ARBE

Good day, and welcome to the Arbe Robotics first quarter 2026 results conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. I would now like to turn the conference over to Kenny Green of EK Investor Relations. Mr. Green, please go ahead.

Thank you. Good day to all of you, and welcome to Arbe's conference call to discuss results for the first quarter of 2026. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements, and the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the investor relations section of the company's website. Today, we are joined by Ram Machness, Arbe's Chief Executive Officer, who will begin with a business and strategic update, Kobi Marenko, President and Co-founder, who will provide perspective on Arbe's long-term direction, and Karine Pinto-Flomenboim, Chief Financial Officer, will review the financials. Following management's formal remarks, we will open the call to the question and answer session.

With that, I'd like to hand the call over to Ram. Ram, please go ahead.

Thank you, Kenny. Good morning, everyone. Thank you for joining us to review Arbe's first quarter 2026 results. I stepped into the CEO role in April, and I see significant potential ahead for Arbe. During the first quarter, we made strong progress and accelerated on the strategy we set out at the start of the year. Today, I will focus on the main areas where we are making progress. Arbe is growing from a chipset-focused automotive company into a supplier of complete radar solutions across automotive and increasingly into adjacent markets. This quarter, we hit several commercial milestones that reflect this transition. We began shipping chips into China through our Tier 1, HiRain. We received orders from robotaxi customers. We also received orders for data collection programs with global automakers and leading mobility players. I will now go deeper into each of these areas, starting with automotive.

Let's start with China, the fastest-moving automotive market in the world. During this quarter, we shipped the initial batch of chipsets to HiRain. These chipsets supported production of 48 by 48 channel radar, a project that we announced in December, in which HiRain is developing a Level four autonomous vehicle solution for a Chinese automaker. In parallel, HiRain is developing new radar also based on our chipset, with 24 by 12 channels designed as a lower-cost system that can be used by a wider range of vehicles. This configuration complements its existing high-end 48 by 48 radar system based on our chipset. With our technology, HiRain is becoming a key radar platform player in China. It can offer OEMs a path from high-end radar systems that are available today in China to full 2K ultra-high-resolution performance. China sold 34.4 million vehicles in 2025.

Through a local Tier 1, Arbe gains direct access to one of the world's largest and fastest-moving markets for Level two plus and Level three deployments. Turning to robotaxis. We received orders for our Phoenix radar system from global robotaxi companies. These systems support Level four autonomy and full 360-degree sensing. This clearly shows that our high-resolution radar delivers the performance and coverage required for Level four. This is strong and growing interest for our automotive chipsets. We are taking part in data collection programs with global automakers and leading mobility players. We have progressed into advanced selection processes with specific Chinese and European automakers. These evaluations focus more and more on the specific use cases where cameras and lidars fall short and where imaging radar becomes the key sensor.

This strengthens our industry interest in our radar technology as a core sensing platform for autonomous driving programs. This interest comes alongside an important shift in the automotive market. Recently, several leading OEMs have revisited their Level three programs. We don't see this as a rejection of eyes-off autonomy. We see it as a reset, going back to the right basics of autonomy. The first-generation Level three systems had clear limitations. They were geofenced, some were limited in speed, some limited to good weather only, and many never reached commercial deployment. Besides the maturity of the algorithm, we believe that one other main reason for that is related to the performance of the sensor, and specifically, imaging radar not providing the needed performance.

Based on our discussions with many OEMs, automakers are now actively looking at the next generation eyes-off platforms and looking for sensing that can support Level three use cases. This is exactly the gap our high-resolution radar is designed to fill. We also wanted to understand what drivers want from the eyes-off autonomy. A survey of 1,000 people across U.S., Europe and Asia came with a clear message showing that drivers are willing to pay, willing to switch their car, and even their brand, for fully operational Level three, Level four autonomous driving. Consumers are ready for eyes-off autonomy, but only when it is safe, smooth and reliable. That is exactly the capability that Arbe's ultra-high-resolution radar enables. You are invited to our website to learn more about this survey. Before moving beyond automotive, let me briefly touch on Physical AI, because it's becoming central to where our technology plays.

