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    HSAI
    Earnings call· Mar 2026(Q1 FY26)

    Hesai Group Q1 FY26 earnings call HSAI

    May 19, 2026 Source

    Executive summary

    Hesai Group Q1 FY26 — Strategic Shift to Physical AI and Mercedes-Benz Partnership

    Hesai Group announced a strategic paradigm shift from spatial perception to spatial intelligence, positioning itself as a key enabler of Physical AI. This quarter was highlighted by a significant partnership with Mercedes-Benz for Level 3 autonomy and strong financial performance, including robust revenue growth and sustained profitability. The company introduced new innovations like Picasso 6D full-color LiDAR and the Kosmo spatial intelligence device, alongside new Robotic Actuation Modules, signaling a broader expansion beyond traditional LiDAR.

    Highlights

    6

    • Secured strategic LiDAR partner and confirmed supplier status for Mercedes-Benz Level 3 autonomy models.

    • Total LiDAR shipments expected to approximately double in 2026, reaching 3 million to 3.5 million units.

    • Ranked #1 globally in long-range ADAS LiDAR shipments with 43% market share in 2025 (Yole Group).

    • China market share surged to 55% in March 2026, marking 14th consecutive month at #1 (Gasgoo).

    • Q1 FY26 total net revenues reached RMB 681 million (USD 99 million), representing a 30% increase year-over-year.

    • Achieved GAAP net income of RMB 18 million (USD 2.7 million) and non-GAAP net income of RMB 48 million (USD 6.9 million), extending track record to 4 consecutive quarters of GAAP profitability and 6 consecutive non-GAAP.

    Guidance & targets

    7
    CategoryTargetConfidence
    Total LiDAR Shipments
    3 million to 3.5 million units
    high materiality
    High
    Net Revenues
    RMB 850 million to RMB 900 million (USD 123 million to USD 130 million)
    high materiality
    High
    Revenue Momentum
    Strengthen progressively
    medium materiality
    High
    SGI Revenues
    Approximately RMB 100 million
    medium materiality
    High
    SGI Revenues
    Around RMB 500 million
    high materiality
    Medium
    Total LiDAR Shipments
    3 million to 3.5 million units
    high materiality
    High
    Total LiDAR Shipments
    Around 650,000 units
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Core Lidar
    The Core Lidar business delivered a robust operating profit, demonstrating its strong self-sustaining profitability.
    		———RMB 42 million operating profit
    Strategic Growth Initiatives (SGI)
    The SGI business recorded an operating loss, representing a deliberate and forward-looking investment in building the infrastructure of Physical AI.
    		———RMB 51 million operating loss

    Operational metrics

    10
    Total LiDAR Shipments
    471,000more than doubling year-over-year
    Q1 FY26

    Total LiDAR shipments for the first quarter, with both broad-based ADAS and Robotic shipments more than doubling year-over-year.

    Total Operating Expenses
    9%year-over-year increase
    Q1 FY26

    Total operating expenses increased, primarily reflecting targeted R&D investments in new initiatives, partially offset by savings from AI tools.

    Core Lidar Operating Expenses
    declinedyear-over-year
    Q1 FY26

    Excluding investments in new initiatives, Core Lidar operating expenses declined year-over-year, driven by efficiency gains and cost discipline.

    OEM Backlog
    6 million
    current

    OEM demand remained exceptionally strong, with backlog now exceeding 6 million units.

    LiDAR Content per Vehicle
    $200
    last year

    LiDAR content per vehicle for Level 2 autonomy, typically anchored by one long-range ATX.

    LiDAR Content per Vehicle
    $350
    current

    LiDAR content per vehicle for entry-level Level 3 platforms, for example, one ATX plus two FTX for blind spot coverage.

    LiDAR Content per Vehicle
    $500 to $1,000
    current

    LiDAR content per vehicle in more advanced Level 3 configurations, with ETX high-end LiDAR and additional blind spot FTX content.

    Kosmo Reconstruction Efficiency
    1/5vs existing 3DGS solutions
    current

    Kosmo can complete reconstruction for a 200 square meter space in roughly 1/5 of the time of existing 3DGS solutions.

    Kosmo Reconstruction Efficiency
    1/50vs traditional workflow
    current

    Kosmo can complete reconstruction for a 200 square meter space in roughly 1/50 of the time of traditional workflow, with substantially lower labor costs.

    Automotive-grade Motors and Encoders Shipped
    1 million
    past decade

    Over the past decade, Hesai has developed and shipped more than 1 million automotive-grade motors and encoders into its LiDAR systems.

    Industry KPIs

    4
    MetricValueDetails
    RevenueRMB 681 millionRMB
    Net incomeRMB 18 million (GAAP) / RMB 48 million (non-GAAP)RMB
    Gross margin39%%
    Market share43%%

    Product announcements

    3
    ProductTypeDetails
    Picasso (integrated into ETX LiDAR)launch
    Kosmolaunch
    Robotic Actuation Modulesroadmap

    Deals & partnerships

    7
    Mercedes-BenzStrategic LiDAR partner and confirmed supplier for Level 3 autonomy models.

    Supports Mercedes-Benz programs in Europe and China. LiDAR production supported by Hesai's new Galileo manufacturing center in Thailand.

