass market.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

With a rapidly growing roster of leading OEMs and flagship vehicles, ATX entered mass production in Q1 and made an immediate impact with close to 40,000 units shipped in its very first quarter on the market, powering models such as Leap Motors V10, the industry's first vehicle offering advanced ADAS at the RMB 120,000 price point with LiDAR hardware. According to public data, Big Motors V10 saw over 15,000 orders within just the first hour of its launch in March, with more than 70% opting for the LiDAR equipped version reflecting its strong appeal in the mass market. As part of our expanded strategic relationship with LEAP Motor, we've secured a landmark order for 200,000 units of HASAC ATX LIDAR, which is set to power a wide range of LEAP Motor's production models starting in 2025. Internationally, we are also achieving breakthroughs. In addition to our exclusive design win with a top European OEM, a multi year program across both ICE and EV platforms that extend into the next decade, we're excited to share that our business in Japan is rapidly gaining momentum.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

We recently secured a new proof of concept POC development project with a top five global Tier one supplier headquartered in Japan. This achievement marks the first time they've joined our client portfolio and is a significant milestone in our global expansion, serving as a powerful endorsement to our LiDAR technology in Japan. Hussai has been actively driving five POC programs with four top global OEMs and Tier one suppliers across Europe and Japan. Three of these programs were successfully completed in the first quarter of twenty twenty five. Evaluation results from these programs will be shared with Hussain, fostering a deeper collaboration between both parties and further refine and enhance the market appeal of a product.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

While these POCs do not yet constitute full design wins, they mark significant progress, and we're encouraged by the positive momentum as we look ahead to the next phase of development. As domestic and international OEM demand continues to evolve across Level two, Level three, and Level four platforms, we took a major step forward this April with launch of our game changing Infinity Eye or Chenlian LiDAR solution, alongside three next generation automotive grid LiDAR sensors. This new platform in conjunction with these sensors is available in three configurations. Infinity iA is built for high level, level four autonomous systems. We achieved this by combining four AT1440 ultra high definition main LiDARs with four solid state FTX LiDARs acting as a blind spot detector offering true three sixty degree coverage without blind spots.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Infinity IB is designed for level three conditional autonomy. It features one new ETX main LiDAR, the world's longest range automotive LiDAR, which can detect up to 400 meters at 10% reflectivity. That's paired with two FTX LiDARs for enhanced blind spot perception. And for level two ADAS applications, Infinity IC brings the perfect balance of performance and cost efficiency using one compact yet powerful ADS main LiDAR. A core feature of this new platform is a shared architecture across our AT, ED, and FD series that features more than 85% component commonality.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

This means faster development, lower cost, and seamless scalability. These industry leading solutions are a direct testament to our product's technical strength and our holistic approach to satisfying customer needs. Beyond delivering superior performance, we created comprehensive solutions that integrate our cutting edge technological capabilities with cost effectiveness. As a result of these strengths, we have won design wins for over 120 vehicle models across 23 OEMs worldwide. Meanwhile, the broader robotics market represents tremendous opportunities, and our LiDAR solutions sit at the core of this growth.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

According to Goldman Sachs estimates, China's autonomous mobility market is set for explosive growth and is expected to expand over the next decade from just US54 million dollars in 2025 to US47 billion dollars by 02/1935. China is clearly on track to become the world's largest autonomous mobility market. In recent months, we've been at the forefront of a new wave of robotaxi breakthroughs across China and beyond. As the mainliner supplier, we're powering mass produced next generation fleets from Baidu, Apollo Go, Didi, PonyAI, WeWrite, some of which have already expanded onto the global stage. Today, we're proud to be the world's largest LiDAR supplier for robotaxis.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

We're also thrilled to be accelerating L4 autonomy across both long haul and last mile logistics. Recently, we signed new agreement to bring our ultra high definition eighteen-fourteen-forty sensor to CargoBot's level four Robotruck fleet. At the same time, we partnered with Xelos, Jiushige, to scale its last mile delivery operations and NeoLeaks, Xinxiqi, to deploy its unmanned Level four vehicles. As Level four autonomy moves into commercial deployment, we're proud to be the LiDAR partner, helping customers scale smarter, safer, and faster. Beyond transportation, LiDAR is unlocking a world of new possibilities, each bringing fresh opportunities to reimagine the everyday and drive incremental revenue and profit.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

We believe that every robot needs LiDAR as a core three d sensor for precise positioning, mapping, navigation, and perception. Take our GT LiDAR for example. It's been chosen for the next generation robotic lawnmowers delivering superior accuracy, stability, and efficiency over traditional RTK and camera based systems, especially in signal challenged or visually complex environments. We also recently expanded our partnership with a leading smart home robotics company in China. Over the next twelve months, we expect to provide 300,000 JT units to this customer, generating meaningful revenue while helping transform everyday consumer products in intelligent, lighter driven capabilities.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