We are seeing how the revolution in AI and machine learning is introducing a new generation of algorithms. Those algorithms, and specifically vision-language-action models, are transforming how intelligent systems sense, understand and interact with the physical world. In automotive, it drives nothing but a breakthrough progress for Level three and Level four capabilities. Beyond automotive, it opens a wider opportunity across robotics, logistics and other autonomous systems. These Physical AI systems are only as good as the real-world data they receive, especially in safety-critical environments such as vehicles. This is where Arbe fits. Our radar provides dense sensing, long range, low latency and consistent performance in all weather. This is exactly the type of machine-understandable input that AI-driven autonomy needs. During the quarter, NVIDIA announced it expanded the global DRIVE Hyperion ecosystem to accelerate the road to full autonomy, and cited Arbe as part of its platform.

Our ongoing work with NVIDIA on radar-based Free Space Mapping and AI-driven automotive capabilities is one example of how we are placing Arbe at the center of this major shift. Now let's look beyond automotive, where our technology is opening meaningful new opportunities. The first important development is that Arbe has begun selling complete end-to-end radar systems in addition to selling chipsets. This allows us to address markets where consumers want a full radar solution and where sales cycles are much shorter. We already started shipping these systems to players across defense, homeland security, transportation applications, perimeter security, Physical AI, and several other applications. To support this, we have also set up dedicated production line to scale system manufacturing. Taken together, these milestones show that our leadership in automotive radar can extend into perception-critical markets. We are expanding our reach, broadening our opportunities, and significantly increasing our total addressable market.

With that, I'll turn the call over to our President and Co-founder, Kobi Marenko.

Thank you, Ram. Good morning, everyone. Stepping into the president role, my focus is on Arbe's long-term strategy, our strategic partnerships, and guiding investments that accelerate Arbe's next phase of growth and commercialization. During the first quarter, we strengthened our balance sheet. We closed an underwritten registered direct offering that raised $18.5 million in gross proceeds. This gave us the financial flexibility to invest in Arbe's current phase of fast growth. What gives me a great deal of confidence is what this quarter demonstrates. Arbe's technology platform is broader and can focus on multiple end markets as well as automotive. The same ultra-high-resolution radar that we built for automotive can be, and is now beginning to be, adopted much more broadly. We see increased interest and potential and, in some cases, initial system sales in homeland security and smart infrastructure, as Ram already mentioned.

Finally, the rise of Physical AI, together with the OEM's demand for better autonomy solutions, plays directly to our strengths: high definition, long range, all condition environment sensing. Ram has recently stepped into the CEO role with strong execution focus, deep product knowledge, and the commercial understanding that is needed. This will take Arbe from where we are today to scale radar systems company across many markets. I have worked closely with Ram over many years, and I have full confidence in his abilities as well as that of the entire team to bring Arbe to the next phase. I am more excited than ever about Arbe's potential over the coming quarters and years. With that, let me turn the call over to Karine to review the financials.

Thank you, Kobi, and hello, everyone. Let me review our financial results for the first quarter of 2026 in more detail. Revenue for the first quarter of 2026 totaled $0.5 million, compared to $0.4 million in Q1 2025. Backlog as of March 31st, 2026, is $1 million. Gross profit for Q1 2026 was a negative $0.1 million, compared to a negative $0.3 million in the same period last year. Turning to operating expenses. Total operating expenses for Q1 2026 were $11.2 million, down from $13.1 million in Q1 of 2025. The decrease in operating expenses was primarily driven by lower share-based compensation expenses, reflecting earlier grants that are now fully vested, along with last year's award being structured with half in cash and half in equity. The decrease was also related to the Q1 2025 tape-out expenses, which are reduced as we advance toward productization.

This decrease in operating expenses was partially offset by the weakening of the US dollar, mainly against the Israeli shekel, and to a lesser extent by labor-based provisions and a merit increase. Operating loss for the first quarter of 2026 was $11.3 million, compared to an operating loss of $13.4 million in the first quarter of 2025. As previously announced, during the quarter, we implemented cost reduction measures that are expected to reduce our ongoing operating expenses by approximately 15%, with the full impact expected to take effect starting during Q2. Adjusted EBITDA, a non-GAAP measurement which excludes expenses for non-cash share-based compensation and for non-reoccurring items, was a loss of $9.9 million in Q1 of 2026, compared to a loss of $9.7 million in the first quarter of 2025.

We believe that this non-GAAP measurement is important in management's evaluation of our use of cash and in planning and evaluating our cash requirements for the coming period. Net loss for the first quarter of 2026 was $9.4 million, compared to a net loss of $13.8 million in the first quarter of 2025. Net loss in Q1 2026 included $1.9 million in financial income, compared to $0.5 million of financial expenses in Q1 of 2025. As of March 31st, 2026, Arbe held $53.6 million in cash and cash equivalents and short-term bank deposits. Turning to our outlook. We are reaffirming the 2026 guidance we provided in February 26. We continue to expect full-year revenue in the range of $4 million to $6 million, and an adjusted EBITDA loss in the range of $28 million to $31 million loss. Now, we will be happy to take your questions. Operator?

