What changed in this filing

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Item 1. Financial Statements

2024-05-08 compared with 2023-11-09 · 151 added, 265 removed, 356 unchanged (54% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

dollars in millions

26 unchanged sentences

shares issued and outstanding :

94,164,300 as of September 30, 2023 and 51,911,905 as of December 31, 2022

94,731,407 as of March 30, 2024 and 94,652,348 as of December 30, 2023

Class B common stock:

2 unchanged sentences

shares issued and outstanding:

711,500,000 as of September 30, 2023 and 750,000,000 as of December 31, 2022

711,500,000 as of March 30, 2024 and December 30, 2023

Additional paid-in capital

Accumulated other comprehensive income (loss)

Retained earnings (accumulated deficit)

4 unchanged sentences

Three months ended

Nine months ended

September 30,

dollars in millions, except per share amounts

5 unchanged sentences

Operating income (loss)

Interest income with related party

Interest expense with related party

Other financial income (expense), net

3 unchanged sentences

Earnings (loss) per share attributed to Class A and Class B stockholders:

Basic and diluted

Weighted-average number of shares used in computation of earnings (loss) per share attributed to Class A and Class B stockholders (in millions):

Basic and diluted

Net income (loss)

9 unchanged sentences

Income (Loss)

(Accumulated Deficit)

Three Months Ended

Balance as of July 1, 2023

Net income (loss)

Share-based compensation expense

Recharge to Parent for Share-based compensation

Balance as of September 30, 2023

Balance as of July 2, 2022

Net income (loss)

Other comprehensive income (loss), net

Tax sharing agreement with Parent

Net transfer from (to) Parent

Balance as of October 1, 2022

Nine Months Ended

Balance as of December 31, 2022

1 unchanged sentence

Other comprehensive income (loss), net

Tax sharing agreement with Parent

Share-based compensation expense

Recharge to Parent for Share-based compensation

Issuance of common stock under employee share-based compensation plans

Secondary offering

Balance as of September 30, 2023

Balance as of April 1, 2023

Balance as of December 30, 2023

Net income (loss)

Other comprehensive income (loss), net

Equity transaction in connection with the legal purchase of Moovit entities

Dividend Note with related party

Dividend distribution

Tax sharing agreement with Parent

Net transfer from (to) Parent

Balance as of October 1, 2022

* Rounding of Class A and Class B share amounts due to Secondary offering.

Share-based compensation expense

Recharge to Parent for Share-based compensation

Balance as of March 30, 2024

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended

September 30,

Three months ended

dollars in millions

7 unchanged sentences

Deferred income taxes

Interest on Dividend Note to related party, net

Interest with related party, net

11 unchanged sentences

Purchase of property and equipment

Repayment of loan due from related party

Issuance of loan to related party

Net cash provided by (used in) investing activities

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Net transfers from Parent

Dividend paid

Share-based compensation recharge

Deferred offering costs

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

5 unchanged sentences

Non-cash share based compensation recharge

Equity transaction in connection with the legal purchase of Moovit entities

Dividend Note with related party

Non cash deferred offering costs

Tax sharing agreement with Parent

1 unchanged sentence

Cash received (paid) for income taxes, net of refunds

Interest received from related party

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

4 unchanged sentences

(“Mobileye”, “the Company” or “we”) is a leader in the development and deployment of advanced driver assistance systems (“ADAS”) and autonomous driving technologies and solutions, aimed to provide the capabilities required for the future of autonomous driving, leveraging a comprehensive suite of purpose-built software and hardware technologies.

Mobileye combines the operations of its consolidated subsidiaries, which include the Mobileye Group, as defined below.

Mobileye operates as a subsidiary of Intel Corporation (“Intel” or the “Parent”), which acquired a majority stake in Mobileye in August 2017 (the “Mobileye Acquisition”).

The remaining issued and outstanding shares of Mobileye were acquired by Intel in 2018.

Before the completion of the Mobileye IPO and the Reorganization (both as defined below) in October 2022, the Company consisted of the “Mobileye Group”, which combined the operations of Cyclops Holdings LLC (“Cyclops”), Mobileye B.V.

and its subsidiaries, GG Acquisition Ltd.

and Moovit App Global Ltd.

and its subsidiaries (“Moovit”) and certain Intel employees mainly in research and development (the “Intel Aligned Groups”).

The Mobileye IPO

In December 2021, Intel announced plans to pursue an initial public offering of the Mobileye Group.

In January 2022, Intel incorporated a new legal entity, Mobileye Global Inc., with the intent to contribute the Mobileye Group to Mobileye Global Inc.

and to have Mobileye Global Inc.

offer newly issued shares of common stock of Mobileye Global Inc.

in an initial public offering.

On October 28, 2022, the initial public offering of Mobileye (the “Mobileye IPO”) was completed and we issued 41,000,000 shares of our Class A common stock, at $ 21 per share, before underwriting discounts and commissions.

Concurrently with the closing of the Mobileye IPO, the Company issued an additional 4,761,905 shares of its Class A common stock to General Atlantic (ME), L.P., a Delaware limited partnership, at $ 21 per share, pursuant to a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, for gross proceeds of $ 100 million (the “Concurrent Private Placement”).

On November 1, 2022, we closed the sale of an additional 6,150,000 Class A shares pursuant to the exercise of the underwriters’ over-allotment option.

The Mobileye IPO generated proceeds to the Company of approximately $ 1.0 billion, including the proceeds from the underwriters exercise of their option and the Concurrent Private Placement, net of underwriting discounts and commissions in the amount of $ 41 million and offering costs in the amount of $ 18 million.

