Shares of chipmaker Mobileye Global Inc. dropped more than 21% today after it lowered its full-year guidance for 2023.

The company released the revised projection alongside the financial results for its fiscal first quarter, which ended April 1. Mobileye topped both revenue and adjusted earnings per share expectations during the quarter.

Mobileye operated as an Intel Corp. subsidiary until last October, when it went public on the Nasdaq at a $24 billion valuation. The stock sale raised more than $861 million. Intel, which bought it for $15.3 billion in 2017, continues to be the majority shareholder.

The company develops a line of chips called the EyeQ series that automakers use to build partly autonomous vehicles. Its other major revenue source is SuperVision, a system that combines four EyeQ chips with sensors and mapping software. SuperVision removes the need for automakers to assemble an autonomous driving system on their own.

Mobileye’s revenue climbed 16% year-over-year in the first quarter, to $458 million. Analysts polled by Zacks had expected the company to post sales of $457.5 million. 

One contributor to the revenue jump was an 11% increase in EyeQ chip sales. According to Mobileye, purchases of its SuperVision partly autonomous driving system more than doubled in the same time. The company says both product lines significantly outperformed the growth rate of global vehicle production.

Thanks to the strong uptake of SuperVision, revenue per product shipped grew as well. Average system price increased to $53.90 in the first quarter from $51 the same time a year earlier.

Mobileye lost $79 million in the three months through April 1. On an adjusted basis, it generated earnings of 14 cents per share. The Zacks consensus estimate projected 13 cents per share.

The company expects its momentum to slow in the coming quarters. In conjunction with the release of its earnings report, its lowered the midpoint of its 2023 revenue guidance by 6.4% and cautioned investors that it anticipates higher losses. It now expects to loss between $166 million and $195 million this year on revenue of $2.06 billion to $2.11 billion.

The chipmaker attributes the lower guidance to slowing demand for its SuperVision system among electric vehicle makers in China. In a statement, Chief Executive Officer Amnon Shashua said the sales slowdown is a “temporary issue.” The company expects strong demand for SuperVision systems and its other products in the longer term.

Mobileye disclosed today that it expects to secure several design wins, or supply contracts, with automakers this year. Those contracts’ long-term value is projected to exceed the $6.7 billion worth of deals that the company inked in 2022. 

“The business performed very well in Q1, including 16% revenue growth as both our EyeQ and SuperVision business lines grew strongly, significantly outperforming underlying global auto production growth,” Shashua said. “We will continue to invest heavily (while maintaining strong profitability) during 2023 to productize and launch our advanced solutions.”

According to Mobileye, some of the design wins it expects to secure this year are set to include its SuperVision and Chauffeur systems. Chauffeur is an improved version of SuperVision that offers broader autonomous driving capabilities. Moreover, it detailed that it’s working with automakers on new vehicle designs powered by its autonomous driving systems.

Mobileye is also developing other technologies as part of its long-term product roadmap. Last year, in the paperwork for its public offering, the company disclosed that it’s working on new lidar and radar sensors for vehicles. It’s collaborating with Intel on the lidar project.

Photo: Mobileye