What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-23 compared with 2025-07-24 · 124 added, 112 removed, 375 unchanged (39% of the section changed)

8 unchanged sentences

These technologies can be harnessed to deliver mission-critical capabilities at the edge and in the cloud, advancing the safety of road users, and revolutionizing the driving experience and the movement of people and goods globally.

As of June 28, 2025, our solutions had been installed in approximately 1,200 vehicle models (including local country, year, and other vehicle model variations), and our System-on-Chips (“SoCs”) had been deployed in approximately 220 million vehicles.

As of September 27, 2025, our solutions had been installed in approximately 1,200 vehicle models (including local country, year, and other vehicle model variations), and our System-on-Chips (“SoCs”) had been deployed in approximately 230 million vehicles.

We are actively working with more than 50 Original Equipment Manufacturers (“OEMs”) worldwide on the implementation of our ADAS solutions.

In the six months ended June 28, 2025, we shipped approximately 18.1 million of our systems, the substantial majority of which were EyeQ TM SoCs.

This represents an increase from the approximately 11.2 million of our systems that we shipped in the six months ended June 29, 2024, primarily due to the normalization of excess inventory at our Tier 1 customers that was previously used to satisfy demand during 2024.

In the nine months ended September 27, 2025, we shipped approximately 27.4 million of our systems, the substantial majority of which were EyeQ TM SoCs.

This represents an increase from the approximately 19.8 million of our systems that we shipped in the nine months ended September 28, 2024, primarily due to the normalization of excess inventory at our Tier 1 customers that was previously used to satisfy demand during 2024.

We were founded in Israel in 1999.

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On June 23, 2025, Israel and Iran agreed to a ceasefire, although there is no assurance that the ceasefire will continue.

On October 9, 2025, Israel, Hamas, the United States and other countries in the region agreed to a framework for a ceasefire in Gaza between Israel and Hamas.

How long and how severe the current conflicts in Gaza, Northern Israel, Lebanon, Iran or the broader region become is unknown at this time and any continued clash among Israel, Hamas, Hezbollah, Iran or other countries or militant groups in the region may escalate in the future into a greater regional conflict.

To date, our operations have not been materially affected, although as of July 15, 2025 approximately 6.7% of our employees have been called to reserve duty in the Israel Defense Forces.

To date, our operations have not been materially affected, although as of October 15, 2025 approximately 3.8% of our employees have been called to reserve duty in the Israel Defense Forces.

We expect that the current conflict in the Gaza Strip, Lebanon, Iran and the broader region as well as the security escalation in Israel will not have a material impact on our business results in the short term.

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The Company paid the costs associated with the registration of shares in connection with the Secondary Offering and the Option, other than underwriting discounts, fees and commissions.

Upon completion of the Secondary Offering, Share Repurchase, Option and Conversion, Intel continues to directly or indirectly hold all of the Class B common stock of Mobileye as well as 50,000,000 shares of Class A common stock, which together represent approximately 79.6% of our outstanding common stock and 97.3% of the voting power of our common stock.

Upon completion of the Secondary Offering, Share Repurchase, Option and Conversion and as of September 27, 2025, Intel continues to directly or indirectly hold all of the Class B common stock of Mobileye as well as 50,000,000 shares of Class A common stock, which together represent approximately 79.6% of our outstanding common stock and 97.3% of the voting power of our common stock.

Our Business Model

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For example, we may license certain technologies from Intel that support the design and development of our software-defined imaging radar, including Intel’s mmWave technologies.

Additionally, we intend to explore a collaboration with Intel on a technology platform to integrate our EyeQ TM SoC with Intel’s market leading central compute capability, with plans to utilize Intel Foundry Services’ advanced packaging capabilities.

This potential platform is intended to enable functions essential to safety, entertainment, and cloud connectivity.

Intel’s strength in government affairs and policy development around the world will continue to be of significant value to us as we collaborate with regulators who are preparing frameworks to enable commercial deployment of AVs.