Prior to the completion of the Mobileye IPO, we were a wholly-owned business of Intel Corporation.

Upon the closing of the Mobileye IPO (after giving effect to the exercise of the underwriters’ over-allotment option), Intel continues to directly or indirectly hold all of the Class B common stock of Mobileye.

Upon completion of the Mobileye IPO, we completed the legal entity reorganization (“Reorganization”) of the operations comprising the Mobileye Group business so that they are all under the single parent entity, Mobileye Global Inc., and the filing and effectiveness of our amended and restated certificate of incorporation.

The Reorganization was accomplished through a series of transactions and agreements with Intel, including the legal purchase of 100 % of the issued and outstanding equity interests of the Moovit entities from Intel.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Secondary Offering

On June 7, 2023, the Company announced the pricing of a public secondary offering of 38,500,000 shares of its Class A common stock (which shares were received upon the conversion of 38,500,000 shares of Class B common stock into Class A common stock) by Intel at a public offering price of $ 42.00 per share, which closed on June 12, 2023 (the “Secondary Offering”).

The Company did not receive any proceeds from this offering.

The Company paid the costs associated with the registration of shares in connection with the Secondary Offering in the amount of $ 1 million, other than underwriting discounts, fees and commissions.

These costs were expensed as incurred within general and administrative expenses.

Upon the completion of the Secondary Offering, Intel continues to directly or indirectly hold all of the Class B common stock of Mobileye, which represents approximately 88.3 % of our outstanding common stock and 98.7 % of the voting power of our common stock.

Intel Corporation (“Intel” or the “Parent”) directly or indirectly hold all of the Class B common stock of Mobileye, which as of March 30, 2024, represents approximately 88.3 % of our outstanding common stock and 98.7 % of the voting power of our common stock.

Operations in Israel

On October 7, 2023, Hamas launched a series of attacks on civilian and military targets in Southern and Central Israel, to which the Israel Defense Forces have responded.

In addition, Hezbollah has attacked military and civilian targets in Northern Israel, to which Israel has responded.

Further, on April 13, 2024, Iran launched a series of drone and missile strikes against Israel, to which Israel has responded.

How long and how severe the current conflict in Gaza, Northern Israel or the broader region becomes 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 and financial results have not been materially affected, although as of May 1, 2024 approximately 4 % of our employees have been called to reserve duty in the Israel Defense Forces.

We expect that the current conflict in the Gaza Strip and the security escalation in Israel will not have a material impact on our business results in the short term.

However, since this is an event beyond our control, its continuation or cessation may affect our expectations.

We continue to monitor political and military developments closely and examine the consequences for our business, results of operations and financial condition.

Other events during the reporting period

On March 18, 2024, the Company announced the winding down of the Aftermarket Solutions Unit that provides retrofitted advanced driver assistance technology.

This decision was made following a thorough review of this unit’s business prospects and investment needs showing that since automakers and other vehicle manufacturers have steadily increased the rate at which integrated ADAS solutions are installed on new vehicles, the demand and future addressable market for retrofitted ADAS solutions has declined.

As a result, this division has seen its revenues decline meaningfully, and in recent years has not positively contributed to Mobileye’s profitability.

The plan for winding down of the Aftermarket Solutions Unit includes a reduction in workforce of over 100 employees worldwide.

The affected employees will be entitled to additional termination costs in the amount of approximately $ 4 million, which was recognized as an expense in the three months ended March 30, 2024.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

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These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We have a 52- or 53-week fiscal year that ends on the last Saturday in December.

Fiscal year 2023 was a 52-week fiscal year;

fiscal year 2023 is a 52-week fiscal year.

The additional week in fiscal year 2022 was added in the first quarter, which consisted of 14 weeks.

The results of operations for the three and nine months ended September 30, 2023 shown in this report are not necessarily indicative of the results to be expected for the full year ending 2023.

fiscal year 2024 is also a 52-week fiscal year.

The results of operations for the three months ended March 30, 2024 shown in this report are not necessarily indicative of the results to be expected for the full year ending 2024.

The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 30, 2023.

The financial statements and accompanying notes that include periods ending or as of dates prior to the completion of the Mobileye IPO have been derived from the consolidated financial statements and accounting records of Intel and are presented as if the Company had been operating as a stand-alone company.

The assets, liabilities, revenue, and expenses directly attributable to the Company’s operations, including the acquired goodwill and intangible assets, have been reflected in these condensed consolidated financial statements on a historical cost basis, as included in the consolidated financial statements of Intel.

As Mobileye Group was not historically held by a single legal entity, total parent net investment is shown in lieu of equity in the periods prior to the completion of the Mobileye IPO and represents Intel’s total interest in the recorded net assets of Mobileye Group.

All intercompany transactions within the previously combined businesses of the Company have been eliminated.

Transactions between the Company and Intel, arising from arrangements with Intel and other similar related-party transactions, were considered to be effectively settled at the time the transactions were recorded, unless otherwise noted.

The total net effect of the settlement of these transactions was reflected within parent net investment as a component of equity and within net transfers from Parent as a financing activity in the periods prior to the completion of the Mobileye IPO, unless otherwise noted.

Following the completion of the Mobileye IPO, the condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There have been no material changes in our significant accounting policies as described in our consolidated financial statements for the fiscal year ended December 30, 2023.

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On an on-going basis, management evaluates its estimates, judgments, and assumptions.

