"Arbe Robotics" Q2 2026 Earnings Call - Revenue Doubles as Defense Pivot and Cost Cuts Extend Cash Runway

Conference Operator: Good day, and welcome to the Arbe Robotics second quarter 2026 earnings results. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key, followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch tone phone, and to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Kenny Green. Please go ahead.

Kenny Green, Investor Relations, Arbe Robotics: Thank you. Good day to all of you, and welcome to Arbe’s conference call to discuss the results of the second quarter of 2026. Before we begin, I’d like to remind all our listeners that certain information provided on this call may contain forward-looking statements, and the safe harbor statement outlined in today’s earnings press release also pertains to this call. If you have not received a copy of the release, please view it in the investor relations section of Arbe’s website. Today, we are joined by Ram Machness, Arbe’s CEO, co-founder and co-president, and co-founder, and Karine Pinto-Flomenboim, Chief Financial Officer. Following management’s formal remarks, we will open the call to the question and answer session. With that, I’d now like to hand the call over to Ram Machness. Ram, please go ahead.

Ram Machness, CEO, Co-Founder and Co-President, Arbe Robotics: Thank you, Kenny. Good morning, everyone, and thank you for joining us to review Arbe’s second quarter 2026 results. I am pleased with the solid progress we made in the second quarter. Our strategy of focusing on broader markets for our radar technology with high demand and more immediate revenue potential is clearly delivering results. We grew our revenue by meeting our customer demand for immediate solutions using our technology, and we started to see the positive impact of our reduced expenses on our bottom line. Today, I will go through the main development of the quarter. Our biggest step forward in this quarter was in the defense and homeland security market. A leading global defense and homeland security integrator selected our technology for three projects. We signed a framework agreement, and as we progress, we expect to add more projects over time.

In a short turnaround time, we shipped complete radar systems from our own production line for their immediate operational needs. Our radars are used to a part of a defense and homeland security markets in many unique ways. They are used in fixed installations and vehicle-mounted systems at both short and long ranges. These multiple use cases demonstrate how our versatile radar platform technology can support different needs. The project of Fortera, a supplier of autonomous systems with the U.S. Department of Defense, continues to progress. Our tier 1, Sensrad, supplies Fortera with high-definition imaging radar built on our chipset, and that radar is integrated into Fortera’s auto drive perception suite. It helps the vehicle recognize its surroundings, detect obstacles, and navigate unstructured contested environments where GPS do not work.

More broadly, we see further strong demand for our radar technology with multiple defense and homeland security channels for various applications, we have shipped out systems for further evaluation. Many of these opportunities have significant business potential. Furthermore, since our product is clearly addressing multiple urgent operational needs, we see an effort by our potential customers to reduce cycle times towards full integration and deployment in the field. Beyond defense, we also continue to make progress in other broader radar applications. Sensrad, a Tier 1 supplying imaging radar based on our chipset for defense and commercial applications, announced a new collaboration with VirtuRail. Sensrad announced that VirtuRail is now integrating the radar into its automated service vehicles for underground tunnel construction. We continue to supply chipset to Sensrad, supporting its customers, Forterra, Tianyi, and Rockit.

Arbe is also directly engaged in other non-automotive programs at various stages of evaluation, including a number of potential applications with unmanned ground vehicles and other applications. In those applications of unmanned ground vehicles, the image coming from our high-definition imaging radar is so rich that it is possible to drive based only on the radar output. With regards to our activities in the automotive market, last quarter, we focused follow-on orders from a global robotaxi player for our Phoenix radar systems. Phoenix scales to give full 360 degrees sensing to support Level 4 autonomy. During the second quarter, we showed further progress, and our radar systems were integrated into their vehicles. I’m pleased to say that these vehicles have now started on-road trials. We continue to engage in active bid processes with additional robotaxi players with very positive feedback. Turning to China.

HiRain, our Tier 1 in China, is leading supplier in this market and offers a portfolio of radar systems built on our chipset. In December, we announced that HiRain’s radar, built on our chipset, was selected for a Level 4 program with a large Chinese automaker. During the quarter, we continued to ship chipsets to support this customer. HiRain advised us that they are now progressing towards the start of production, which is planned in the next few months. Alongside the high-end 48x48 system, HiRain is developing a second lower spec platform based on our chipset. This platform has 24x12 channels at a lower cost point for a wider range of vehicles. These two platforms give us a direct path into the Chinese market, which is the largest and fastest-moving market for Level 2 class and Level 3 vehicles.