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ADAS volumes have grown faster in recent years than the overall automotive market as ADAS penetration rates have increased, and we believe that we will continue to benefit from that trend.

Our revenue of $944 million in the six months ended June 28, 2025 was up 39% year-over-year, primarily due to the unusually low volume caused by the usage of meaningful excess inventory at our Tier 1 customers to satisfy demand in the first half of 2024.

Our revenue of $1,448 million in the nine months ended September 27, 2025 was up 24% year-over-year, primarily due to the unusually low volume caused by the usage of meaningful excess inventory at our Tier 1 customers to satisfy demand in the first half of 2024.

Continued or future constraints on global automotive production resulting from the effects of economic uncertainty, both global and in specific markets in which we operate, may be a limiting factor on our ability to increase revenue.

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Further, the United States announced on July 8, 2025 additional sector tariffs, including on copper imports.

In response to export controls imposed by China, the United States announced on October 10, 2025 the possible resumption of significant tariffs and other export controls on China.

As of the date of this report, there remains a high degree of uncertainty surrounding U.S.

81 unchanged sentences

Because of the complex nature of our products and the need to customize and validate a product and to integrate it into the OEM’s overall ADAS system, we also have strong direct relationships with the OEMs.

EyeQ TM SoC sales represented approximately 92% and 86% of our revenue for the three months ended June 28, 2025 and June 29, 2024, respectively, and 93% and 81% of our revenue in the six months ended June 28, 2025 and June 29, 2024, respectively.

Sales of our SuperVision™ product represented less than half of the remainder of our revenue for the three and six months ended June 28, 2025 and the majority of the remainder of our revenue for the three and six months ended June 29, 2024.

EyeQ TM SoC sales represented approximately 89% and 86% of our revenue for the three months ended September 27, 2025 and September 28, 2024, respectively, and 91% and 83% of our revenue in the nine months ended September 27, 2025 and September 28, 2024, respectively.

Sales of our SuperVision™ product represented more than half of the remainder of our revenue for the three months ended September 27, 2025, less than half of the remainder of our revenue for the nine months ended September 27, 2025 and the majority of the remainder of our revenue for the three and nine months ended September 28, 2024.

Revenue from the sale of our EyeQ TM products and SuperVision™ products is recognized at the time of product shipment from our facilities, as determined by the agreed-upon shipping terms.

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The expected increase is mainly associated with the costs related to being a public company, as well as increased premiums for directors’ and officers’ insurance and the increased use of share-based compensation for general and administrative personnel.

Goodwill Impairment

Goodwill impairment expenses consist of a non-cash impairment loss recognized for the goodwill of the “Mobileye” reporting unit in the three and nine months ended September 28, 2024, as a result of the impairment analysis the Company performed during the third quarter of 2024.

Financial Income (Expense), net

Financial income (expense), net, consists primarily of income related to investments in money market funds, as well as income from short term deposits, fair value revaluation of equity investments and fluctuations in value due to foreign exchange differences between our monetary assets and liabilities denominated in New Israeli Shekels and to a much lesser extent, the Euro, the Chinese Yuan, the Japanese Yen, and other currencies.

Financial income (expense), net, consists primarily of income related to investments in money market funds, as well as income from short term deposits and fluctuations in value due to foreign exchange differences between our monetary assets and liabilities denominated in New Israeli Shekels and to a much lesser extent, the Euro, the Chinese Yuan, the Japanese Yen, and other currencies.

Benefit (provision) for income taxes

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In July 2025, the United States enacted tax reform through the One Big Beautiful Bill Act (“OBBBA”).

Included in this legislation are provisions that allow for the immediate expensing of research and development conducted in the United States, immediate expensing of certain capital expenditures, and other changes to the U.S.

Included in this legislation are provisions that allow for the immediate expensing of research and development costs conducted in the United States, immediate expensing of certain capital expenditures, and other changes to the U.S.

taxation of profits derived from foreign operations.

The Company is assessing the impact of this new legislation on its future consolidated financial statements.

