Detailed Narrative
Strategic pivot from chipset vendor to full radar-systems supplier
New CEO Ram Machness (stepped into the role in April 2026) framed the quarter as the start of a new chapter: Arbe is evolving from a chipset-focused automotive company into a supplier of complete radar solutions across automotive and adjacent markets. The company has begun selling complete end-to-end radar systems in addition to chipsets, addressing markets with much shorter sales cycles and higher average unit prices. Dedicated production lines were set up to scale system manufacturing. Management positions this as significantly increasing its total addressable market.
China market entry via Tier 1 Hirain
Arbe shipped the initial batch of chipsets to its Chinese Tier 1 partner Hirain during the quarter. These chipsets support production of a 48x48 channel radar for a Level 4 autonomous vehicle solution Hirain is developing for a Chinese automaker (a project announced in December). In parallel, Hirain is developing a lower-cost 24x12 channel radar based on Arbe chipsets to address a wider range of vehicles, complementing the high-end 48x48 system. Management noted China sold 34.4 million vehicles in 2025, giving Arbe direct access to one of the world's largest and fastest-moving markets for Level 2+ and Level 3 deployments.
Robotaxi and autonomous-driving traction
Arbe received orders for its Phoenix radar system from global robotaxi companies, supporting Level 4 autonomy and full 360-degree sensing. Opportunities are concentrated in North America and China. Management also cited participation in data collection programs with global automakers and leading mobility players, with advanced evaluation processes underway with specific Chinese and European automakers. These evaluations increasingly focus on use cases where cameras and LiDAR fall short and imaging radar becomes the key sensor.
Level 3 reset and physical AI positioning
Management addressed several leading OEMs revisiting their Level 3 programs, characterizing it as a reset rather than a rejection of eyes-off autonomy. First-generation Level 3 systems were geofenced, speed- or weather-limited, and many never reached commercial deployment — partly due to inadequate imaging-radar sensor performance. Arbe positions its ultra-high-resolution radar to fill this gap. Management also emphasized 'physical AI' and vision-language-action models as central to where its dense, long-range, all-weather sensing plays. A survey of 1,000 people across the U.S., Europe and Asia indicated drivers are willing to pay and even switch brands for fully operational Level 3/Level 4 autonomy.
NVIDIA ecosystem inclusion
During the quarter, NVIDIA announced it expanded its global DRIVE Hyperion ecosystem and cited Arbe as part of its platform. Arbe's ongoing work with NVIDIA covers radar-based free-space mapping and AI-driven automotive capabilities. In Q&A, management framed NVIDIA as the strongest player in the AV software-stack race, making its platform choices important to all OEMs, and expects autonomous-vehicle software to reach market 'pretty soon,' starting with China and moving to the Western world.
Non-automotive systems expansion into defense and security
Arbe began shipping complete radar systems to players across defense, homeland security, transportation, perimeter security and physical AI. In defense, applications include autonomous/armored vehicles operating off-road in dust, rain and fog, and perimeter defense against intruders and drones. The U.S. Army has already bought hundreds of units, with management expecting a follow-on order. The company is pursuing business development with both established defense primes (e.g., Lockheed Martin) and emerging players. Non-automotive systems carry significantly higher average unit prices but lower volumes and somewhat lower percentage gross margins than chipsets, though higher absolute dollar profit per unit.
Financial results and balance sheet
Q1 2026 revenue was $0.5M (vs $0.4M in Q1 2025) with gross profit of negative $0.1M (improved from negative $0.3M). Total operating expenses fell to $11.2M from $13.1M, driven by lower share-based compensation (earlier grants now fully vested; prior-year award split half cash/half equity) and reduced tape-out expenses as the company advances toward productization, partially offset by a weaker U.S. dollar against the Israeli shekel plus labor provisions and a merit increase. Operating loss was $11.3M (vs $13.4M) and net loss $9.4M (vs $13.8M), the latter including $1.9M of financial income vs $0.5M of financial expense a year earlier. The company raised $18.5M gross in a registered direct offering and held $53.6M in cash, equivalents and short-term deposits at quarter-end.