Horizon Robotics (HAM:8YO) (H1 2026) Earnings Call Highlights: Revenue Surges 32. ...

Q & A Highlights

Q: Could management share more details about project wins in the second half, particularly regarding the major EV new platforms? Which product lines will drive stronger revenue growth, the Journey 6A or the higher-end 6P? A: (Management) In the second half, we will see volume ramp-up on the entry-level AD platform of a leading NEV company, with the J6M being the main volume driver. However, higher-value products like the high-compute J6M SOC, HSD, and our software solutions will further drive revenue growth. We recently made breakthroughs with two leading Chinese automakers, and our HSD platform now covers the top five Chinese domestic brands and the top two joint ventures. These design wins begin mass production at the end of the year and are expected to deliver significant revenue contributions next year.

Q: As Horizon steps up its 2026 budget for higher spending on Vico, CloudSci large model training, and next-generation chip development, how do you balance return on investment, and when should we expect a visible inflection in profitability? A: (Management) We will continue to maintain our high gross margin level to keep our competitive edge and fund continued high investment. This is a long-cycle industry; today's revenue is the result of past R&D investments. We must maintain high-intensity, saturated investment to secure future victory. If we only invested RMB1-2 billion in R&D, the industry threshold would be too low. We are working towards reaching break-even by 2028.

Q: Regarding HSD, with strong major OEM progress, how should we think about HSD volume in '26 and '27, and what are the key milestones? Also, for Journey 7, how should we think about the timeline from tape-out to customer SOP and revenue contribution? A: (Management) HSD has become our core industry name card. We have achieved design-win breakthroughs with all top five domestic automakers and secured core project design wins with the top two JV automakers. For chip shipments, we expect to achieve around 5 million units this year and more than 7 million units next year. Regarding Journey 7, R&D is progressing smoothly, and it is expected to launch in 2027. It has already attracted significant attention from leading automakers and Tier 1 suppliers, and we are confident it will become a world benchmark in the advanced market.

Q: Can you elaborate on the company's business model evolution, specifically the "Wintel" and "ARM plus Android" models, and how this will drive future growth? A: (Management) Our business model combines direct revenue from SoC and software sales (like Intel) with indirect revenue from IP licensing (like ARM plus Android). As we evolve to L4/L5, we believe the business model will shift to subscription-based, similar to Microsoft 365. Our IP licensing model has strong stickiness, rooting customers' products deeply in our technology ecosystem. We have licensed our technology to the world's largest NEV maker, one of the largest auto parts groups, and China's largest JV automaker, ensuring long-term partnerships and recurring revenue.

Q: What is the company's strategy for the joint venture (JV) and overseas market expansion, and what progress has been made? A: (Management) JV brands have stabilized at about 35% market share, and they have an urgent need for intelligent upgrading, which now comes largely from Chinese suppliers. We are working with partners like Ormobile (formerly Continental), STMO, Aptiv, Bosch, and Carizon (our JV with Volkswagen). Our Journey series SOC and IP will be deployed in seven all-new Volkswagen models this year, expanding to Volkswagen's mainstream CVP architecture next year. With Toyota, our Journey 6 has entered mass production on GAC Toyota's highest-volume entry-level model. We have secured 24 brands and nearly 60 export vehicle models, covering the top six auto groups by export volume.

Q: Can you provide more details on the financial performance for the first half of 2026, particularly regarding revenue, gross margin, and expenses? A: (CFO Lei Wang) Revenue for the first half was slightly less than RMB2.1 billion, a 32.9% year-over-year increase. Gross profit was around RMB1.4 billion, with a robust gross margin of 66%. Product solutions revenue reached RMB225.6 million, up 14.8%, while license and service revenue reached RMB1.1 billion, up 52.7%. R&D expenses including SBC were slightly more than RMB2.7 billion, and combined SG&A expenses were RMB634 million. The company reported an IFRS profit of RMB3.8 billion, largely due to the fair value change on the convertible loan. Adjusted net loss was RMB1.67 billion.

Q: How is the company positioned in the advanced intelligent driving market, and what is the competitive landscape? A: (Management) In the first half of this year, our market share of computing platforms featuring urban NOA functions rose to around 23% among Chinese domestic brands, an increase of roughly 5 percentage points, moving us from third to second place. The current price war in the auto industry is providing a good opportunity for Horizon, as we can offer high performance, cost-effective technologies. We believe that in the end game, only 20% or less of leading companies will have in-house R&D capabilities, and the majority of OEMs will adopt technologies from independent third parties like Horizon.

Q: What is the company's strategy for expanding beyond automobiles, particularly in robotics and embodied intelligence? A: (Management) We are leveraging our underlying technologies developed for vehicles to enable real-world applications. Through our associate in robotics, we have empowered over 100 downstream robot categories, serving over 400 customers and covering more than half of the embodied intelligence companies in China. Our open-source models have been tested or used by more than 100 academic institutions and companies, including NVIDIA, Meta, Microsoft, and Stanford University. Within six months, we will release the next generation of brain and cell rebalance models that integrate a world model with general-purpose understanding.

Q: What are the key milestones for the second half of 2026 and the outlook for next year? A: (Management) We are confident of reaching a 70% to 80% share on our core customers' entry-level AD vehicle models and completing mass production and delivery of high-compute SoCs with HSD on their urban NOA models. The cockpit-driving integrated solutions based on the Journey chip and Kakacro will enter mass production in Q4 of this year. We expect to complete the tape-out of Journey 7 early

For the complete transcript of the earnings call, please refer to the full earnings call transcript .