Thank you. We will now begin the question and answer session. Our first question today comes from George Gianarikas with Canaccord Genuity. Please go ahead.

Hi, everyone. Thank you for taking my questions. I was wondering if you can go into a little bit more detail around the traction you're seeing in defense-related applications, drones, et cetera. Thank you.

Thank you, George, for the question. Basically, around the defense, there are a few applications that our radar can function. The first is not so different from our automotive application. It's autonomous vehicles, whether they are supply trucks or even armored vehicles. All of them want to drive safe, especially off-road in environments that are full of dust, rain, fog, and all of the main problems that the radar is the best sensor for that. For that, we already have a client, the U.S. Army, that bought from us hundreds of units. We believe that we will get another order for that as well. Second application is defending perimeter, whether it's from human beings that trying to get into this area of a perimeter that we want to defend or even drones that can attack or throw some supply or drugs to those areas.

We definitely see this as something that its application that our radar can supply. On top of it, I would say that those are the two main initiations that we are in, but there is few other smaller applications that the radar, especially our radar, can help with. If a year ago we were not even considering those markets, today we are focusing on that and we are trying to do business development with all of the leading players, with the big names of the defense industry, as well as the new players. Also, this market is going through a retransformation. The players that were there 10 years ago, like the Lockheed Martin of this world, are also changing, as well as there is new emerging players that taking their market share.

We are trying to work with the old players as well as with the new players, and provide our solution.

Thank you. Maybe just as a follow-up, you obviously mentioned the NVIDIA reference design. I'm wondering what the conversations have been like, how much additional traction, or how has that changed any of the conversations you're having with OEMs and other partners in terms of deploying your imaging radar alongside NVIDIA? Thank you.

I think that this question refers a lot on the, who are the players that really can potentially bring AV stack, the autonomous vehicle software stack, to the market. Eventually, autonomous driving is all about software, all about algorithms, and machine learning. For sure, NVIDIA is the top player in the market today on that. This is very important from all perspective of all the OEMs. Either they selected NVIDIA or even if they didn't select yet, I think they are all looking at what's going on in the industry and who has the potential to get the AV stack to the finish line and really provide a reliable and sustainable solution to the consumer.

Eventually you want to get into your car in the morning and drive safely to work and let the car drive it for you so you can do something else, and buy your time back by using the autonomous vehicle feature of your car. There is a race right now. Many players are working towards that. For sure, NVIDIA is probably the strongest player there. It's very important for everyone what's going on with the NVIDIA platform and the NVIDIA AV Stack, for sure. There are other players as well. Also, some OEMs are trying to build their own homegrown stack. There are these players as well, but everybody is looking at what are the others are doing, and there is a definitely clear race right now on that.

I think that it's really important to see the progress that we've seen recently on the algorithm level and the breakthrough that we all see in our everyday life in deep learning and AI. This comes also into place with the autonomous vehicle software, and we'll see this coming into the market pretty soon, starting with China, and moving forward with the Western world.

Thank you so much.

Thank you. As a reminder, if you'd like to ask a question, please press star then one. Our next question comes from Casey Ryan at AmerX. Please go ahead.

Hello. Good evening, everyone. Thanks for the terrific update. I had a couple questions. Would you care to describe, it sounds like you have multiple robotaxi opportunities. Is there a regional tilt to those or are they global? Meaning North America, Europe, China, or are they focused in one region?

The opportunities that we see right now are coming from North America and we see also in China. The main sales are definitely North America and China.

Okay, that's terrific. When you talk about supplying sort of the full radar system versus a chipset, can you talk about maybe what the revenue differential or sort of the pricing differential is between those two as we think about unit growth in both products?

Yeah. If we look at it now, several factors that influence the change and significantly increase in the AUP, the average unit price, when we talk about specifically the non-automotive, the non-driving automotive. Two factors. One is the fact that we are selling a complete system.

not just the chipset, and that obviously drives the average unit price up.

Also the volumes are much lower. When we work on a Level three project with an OEM, the volumes are really high. Okay.

The negotiation power and the economy of scale drives the AUP down. When you talk here about Those projects, if it's a robotaxi, robot trucks, commercial vehicles, defense applications, the volumes are significantly lower on one hand side, but the AUP is significantly higher because of

there is no economy of scale to the level that you have in the automotive industry. We see a significantly higher AUP in the business of the radar.

the complete system compared to the automotive chip set.