In summary, Q1 has laid a powerful foundation for what promises to be another transformative year for Hussai. We stand at a pivotal moment, where breakthrough technology meets a real market readiness. With our unmatched technology leadership and scalable production, we're leading in the industry to shape the future of mobility. And we're doing it alongside customers who share our mission to make advanced perception and safety accessible for all. Before I hand it over to Andrew, I want to share some exciting news.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

In early May, the US District Court for District of Delaware has officially dismissed Alstair's patent infringement case against us with no conditions, no financial settlement, and no injunctive relief. This brings an end to all existing IP actions against us, and it reaffirms the integrity of our technology. It's a powerful validation of the strength of our IP portfolio and the years of R and D that power it. We are proud that our innovations have not only withstood legal scrutiny, but have also prevailed. Our deep passion for technology and unwavering commitment to R and D continue to give us a real edge, and no legal tactics can change that.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

With that, I will now turn the call over to Andrew to share more details on our financial performance and outlook. Andrew, please go ahead.

[Andrew Fan, CFO at Hesai Group]

Thank you, David, and hello, everyone. I will now go through our operating and financial figures for the first quarter of twenty twenty five. For further details beyond what I cover on this call today, I encourage listeners to refer to our earnings release. Our Q1 results highlight the strong sustained momentum. Total revenues soared 46% year over year, reaching RMB525.3 million or US72.4 million dollars This impressive growth was fueled by exceptional shipment performance.

[Andrew Fan, CFO at Hesai Group]

Nearly 200,000 units were delivered during the quarter, more than triple the volume from the same period last year. Notably, this marks our third consecutive quarter of over 150% year over year shipment growth, a clear reflection of both surging market demand and the strength of our operational execution. The surge in shipments was driven primarily by the rapid adoption of our ATX LiDAR among OEMs, with large scale mass production commencing in Q1. At the same time, our JT LiDAR gained strong momentum with 45,000 units shipped in the first quarter alone, driving our robotics LiDAR shipments to nearly 50,000 units in the first quarter of twenty twenty five with over 600% year over year growth. Meanwhile, our gross margins stood healthy at 42% in Q1, and we cut operating expenses by 9% year over year, reflecting the strength of our disciplined cost management.

[Andrew Fan, CFO at Hesai Group]

As a result, we narrowed our first quarter net loss by 84% year over year to RMB70.5 million or US2.4 million while remaining non GAAP profitable for the quarter, a performance that was significantly stronger than our earlier guidance and especially notable given that Q1 is typically a seasonally slower period. Looking ahead, we are encouraged by the strong momentum we built in Q1 and we remain confident in our outlook for the rest of the year. For Q2, we are expecting net revenues of between RMB680 million or $93,700,000 and RMB720 million or $99,200,000 which would be a 48% to 57 increase year over year. This forecast conservatively takes into account the current tariff environment as well as some expected short term shifts in customer demand to Q3, mainly from U. S.-bound robotics LiDAR shipments.

[Andrew Fan, CFO at Hesai Group]

Despite these considerations, we are projecting total shipments of over 300,000 units in the second quarter, a substantial increase of almost 250% year over year. Even more encouraging, we expect to reach GAAP breakeven in Q2 and remain firmly on track to hit our full year profitability targets despite navigating a dynamic tariff environment. As the global environment continues to evolve, we will remain proactive, refining our strategies to ensure minimal disruption to our long term growth path. We are confident that our products remain highly competitive even in a tariff impacted landscape. And if cost adjustments are needed, we will take a measured approach to pricing, always focused on delivering strong value to our customers.

[Andrew Fan, CFO at Hesai Group]

At the same time, we are prioritizing long term resilience with strong momentum behind our overseas manufacturing plants to swiftly mitigate the geopolitical risks and better serve our global customers. In May, we signed a lease for our new factory in Southeast Asia, a decisive first step forward. To conclude, Q1 represents an exceptional start to 2025 with outstanding performance across revenue, shipments, margins and cost management. We have laid a solid foundation and are confident in our ability to sustain this positive momentum in the coming quarters. This concludes our prepared remarks today. Operator, we are now ready to take questions.

[Operator]

For the benefit of all participants on today's call, if you wish to ask your question to the management team in Chinese, please immediately repeat your question in English. Your first question comes from Tina Howe from Goldman Sachs. Please go ahead.

[Tina Hou, Analyst at Goldman Sachs]

Hi. Thanks management for taking my question and congrats on the strong result and strong guidance. So my question is mainly regarding our full year guidance. Since we have seen, I think starting from the beginning of the year, have seen a very strong take rate for LiDAR from both premium OEMs as well as mass market ones. So wondering if we're still maintaining our annual shipment guidance for 200,000.0 to $1,500,000 Or do we see more like upside from there?