The Company is monitoring developments related to the implementation of the OBBBA and any additional guidance issued by the U.S.

Department of the Treasury, the Internal Revenue Service, or other standard-setting bodies that may affect the Company’s accounting for income taxes.

Based on information available at the end of the reporting period and management’s assessment of that information, the OBBBA does not have and is not expected to have a material impact on the Company’s consolidated financial statements.

During the periods presented in our condensed consolidated financial statements, certain components of our business operations were included in the consolidated U.S.

tax return filed by Intel.

federal tax return filed by Intel.

We also file certain foreign income tax returns on a separate basis, distinct from Intel.

The income tax provision included in our condensed consolidated financial statements has been calculated using the separate return method as if we had filed our own tax returns.

We present tax loss and tax credit carry-forward amounts that have not been utilized by Intel only to the extent such tax attributes can be claimed as a benefit consistent with our separate income tax return method approach.

The use of the separate return method may result in differences between our income tax provision compared to Intel’s consolidated income tax provision.

Following the Secondary Offering, which resulted in the Tax Deconsolidation (see Note 1 to the condensed consolidated financial statements), the Company is no longer included in Intel’s U.S.

federal consolidated income tax return and will be filing its own U.S.

federal income tax returns for periods beginning July 12, 2025 onwards.

Since prior to the Tax Deconsolidation, the Company’s income tax provision was calculated using the separate return method, as if the Company had filed its own U.S.

federal income tax returns, the Tax Deconsolidation event does not have a material impact on the Company’s tax provision for the nine months ended September 27, 2025.

Additionally, the Tax Deconsolidation results in an adjustment to the Company’s deferred income tax assets and liabilities, primarily with respect to its net operating losses, reflecting attributes that the Company will not retain as a result of its status as a standalone taxpayer.

These changes are offset with a change in valuation allowance.

In 2021, Mobileye’s Israeli operations became taxable in the United States as a branch entity.

6 unchanged sentences

branch deferred tax assets not currently expected to be realized given that we have sustained recent losses based on the separate return method.

Certain net operating losses and tax credit carry-forward tax attributes generated by the Company that have been utilized as part of Intel’s consolidated income tax return filings, but have not been utilized by the Company under the separate return method approach, have been reflected in these condensed consolidated financial statements because the Company will recognize a benefit based on the separate return method when determined to be realizable.

As a result of the Secondary Offering, Share Repurchase, Option and Conversion, the Company anticipates that from a U.S.

income tax perspective, Intel may no longer hold a sufficient percentage of the Company’s issued and outstanding common stock, which may result in the deconsolidation of the Company from Intel’s U.S.

domestic income tax return.

The Company is evaluating the potential impact that such a deconsolidation may have on its future Consolidated Financial Statements, as well as in respect of the Tax Sharing Agreement.

Results of Operations

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Three Months Ended

Six months Ended

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Nine Months Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

dollars in millions

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General and administrative

Goodwill impairment

Total operating expenses

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Three Months Ended

Six months ended

Nine Months Ended

dollars in millions

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

Cost of revenue

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Three Months Ended

Six months ended

Nine Months Ended

dollars in millions

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

Cost of revenue

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Total share-based compensation

Comparison of the three and six months ended June 28, 2025 and June 29, 2024

In the three months ended June 28, 2025, revenue increased by $67 million, or 15%, compared to the three months ended June 29, 2024.

This increase in revenue was primarily due to an increase of $91 million or 24% in EyeQ TM SoC revenue mostly attributable to a 28% increase in volume, resulting from higher customer demand and from the normalization of excess inventory by our Tier 1 customers that was previously used to satisfy demand during the first half of 2024.

This was partially offset by a decrease of $23 million in SuperVision TM related revenue.

Average System Price, calculated as the sum of revenue related to EyeQ TM and SuperVision TM systems divided by the number of systems delivered, decreased by approximately 9%, primarily due to the lower percentage of SuperVision TM related revenue as compared to the second quarter of 2024.