HiRain is also competing and undergoing due diligence in other meaningful RFIs and RFQs for the radar product portfolio based on our technology. This involves evaluation and fit price. We are closely supporting HiRain with all these evaluations as they progress through various stages of selection. We also continue to make steady progress with global OEMs. OEMs are actively testing advanced radar solutions with the goal to update their sensing suite to support higher Level of autonomy. We feel that we are in good position as Arbe is regarded as the leading ultra-high-resolution radar provider for Level 3 autonomy and above, at a lower enough cost that will allow for a proliferation of our technology to high volume programs at various OEMs. Let me take a few words on our revenue growth this quarter before we go into the numbers.

While still modest, this trend is in the right direction. Our sales this quarter grew on three fronts. We sold more chipsets to our tier 1s, we sold radar systems into defense and civilian programs, and we earned revenue from engineering and development work for our customers. This revenue mix shows that our new strategy of end market diversification is gaining traction. Some of the systems that we sold are being used by our integrator partners to compete on various projects. Any wins by them will potentially translate to significant revenue down the road. Previously, Arbe was just an automotive chipset supplier with many years between a design win and a program maturing to full production. Today, we are supplier of both chipsets as well as complete end-to-end radar systems with much shorter cycles.

With our focus on driving end market with urgent need, we sell directly to customers who need our product now. This lets us generate revenue in the near and medium term. We’re still competing for the automotive OEM programs with their long-term significant revenue potential. At the end of 2025, we also announced steps to lower expenses and enhance operational efficiencies. Indeed, we have leveraged AI to automate many processes and lower our costs. We have reduced our costs base by about 15% for first quarter level, and we expect to see the full effect by the third quarter, where our cash burn is targeted to fall to below $7 million per quarter due to the expected lower expenses and revenue growth.

We ended the quarter with around $42 million in cash on the balance sheet. Given our expected reduced quarterly burn rate, we believe we have a sufficient runway to fully execute on our strategy. Looking back, our first half of 2026 reflects the early stages of this transition. We expect meaningful growth in the second half of the year into 2027. Karine will share our detailed outlook shortly. With that, I’ll hand over the call to our President and Co-Founder, Kobi Marenko. Kobi, please go ahead.

Kobi Marenko, President and Co-Founder, Arbe Robotics: Thank you, Ram. Good morning, everyone. As we announced, this is the last quarter with Arbe for Karine, our Chief Financial Officer. Karine has served in that role for close to five years. During that time, she built our finance organization, led much of our fundraising, and managed our reporting as a public company on two exchanges. On behalf of the board, the management team, and everyone at Arbe, I would like to thank Karine for all that she has done for the company and to wish her much success in her next role. Karine’s last day with Arbe is today. During the transition period, I will temporarily oversee our financial functions together with the team. I am also pleased to share that Assaf Pereg will join Arbe as our Incoming Chief Financial Officer, effective August 30, 2026.

Assaf brings close to two decades of financial leadership experience with both Nasdaq-listed public and private technology companies in Israel and internationally. He joined us from Ibex Medical Analytics Ltd., and previously held finance role at Nano Dimension, Aquarius Engines, Become Technological Solutions, and Cyberint. We look forward to welcoming him on the team. With that, let me turn the call over to Karine to review her last financials.

Karine Pinto-Flomenboim, Chief Financial Officer, Arbe Robotics: Thank you, Kobi. Hello, everyone. Let me review our financial results for the second quarter of 2026 in more detail. Revenue for the second quarter of 2026 totaled $0.7 million, compared to $0.3 million in Q2 2025. This was our third consecutive quarter of revenue growth. Backlog as of June 30th, 2026, was $1 million. Gross loss for Q2 2026 was around breakeven, compared to a gross loss of $0.2 million in Q2 2025.

Total operating expenses for Q2 2026 were $9.8 million, down from $11.3 million in Q2 2025. The lower expenses were primarily driven by lower share-based compensation expenses, reflecting both the lower grant date fair value of equity award issued during the period and the ongoing vesting of previously granted awards, some of which have now fully vested. Increased expenses due to the unfavorable exchange rate impact were fully offset by the decrease in headcount as part of the cost reduction measures taken this quarter, which are expected to be fully reflected by next quarter. Even as we manage costs carefully, we remain committed to investing in and advancing our AI capabilities. Operating loss for the second quarter of 2026 was $9.8 million, compared to an operating loss of $11.5 million in the second quarter of 2025.