[Tina Hou, Analyst at Goldman Sachs]

And also in related to that, as the ADAS LiDAR portion becomes larger for our entire portfolio, how do we see the trajectory for our gross margin? And where could twenty twenty five total company gross margin end up? Yes, that's my main question. Thanks.

[Andrew Fan, CFO at Hesai Group]

Tina, thanks for the question. Let me take this first. Regarding our 2025 full year guidance, despite the evolving tariff environment, I think we are still maintaining our 2025 revenue guidance at RMB3 billion to RMB3.5 billion. The total shipment remained at RMB1.2 billion to RMB1.5 billion and 40% in gross margin with 200,000,000 to $350,000,000 GAAP net profits for 2025. So we maintain our 2025 full year guidance unchanged.

[Andrew Fan, CFO at Hesai Group]

I would also like to share some information about our Q2 guidance. In the upcoming quarter, in the current quarter, our revenue is expected to reach about RMB $680,000,000 to RMB $720,000,000, strong year over year growth of about 48% to 57%, driven by the rapid adoption of LiDAR in passenger vehicles in China. This forecast conservatively takes into account the current tariff environment as well as some expected short term shifts in customer demand to Q3, mainly from The U. S.-bound robotics LiDAR shipments. In Q1, we shipped about nearly 200,000 units in total, up over 200% year over year.

[Andrew Fan, CFO at Hesai Group]

We expect the shipments to continue accelerating through the year with 2Q shipments reaching over 300,000 units. The ATX LiDAR, which has a market price at around $200 entered the mass production in Q1 and is ramping up shipments in Q2 expected to account for about 50% to 60% of total deliveries in Q2. With all these ATX LiDAR shipments in consideration, our GP margin is expected to remain healthy at around 40%. As you can tell from our Q1 gross profit margin, with the ATX ramping up, our quarter over quarter margin still enjoyed a moderate improvement. Therefore, we are still very positive about reaching the full year gross profit margin targets.

[Andrew Fan, CFO at Hesai Group]

On the bottom line, despite the typical seasonality in Q1, we achieved a non GAAP profitability and significantly narrowed our GAAP net loss by 84% for Q1, well above our previous guidance. We anticipate a further quarter over quarter improvement in Q2 reaching breakeven point on a GAAP level. That's my responses to the questions of Tina. Hopefully, that can address the questions you just mentioned.

[Tina Hou, Analyst at Goldman Sachs]

Yes, that's very clear. Thanks, Andrew.

[Operator]

Thank you. Your next question comes from Jessie Lowe from Bank of America. Please go ahead.

[Jessie Lo, Director - Equity Research at Bank of America]

Hi, David, Andrew and management team. Thank you for taking my question. My first question is regarding to the ADAS LiDAR AC train. As we currently supplies ATX or ATL and also existing ATP product to our clients? And then after we migrate to AT1440 and also ET and even potentially like next year for the overseas clients, how do you foresee this ADAS LIDAR ASP train?

[Andrew Fan, CFO at Hesai Group]

Thank you, JC. Regarding we starting from Q1, since our product mix has started to shift meaningfully with the ramp up of ATX mass production. Our blended or average ASP will be naturally brought down. But it doesn't tell the full story. It's more helpful to look at the ASP volume trends by products.

[Andrew Fan, CFO at Hesai Group]

For 2025, we have three variations of the AT series in production. First, our ATP LiDAR will see a moderate ASP decline in the low teens year over year reaching around $350 in year 2025. The ATP is expected to account for a low six figure shipment volume in 2025 with production scheduled to conclude by end of this year. Then we will have the ultra high performance AT LiDAR built for A3 application L3 applications, which carries a higher ASP of about $500 but is being shipped in relatively smaller volume this year. We expect a large scale shipments of eight of these high performance LiDAR to ramp up starting 2026.

[Andrew Fan, CFO at Hesai Group]

Lastly, our ATX LiDAR, most cost efficient compact version with a market price at $200 It started a mass production in Q1 and has already adopted has been adopted as a standard feature for many popular car models. For large volume orders, customers typically receive a modest discount of the market price, a common practice across the supply chain industry. While the ATX brings down the blended ASP, it opens up much larger volume potential. We project ATX to shift in the high six digits range, possibly up to 1,000,000 units in year 2025. At present, we do not anticipate new market products pricing another half of the ATX.

[Andrew Fan, CFO at Hesai Group]

For the foreseeable future, the ATX will remain Hesai's flagship long range front LiDAR offering high cost performances. Overall, while the mix is shifting, we believe LiDAR content per vehicle will remain stable in the long run given its irreplaceable safety and the functional value. With the adoption of L3 driving the need for multiple LiDAR units per vehicle to enable full three sixty degrees coverage, we expect LiDAR content per vehicle to stay in the range of $500 to $1,000 Jessie, that's my response to your question.