In the six months ended June 28, 2025, revenue increased by $266 million, or 39%, compared to the six months ended June 29, 2024.

Comparison of the three and nine months ended September 27, 2025 and September 28, 2024

In the three months ended September 27, 2025, revenue increased by $18 million, or 4%, compared to the three months ended September 28, 2024.

This increase in revenue was primarily due to an increase of $29 million or 7% in EyeQ TM SoC revenue mostly attributable to a 8% increase in volume, resulting from higher customer demand.

This was partially offset by a decrease of $8 million in SuperVision TM related revenue resulting from a decrease in volume.

Average System Price, calculated as the sum of revenue related to EyeQ TM and SuperVision TM systems divided by the number of systems delivered, decreased by approximately 3%, primarily due to the lower percentage of SuperVision TM related revenue as compared to the third quarter of 2024.

In the nine months ended September 27, 2025, revenue increased by $284 million, or 24%, compared to the nine months ended September 28, 2024.

This increase was primarily due to an increase of $359 million, or 37%, in EyeQ TM SoC revenue attributable mainly to a 39% increase in volume, resulting mainly from the normalization of excess inventory by our Tier 1 customers that was previously used to satisfy demand during the first half of 2024.

This was partially offset by a decrease of $66 million in SuperVision TM related revenue.

Average System Price, calculated as the sum of revenue related to EyeQ TM and SuperVision TM systems divided by the number of systems delivered, decreased by 13%, due to lower percentage of SuperVision TM related revenue as compared to the six months ended June 29, 2024.

This was partially offset by a decrease of $74 million in SuperVision TM related revenue resulting from a decrease in volume.

Average System Price, calculated as the sum of revenue related to EyeQ TM and SuperVision TM systems divided by the number of systems delivered, decreased by 9%, mainly due to lower percentage of SuperVision TM related revenue as compared to the nine months ended September 28, 2024.

Cost of Revenue

In the three months ended June 28, 2025, our cost of revenue increased by $24 million, or 10% compared to the three months ended June 29, 2024.

In the six months ended June 28, 2025, our cost of revenue increased by $70 million, or 17%, compared to the six months ended June 29, 2024.

In the three months ended September 27, 2025, our cost of revenue increased by $12 million, or 5% compared to the three months ended September 28, 2024.

In the nine months ended September 27, 2025, our cost of revenue increased by $82 million, or 12%, compared to the nine months ended September 28, 2024.

In both periods, the increase is attributed to manufacturing costs, mainly resulting from the growth in sales of EyeQ TM SoC, which was partially offset by the decrease in sales of SuperVision TM systems.

Gross Profit and Margin

In the three months ended June 28 2025, our gross profit increased by $43 million, or 21% compared to the three months ended June 29, 2024.

In the six months ended June 28 2025, our gross profit increased by $196 million, or 75%, compared to the six months ended June 29, 2024.

In the three months ended September 27 2025, our gross profit increased by $6 million, or 3% compared to the three months ended September 28, 2024.

In the nine months ended September 27 2025, our gross profit increased by $202 million, or 40%, compared to the nine months ended September 28, 2024.

The increase in both periods was primarily due to the increase in sales of EyeQ TM systems, which was slightly offset by the decrease in sales of SuperVision TM systems.

In the three months ended June 28 2025, our gross margin increased to 50% compared to 48% in the three months ended June 29, 2024.

In the six months ended June 28, 2025, our gross margin increased to 49% compared to 39% in the six months ended June 29, 2024.

The increase in both periods was primarily due to the lower impact of amortization of intangible assets as a percentage of revenue.

In the three months ended September 27 2025, our gross margin decreased to 48% compared to 49% in the three months ended September 28, 2024.

This decrease was due to a modest reduction in EyeQ TM ASP mainly due to higher volumes in China which carry lower ASP, and a higher EyeQ TM -related cost per unit given a different mix of EyeQ TM products sold.

In the nine months ended September 27, 2025, our gross margin increased to 48% compared to 43% in the nine months ended September 28, 2024.