The most significant estimates and assumptions relate to useful lives of intangible assets, impairment assessment of goodwill and income taxes.

The most significant estimates and assumptions relate to useful lives of intangible assets, impairment assessment of intangible assets and goodwill and income taxes.

Cash, cash equivalents and restricted cash

1 unchanged sentence

dollars in millions

September 30, 2023

March 30, 2024

December 30, 2023

5 unchanged sentences

The carrying value of short term deposits classified as cash equivalents approximates their fair value due to the short maturity of these items.

The Company’s investment in money market funds is measured at fair value and consists of financial assets for which quoted prices are available in an active market.

Interest income related to money market funds for the three and nine months ended September 30, 2023 amounted to $ 15 million and $ 35 million, respectively.

The Company’s investment in money market funds is measured at fair value within Level 1 of the fair value hierarchy because they consist of financial assets for which quoted prices are available in an active market.

Interest income related to money market funds for the three months ended March 30, 2024 and April 1, 2023, amounted to $ 12 million and $ 8 million respectively.

The carrying amounts of trade accounts receivable and accounts payable approximate fair value because of their generally short maturities.

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Research and development expenses are expensed as incurred, and consist primarily of personnel, facilities, equipment, and supplies for research and development activities.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company occasionally enters into best-efforts nonrefundable, non-recurring engineering (“NRE”) arrangements pursuant to which the Company is reimbursed for a portion of the research and development expenses attributable to specific development programs.

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All intellectual property generated from these arrangements is exclusively owned by the Company.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Participation in expenses for research and development projects are recognized on the basis of the costs incurred and are netted against research and development expenses in the condensed consolidated statements of operations and comprehensive income (loss).

Research and development reimbursements of $ 24 million and $ 15 million were offset against research and development costs in the three months ended September 30, 2023 and October 1, 2022, respectively;

and $ 57 million and $ 40 million were offset in the nine months ended September 30, 2023 and October 1, 2022, respectively.

Research and development reimbursements of $ 36 million and $ 17 million were offset against research and development costs in the three months ended March 30, 2024 and April 1, 2023, respectively.

Derivatives and hedging

Beginning in 2021, as part of Intel’s corporate hedging program, Intel hedges forecasted cash flows denominated in Israel Shekels (“ILS”) related to the Company.

Beginning in 2021, as part of Intel’s corporate hedging program, Intel hedges forecasted cash flows denominated in Israeli Shekels (“ILS”) related to the Company.

ILS is the largest operating expense currency of the Company.

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Derivative gains and losses attributed to these condensed consolidated financial statements are recorded under accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects the statement of operations.

During the fourth quarter of 2022, the Company de-designated its remaining cash flow hedges for forecasted operating expenses denominated in ILS.

During the fourth quarter of 2022, the Company de-designated its remaining cash flow hedges for forecasted operating expenses denominated in ILS and no longer participates in the hedging services agreement with Intel.

As the hedged transactions and cash flows related to the outstanding instruments were expected to occur as originally forecasted, the associated gains and losses deferred in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheet were reclassified into earnings in the same period or periods during which the originally hedged transactions affect earnings.

Any subsequent changes in the fair value of the outstanding derivative instruments after the de-designation and termination of hedge accounting were immediately reflected in operating expenses.

As of September 30, 2023, there are no outstanding hedging instruments and all of the related accumulated other comprehensive income (loss) was reclassified into the statement of operations and comprehensive income (loss).

The notional amount and fair value of derivatives outstanding at Intel on behalf of Mobileye were:

dollars in millions

September 30, 2023

December 31, 2022

Notional amount of derivatives

Fair value of derivatives receivable from (payable to) Intel

The change in accumulated other comprehensive income (loss) relating to gains (losses) on derivatives used for hedging was as follows:

Three Months Ended

Nine Months Ended

dollars in millions

September 30, 2023

October 1, 2022

September 30, 2023

October 1, 2022

Other comprehensive income (loss) before reclassifications

March 30, 2024

April 1, 2023

Amounts reclassified out of accumulated other comprehensive income (loss)

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The overall effective tax rate is influenced by valuation allowances on tax assets for which no benefit can be recognized due to the Company’s recent history of pretax losses sustained.

Tax jurisdictions with forecasted pretax losses for the year for which no benefit can be recognized are excluded from the calculation of the worldwide estimated annual effective tax rate, and any associated tax expense or benefit for those jurisdictions is recorded separately.

Tax jurisdictions with forecasted pretax losses for the year for which no benefit can be recognized are excluded from the calculation of the worldwide estimated annual effective tax rate, and any associated tax provision or benefit for those jurisdictions is recorded separately.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

During the periods presented in the consolidated financial statements, certain components of the Company’s business operations were included in the consolidated U.S.

domestic income tax return filed by the Company’s Parent.

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The Company has entered into a Tax Sharing Agreement with its Parent that establishes the amount of cash payable for the Company’s share of the tax liability owed on consolidated tax return filings with its Parent.

Any differences between taxes payable to the Company’s Parent under the Tax Sharing Agreement and the current tax provision computed on a separate return basis, is reflected as adjustments to additional paid-in capital in the condensed consolidated statement of changes in equity and financing activities within the condensed consolidated statement of cash flows.

The Company reflects tax loss and tax credit carry-forward attributes under the separate return method approach.

Such tax attributes may not be benefited in the same period as the Company’s Parent on a consolidated tax return.

Loss contingencies

Management believes that there are no current matters that would have a material effect on the Company’s condensed consolidated balance sheets, statements of operations or cash flows.

Legal fees are expensed as incurred.

As a result, there are inherent differences between the Company’s separate tax return method approach and certain actual tax returns filed on a consolidated basis with Intel.

Concentration of credit risk

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The Company performs ongoing credit evaluations of its customers and has not experienced any material losses in the periods presented.

The Company establishes credit losses for accounts receivable by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history from such customers, and the customers’ current ability to pay its obligation to the Company.

As of September 30, 2023 and December 31, 2022, the credit losses for accounts receivable were not material.

The Company writes off accounts receivable when they are deemed uncollectible.

For the three and nine months ended September 30, 2023 and October 1, 2022, the charge-offs and recoveries in relation to the credit losses accounts were not material.

The Company recognizes an allowance for credit losses for any potential uncollectible amounts.

The allowance is based on various factors, including historical experience, the age of the accounts receivable balances, credit quality of the customers, and other reasonable and supportable information.

This allowance consists of an amount based on overall estimated exposure for the receivable portfolio and amounts identified for specific customers.

Expected credit losses are recorded as general and administrative expenses in the Company’s condensed consolidated statement of operations and comprehensive income.

As of March 30, 2024 and December 30, 2023, the credit loss allowance of trade accounts receivable was not material.

For the three months ended March 30, 2024 and April 1, 2023 , the charge-offs and recoveries in relation to the credit losses were not material.

MOBILEYE GLOBAL INC.

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Any issues that occur and persist in connection with the manufacture, delivery, quality, or cost of the assembly and testing of inventory could have a material adverse effect on the Company’s business, results of operations and financial condition.

See below regarding a shortage in EyeQ® SoCs that the Company experienced during 2022 and may experience in the future, including in ECUs for SuperVision™ and other components for our products.

See below regarding a shortage in EyeQ™ SoC that the Company experienced during 2021 and 2022 and may experience in the future, including in ECUs for SuperVision™ and other components for our products.

Supply chain risk

During the fiscal year ended December 31, 2022, due to global supply chain constraints and shortage of semiconductors, the Company’s sole supplier was not able to meet demand of the Company for EyeQ® SoCs, causing a significant reduction in the Company’s inventory levels.

We may experience a shortfall of EyeQ® SoCs, ECUs for SuperVision™ and other components for our products.

During the fiscal years 2022 and 2021, due to global supply chain constraints and shortage of semiconductors, the Company’s sole supplier was not able to meet demand of the Company for EyeQ™ SoCs, causing a significant reduction in the Company’s inventory levels.

Starting in late 2022 and early 2023, such supply chain constraints and shortage abated and during 2023, we successfully increased levels of EyeQ™ SoC inventory on hand, mitigating the potential for future supply constraints to cause a shortfall.

However, in the event of a reoccurrence of supply chain constraints, and subject to the duration and severity thereof, we may be required to operate with minimal or no inventory of EyeQ™ SoCs or SuperVision™ ECUs on hand.

The reoccurrence of shortages and supply chain constraints in EyeQ™ SoCs and ECUs for SuperVision™ and in components of our other products, may impair the Company’s ability to meet its customers’ requirements in a timely manner and may adversely affect the Company’s business, results of operations and financial condition.

Moreover, to the extent that a global semiconductor shortage results in reduced production or production delays by automakers, those delays could result in reduced or delayed demand for the Company’s products.

In addition, issues relating to the COVID-19 pandemic led to port congestion and intermittent supplier shutdowns and delays in the delivery of critical components, which resulted in additional expenses to expedite delivery of critical parts.

Sustaining the Company’s production trajectory requires the readiness and solvency of its suppliers and vendors, a stable and motivated production workforce and ongoing government cooperation, including for travel and visa allowances, which governments may restrict.

Moreover, to the extent that the global semiconductor shortage results in reduced production or production delays by automakers, those delays could result in reduced or delayed demand for the Company products.

Sustaining the Company’s production trajectory require the readiness and solvency of its suppliers and vendors, a stable and motivated production workforce and ongoing government cooperation, including for travel and visa allowances, which governments may restrict.

Although we cannot fully predict the length and the severity of the impact these pressures would have on a long-term basis, we do not anticipate that short-term supply chain constraints would materially adversely affect our results of operations, capital resources, sales, profits, and liquidity.

New Accounting pronouncements

Accounting Pronouncements effective in future periods

In December 2023, the FASB issued ASU 2023-09 Improvements to Income Tax Disclosures.

The ASU improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

For public business entities, the ASU is effective for annual periods beginning after December 15, 2024.

The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In November 2023, the FASB issued ASU No.

2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The ASU improves reportable segments disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

NOTE 3 - OTHER FINANCIAL STATEMENT DETAILS

dollars in millions

September 30, 2023

March 30, 2024

December 30, 2023

3 unchanged sentences

Total inventories

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Inventory write-downs and write-offs were not material for the periods presented in these condensed consolidated financial statements.

Property and equipment, net:

Property and equipment

dollars in millions

September 30, 2023

March 30, 2024

December 30, 2023

2 unchanged sentences

Leasehold improvements

Construction in process

Total property and equipment, gross

1 unchanged sentence

Total property and equipment, net

Depreciation expenses totaled $ 9 million and $ 7 million for the three months ended September 30, 2023 and October 1, 2022, respectively;

and $ 24 million and $ 17 million for the nine months ended September 30, 2023 and October 1, 2022, respectively.

Depreciation expenses totaled $ 14 million and $ 7 million for the three months ended March 30, 2024 and April 1, 2023, respectively.

During the three months ended March 30, 2024, the Company derecognized the cost and accumulated depreciation of fully depreciated assets in the amount of $ 6 million.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - EQUITY

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Restricted Stock Units

The RSUs activity for the nine months ended September 30, 2023 for RSUs granted to Company’s employees under the 2022 Plan was as follows:

The RSUs activity for the three months ended March 30, 2024 for RSUs granted to Company’s employees under the 2022 Plan was as follows:

Weighted average grant

2 unchanged sentences

Outstanding as of December 30, 2023

Outstanding as of September 30, 2023

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The RSUs activity for the three months ended September 30, 2023 for RSUs granted to Company’s employees under the 2022 Plan was as follows:

Weighted average grant

Number of RSUs

date fair value

Options outstanding as of July 1, 2023

Outstanding as of September 30, 2023

As of September 30, 2023, the unrecognized compensation cost related to all unvested RSUs granted under the 2022 Plan, was $ 327 million, which is expected to be recognized as expense over a weighted-average period of 2.4 years.

Outstanding as of March 30, 2024

As of March 30, 2024, the unrecognized compensation cost related to all unvested RSUs granted under the 2022 Plan, was $ 291 million, which is expected to be recognized as expense over a weighted-average period of 1.96 years.

Prior to the Mobileye IPO, since 2017, employees of the Company had been incentivized and rewarded through the grant of Intel equity awards under Intel’s equity incentive plan which contains only a service condition.

The equity awards granted generally vest over the course of three years from the grant date.

Outstanding and exercisable options for Intel’s common stock under Intel’s plan as of September 30, 2023 were as follows:

Outstanding and exercisable options for Intel’s common stock under Intel’s plan as of March 30, 2024 were as follows:

Weighted average

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exercise price

$ 22.4 - 24.3

The option activity for the nine months ended September 30, 2023 for options granted to the Company’s employees for Intel’s common stock was as follows:

Weighted average

contractual Life

exercise price

dollars in millions

Options outstanding as of December 31, 2022

Options outstanding as of September 30, 2023

Options exercisable as of September 30, 2023

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The option activity for the three months ended September 30, 2023 for options granted to the Company’s employees for Intel’s common stock was as follows:

The options activity for the three months ended March 30, 2024 for options granted to the Company’s employees for Intel’s common stock was as follows:

Weighted average

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dollars in millions

Options outstanding as of July 1, 2023

Options outstanding as of September 30, 2023

Options exercisable as of September 30, 2023

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of Intel’s ordinary share.

On September 30, 2023, Intel’s ordinary share price was $ 35.6 .

Options outstanding as of December 30, 2023

Options outstanding as of March 30, 2024

Options exercisable as of March 30, 2024

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of Intel’s ordinary shares.

On March 30, 2024 and December 30, 2023, the share price was $ 44.17 and $ 50.25 .

This represents the potential pre-tax amount receivable by the option holders had all option holders exercised their options as of such date.

(2) The remaining options expected to vest as of September 30, 2023 are 7 thousand options with an average weighted exercise price of $ 21.6 .

The RSUs activity for the nine months ended September 30, 2023 for RSUs granted to the Company’s employees for Intel’s common stock was as follows:

(2) The remaining options expected to vest as of March 30, 2024 are 7 thousand options with an average weighted exercise price of $ 21.6 .

The RSUs activity for the three months ended March 30, 2024 for RSUs granted to the Company’s employees for Intel’s common stock was as follows:

Weighted average

2 unchanged sentences

Outstanding as of December 30, 2023

Outstanding as of September 30, 2023

The RSUs activity for the three months ended September 30, 2023 for RSUs granted to the Company’s employees for Intel’s common stock was as follows:

Weighted average

Number of RSUs

grant date fair value

Outstanding as of July 1, 2023

Outstanding as of September 30, 2023

Outstanding as of March 30, 2024

Unrecognized expenses

As of September 30, 2023, the unrecognized compensation cost related to stock options and RSUs granted under the Intel 2006 Plan was $ 108 million, which will be recognized over a weighted average period of 1.1 years.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 30, 2024, the unrecognized compensation cost related to stock options and RSUs granted under the Intel 2006 Plan was $ 59 million, which will be recognized over a weighted average period of 0.8 years.

Share-based compensation expense summary (for both Mobileye and Intel Plans)

1 unchanged sentence

Three months ended

Nine months ended

dollars in millions

September 30, 2023

October 1, 2022

September 30, 2023

October 1, 2022

March 30, 2024

April 1, 2023

Cost of revenue

3 unchanged sentences

Total share-based compensation

NOTE 5 - EARNINGS (LOSS) PER SHARE

Before the Mobileye IPO, Intel held directly or indirectly the 100 shares of common stock of Mobileye, with a par value of $ 0.01 per share, that were issued and outstanding .

Immediately prior to the Mobileye IPO, those 100 shares of common stock held by Intel were reclassified into 100 shares of Class B common stock with a par value of $ 0.01 per share.

Concurrently, we issued to Intel an additional 749,999,900 shares of our Class B common stock pursuant to an agreement with Intel.

Accordingly, as of the completion of the Mobileye IPO, we had 750,000,000 Class B shares, all held by Intel.

Per ASC 260-10-55-12, this share amount is being retroactively utilized for the calculation of basic and diluted earnings (loss) per share (“EPS”) for all periods presented.