Adjusted EBITDA, a non-GAAP measurement which excludes expenses for non-cash share-based compensation and for non-reoccurring items, was a loss of $8.7 million in Q2 of 2026, compared to a loss of $8.9 million in the second quarter of 2025. We believe that this non-GAAP measurement is important in management’s evaluation of our use of cash and in planning and evaluating our cash requirements for the coming period. Net loss for the second quarter of 2026 was $9.1 million, reduced from a net loss of $10.2 million in the second quarter of 2025. Net loss in Q2 2026 included $2.7 million of financial income, compared to $1.3 million of financial income in Q2 2025. As of June 30th 2026, Arbe held $41.9 million in cash equivalents, and short-term bank deposits. Shareholders’ equity was $40.5 million.

Turning to our outlook, management reaffirms the full year 2026 outlook, which we provided in February 2026. Arbe continues to expect full year revenue in the range of $4 million to $6 million, and an adjusted EBITDA in the range of $28 million loss to $31 million loss. Finally, as I conclude nearly five years at Arbe, I wanted to express how meaningful this journey has been for me. Together, we’ve strengthened the company’s balance sheet and funded development through rounds of successful fundraising, streamlined our cost structure for greater efficiency, and built the reporting and governance infrastructure required of a public company, all while laying the groundwork of Arbe’s next step towards full productization. I have great confidence in Arbe’s continued success under the strong leadership of Ram and the talented team here.

I would like to thank Kobi, Ram, our board, and the entire Arbe team for going through this journey together with me, which made our achievements possible, also our investors and analysts for the open dialogue we’ve had over the years. I leave Arbe moving in the right direction with a strong financial position, a lower cost base, and a growing revenue trend. I’m also leaving it in very good hands, and I look forward to continue following the company’s progress from afar. We will be happy to take your questions. Operator?

Conference Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Our first question for today will come from Matthew Galinko with Canaccord Genuity. Please go ahead.

Matthew Galinko, Analyst, Canaccord Genuity: Hi, everyone. Thank you for taking my questions, and Karine, best of luck in your next role.

Karine Pinto-Flomenboim, Chief Financial Officer, Arbe Robotics: Thank you

Matthew Galinko, Analyst, Canaccord Genuity: on the recent defense selection, I believe you mentioned there’s kind of three separate projects here. Could you just provide us some, you know, additional insights as to, you know, what these volumes should look like and how the partnership could expand over time?

Ram Machness, CEO, Co-Founder and Co-President, Arbe Robotics: Yeah. The partnership agreement is a long-term agreement, and right now, to begin with, three specific projects were defined. The agreement is a framework agreement that will be extended to several applications as well. On this specific one, we were requested not to mention the exact application. I can say in general that we see on the defense sector several applications which are very relevant on the radar that are not necessarily specific to this to this agreement.

When we talk about defense application, for example, the unmanned ground vehicles and mission vehicles, that’s something very common and makes a lot of sense to use an imaging radar since it has a very good perception of the surrounding.

It doesn’t have the disadvantages of cameras, like dust, of course, night issues, and weather issues. Many applications that are using radar and imaging radar for unmanned ground vehicle, this is one example of a very common use case in the defense applications. Another one would be some peripheral security. That’s another application that is very common in the defense sector, and there are actually several more applications that are very relevant.

Matthew Galinko, Analyst, Canaccord Genuity: Great. Appreciate the color. Maybe just on the robotaxi front, similarly, it seems like you’re making some nice progress here. If you can perhaps just dive into some detail around what these selection processes look like, what milestones you still need to achieve, and maybe just from a timing perspective, what we should anticipate there.

Ram Machness, CEO, Co-Founder and Co-President, Arbe Robotics: Yeah. We have our radars right now, several vehicles equipped with our radars. This is a 360 degree view coming from our radar. The launch of the development of the perception stack based on our radar is now beginning, and we expect that to roll out towards end of the year and the beginning of next year. That’s with one of the robotaxi providers. There are more coming that are in, right now, in earlier stages.

Matthew Galinko, Analyst, Canaccord Genuity: Great. Thank you.

Conference Operator: Again, if you have a question, please press star then one. This will conclude our question and answer session. I would like to turn the conference back over to Ram Machness for any closing remarks. Please go ahead.

Ram Machness, CEO, Co-Founder and Co-President, Arbe Robotics: Thank you. On behalf of the entire management team at Arbe, I would like to thank you, our shareholders, for the continued interest, the long-term support for our business. I believe that Arbe is now very well situated for the future, having planted the seeds beyond passenger automotive, which, as you saw today, are beginning to sprout. Finally, I would like to thank Karine for her hard work, leadership, and partnership over the past five years and wish her much luck in her future roles. I would also like to welcome Assaf, our new CFO, and we are all very much looking forward to working with him to bring Arbe to the next stage. To our investors and analysts, we look forward to updating you on our progress next quarter. With that, we end our call. Have a great day.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.