[Jessie Lo, Director - Equity Research at Bank of America]

Thank you, Andrew. And then I have a second question regarding our capacity and CapEx. So earlier in last conference call, we mentioned that towards end of this year, we will be expanding our capacity in domestically to 2,000,000 units. So could you share some of the progress on that capacity expansion? And then on top of that, you also mentioned that we just found a lease in Southeast Asia.

[Jessie Lo, Director - Equity Research at Bank of America]

And then what's current like CapEx will be look like for the Southeast Asia capacity and also the total production units and potential like profitability from this oversea plants? Thank you.

[Andrew Fan, CFO at Hesai Group]

Okay. So as of now, as you just mentioned, have about 2,000,000 production capacity guided by end of this year. To give you an update of that, we are building up new production lines starting from Q1, which will begin mass production in Q3. Therefore, this 2,000,000 production capacity is being installed on track. Also on top of that, we have more production lines in the planning stage, which might start building up in this year.

[Andrew Fan, CFO at Hesai Group]

And it typically takes us four five months to set up a new production line in China. Our operations are very lean and efficient. Meanwhile, I would also want to comment on our overseas expansion plans. We are making good progress on our overseas manufacturing plants, which are a key part of strengthening our long term resilience under the current geopolitical environment. To better manage the risk and support our global customers more effectively, we have signed the lease contract for our new overseas factories in May, making a key step forward.

[Andrew Fan, CFO at Hesai Group]

We plan to break ground later this year and expect the facility to be up and running by late twenty twenty six or early twenty twenty seven to support the demand of our overseas customers. Our highly automated production technology enables us to set up an overseas production line with controlled and efficient CapEx. To summarize, we expected that our 2025 CapEx should be around US30 million to US50 million dollars in total. David, go ahead.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Yes, this is David. I want to give you some insight on the ASP. So there are really two ways to to reduce or improve the cost structure of our products. The the first one, I I I think it's by design. It's really the the integrated circuit, the ASICs, and it's really the innovation.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

So for each generation, obviously, we designed that roughly two years ahead of the shipment and for domestic market. And the way we look at it is that, okay, we think about it, the volume, we think about where we should reach at the price and we sort of reverse that back into the cost structure. And by that time, we already factor in how many were expected to ship for the lifetime of the the product, at least for the first two, three years. So that's why if you look at the results of the ASP, it's very predictable. Right?

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

It starts with for with above $500 and slowly declined, but it it's within the expectation because we already designed the cost structure based around that. The the the second reason is that it's it's still the economies of scale. As you can see, the ATX and ATL product, what we're shipping this year, the volume is much higher than ATP. So and then it will grow to another level next year with very high certainty. That's where we see slow decline of the ASP similarly with products like ETX.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

But you will not be able to expect a decline that's falling to the range of halving that simply because if you look at the original design architecture of such a product, it will have slow decline on ASP, but it doesn't have the room to continue to the 50% level that isn't designed. So that's how we see the price will will change down the road.

[Jessie Lo, Director - Equity Research at Bank of America]

Thank you, David. Thank you, Andrew. This is super helpful. That's all from me. Thank you.

[Operator]

Thank you. Your next question comes from Tim Hideaux from Morgan Stanley. Please go ahead.

[Tim Hsiao, Analyst at Morgan Stanley]

Hi David, Andrew and management team. Thanks for taking my question. I've got two questions. The first one is about the competition. Because we noticed that one the high school provider peers is reportedly winning the project from the brands like Xiaomi and LiPmotor, which I think both are the site's key clients.

[Tim Hsiao, Analyst at Morgan Stanley]

So, with management team concerned about the potential to reshuffles, I think your company used to be the sole supplier to the top notch car EV makers like Xiaomi and what's the implication to our orders and the potential price competition? That's my first question. Thank you.

[Andrew Fan, CFO at Hesai Group]

Okay. Thank you, Chi. We do not want to comment on our market speculations because ultimately, orders and official announcements speak for themselves. The LiDAR industry has been a very competitive arena since its inception. And currently, only a few players possess massive production capabilities.

[Andrew Fan, CFO at Hesai Group]

HeSai's products have earned a strong reputation for the performance, quality and reliability over time. Notably, we have observed a consistent change of our ADAS customers switched from our competitors, which underscores He Sai's robust competitive edge. I would say, winning contract doesn't mean mass production and doesn't mean they can generate a meaningful revenue from this contract. Strategically, we chose to collaborate with high quality promising clients to ensure reasonable pricing and maintain healthy financials. Our customer bases comprise top tier OEMs, reflecting our commitment to quality partners.