In connection with the Mobileye IPO, we issued 41,000,000 shares of our Class A common stock to the public at a public offering price of $ 21 per share and an additional 4,761,905 Class A shares at a private placement.

The Mobileye IPO closed on October 28, 2022.

On November 1, 2022, we closed the sale of an additional 6,150,000 shares pursuant to the exercise of the underwriters’ over-allotment option.

In accordance with ASC 260, the Class A shares issued in connection with the Mobileye IPO are included in earnings (loss) per share calculations for periods subsequent to the closing of the Mobileye IPO and are not included in the earnings (loss) per share calculations for periods prior to the closing of the Mobileye IPO.

On June 12, 2023, we completed the Secondary Offering, pursuant to which 38,500,000 shares of Class B common stock held by Intel were converted into an equal number of shares of Class A common stock.

Accordingly, as of September 30, 2023, we have 711,500,000 Class B shares, all held by Intel, and 94,164,300 Class A shares, both of which are utilized for the calculation of basic and diluted EPS.

The outstanding Class A shares also include shares issued upon vesting of outstanding RSUs, see note 4.

For the three and nine months ended September 30, 2023, the computation of diluted earnings (loss) per share attributable to common stockholders does not include 5.5 million and 14.9 million potential common shares, respectively, related to restricted stock units granted under the 2022 Plan to the Company’s employees, as the effect of their inclusion would have been anti-dilutive.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - EARNINGS (LOSS) PER SHARE

The following table summarizes the calculation of basic earnings (loss) per share for the periods presented:

Three months ended

Nine months ended

September 30,

In millions, except per share amounts

Net income (loss)

Weighted average common shares - basic

Dilutive effect of unvested RSU awards

Weighted average common shares - diluted

Weighted average common shares - basic and diluted

Earnings (loss) per share:

Basic and diluted

For the three months ended March 30, 2024 and April 1, 2023, the computation of diluted earnings (loss) per share attributable to common stockholders does not include potential common shares, related to restricted stock units granted under the 2022 plan to the Company’s employees, as the effect of their inclusion would have been anti-dilutive due to a net loss in the three months ended March 30, 2024 and April 1, 2023.

NOTE 6 - INCOME TAXES

The Company’s quarterly benefit (provision) for income taxes and the estimates of its annual effective tax rate, are subject to fluctuation due to several factors, principally including variability in overall pre-tax income and the mix of tax paying components to which such income relates.

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

The income tax benefit (provision) included in these condensed consolidated financial statements has been calculated using the separate return method, as if the Company had filed its own tax returns.

Net operating losses generated by the Company that have been utilized as part of the Parent’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 for the separate return method net operating losses when determined to be realizable, whether as a deduction against current taxable income in future periods or upon recognition of associated deferred tax assets based on valuation allowance assessments.

Any differences between taxes currently payable to the Company’s Parent under the Tax Sharing Agreement and the current tax provision computed on a separate return basis, is reflected as adjustments to additional paid-in capital (see also Note 2).

There was no adjustment to additional paid-in capital for the three and nine months ended September 30, 2023, based on estimates of forecasted 2023 US taxes payable under the separate return method for those periods.

The adjustment to additional paid-in capital for the three and nine months ended October 1, 2022 was a decrease of $ 9 million and $ 16 million, respectively, because amounts payable under the Tax Sharing Agreement exceeded the amounts calculated under the separate return method.

The tax expense for the nine months ended September 30, 2023 and October 1, 2022 was unfavorably impacted by a valuation allowance for certain jurisdictions.

The decrease in tax expense was driven by a change in the jurisdictional composition of our taxable income based on operational results and the recognition of discrete tax items in 2022.

Additionally, an accrued withholding tax expense of $ 14 million related to a dividend distribution between entities within the Mobileye Group that was recorded in the nine months ended October 1, 2022.

As the Company has jurisdictions that have sustained recent losses based on the separate return method, a valuation allowance is required for deferred tax assets for which no benefit can be currently realized.

Benefit for income tax in the three months ended March 30, 2024, was $ 3 million compared to a provision for income tax of $( 6 ) million in the three months ended April 1, 2023, mainly due to a higher loss before income taxes in the three months ended March 30, 2024 compared to prior year period.

MOBILEYE GLOBAL INC.

2 unchanged sentences

The Company has entered into a series of related party arrangements with Intel.

For further description of the arrangements refer to Note 9 of the notes to consolidated financial statement for the year ended December 31, 2022.

For further description of the arrangements refer to Note 9 of the notes to the consolidated financial statements for the year ended December 30, 2023.

Stock Compensation Recharge Agreement

The Company entered into a stock compensation recharge agreement with Intel, which requires the Company to reimburse Intel for certain amounts relating to the value of share-based compensation provided to the Company’s employees for RSUs or stock options exercisable in Intel stock.

The liability associated with the stock compensation recharge agreement that is reflected on the condensed consolidated balance sheets, under related party payable was approximately $ 1 million and $ 1 million as of September 30, 2023 and December 31, 2022, respectively.

The reimbursement amounts recorded as an adjustment to additional paid-in capital (and to parent net investment prior to the Mobileye IPO) in the condensed consolidated statement of changes in equity were $ 7 million and $ 5 million for the three months ended September 30, 2023 and October 1, 2022, respectively and $ 29 million and $ 45 million for the nine months ended September 30, 2023 and October 1, 2022, respectively.