This increase was primarily due to the lower impact of amortization of intangible assets as a percentage of revenue as well as an increase in the percentage of revenue attributable to EyeQ TM SoCs.

Research and Development Expenses, net

Research and development expenses, net, in the three months ended June 28, 2025, increased by $26 million, or 10%, compared to the three months ended June 29, 2024.

This increase was primarily due to an increase in payroll and related expenses, resulting mainly from an increase in average research and development headcount of 131 employees, as well as higher share-based compensation expenses.

This was partially offset by an increase in NRE reimbursements influenced by the projects’ progress and timing.

Research and development expenses, net, in the six months ended June 28, 2025 increased by $58 million, or 12%, compared to the six months ended June 29, 2024.

This increase was mainly due to an increase in payroll and related expenses, resulting from an increase in average research and development headcount of 135 employees, as well as an increase in share-based compensation.

Additionally, there was an increase in depreciation costs associated with additional sites.

Research and development expenses, net, in the three months ended September 27, 2025, increased by $1 million, or 0%, compared to the three months ended September 28, 2024.

This increase was primarily due to an increase in payroll and related expenses, resulting mainly from an increase in average research and development headcount of 140 employees and a decrease in NRE reimbursements influenced by projects progress and timing.

This was partially offset by a decrease in R&D direct expenses including professional services mostly related to the wind-down of the Lidar division that took place during 2024, as well as lower share-based compensation expenses.

Research and development expenses, net, in the nine months ended September 27, 2025 increased by $59 million, or 7%, compared to the nine months ended September 28, 2024.

This increase was mainly due to an increase in payroll and related expenses, resulting from an increase in average research and development headcount of 137 employees, a decrease in NRE reimbursements influenced by projects progress and timing and higher depreciation expenses.

This was partially offset by a decrease in R&D direct expenses including professional services mostly related to the wind-down of the Lidar division that took place during 2024.

Sales and Marketing Expenses

Sales and marketing expenses in the three months ended June 28, 2025, decreased by $3 million or 11% compared to the three months ended June 29, 2024, mainly due to lower marketing expenses.

Sales and marketing expenses in the six months ended June 28, 2025, decreased by $6 million or 10% compared to the six months ended June 29, 2024.

Sales and marketing expenses in the three months ended September 27, 2025, increased by $1 million or 4% compared to the three months ended September 28, 2024, mainly due to higher marketing expenses.

Sales and marketing expenses in the nine months ended September 27, 2025, decreased by $5 million or 6% compared to the nine months ended September 28, 2024.

This decrease is mainly associated with a decrease in payroll and related expenses due to the wind down of the after market division that took place in 2024.

General and Administrative Expenses

General and administrative expenses remained flat in the three months ended June 28, 2025 compared to the three months ended June 29, 2024.

General and administrative expenses in the six months ended June 28, 2025 increased by $3 million or 9%, compared to the six months ended June 29, 2024.

This increase was primarily due to an increase in legal and corporate expenses.

General and administrative expenses in the three months ended September 27, 2025 increased by $1 million or 6% compared to the three months ended September 28, 2024 due to higher share-based compensation expenses.

General and administrative expenses in the nine months ended September 27, 2025 increased by $4 million or 8%, compared to the nine months ended September 28, 2024, primarily due to an increase in share-based compensation expenses as well as legal and corporate expenses.

Goodwill Impairment

Goodwill impairment expenses were zero in the three and nine months ended September 27, 2025 and $2,695 million in the three and nine months ended September 28, 2024.

During the third quarter of 2024, the Company performed an interim quantitative goodwill impairment analysis for the “Mobileye” reporting unit, resulting in a non-cash impairment loss.

For further details, refer to Note 10 to the audited consolidated financial statements for the fiscal year ended December 28, 2024.

Financial Income (expense), net

Financial income, net, remained flat in the three months ended June 28, 2025 compared to the three months ended June 29, 2024.

