Hesai Group NASDAQ: HSAI reported first-quarter 2026 revenue growth and continued profitability while outlining a broader strategic shift beyond lidar into what management called “spatial intelligence” and physical AI.
On the earnings call, CEO David Li said the company has entered a “new era of growth and possibility” as it expands from its core lidar business into new products intended to help machines perceive, understand and interact with the physical world. The company also announced that it is serving as a strategic lidar partner and confirmed supplier for Mercedes-Benz models enabling Level 3 autonomy.
Revenue Rises as Lidar Shipments Expand
CFO Peng Fan said first-quarter net revenue reached RMB 681 million, or $99 million, up 30% from a year earlier. He said this marked Hesai’s eighth consecutive quarter of year-over-year revenue growth.
Total lidar shipments exceeded 471,000 units in the quarter, with ADAS and robotics shipments both more than doubling year-over-year, according to management. Gross margin remained above 39%.
Hesai reported GAAP net income of RMB 18 million, or $2.7 million, and non-GAAP net income of RMB 48 million, or $6.9 million. Peng said the results extended the company’s profitability streak to four consecutive quarters on a GAAP basis and six consecutive quarters on a non-GAAP basis.
The company also introduced a new reporting structure, separating its operations into two categories: its core lidar business and “strategic growth initiatives,” or SGI. Peng said the lidar business generated operating profit of RMB 42 million in the quarter, while SGI recorded an operating loss of RMB 51 million, reflecting investment in new initiatives.
Mercedes-Benz Agreement Highlights Level 3 Push
Li said Hesai is a strategic lidar partner and confirmed supplier for Mercedes-Benz models enabling Level 3 autonomy. The supply agreement supports Mercedes-Benz programs in Europe and China, with production supported by Hesai’s new Galileo manufacturing center in Thailand.
In response to an analyst question, Li said the company could not disclose additional details about the customer’s strategy but confirmed that the new contracts are a continuation of an existing collaboration, with additional volumes and car models.
Management framed Level 3 autonomy as a major growth driver for lidar. Li said vehicle architectures are moving from about one lidar per vehicle in Level 2 systems, representing roughly $200 of lidar content per car, to three to six lidars in Level 3 platforms. He said that could raise lidar content to about $350 in entry-level multi-lidar setups and $500 to $1,000 in more advanced configurations.
Hesai said it has secured multi-lidar design wins with automakers including Li Auto, Xiaomi and Changan. Li also said Li Auto began deliveries of a multi-lidar model on May 15, 2026, marking the first mass production deployment of Hesai’s FTX blind spot lidar.
Company Reaffirms 2026 Shipment Outlook
For the second quarter, Peng said Hesai expects net revenue of RMB 850 million to RMB 900 million, or $123 million to $130 million, representing year-over-year growth of about 20% to 27%. He also said the company expects around 650,000 lidar shipments in the quarter.
For the full year, Hesai reaffirmed its lidar shipment guidance of 3 million to 3.5 million units, compared with 1.6 million units delivered last year. Management said revenue momentum is expected to strengthen progressively throughout 2026.
Li pointed to several signs of market share momentum. He said Hesai lidar was featured in 56 vehicle models across 24 automotive brands at the Beijing Auto Show. He also cited Yole Group data showing Hesai ranked No. 1 globally in long-range ADAS lidar shipments in 2025 with a 43% market share, and Gasgoo data showing its China market share reached 55% in March 2026.
New Products Target Physical AI and Robotics
A major portion of the call focused on Hesai’s expansion beyond traditional lidar. Li introduced Kosmo, which he described as an “AI algorithm integrated spatial intelligence device” that combines Hesai lidar with proprietary 3DGS and AIGC algorithms to generate photorealistic 3D environments.
Li said Kosmo can reconstruct a 200-square-meter space in about one-fifth the time of existing 3DGS solutions and about one-fiftieth the time of traditional methods, with lower labor costs. He said the product is intended for applications including robotics, simulation and training, immersive media, 4D entertainment and industrial uses.
Peng said SGI revenue is expected to begin contributing in the second quarter and reach approximately RMB 100 million for full-year 2026. He said Hesai aims to scale SGI revenue to about RMB 500 million in 2027. Management said Kosmo may carry a higher-margin profile over time because it includes hardware, software, data processing and potential subscription or licensing services.
Li also discussed robotic actuation modules, describing them as a natural extension of Hesai’s experience with motors, encoders, materials, simulation and precision manufacturing used in lidar systems. He said the company has not yet disclosed detailed information but that early performance metrics are encouraging.
Picasso Chip and 6D Full-Color Lidar
Hesai also highlighted Picasso, which Li called the world’s first 6D full-color ultra-sensitive SPAD-SoC. He said the chip fuses RGB color and 3D geometry at the chip level, producing real-time colorized point clouds.
Li said the technology is designed to address edge cases such as distinguishing overlapping traffic lights at adjacent intersections or differentiating a yellow signal from sunlight. He said customer feedback has been encouraging across ADAS and robotics, and that Hesai has secured an exclusive design win with KargoBot for transport robots using its ETX and FTX lidar products.
Hesai expects Picasso-equipped ETX products to enter mass production in the second half of 2026, with broader adoption ramping through 2027 and 2028, according to Li.
Management said Hesai’s core lidar business remains the company’s foundation, while SGI is expected to expand its long-term growth opportunity. “Our LiDAR business continues to serve as a very solid foundation with clear market leadership and global scale,” Peng said, adding that the company is “extremely excited” about its new businesses.
About Hesai Group NASDAQ: HSAI
Hesai Group is a technology company specializing in the development and production of advanced LiDAR (Light Detection and Ranging) sensors and perception software platforms for autonomous vehicles, robotics, industrial automation and mapping applications. The company’s core business centers on delivering high-performance, high-reliability LiDAR solutions designed to enable precise three-dimensional sensing and real-time environment perception. Hesai’s product lineup spans mechanical rotating LiDAR units, solid-state and MEMS-based sensors, as well as integrated software stacks for object detection, tracking and data fusion.
Founded in 2014 by a team of laser sensing and robotics researchers, Hesai built its reputation on improving range, resolution and reliability of LiDAR systems while driving down cost and size.
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