Okay. Just a small thing, but do you think ultimately long-term, the gross margins for both product lines are similar, or do you think the complete radar system might be lower long-term?

Yeah. Usually, the gross margins, if you look at the mid-scale projects on systems are a bit lower than when you talk about a chip set.

Okay.

They are a bit lower. That's always expected because when we charge for chip sets, we charge for the differentiation that we bring. Okay?

for system, you charge also for the mechanics, for the testing, for other components that are there, basically. When you look just the code margin, the profit though, the dollar profit per system is significantly higher.

Yeah.

Okay?

Okay.

When you look percentage-wise, yes, it's lower. When you look at absolute dollar value, it's higher.

Of course, worth mentioning the volumes.

Yeah

which are significantly different between systems and chip sets.

Yeah. Understood. That's terrific. Just one last question from me, maybe Karine. On the backlog, are we to take that as being a 12-month backlog number or shorter or longer?

No, this is 12 months. Correct.

Oh, okay. Terrific. Thank you. Like maybe to clarify for myself, that $1 million, it's fair to think would be consumed in 2026 or are you saying it's 12 months from the end of Q1, basically?

It's 12 months from the end of 2021, but I assume all of it will be in 2026.

Okay

Okay. Perfect. Understood. Thank you. It's a very positive update. I'll get out of the queue and let others ask questions.

Thank you.

Thank you.

Thank you. Our next question today comes from Matthew Galinko at Maxim Group. Please go ahead.

Hey, thanks for taking my question. I'm curious what the cost was to stand up the full production line for radar. I guess with given your current capacity there, do you expect that's sufficient to meet what you have in the pipeline for defense and AI applications, or do you expect only to add to capacity over time?

We build our production line to supply the current capacity that is needed, which we assume going to be hundreds of systems per month, thousands of systems per year. The investment is not so dramatic. It will be on the low side of the $hundreds of thousands, not more than that. We have the ability to increase this capacity as time goes by and as the demand grow during the coming quarters.

We also started discussions with some contract manufacturers for expanding this production line further down the road.

Excellent. Thank you.

Thank you. That does conclude our question and answer session for today. I'd like to turn the conference back over to Mr. Machness, CEO, for any closing remarks.

On behalf of the entire management team of Arbe, I would like to thank you, our shareholders for your continued interest and long-term support of our business. This quarter marks the start of a new chapter for Arbe. A chapter focused on turning our technology leadership into commercial scale across many markets. We have our first system-level order, growing robotaxi traction, and expanding Chinese market opportunities through HiRain, and a clear position at the center of the next wave of eyes-off autonomy and Physical AI. Based on all of this, we believe Arbe is well-placed to deliver meaningful value. We look forward to updating you on our progress next quarter, and I personally look forward to taking on the CEO role to bring Arbe to the next level in its development. With that, we end our call. Have a good day.

Thank you. Today's conference has now concluded, and we thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.

Ladies and gentlemen, thank you for standing by. Welcome to Arbe Robotics' fourth quarter and full year 2025 results conference call. All participants are at present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance, please press star 0. As a reminder, this conference is being recorded. You should have all received the company's press release by now. If you have not, please check the company's website at www.arberobotics.com or call EK Global Investor Relations. I would now hand over the call to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin?

Thank you. Good day to all of you, welcome to Arbe's conference call to discuss the results of the fourth quarter and full year 2025. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements, the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the investor relations section of the company's website. Today, we are joined by Kobi Marenko, Arbe's Co-founder and CEO, who will begin with a business update. We'll turn the call over to Ms. Karine Pinto-Flomenboim, CFO, who will review the financials, and Mr. Ram Machness, Arbe's Chief Business Officer. Finally, we will open the call up to our listeners for the question and answer session.

With that, I'd like to open it over to Kobi Marenko. Kobi, please go ahead.

Thank you, Kenny. Good morning, everyone, and thank you for joining us to review Arbe's fourth quarter and full year 2025 results, as well as our strategic direction and outlook for 2026. Over the past few months, we conducted a full strategic review and made a number of refinements. We have broadened our focus to markets which we believe have shorter adoption cycles and clearer near-term revenue opportunities, while at the same time keeping an eye on the longer-term target of winning major OEM deals. This change in focus is because we see strong momentum in defense, homeland security, and other transportation applications beyond passenger vehicles, where we are seeing growing commercial traction.

We also took actions to improve efficiencies, reducing our cost base by about 15%, enhanced our balance sheet with an institutional-led $18.5 million financing that we closed a few weeks ago, extending our financial runway to fully support our next phase of execution. In this call, I want to provide more color on our strategic evolution, highlight recent commercial progress, and outline our expectations for 2026. Adoption timelines for level three autonomy in Western markets remain uncertain. In contrast, Chinese OEMs, including a new win, which we recently announced, are advancing in autonomous and sensing technologies. Beyond that, we see near-term revenue opportunities that can serve as meaningful growth engine for Arbe. We decided to broaden our marketing and sales focus beyond Western automotive OEM programs.

We are prioritizing Chinese OEMs as well as markets, including defense, homeland security, robotaxi, marine safety, and smart infrastructure, where our ultra-high-resolution radar provides clear differentiation. The opportunities in our pipeline tend to have shorter sales cycles. I do want to point out that Western automotive OEMs remain a long-term growth engine for Arbe, and we will still compete to be designed into Western OEMs' transfer suit. However, our strategy today broaden our scope and reduces our dependence on their extended timeline. As part of this strategic change, we announce today a planned leadership transition to support Arbe's next phase of execution. Ram Machness, who has served as Arbe's Chief Business Officer over the past eight years and led our strategy, sales, product, and support functions, will assume the role of CEO as of April 1st, 2026.

At the same time, I will remain fully and actively involved in the company in my new role as President of Arbe. Ram has the full confidence of our board of directors and me, bringing 30 years of experience across embedded systems, semiconductors, and the automotive industry, including 12 years in senior leadership roles at Texas Instruments. He brings a strong execution mindset, deep product and customer understanding, and proven experience scaling complex technologies from development into production and into commercialization. With Ram leading day-to-day execution as CEO, I will focus on our long-term strategy, advance new initiatives, specifically in the defense market, develop key partnerships, and guide strategic investments to help accelerate what I see as the new phase of sustainable long-term growth. I will hand over the call to Ram to say a few words.

Thank you, Kobi. I deeply appreciate the trust and confidence that the board and our cofounders, Kobi Marenko and Noam Arkind, had placed in me. I would like to thank Kobi for leading Arbe from its inception and for building the strong foundation that has now enabled us to transition into serial production and move towards full commercialization. I'm excited about the opportunities ahead, and I'm committed to leveraging our strong product. I look forward to guiding Arbe for its next phase of growth and success. Back to you, Kobi.

Thank you, Ram. Turning to recent highlights, during 2025, we made solid progress. First, on the automotive front, we announced a new serial production design win with a state-owned OEM in China. HiRain Technologies LRR610 radar, powered by our ultra-high definition radar chipset, was selected for a level 4 autonomous vehicle program. Production vehicles are expected to reach the market starting in 2027. We see meaningful long-term potential. Second, in line with our strategy to expand beyond automotive, defense and homeland security continue to gain traction. Our Tier 1 Sensrad has placed chipset orders for Forterra's autonomous vehicle program for the U.S. Department of Defense. Forterra equips the next generation of defense unmanned ground vehicles, shaping operations in demanding environments.

Sensrad ultra-definition imaging radar, powered by the Arbe chipset, has been integrated into the Forterra AutoDrive perception suite to improve environmental awareness, obstacle detection, and navigation in unstructured and GPS-denied conditions. In parallel, we are integrating our chipset into a leading homeland security supplier radar systems to deliver joint system-level solutions for defense forces, law enforcement, perimeter security, and other homeland security applications. These collaborations significantly expand our best presence in mission-critical defense markets. Third, we are seeing momentum in robotaxi applications, supporting multiple robotaxi projects already across several countries. While the addressable market is smaller than that of passenger vehicles, we see strong long-term potential. Fourth, in the marine safety space, Sensrad recently secured a large follow-up order from WATCHIT for marine collision preventing system, powered by our chipset.

The technology powers WATCHIT Eye, a commercially available system already selected by the Azimut Benetti Group, a leading builder of luxury yachts. Fifth, we are seeing traction in smart infrastructure applications. Sensrad delivered follow-on orders for it's 4D imaging radars to its customers, Tianyi Transportation Technology in China in December 2025. Additional smart infrastructure projects using Arbe-based radars are underway. We continue to work closely with NVIDIA to integrate our ultra-high-resolution radars into their DRIVE Hyperion platform, combining our highly detailed sensing with their advanced AI compute to support production-ready vehicle autonomy. Finally, our technology leadership was recognized with two industry awards in 2025, including the Just Auto Excellence Award and the AutoTech Breakthrough Award. Looking ahead for 2026, our focus on markets with shorter adoption cycles is expected to begin contributing to revenue this year.