Financial income, net, in the six months ended June 28, 2025 increased by $1 million, or 3%, compared to the six months ended June 29, 2024, due to an increase in interest income, which was partially offset by the impact of fluctuations in foreign exchange rates.

Financial income, net, in the three months ended September 27, 2025 increased by $3 million, or 21%, compared to the three months ended September 28, 2024, mainly due to an increase in interest income and the impact of fluctuations in foreign exchange rates.

Financial income, net, in the nine months ended September 27, 2025 increased by $4 million, or 9%, compared to the nine months ended September 28, 2024, due to an increase in interest income, which was partially offset by the impact of fluctuations in foreign exchange rates.

Benefit (Provision) for Income Tax

In the three months ended June 28, 2025 provision for income tax was $6 million, compared to a $5 million provision for income tax in the three months ended June 29, 2024.

In the six months ended June 28, 2025, provision for income tax was $9 million, compared to a $2 million provision for income tax in the six months ended June 29, 2024.

In both periods, the change is mainly related to a lower loss before income taxes compared to prior-year period.

In the three months ended September 27, 2025 provision for income tax was $4 million, compared to a benefit for income tax of $78 million in the three months ended September 28, 2024.

In the nine months ended September 27, 2025, provision for income tax was $13 million, compared to a benefit for income tax of $76 million in the nine months ended September 28, 2024.

In both periods, the change is mainly due to the deferred tax effect of $82 million attributed to goodwill impairment of the Mobileye reporting unit which was recognised in the prior year period.

Liquidity and Capital Resources

2 unchanged sentences

Our primary uses of funds have been for funding increases in headcount in our research and development departments, investments attributable to new product development, as well as for funding our capital expenditures.

Our capital expenditures have related mainly to data storage and other computer related equipment, expenditure related to research and development projects and to the construction of new sites, and were $28 million and $46 million for the six months ended June 28, 2025 and June 29, 2024, respectively.

Our capital expenditures have related mainly to data storage and other computer related equipment, expenditure related to research and development projects and to the construction of new sites, and were $52 million and $68 million for the nine months ended September 27, 2025 and September 28, 2024, respectively.

To fund our cash requirements in the ordinary course of business, we anticipate that we will continue to primarily rely on operating cash flows, supplemented by our total cash and cash equivalents.

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The following table sets forth certain consolidated statements of cash flow data:

Six months ended

Nine Months Ended

dollars in millions

June 28, 2025

June 29, 2024

September 27, 2025

September 28, 2024

Net cash provided by operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net cash used in financing activities

Effect of foreign exchange rate changes on cash and cash equivalents

Increase (decrease) in cash, cash equivalents and restricted cash

Increase in cash, cash equivalents and restricted cash

Operating activities

For the six months ended June 28, 2025 compared to the six months ended June 29, 2024, the $252 million increase in cash provided by operating activities was mainly due to a decrease in net loss and a decrease in inventories compared to an increase in prior year period, partially offset by a slight increase in trade accounts receivable compared to a decrease in prior year period.

For the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024, the $293 million increase in cash provided by operating activities was mainly due to a decrease of $2,754 million in net loss, partially offset by $2,695 million ($2,613 million, net of tax) of non-cash goodwill impairment loss recognized in the nine months ended September 28, 2024, as well as a decrease in inventories compared to an increase in prior year period.

Investing activities

Net cash used in investing activities in the six months ended June 28, 2025 and June 29, 2024 was $39 million and $64 million, respectively, consisting of capital expenditures and debt investments.

Net cash used in investing activities in the nine months ended September 27, 2025 and September 28, 2024 was $64 million and $98 million, respectively, consisting of capital expenditures and debt investments.

Financing activities

Net cash provided by (used in) financing activities in the six months ended June 28, 2025 and June 29, 2024 was $0 million and $11 million, respectively, consisting of share-based compensation recharge payments made to Intel.

Net cash used in financing activities in the nine months ended September 27, 2025 was $102 million consisting of $100 million repurchase of common stock from Intel and share-based compensation recharge payments made to Intel.