[Andrew Fan, CFO at Hesai Group]

Unlike the Internet industry, the LiDAR sector requires long term perspective. Our goal is to build a sustainable industry, avoiding short term gains at the expenses of long term viability. Achieving a win win scenario with our clients is our ultimate object.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Hi. This is David. I think it's kind of unfair for Andrew to to ask Andrew to comment on competitors, especially. So maybe I'll offer some of my my my market information. I'm actually unaware of that, which you mentioned.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

I think it's the speculations always may be, and it's difficult for a existing vendor like us to prove the negative. I think it's in every customer's best interest to continue to understand what's available on the market, and they do. Everyone does that. It's just a common practice. But in the end, you have to provide your unique value proposition for your quality, your performance in the enterprise as a a combo, especially when you already are a incumbent player for OEMs.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

There's a lot of inertia in this in in terms of the data compatibility, and also their vehicles are designed around your sensor. So there is a a pretty high bar for a second vendor to be able to step in, especially during the phase where everybody is rushing to upgrade their their products to the smaller, better sensor for to take it to the next level. So the the answer is we're actually unaware of it. In the end, you should refer to the announcement of the OEM to know what's really going on, and I would not just make decisions or circulations based on rumors.

[Tim Hsiao, Analyst at Morgan Stanley]

Great. Thank you very much for sharing the details. My second question is about the new products because during the presentation, I think David also mentioned about new solutions, the Infinity Eye. So just want to gather a little bit more colors about when do you think the shipments or mass production will start and the potential client wins. And of course, the value content will be much higher, but we have the rough idea about the rough range of the value content and the margin.

[Tim Hsiao, Analyst at Morgan Stanley]

So this is the new solution. Yes, that's my second question. Thank you.

[Andrew Fan, CFO at Hesai Group]

Okay. I'll first to provide a like response to the question about our launch of the Infinity Eye. We are very proud to be the first provider of a full stack of L2 to L4 LiDAR solutions. We have seen very encouraging feedback from our OEM customers since the launch of our new Infinity I. One of its key strengths is its flexibility.

[Andrew Fan, CFO at Hesai Group]

Infinity I A, B and three are built on a shared architecture, but are tailored to different customer needs and the system setups. Depending on the OEMs vehicle platform and the software stack, each configuration can support anything from L2 all the way to L4 autonomous driving. All of our primary LiDAR sensors deliver outstanding performance, but each is optimized for specific technical priorities. The AT1440 boasts the world's highest angular resolution, delivering ultra high definition image level point clouds. The ETX, which is a core part of our Infinity IP solutions, is engineered for superior ranging capabilities, offering best in class detection distances. Both

[Andrew Fan, CFO at Hesai Group]

AT1440 and ETX are high performance LiDAS, each priced above $500 The ATX, which is a core component for Infinity IC priced around $200 represents our cost effective solutions, combining compact design with robust performances. The choice among them depends on the specific autonomous driving capabilities of our customers. All three models, I. E, AT1440, ETX and ATX are suitable for L2 to L4 applications and have all secured a series production design wins. These design wins are a strong validation of the Infinity Eye Solutions adaptability and the technical differentiation across our LiDAR portfolio.

[Andrew Fan, CFO at Hesai Group]

And as we repetitively conveyed message to the market. Though we have different price ranges for our different products, but when we design the pricing, the architecture of the product and also the cost components of the product, we always aim a healthy and relatively stable gross margin targets. Therefore, as you can tell from our historical gross profit margin performances, I would like to assure you that the gross profit margin will not fluctuate significantly in the future due to the change of product mix with these new products launching.

[Tim Hsiao, Analyst at Morgan Stanley]

Great. Thank you very much for sharing all the information and congratulations on the solid result again. Thank you.

[Operator]

Thank you. Your next question comes from Bing Rui Kui from Goethe Haiyong. Please go ahead.

[Analyst]

Hi management team. This is Bing Rui from Goethe Haiyong Securities. Thank you for taking my question and congratulations on the strong results and guidance. So my question is about the tariff. Could you please share some details about the impact of Trump tariff on pricing, supply chain, etcetera, and how to deal with this problem? Thank you.

[Andrew Fan, CFO at Hesai Group]

Okay. We have closely monitoring the situations of tariff, which is changing on a daily basis and have conducted a thorough analysis of the potential impact. While the tariffs do introduce certain cost considerations, we believe that their impact on our overall business will be limited for three primary reasons. First, our direct exposure is very limited. The U.

[Andrew Fan, CFO at Hesai Group]

S. Market is projected to account for only 10% of our total revenue in year 2025. Secondly, only 5% of our total revenue or 50% of the revenue from U. S. Is under the so called the DDP terms or delivered duty paid models, where we, as the seller, bear the cost of tariffs.

[Andrew Fan, CFO at Hesai Group]

And thirdly, our continued focus on operational efficiency and cost control and also our market position give us the flexibility to effectively manage external challenges like those. And we have a relatively strong market position against our customers. Moreover, we have several levers including adjusting the pricing strategies and efficiency gains, which will help absorb or offset these tariff related costs. When we provide also when we provided our profitability outlook in our last earnings call, which is March, we had already assumed a 45% tariff as our base case scenarios. We have seen some customers front loaded or rescheduled their orders due to the uncertainty around future policy changes, especially after April.