I know that we remain engaged with global automotive OEMs, and while we expect to continue securing additional design wins over time, similar to our recent OEM wins in China, we are no longer providing guidance on their timing. In summary, we believe we are well positioned for the years ahead. We are diversifying our potential revenue base, having broadened our focus beyond passenger vehicle OEM programs and expanded into defense and other non-automotive verticals. We start 2026 with a much strengthened balance sheet and lower expense footprint and improved efficiency, which will extend our financial runway. In a few weeks, at the beginning of the second quarter, I will be handing over the CEO reins to a strong pair of hands from a position of strength. Looking ahead, I believe that Arbe is increasingly well positioned for long-term and sustainable growth.

I would like to turn the call over to our CFO, Karine, to go over the dimensions.

Thank you, Kobi. Hello, everyone. Let me review our financial results for the fourth quarter and full year of 2025 in more detail. Revenue for the fourth quarter of 2025 totaled $0.5 million compared to $0.1 million in Q4 2024. For the full year of 2025, total revenue was $1 million compared to $0.8 million in 2024. Backlog as of today stands at $1.3 million. Gross profit for Q4 2025 was -$0.1 million, compared to a -$0.2 million in the same period last year. Gross annual profit for 2025 was at the same level as 2024, a -$0.8 million. Turning to operating expenses. Total operating expenses for Q4 2025 were $11.5 million before.

Operating expenses for the full year of 2025 totaled $47.1 million compared to $48.9 million in 2024. Operating expenses decreased year-over-year, primarily driven by lower share-based compensation. This reflects earlier equity grants that have now fully vested, as well as our most recent award being structured approximately half in cash and half in equity, resulting in lower equity expenses for this year. This decrease was partially offset by unfavorable foreign exchange impact and, to a lesser extent, merit-based salary increases. As a result, Operating loss for the fourth quarter of 2025 was $11.6 million, down from $12.8 million loss in the fourth quarter of 2024.

Operating loss for the full year of 2025 was $47.9 million, compared to a loss of $49.6 million in 2024. Adjusted EBITDA, a non-GAAP measurement, which excludes expenses for non-cash share-based compensation and for non-recurring items, was a loss of $9.7 million in Q4 of 2025, compared to a loss of $9 million in the fourth quarter of 2024. Adjusted EBITDA for the full year of 2025 amounted to a loss of $37.6 million, resulting from the cash grant award and from the unfavorable foreign exchange impact, compared to 2024 Adjusted EBITDA loss of $33.3 million. We believe that this non-GAAP measurement is important in management's evaluation of our use of cash and planning and evaluating our cash requirements for the coming period.

Net loss in the fourth quarter of 2025 was $10.2 million, compared to a net loss of $12.2 million in the fourth quarter of 2024. Net loss for the full year of 2025 was $45.2 million, compared to a loss of $49.3 million in 2024. Net loss in 2025 included financial income of $2.8 million, compared to a financial income of $0.3 million in 2024. Full year 2025 financial income included interest earned on deposits and gains from call option, as well as impact of changes in the warrant liability for warrants not classified as equity and the revaluation of lease liabilities. These were partially offset by foreign exchange revaluation, losses, and to a lesser extent, issuance cost.

Moving to our balance sheet. As of December 31st, 2025, Arbe held $45 million in cash and cash equivalent and short-term bank deposits. During January 2026, we raised gross proceeds of $18.5 million in an underwritten public offering, thus providing a robust balance sheet, enabling an extended financial runway to fully support our next phase of execution. With respect to our guidance, to broaden our commercial business potential, we decided to expand our strategic focus beyond the Western Automotive OEM programs to opportunities we believe have shorter adoption cycle and more immediate commercial potential, including defense, robotaxi, robot trucks, and off-road markets. Our expanded strategy is intended to accelerate revenue generation while maintaining engagements with global automotive OEMs as part of the company's long-term vision.

Based on current market condition and customer engagements, visibly, the company provides the following outlook for 2026 is projected to be a loss in the range of $28 million-$31 million, reflecting the company's strengthened balance sheet and cost reduction measures taken. This outlook reflects management's current expectations as of today and is subjected to change based on market conditions, customer adoption timelines, and other factors. Arbe expects to continue signing additional automotive OEM design wins over time beyond the recently announced design wins. The timing of future wins remains dependent on OEM adoption cycles, which are taking longer than previously anticipated. The company is not providing guidance on the timing of additional automotive OEM design wins. We will be happy to open the call for your questions. Operator?

Thank you, ladies and gentlemen. At this time, we will begin the question-and-answer session. If you have a question, please press the star, followed by the one on your touch-tone phone. If you wish to decline from the polling process, please press the star key followed by a two. Your questions will be polled in the order they are received. The first question comes from George Gianarikas of Canaccord Genuity. Go ahead, please.

Hi, everyone. Thank you for taking my questions and welcome, Ram. Congratulations.

Thank you.

Maybe to start first on defense applications that appear to be gaining momentum, can you help us in the pace that you're seeing in that market and whether or not it's, you know, what kind of traction you're seeing per vehicle so far? Thank you.

You mean, on the non-automotive or you mean robotaxi?

Just first, purely on defense applications. Like, is there a different structure to applications that means that they need more than one chip? Thank you.

In the defense application, there is a few verticals that we are targeting. First of all, there is Forterra, which is basically it's very close to regular automotive because it's autonomous driving, it's off-road, it's military, it's the U.S. Army, but it's basically very close to that. Which means that it's a one radar per vehicle, the same opportunity. Remember that because of the low volume, the price of this chip set is much higher than automotive, and our gross margins are much better. The second vertical is the perimeter defense and drones detection. For that, we need to provide a 360-degree solution, which means it's basically four radars per unit.

Again, since the volumes are, and the prices are prices of homeland security and defense, the gross margin is gonna be much better than regular automotive. Same I would say in robotaxis. The low volume represent much better gross margins. Of course, if you compare it to millions of units per year, this is not the same, but since anyway, the level three assumptions were that the ramp up of revenues will be very low, we believe that in 2027 we will be able to reach revenues that from level three, maybe will be there in 2031 or 2032.

Maybe just to focus a little bit on robotaxi. Are the opportunities that you're seeing in the market with Chinese traditional and non-traditional OEMs, or is it more Western non-traditional and traditional OEMs?

With the robotaxi players that are not OEMs, we don't see other OEMs. We know those players, you know, from Waymo to Nuro to Cruise, all of those, we believe, gonna be the leaders in this market. I don't think it's a market of OEMs.

Right. Are the, is the interest you're seeing with OEMs that are non-Chinese in the robotaxi market?

Not really. I think the Western OEMs, except of course, Tesla, lost their appetite for robotaxi.

Understood. Maybe I just wanna clarify what you said about the robotaxi revenue potential. Is that something that you see maybe ramping from a revenue perspective in 2027, or did you say later this decade?

The robotaxi, we gonna see revenues already in 2026, and we're gonna see ramp up in, we believe in, 2026, it's 2027, 2028.

Maybe last question from me with regard to the robo trucking, the autonomous trucking opportunity. How should we think about that and the potential for wins there and revenue ramp? Thank you.

Yeah, it's the same. Where we have, we already announced the truck customer. Yes, we believe that the when we are saying to robotaxi, we take the robot trucks as well.

Understood. Thank you very much.

The next question comes from Suji Desilva of ROTH Capital. Go ahead, please.

Hi, Kobi and Karine, and Ram, best of luck in the new role. You talked about the non-auto opportunity. Can you talk about the sales cycle there and how much shorter it is versus passenger auto, and how long you've been pursuing that market? Sounds like you already have some traction there.

First, thank you for joining us, even from London. We began this shift around end of Q3 last year, when we saw that the delays in the level three and the volumes, in the, and the appetite of the OEM is getting a bit lower than expected. Well, at least a meaningful order. In the midterm, there is of course, order for one to 10 to 20 units for evaluation, and then, from six months, we can get a meaningful order, which is hundreds or even more than that of units.

Okay. It sounds like on this call, Kobi, that you're formalizing this effort or at least communicating it was formally. What steps will you take internally to deploy kind of, as, people internally to target these non-passenger auto opportunities?

First of all, we have dedicated sales operations for that. You're gonna see our marketing, all efforts and the conferences that we are taking this year, they are all shifted to include also non-automotive. Also from the inside organization, we, of course, did what is needed in terms of in order to support it, because the support here is much more complicated. Every customer has his own demands and his own variations. We are incorporating here also with Sensrad, and there is some customers that we need to support directly. All of that is things that we are doing.

Great. Then last question, Kobi. Can you talk about the difference perhaps in the competitive landscape of this non-passenger auto market, or is it similar to the auto market? Any color there would be helpful. Thanks.

It's different between, let's say, robot taxi and the robot truck, where we basically, I think, meeting with the same competitors as in automotive. In the other verticals like defense and like marine and so on. On the defense side, there is not a solution right now in 77 GHz that is competing with us, that can really support what we are offering. There is a 24 GHz radar, Echodyne and MatrixSpace are players in this market. We believe that first of all, there is a large demand right now. There is room for everyone, and there is a lot of advantage for the 77 GHz coming from the price and also the weather.

24 GHz is a spectrum that has problems in the humidity and rain. It's not as resilient as 77 GHz, and in those applications, of course, it's critical.

Okay, thanks, Kobi. Thanks, everyone.

The next question comes from Casey Ryan of WestPark Capital. Go ahead, please.

Thank you. Good morning. This is exciting update. Can I ask you a quick few modeling questions? The $4 million-$6 million in guidance sounds like that's going to be all non-automotive is sort of the expectation today, or is there some automotive built into that $4 million-$6 million revenue guide?

We've mentioned it's mainly non-auto.

Mm-hmm.

We did mention. HiRain, which is also

Which is also.

Which is also.

Okay. That's helpful. Then, just quickly on the OpEx numbers, do you believe Q4 numbers will be consistent roughly across 2026, or do you think that number will come down further? What are your thoughts just about direction, not giving out specific numbers?

Sure. As we mentioned, we did do restructuring in order for the company to continue its runway. I assume that the Adjusted EBITDA that we guided reflects this new course of expenses. It will go down slightly.

Okay.

In order to enable us.

Okay. Yeah, great. Those two points are helpful. Then sort of broadly, defense is a very exciting sector, and so are smart cities and all these sort of, physical AI end markets. Is your product a candidate for things that are retrofits instead of new builds? Saying maybe existing military vehicles being equipped with autonomy or upgraded in some fashion to sort of consume advanced technologies like your chipset.

Sure. It's like the robotaxi and like the robotruck. Basically, the platform itself, can get the radar in a later stage, so it's aftermarket like, so of course, we can support retrofit as well.

Okay. That's actually very exciting.

Now we need a big RFP for a retrofit of almost vehicle that is already deployed in thousands of units.

Right. Do you think that there's interest in movement in sort of doing retrofits?

Yeah, sure. Sure, there is new, our ability to provide drone detection in tactical pulses is really appreciated by the customers. This is all a retrofit.

Mm-hmm. Okay. Yeah, that's actually pretty exciting because that is faster to market as well, but also, fairly large, right? Upgrading all the existing could be a pretty exciting opportunity. Just last question around defense. Are other defense forces candidates for you as well, with your customers who could presumably build product for, you know, Western European forces as well, beyond the U.S.?

Yeah, sure. Beyond U.S. and Israeli, of course, we are looking also into Western Europe, armies as well.

Okay. Okay, sort of the last question, to slow down a little bit in automotive. Is there any connection to sort of the pacing of, say, EVs versus ICE in terms of the powertrain, you know, thoughts around OEMs? Or are there other factors at play around moving to L3 and L4, and those types of things?

I think, it's connected and not connected. Of course, the fact that, the OEMs invested a lot in EV, and the EV basically, is there slowing down, this has caused the OEMs for a huge write-off in tens of billions of dollars. Of course, this is, forces them, to reduce, the headcount and to cut, expenses, and this is all delaying their R&D for, the level 3.

I see.

it's not because the fact that the EV is not there, it's because of the fact that the EV caused them major losses.

Got it. That's actually very helpful and makes a lot of sense. Well, sort of beyond that sort of short-term slowdown, it feels like a pretty exciting outlook for 2026 with new markets and then, you know, hopefully progress in automotive as we hit the 2027. That's it for me. Thank you for those answers and discussion points.

Thank you.

If there are any additional questions, please press the star key followed by the one on your touch-tone phone. If you wish to cancel your request, please press the star key followed by a two. There are no further questions at this time. Mr. Marenko, would you like to make your concluding statement?

Yeah. On behalf of the management shareholders for your continued interest and long-term support of our business. Before I leave, I want to say that I have totally enjoyed serving as Arbe's CEO, and I am proud of our achievements. Over the years, we have built a strong technology foundation, achieved important milestones, and positioned the company for its next phase to ramp in the near future. I have full confidence in Ram's leadership and look forward to working closely with him as President of Arbe, as we continue to execute on Arbe's strategy and build long-term value. With that, we will end our call. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.