Net cash used in financing activities in the nine months ended September 28, 2024 was $16 million consisting of share-based compensation recharge payments made to Intel.

Liability in respect of employee rights upon retirement

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As a result, we do not recognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as assets on the consolidated balance sheets.

Severance pay liability increased from $62 million as of December 28, 2024, to $69 million as of June 28, 2025, mainly due to the impact of fluctuations in foreign exchange rates.

Severance pay liability increased from $62 million as of December 28, 2024, to $74 million as of September 27, 2025, reflecting the impact of annual salary increases and fluctuations in foreign exchange rates.

Lease liabilities

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All leases are operating leases with fixed payment terms where some of the leases include annual increases to lease payments based on an index or a rate.

Lease liabilities, representing the present value of future lease payments, have increased from $50 million as of December 28, 2024 to $56 million as of June 28, 2025, reflecting mainly new lease contracts and foreign currency exchange effects, partially offset by the progress in lease payments for existing arrangements.

We have several bank guarantees aggregating approximately $19 million as of June 28, 2025 (denominated in New Israeli Shekels) mainly in connection with lease agreements and import of vehicles.

Lease liabilities, representing the present value of future lease payments, have increased from $50 million as of December 28, 2024 to $61 million as of September 27, 2025, reflecting mainly new lease contracts and foreign currency exchange effects, partially offset by the progress in lease payments for existing arrangements.

We have several bank guarantees aggregating approximately $19 million as of September 27, 2025 (denominated in New Israeli Shekels) mainly in connection with lease agreements and import of vehicles.

Non-GAAP Financial Measures

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In addition, we also believe these adjustments enhance comparability of our financial performance against those of other technology companies.

Our non-GAAP financial measures reflect adjustments for amortization charges for our acquisition-related intangible assets, share-based compensation expense as well as the related income tax effects where applicable.

Our non-GAAP financial measures reflect adjustments for amortization charges for our acquisition-related intangible assets, share-based compensation expense, impairment of goodwill as well as the related income tax effects where applicable.

We exclude amortization charges for our acquisition-related intangible assets for purposes of calculating certain non-GAAP measures, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions.

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Although we exclude share-based compensation expenses from our non-GAAP measures, equity compensation has been, and will continue to be, an important part of our future compensation strategy and a significant component of our future expenses, and may increase in future periods.

We believe that the exclusion of goodwill impairment is appropriate because it does not reflect our core operating performance, and excluding such non-cash impairment loss facilitates a useful evaluation of our performance and comparisons to past operating results.

Adjusted Gross Profit and Margin

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Three Months Ended

Six months Ended

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Nine Months Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

dollars in millions

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However, as a result of a higher expected selling price for such systems, we expect our gross profit per unit will increase on a dollar basis.

Our Adjusted Gross Margin remained flat in the three months ended June 29, 2024 compared to the three months ended June 28, 2025, primarily due to an increase in the percentage of revenue attributable to EyeQ TM SoCs which was offset by a slight reduction in EyeQ TM ASP, mainly due to higher volumes in China.

Our Adjusted Gross Margin increased from 67% for the six months ended June 29, 2024 to 69% for the six months ended June 28, 2025.

This increase was primarily due to an increase in the percentage of revenue attributable to EyeQ TM SoCs which was offset by a slight reduction in EyeQ TM ASP, mainly due to higher volumes in China.

Our Adjusted Gross Margin decreased from 68% in the three months ended September 28, 2024 to 67% for to the three months ended September 27, 2025.

Our Adjusted Gross Margin increased from 67% for the nine months ended September 28, 2024 to 68% for the nine months ended September 27, 2025.

This increase was primarily due to an increase in the percentage of revenue attributable to EyeQ TM SoCs.

Adjusted Operating Income (Loss) and Margin

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Three Months Ended

Six months Ended

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Nine Months Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

dollars in millions

2 unchanged sentences

Share-based compensation expense

Goodwill impairment

Adjusted Operating Income and Margin

Operating loss decreased from $(94) million in the three months ended June 29, 2024 to $(74) in three months ended June 28, 2025, mainly due to an increase in gross profit, partially offset by higher operating expenses.