[Andrew Fan, CFO at Hesai Group]

But depending on the current shipment and the delivery schedules, this may shift to some of our revenue from Q2 to Q3. That's also part of the reason why our Q2 guidance is presented as a range. For the full year, we are keeping our revenue guidance unchanged at RMB3 billion to RMB3.5 billion. We haven't seen our major customers canceling their orders due to these tariff changes. For the full year target, our gross margin target remains healthy around 40%, and we expect that the current impact from tariffs on our full year gross margin and profitability to be immaterial.

[Analyst]

Okay. Thanks for sharing. That's very clear and helpful.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Yes. And I want also add to the the tariff topic. So first is, obviously, a small percentage of our revenue today already from The US. And there are really two types of customers when they face the tariff. A small part will treat this as a when it was really high, and they treat this unacceptable, so they just pause.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

They're not canceling because they couldn't find a an alternative, but they're they were pausing for some time until they came back down to where it is now. The the other part is actually front loading more because they realize that there is risk down the road that it could go back up again or facing other challenges, and they definitely don't see a easier solution just to switch over at all. So they actually try to buy more and at the price, they're okay. And they feel like it's a reasonable number, especially now. They just wanted to make sure the continuity of their supply chain is guaranteed.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

So that's why we also see some of the customers placing, let's call that for lack of better word, revenge orders as we see both type of customers.

[Operator]

Thank you. Your next question comes from Jia Liu from BOCI. Please go ahead.

[Jia Lou, Associate Director at Bank of China International(BOCI)]

Thank you, management, for taking my question. My first question is regarding our new ADAS product ATL and ATX. We noticed that our key client, Lioto, newly launched models all integrated Jose's ATL LIDAR, which is a customized version based on ATX. But most other OEM customers all choose the standardized ATX version. So for Jose, is there any difference between ATL and ATX in terms of ASP cost and gross margin?

[Jia Lou, Associate Director at Bank of China International(BOCI)]

And in future, if standardized ATX will remain as a mainstream solution for OEM customers or more OEMs will follow the auto to adopt a specialized one. Thank you.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

So Okay. I'll I'll I'll give the yeah, I'll I'll just give some of the background of this product. It's a a variant, but it's an enhanced and advanced version with enhanced resolution and a few other things. The main idea behind that is that, well, we wanted to keep the standardized platform for specific customer like Liaotou. They're very particular about the specifics advanced functions of that LiDAR because that's what they see as needed as they develop their ADMAX platform.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

So in a way, it's a customized version for them to best match the requirements of their software. In the ideal world, maybe every customer have something a little differently than others want, but in the Alto specific case, we have very particular requirement that's above the standard ATX, and we were able to meet that. So that's the nature of such a product. And we don't have additional information on the price or the the the gross margin, but it remains largely in line with the typical platform.

[Jia Lou, Associate Director at Bank of China International(BOCI)]

Okay, got it. And my second question is related to the Robotexi LiDAR. Recently we see that Baidu, DD, Pony, all adopt our ADAS product, the AT series, to replace the traditional mechanic lidar for cost reduction. Just wondering, the usage of ADAS lidar by these L4 players, the transitional temporary solution for robotaxi industry. Looking ahead, we are Jose, we are developing the specialized product series for robotaxi, or we'll continue to sell ADAS LiDAR to these L4 players? Thank you.

[Andrew Fan, CFO at Hesai Group]

Okay. I'm glad that you asked this question as Hussain is the largest robotaxi LiDAR supplier globally with 60% to 70% market share. Our main LiDAR products are widely used by all the top robotaxi players in China and outside China. Historically, robotaxi operators have used mechanical spinning LiDARs for small fleet testing and operations. However, recent trends in China indicate an urgent need for scalability in the robotaxi fleets.

[Andrew Fan, CFO at Hesai Group]

By adopting our flagship ADAS LiDAR on robotaxi, our customers achieve a better balance between price and the performance of the sensors, enabling faster fleet growth and helping them become closer to profitability. As a result, we are expecting to receive significantly larger LiDAR orders for use in our robotaxi for the years to come. Historically, on the robotaxi side in China, we expect that moving from smaller scale, high priced mechanical LiDARs to larger scale ADAS LiDARs will boost our revenue and gross profit in the long run as the robotaxi business grows in China. Meanwhile, global robotaxi companies continue to rely on mechanical spinning LiDAS to ensure the highest sophistication of their AD solutions. Take this for example from the earnings.

[Andrew Fan, CFO at Hesai Group]

We are the exclusive supplier to a top global robotaxi player and their fleet has already racked up nearly 1,000,000 autonomous miles in 2024. Now they are gearing up for a bigger expansion in 2025, scaling their self driving fleets in a big way, all powered by our Panda series LiDAS. With the robotaxi market rapidly advancing towards large scale commercialization, our technology plays a crucial role in enabling safe and reliable autonomous driving autonomous transportations. Also, when our ATX AT128 or ATX type of LiDAR to be deployed in the robotaxi, these ASIC based semisolid state design provides a more cost efficient solution. However, due to its 120 degrees horizontal field of view, robotaxi typically require three to four units of our AT series LiDAR to achieve three sixty degrees perception, also advanced algorithm approach.

[Andrew Fan, CFO at Hesai Group]

So that's my response to your question. Hopefully, that can cover that.

[Jia Lou, Associate Director at Bank of China International(BOCI)]

Okay. Thank you. Very helpful. Thank you, David and Andrew.

[Operator]

Thank you. Your next question comes from Zhang Yu from Huatai Securities. Please go ahead.

[Yutong Zhang, Product Manager at Huatai Securities]

Hi, David, Andrew, Renzin. Thanks for taking my questions. My first question is about the global market. When will we deliver LiDARs to the global OEMs? And what's the impact of volume for the next one or two years?

[Yutong Zhang, Product Manager at Huatai Securities]

And how to estimate the NRE income from the global OEMs this year?

[Andrew Fan, CFO at Hesai Group]

Thank you. Hosai has been actively discussion and cooperation with our global customers. Recently, we have actively driving five POC programs with four top global OEMs and Tier one suppliers across Europe and Japan, including the most recent POC awarded in Q1 by a top five global Tier one supplier headquartered in Japan. While these POC contracts are not yet full design wins, they play a critical role in the decision making process.

[Andrew Fan, CFO at Hesai Group]

OEMs typically define final product specifications based on POC outcomes and use this phase to validate and co develop surrounding components. As a result, suppliers engaged earlier in the POC stage are strategically positioned and may have a higher chance of securing the design win once the OEM issue a formal RFQ. We have secured the design win partnerships with five global OEMs, four through their JVs and most importantly, an exclusive design win with the top European OEM as we announced in last quarter. This long term deal extends into the next decade across both their ICE and EV vehicle platforms, representing the largest global program in the automotive LIDAR industry. Where we refer to the largest global program, it signifies not only our collaboration with this leading global OEM, but also the extensive worldwide reach of our shipments spanning China and the numerous other international markets.

[Andrew Fan, CFO at Hesai Group]

Our quality and the performance have become our name card and our ability to deliver a comprehensive solution bundling both long and short range LiDAS makes us the go to partner for global OEMs. The market potential is just massive. Global LiDAR penetration is nearly zero today, but as both ICE and EVs started to adopt ADAS and LiDAR, we are unlocking an additional 30,000,000,000 to $60,000,000,000 market in overseas markets in the long run, driven by 60,000,000 overseas vehicles at a $500 to $1,000 LiDAR content per car as we estimated. That's my question to your that's my response to your question, Zhang.

[Yutong Zhang, Product Manager at Huatai Securities]

Thank you.

[Yutong Zhang, Product Manager at Huatai Securities]

It's very helpful for me. Thank you. That's all my questions.

[Operator]

Thank you. Your next question comes from Sia Huang from SPDBI. Please go ahead.

[Jiaqi Huang, Equity Research Associate at SPDB International Securities]

Good morning, management team. Thanks for taking my question. This is Siya from SPDBI. And I've got just one question about our dual listing plan as market rumor saying that Heisa has confidentially filed for Hong Kong listing. How do we respond to this?

[Andrew Fan, CFO at Hesai Group]

Okay. Thank you for asking this question. Regarding this market speculation about our dual listing plan in Hong Kong, I have no comment on that. That said, we periodically evaluate all possible and available options, including listing on other stock exchanges to protect our investors' interest and sustain our growth trajectory. Rest assured, our commitment to the company's long term success in the capital markets remains steadfast. I guess, the reason why you asked this question or the market is so focused on this is related to the market rumors about potential delisting of China ADRs from U. S. Market. But based on the advice of our SEC compliance counselors, there is no legal or factual basis on the current NASDAQ listing rules or past precedent that support the delisting of Kusai from any government bodies. To date, we have received no inquiries, no investigations, nor communications from NASDAQ concerning the potential delisting or similar actions.

[Andrew Fan, CFO at Hesai Group]

Based on the currently available information, we do not find any concrete legal risk of being delisted from NASDAQ. At this time, we are fully compliant with all the regulatory requirements from Nasdaq markets.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Yes. I don't know if people will respond to a confidential felony. The entire point is it's confidential.

[Jiaqi Huang, Equity Research Associate at SPDB International Securities]

That's very helpful. Thank you, David, and thank you, Andrew.

[Operator]

Thank you. Your next question comes from Joanna Ma from CNBI. Please go ahead.

[Joanna Ma, Analyst at CMBI]

Hi, management. Thanks for taking my question and congrats on the solid result. So I have a question regarding could you please share with us your review on impact on LiDAR industry development from latest AEBS draft for soliciting opinions? Thank you.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

I'll take it on the AED question. I think it's very important. Hello? Can you hear me?

[Joanna Ma, Analyst at CMBI]

Yes, thank you.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Yes, I think it's taking such a technology to the the the next level. Historically, the idea is if you buy a car with a LIDAR, you have a few more functions. Some type of NOA, blah blah blah blah, and people can always say, no, I feel very comfortable driving my own car, or I feel like I'm safer than the car driving itself. So that's where LiDAR was about. And then starting from last year, AEB take us to a new domain in which it will trigger, no matter you turn it on or not, if it sees a risk.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

Essentially it becomes the future of invisible airbag. It's even better than airbag because obviously it can stop a crash before it crashes. So the the entire penetration of AEB with LiDAR became much faster than the previous round for that reason. And this is what we see the entire LIDAR industry or the ADAS industry is now rushing to have most of the vehicles have a % take rate for LIDARs. Almost everybody is doing that because now you buy a car, you don't want people to see to worry about not having a LiDAR.

[Yifan Li, Co-Founder, CEO & Director at Hesai Group]

And now we're also seeing a lot of the discussion at the regulatory level because clearly having advanced ADAS function with ability to detect in complex environment is a must, and most people agree LiDAR is a critical part of such an effort. So that's why you see the penetration rate is quickly go growing going up and now the marketing for different OEMs are focusing on not only the computation, but also the LiDAR. Many, many, many car launches today will explicitly a page about LiDAR adoption in their car because no one wants to be not future proof.

[Joanna Ma, Analyst at CMBI]

Okay, got it. That's really helpful. And my second question, also can management share with us your outlook on the room for operating efficiency improvement in the coming years? Well and also are there any update regarding the outlook for your CapEx? Thank you so much. Thank you.

[Andrew Fan, CFO at Hesai Group]

Okay. Let me answer this question. The second question first. The CapEx, I have guided that we expect our full year CapEx will be around US30 million to US50 million dollars in the current year. For the OpEx, on a non GAAP basis, we our OpEx in year 2024 is about 1,000,000,000 and about 65% of the OpEx is R and D and 15% goes to sales and marketing and the rest are the G and A.

[Andrew Fan, CFO at Hesai Group]

In 2025, we actually guided that we are going to we expect that we are going to achieve a CNY 100,000,000 savings in the GAAP basis OpEx. We are committed to taking expenses management to the next level, ensuring even better efficiency and the financial discipline. As you can tell from our Q1 results, our OpEx declined by about 9% on a quarter over quarter basis, which is in line or even slightly better than the full year cost saving target. Our headcount for year '20 '20 '5 currently is about 50% for R and D staff, fifteen percent for production and the remaining is the sales and marketing and G and A related employees. Also, I would like to highlight the importance of the operating leverage.

[Andrew Fan, CFO at Hesai Group]

We have spent over a decade building a strong and a stable organization structure, which is what we called a large mid platform with a lean front end. This allows us to scale our business without significantly increasing R and D expenses, while our revenue and the gross profit grows. Therefore, we expect our R and D investments to remain relatively stable on the absolute amount, even as our revenue and the gross profit continue to grow at a solid pace. Internationally, our ADAS business is still in the early stage and contributes a relatively modest share of total revenue as of today. At the same time, we are allocating some of the R and D resources to support our global programs.

[Andrew Fan, CFO at Hesai Group]

In our Robotics segment, most of the costs are tied up to our global sales network. On the product side, we are benefiting from our platform based development. So we are not starting from scratch in each application of robotics, which help us scale more efficiently. Yes, that's my answers to the question you just raised.

[Analyst]

Okay, got it. That's really helpful. Thank you, David. Thank you, Andrew. And congrats again.

[Operator]

Thank you. As there are no further questions, I'd like to now turn the conference back over to the company for closing remarks.

[Yuanting Shi, Head of Capital Market at Hesai Group]

Thank you once again for joining us today. If you have any further questions, please feel free to contact our IR team. This concludes today's call, and we look forward to speaking to you again next quarter. Thank you, and goodbye.

[Operator]

This concludes today's conference call. You may now disconnect your line. Thank you.

Participants

Executives

• Yuanting Shi, Head of Capital Market
• Yifan Li, Co-Founder, CEO & Director
• Andrew Fan, CFO

Analysts

• Tina Hou, Analyst at Goldman Sachs
• Jessie Lo, Director - Equity Research at Bank of America
• Tim Hsiao, Analyst at Morgan Stanley
• Analyst
• Jia Lou, Associate Director at Bank of China International(BOCI)
• Yutong Zhang, Product Manager at Huatai Securities
• Jiaqi Huang, Equity Research Associate at SPDB International Securities
• Joanna Ma, Analyst at CMBI