The Company entered into a stock compensation recharge agreement with Intel, which requires the Company to reimburse Intel for certain amounts, net of any related withholding tax, relating to the value of share-based compensation provided to the Company’s employees for RSUs or stock options exercisable in Intel stock.

The reimbursement amounts recorded as an adjustment to additional paid-in capital in the condensed consolidated statement of changes in equity were $ 5 million and $ 4 million for the three months ended March 30, 2024 and April 1, 2023, respectively.

Lease agreements

1 unchanged sentence

The costs are included in the condensed consolidated statements of operations and comprehensive income (loss) primarily on a specific and direct attribution basis.

The leasing costs for the three months ended September 30, 2023 and October 1, 2022, were $ 1.2 million and $ 1.3 million, respectively and $ 3.6 million and $ 2.0 million for the nine months ended September 30, 2023 and October 1, 2022, respectively.

The leasing costs for the three months ended March 30, 2024 and April 1, 2023, were $ 0.6 million and $ 1.3 million, respectively.

Other services to a related party

The Company reimbursed its Chief Executive Officer for reasonable travel related expenses incurred while conducting business on behalf of the Company.

Travel related reimbursements totaled $ 0.5 million and $ 0.5 million for the three months ended September 30, 2023 and October 1, 2022, respectively and $ 1.7 million and $ 0.8 million for the nine months ended September 30, 2023 and October 1, 2022, respectively.

Travel related reimbursements totaled $ 0.6 million and $ 0.7 million for three months ended March 30, 2024 and April 1, 2023, respectively.

Administrative Services Agreement

Under the Administrative Services Agreement, effective as of the completion of the Mobileye IPO, Intel provides the Company with administrative, financial, legal, tax, and other services.

Under the Administrative Services Agreement, Intel provides the Company with administrative and other services.

The Company pays fees to Intel for the services rendered based on pricing per service agreed between the Company and Intel.

The costs incurred under this agreement for the three and nine months ended September 30, 2023 were $ 1.7 million and $ 2.9 million, respectively.

The costs incurred under this agreement for the three months ended March 30, 2024 and April 1, 2023 were $ 1.5 million and $ 0.4 million, respectively.

Technology and Services Agreement

The Technology and Services Agreement, effective as of the completion of the Mobileye IPO, provides a framework for the collaboration on technology projects and services between the Company and Intel (“Technology Projects”), and sets out the licenses granted by each party to its respective technology for the conduct of the Technology Projects, provisions relating to the ownership of certain existing technology, the allocation of rights in any new technology created in the course of the Technology Projects, and certain provisions applicable to the development of a certain radar product of the Company.

The Technology and Services Agreement does not apply to projects for the development and manufacture of a Lidar sensor system for automobiles, for which the LiDAR Product Collaboration Agreement applies.

The Technology and Services Agreement provides a framework for the collaboration on technology projects and services between the Company and Intel (“Technology Projects”), and sets out the licenses granted by each party to its respective technology for the conduct of the Technology Projects, provisions relating to the ownership of certain existing technology, the allocation of rights in any new technology created in the course of the Technology Projects, and certain provisions applicable to the development of a certain radar product of the Company.

The Technology and Services Agreement will not apply to projects for the development and manufacture of a Lidar sensor system for automobiles, for which the LiDAR Product Collaboration Agreement will apply.

Pursuant to the Technology and Services Agreement, the Company and Intel will agree to statements of work with additional terms for Technology Projects.

The amount incurred under this agreement for the three months ended March 30, 2024 and April 1, 2023 was $ 1 million.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The amount incurred under this agreement for the three and nine months ended September 30, 2023 were $ 1.4 million and $ 3.8 million, respectively.

LiDAR Product Collaboration Agreement

The LiDAR Product Collaboration Agreement, effective as of the completion of the Mobileye IPO, provides the terms that will apply to the Company’s collaboration with Intel for the development and manufacture of a Lidar sensor system for ADAS and AV in automobiles (“LiDAR Projects”).

The LiDAR Product Collaboration Agreement provides the terms that will apply to the Company’s collaboration with Intel for the development and manufacture of a Lidar sensor system for ADAS and AV in automobiles (“LiDAR Projects”).

On some of the LiDAR programs joint funding will apply between Intel and Mobileye until the end of 2027 whereby Mobileye will bear its own Lidar sensor system development costs up to the first $ 40 million per year and Intel will bear up to $ 20 million per year of Mobileye’s Lidar sensor system development costs that are greater than $ 40 million per year.

2 unchanged sentences

In addition, the agreement also includes a profit-sharing model under which Mobileye will pay Intel a share of the gross profit for each LiDAR sensor system or components thereof, based on Intel technology, sold by Mobileye.

There were no amounts received or receivable from Intel under this agreement for the three and nine months ended September 30, 2023.

In 2023, Mobileye opted to pursue a different lidar technology, and as a result, Mobileye and Intel are no longer actively working on developing the LiDAR Project under the LiDAR Product Collaboration Agreement.

Mobileye and Intel have begun negotiation of an amendment to the LiDAR Product Collaboration Agreement which contemplates the parties’ cessation of lidar development work and Mobileye’s potential, continued use of certain licenses granted by Intel under the LiDAR Product Collaboration Agreement.

In connection with the foregoing, Mobileye would no longer be obligated to share its profits associated with the LiDAR Project with Intel, and Intel would no longer be obligated to provide development services for the LiDAR Project and fund Mobileye’s lidar investments beyond the $ 40 million per year threshold set forth in the LiDAR Product Collaboration Agreement.