    GAC ToyotaSelected for 2026 bZ3X model.

    Marks Hesai's first entry into the Japanese automotive ecosystem.

    XiaomiSecured new overseas design wins.

    Xiaomi is one of Hesai's largest customers.

    Cargo BotExclusive design win for its Phase 2 Transport Robots, deploying 4,320 channel ETX together with FTX blind spot LiDARs.

    Marks the first commercial vehicle contract for Hesai's 6D full-color LiDAR.

    ZelosExclusive design win for 200,000 LiDAR units for Robovans.

    Exclusive design win for 200,000 LiDAR units for Robovans.

    NeolixDeepened partnership as its largest LiDAR supplier for Robovans.

    Deepened partnership as its largest LiDAR supplier for Robovans.

    New TechnologiesFTX design win for next-generation electric 2-wheelers.

    FTX design win for next-generation electric 2-wheelers, a market with more than 60 million units sold annually in China.

    What to watch in Q2 FY26

    5

    SGI Revenue Contribution

    Q2 FY26
    Currentexpected to start in Q2 FY26
    TargetInitial revenue contribution

    Why it matters

    SGI is a new strategic growth initiative with significant long-term potential, and its initial revenue contribution will validate its early commercialization.

    we expect SGI to generate approximately RMB 100 million in revenues this year, with revenue contributions expected to start in the second quarter of 2026.

    Q&A highlights

    7

    What are the volume, revenue, and margin contributions expected from the Mercedes-Benz L3 autonomy partnership over the next 1-3 years and longer term?

    Management confirmed the Mercedes-Benz contracts are a continuation of existing collaboration with additional volumes and car models, but could not disclose specific financial details due to customer strategy. They highlighted the support from Hesai's Thailand manufacturing center, unified product architecture, and NVIDIA partnership for global ADAS market leadership.

    “We will not be able to disclose further details on the strategies of the customer, but we do confirm the new contracts are a continuation of the existing collaboration with additional volumes and car models.”

    asked by Tina Hou · answered by Yifan Li

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Shift to Physical AI

    Hesai Group is undergoing a strategic evolution from spatial perception to spatial intelligence, aiming to become a key enabler of Physical AI. This involves developing 'eyes and muscles' for AI, encompassing chip-based LiDAR solutions, the new Kosmo spatial intelligence device, and Robotic Actuation Modules. This shift leverages the company's deep-tech innovation and R&D intensity to unlock long-term industry value.

    02

    Mercedes-Benz Partnership and Global Expansion

    Hesai has been confirmed as a strategic LiDAR partner and supplier for Mercedes-Benz models enabling Level 3 autonomy in Europe and China, with production supported by its new Galileo manufacturing center in Thailand. The company also secured design wins with GAC Toyota for its 2026 bZ3X model, marking its entry into the Japanese automotive ecosystem, and new overseas design wins with Xiaomi for SOP in 2027. These partnerships highlight international OEM collaborations and the global expansion of Chinese automakers as key structural growth drivers.

    03

    Picasso 6D Full-Color LiDAR Innovation

    Hesai introduced Picasso, the world's first 6D full-color ultra-sensitive SPAD-SoC, which enables real-time colorized point clouds by integrating RGB color and precise 3D geometry at the chip level. This technology, incorporated into the ETX LiDAR, supports up to 4,320 channels and delivers a maximum 600-meter range, significantly enhancing small object detection and safety. Commercial momentum is building, with an exclusive design win with Cargo Bot for its transport robots, and ETX is expected to enter mass production in H2 2026.

    04

    Kosmo Spatial Intelligence Device Launch

    The company unveiled Kosmo, an AI algorithm-integrated spatial intelligence device designed to provide an un-compromised digital foundation for the Physical AI era. Kosmo combines custom LiDAR, multiple sensors, and proprietary 3DGS and AIGC algorithms to rapidly generate photorealistic production-grade 3D environments. It offers significant efficiency improvements, reducing reconstruction time for a 200 square meter space to 1/5 of existing 3DGS solutions and 1/50 of traditional workflows, with initial 8-digit revenues expected in FY26.

    05

    Robotic Actuation Modules Development

    Hesai is expanding into Robotic Actuation Modules, leveraging its systemic expertise in materials, simulation, physical design, and manufacturing of delicate components. This initiative builds on the company's experience from developing and shipping over 1 million automotive-grade motors and encoders for its LiDAR products. These modules are intended to provide the 'muscles' for physical AI to interact with the real world, with early performance signals described as very encouraging.

    AI-generated summary of the company’s earnings call. Not investment advice.