TEL AVIV - Arbe Robotics Ltd. (NASDAQ: NASDAQ:ARBE), a company specializing in Perception Radar solutions, has entered into a significant agreement through its tier-1 provider, Sensrad. The deal, valued at approximately 7 million euros, involves supplying 4D Imaging Radars to Tianyi Transportation Technology, a China-based company. Deliveries are slated to commence in the third quarter of 2024.
The partnership follows a rigorous year-long evaluation and development of Sensrad's 4D Imaging Radar, which incorporates Arbe's advanced chipset technology. Marcus Hasselblad, CEO of Sensrad, expressed his contentment with the contract, marking it as a crucial milestone for the company. He commended his team's achievements and acknowledged Tianyi's trust in their product.
Arbe's technology is distinguished for its detailed radar imaging, which is essential for advanced driver-assistance systems and the progression toward fully autonomous driving. The company's radar is said to be 100 times more detailed than other market offerings.
Kobi Marenko, CEO of Arbe, congratulated Sensrad on this achievement, emphasizing the market's acknowledgment of their radar technology's superior performance and reliability. He noted the growing opportunities in China and the company's commitment to transforming global perception capabilities.
The press release included forward-looking statements, cautioning that actual results could vary due to numerous risks and uncertainties. These include the company's ability to meet Sensrad's quality and timing requirements, Tianyi's capacity to market products using the chipset, and broader economic and geopolitical factors affecting the Israeli economy and Arbe's operations.
Investors should note that this announcement is based on a press release statement from Arbe Robotics Ltd. and should consider the risks involved. Arbe is recognized in the automotive radar market and maintains a presence in Tel Aviv, with additional offices in China, Germany, and the United States.
In other recent news, Arbe Robotics disclosed during their Q2 2024 earnings call that they have secured two major customers, marking a significant advancement in their imaging radar development for production vehicles. The company has been chosen by one of the top 10 global OEMs to supply chipsets for the development of next-generation imaging radar systems. Moreover, a well-known European truck manufacturer will incorporate Arbe's radar into its next-gen sensor suite for trucks.
Despite a net loss for the quarter, Arbe Robotics is optimistic about its growth prospects and anticipates revenue from these deals by late 2025 or early 2026. Q2 2024 financials showed $0.4 million in revenue, a gross margin of -9.5%, operating expenses of $11.6 million, and a net loss of $11.8 million. The company's 2024 guidance includes achieving four design-ins with automakers and projecting an adjusted EBITDA loss between $30 million to $36 million.
These are recent developments in the company's journey, with Arbe actively working on securing four design wins with leading global automakers. This news comes alongside the company's recognition for its affordable and power-efficient radar technology. The firm's European headquarters are a focal point for short-term design-ins, with China, Japan, and Europe being key markets for the next year.
InvestingPro Insights
As Arbe Robotics Ltd. (NASDAQ: ARBE) announces its new deal with Sensrad to supply 4D Imaging Radars to Tianyi Transportation Technology, there are several financial metrics and InvestingPro Tips to consider that may influence investor perspectives.
Arbe's market capitalization stands at $158.59 million, reflecting the current valuation of the company in the market. Despite the promising news about the recent deal, the company's financial health shows signs of challenges. With a negative Price-to-Earnings (P/E) ratio of -3.39, and an adjusted P/E ratio for the last twelve months as of Q2 2024 at -3.48, investors can see that the company is not currently generating profits relative to its share price.
InvestingPro Tips highlight that Arbe is quickly burning through cash and suffers from weak gross profit margins, with the last twelve months showing a gross profit margin of -27.62%. This indicates that the cost of goods sold is higher than the revenue generated from those sales, which is a concern for profitability. Additionally, analysts do not anticipate the company will be profitable this year, which could be a red flag for those looking for short-term gains.
Nevertheless, the deal with Tianyi may provide a future boost to revenue growth, which has seen a quarterly increase of 41.52% as of Q2 2024. This could be a sign of potential turnaround or growth, which prospective investors may want to monitor closely. It's worth noting that the company does not pay a dividend, which means that investors are likely looking for capital gains rather than income from their investment in Arbe.
For a more comprehensive analysis and additional insights, including the company’s moderate level of debt and its high revenue valuation multiple, investors can explore the 9 additional InvestingPro Tips available at https://www.investing.com/pro/ARBE.
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