Final commercial terms for this amendment remain subject to further negotiation by Mobileye and Intel.

There were no amounts received or receivable from Intel under this agreement for the three months ended March 30, 2024 and April 1, 2023.

Tax Sharing Agreement

The Tax Sharing Agreement establishes the respective rights, responsibilities and obligations of the Company and Intel after the completion of the Mobileye IPO with respect to tax matters, including the amount of cash the Company will pay to Intel for its share of the tax liability owed on the consolidated filings in which the Company or any of the Company’s subsidiaries are included, audit or other tax proceedings.

As of September 30, 2023 and December 31, 2022, the related party payable to Intel, pursuant to the Tax Sharing Agreement was $ 34 million.

As of March 30, 2024 and December 30, 2023, the related party payable to Intel, pursuant to the Tax Sharing Agreement, was $ 37 million.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - IDENTIFIED INTANGIBLE ASSETS

dollars in millions

September 30, 2023

March 30, 2024

December 30, 2023

3 unchanged sentences

Three months ended

Nine months ended

September 30,

dollars in millions

2 unchanged sentences

Total amortization expenses

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company expects future amortization expenses for the next five years and thereafter to be as follows:

10 unchanged sentences

Segment performance is the operating income reported excluding the amortization of acquisition-related intangible assets.

The CODM uses segment performance to allocate resources (including employees and financial resources) to segments in the annual budget and forecasting process and also uses that measure to assess the segment performance.

The measure of assets has not been disclosed for each segment as it is not regularly reviewed by the CODM.

3 unchanged sentences

The following are segment results for each period as follows:

Three months ended September 30, 2023

dollars in millions

Cost of revenues

Research and development, net

Sales and marketing

General and administrative

Segment performance

Other financial income (expense), net

Income (loss) before taxes on income

Share-based compensation

Depreciation of property and equipment

Three months ended October 1, 2022

dollars in millions

Cost of revenues

Research and development, net

Sales and marketing

General and administrative

Segment performance

Interest income (expense) with related party, net

Other financial income (expense), net

Income (loss) before taxes on income

Share-based compensation

Depreciation of property and equipment

Nine months ended September 30, 2023

Three months ended March 30, 2024

dollars in millions

8 unchanged sentences

Depreciation of property and equipment

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine months ended October 1, 2022

Three months ended April 1, 2023

dollars in millions

4 unchanged sentences

Segment performance

Interest income (expense) with related party, net

Other financial income (expense), net

4 unchanged sentences

Three months ended

Nine months ended

September 30,

dollars in millions

2 unchanged sentences

Rest of World

We generate the majority of our revenue from the sale of our EyeQ® SoCs to OEMs through sales to Tier 1 automotive suppliers.

EyeQ® SoC sales represented approximately 89 % and 88 % of our revenue for each of the three months ended September 30, 2023 and October 1, 2022, respectively and 90 % and 90 % of our revenue for each of the nine months ended September 30, 2023 and October 1, 2022, respectively.

We generate the majority of our revenue from the sale of our EyeQ TM SoCs to OEMs through sales to Tier 1 automotive suppliers.

EyeQ TM SoC sales represented approximately 72 % and 88 % of our revenue for each of the three months ended March 30, 2024 and April 1, 2023, respectively.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Major Customers

1 unchanged sentence

Three months ended

Nine months ended

September 30,

Percent of total revenues:

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

*Less than 10%

Accounts receivable balances of major customers that amount to 10% or more of total accounts receivable balance:

September 30,

Percent of total accounts receivables balance:

*Less than 10%

NOTE 10 - CONTINGENCIES

On January 16, 2024, a putative class action captioned McAuliffe v.

Mobileye Global Inc., et al., 1:24-CV-00310 (S.D.N.Y.), was filed in the United States District Court for the Southern District of New York against Mobileye and certain of its current and former officers, asserting violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 in connection with defendants’ alleged misstatements and omissions concerning the build-up of excess inventory by certain Tier 1 Mobileye customers.

The complaint seeks unspecified damages and other relief on behalf of all persons and entities who purchased or otherwise acquired Mobileye securities between January 26, 2023 and January 3, 2024.

We intend to defend the matter vigorously.

No provision was recorded in the financial statements as of March 30, 2024.

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Derivative Action

On April 12, 2024, a derivative lawsuit was filed against the members of the Mobileye Board of Directors and Intel Corporation, in its capacity as Mobileye’s controlling shareholder.

Mobileye was also named as a nominal defendant.

The complaint principally asserts claims for breach of fiduciary duty and unjust enrichment based on alleged failures to take steps to prevent the Company from making allegedly false and misleading statements concerning the build-up of excess inventory by certain Tier 1 Mobileye customers.

The complaint also asserts a claim for violation of Section 14(a) of the Securities Exchange Act of 1934 based on alleged misstatements and omissions in Mobileye’s 2023 proxy statement.

The complaint seeks unspecified damages and other relief.

We intend to defend the matter vigorously.

No provision was recorded in the financial statements as of March 30, 2024.

NOTE 11 - SUBSEQUENT EVENTS

In October 2023, the Company’s compensation committee approved the issuance of restricted stock units to be issued under our 2022 Equity Incentive Plan.

In April 2024, the Company’s compensation committee approved the issuance of restricted stock units to be issued under our 2022 Equity Incentive Plan.

The total aggregate fair value of RSUs granted was $ 26.6 million, which consisted of 967 thousand RSUs, which will vest over a service period of three years .

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 1. Financial Statements