Operating loss decreased from $(332) in the six months ended June 29, 2024 to $(191) in the six months ended June 28, 2025, mainly due to the increase in revenue, partially offset by higher operating expenses.

Our Adjusted Operating Income increased by $27 million in the three months ended June 28, 2025 compared to the three months ended June 29, 2024, and by $151 million in the six months ended June 28, 2025 compared to the six months ended June 29, 2024.

The increase in both periods was mainly due to the increase in revenue partially offset by an increase in operating expenses.

Our Adjusted Operating Margin increased from 18% for the three months ended June 29, 2024 to 21% for the three months ended June 28, 2025.

Our Adjusted Operating Margin increased from 2% for the six months ended June 29, 2024 to 17% for the six months ended June 28, 2025.

The increase in both periods is mainly due to lower operating expenses as a percentage of revenue.

Our operating loss decreased from $(2,807) million in the three months ended September 28, 2024 to $(109) million in three months ended September 27, 2025, mainly due to a goodwill impairment loss recognized during the three months ended September 28, 2024.

Our operating loss decreased from $(3,139) million in the nine months ended September 28, 2024 to $(300) million in the nine months ended September 27, 2025, mainly due to a goodwill impairment loss recognized during the three months ended September 28, 2024.

Our Adjusted Operating Income decreased by $4 million in the three months ended September 27, 2025 compared to the three months ended September 28, 2024 mainly due to an increase in operating expenses partially offset by an increase in adjusted gross profit.

Our Adjusted Operating Income increased by $147 million in the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024, mainly due to an increase in adjusted gross profit partially offset by an increase in operating expenses.

Our Adjusted Operating Margin decreased from 16% for the three months ended September 28, 2024 to 15% for the three months ended September 27, 2025, mainly due to a decrease in adjusted gross margin.

Our Adjusted Operating Margin increased from 8% for the nine months ended September 28, 2024 to 17% for the nine months ended September 27, 2025, mainly due to lower operating expenses as a percentage of revenue.

Adjusted Net Income (Loss)

4 unchanged sentences

Three Months Ended

Six months Ended

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Nine Months Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

dollars in millions

2 unchanged sentences

Share-based compensation expense

Goodwill impairment

Income tax effects

Adjusted Net Income

The three months ended June 28, 2025 ended with a net loss of $(67) million compared to a $(86) million net loss in the three months ended June 29, 2024.

Our net loss decreased by $135 million in the six months ended June 28, 2025, compared to the six months ended June 29, 2024.

The decrease in net loss in both periods is mainly due to an increase in gross profit partially offset by higher operating expenses.

Our Adjusted Net Income increased by $26 million in the three months ended June 28, 2025, compared to the three months ended June 29, 2024.

Our Adjusted Net Income increased by $144 million in the six months ended June 28, 2025, compared to the six months ended June 29, 2024.

The increase in both periods is primarily due to the increase in Adjusted Gross Profit, partially offset by an increase in operating expenses.

The three months ended September 27, 2025 ended with a net loss of $(96) million compared to a $(2,715) million net loss in the three months ended September 28, 2024.

Our net loss decreased by $2,754 million in the nine months ended September 27, 2025, compared to the nine months ended September 28, 2024.

The decrease in net loss in both periods is mainly due to a goodwill impairment loss recognized during the three months ended September 28, 2024.

Our Adjusted Net Income decreased by $1 million in the three months ended September 27, 2025, compared to the three months ended September 28, 2024 mainly due to a decrease in adjusted operating income partially offset by higher financial income.

Our Adjusted Net Income increased by $143 million in the nine months ended September 27, 2025, compared to the nine months ended September 28, 2024.

The increase is primarily due to the increase in Adjusted Gross Profit, partially offset by an increase in operating expenses.

Critical Accounting Policies and Estimates

38 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis