Hesai Group ADR’s Robotics Shipment and 2026 Revenue Guidance Clash With Prior Projections, Margin Claims

Date of Call: Mar 24, 2026

Financials Results

• Revenue: Over CNY 3 billion ($433 million), up 46% YOY
• Gross Margin: Over 40%

Guidance:

• Core lidar shipments for 2026 expected to be 3-3.5 million units, up from 1.6 million in 2025.
• Q1 2026 revenue guidance of CNY 650-700 million ($93-$100 million), up 24%-33% YOY.
• Q1 2026 lidar shipments expected to be 400,000-450,000 units, including ~100,000 from robotics.
• Robotics lidar shipments expected to at least double in 2026, from nearly 240,000 units in 2025.
• Gross margin expected to remain resilient in 2026 despite increased ADAS shipments.
• Expect initial revenue contributions from new 'eyes and muscles' products beginning in 2026.

Business Commentary:

Record Financial Performance and Profitability:

• Hesai Group achieved a milestone with the industry's first full-year GAAP net income of CNY 436 million. The company reported record net revenues of over CNY 3 billion ($433 million), representing a 46% year-over-year increase.
• The strong financial performance was driven by substantial ramp in production volumes and robust demand across multiple markets, including automotive and robotics.

ADAS Lidar Market Leadership:

• Hesai's flagship ADAS lidar, ATX, contributed to its number one position in 2025, with over 40% share of the long-range automotive lidar market.
• The leadership was reinforced by securing design wins with key automotive partners and achieving 100% lidar adoption on best-selling models, indicating a shift in lidar from a premium add-on to a core safety feature.

Robotics Lidar Expansion:

• The robotics lidar segment saw nearly 240,000 units shipped in 2025, with expectations to at least double in 2026.
• This growth was driven by establishing a strong market position in segments like humanoid robots, robotaxi, and robotic lawnmowers, with significant design wins and partnerships.

Strategic International Expansion:

• Hesai announced a strategic partnership with Grab and was selected as the primary lidar partner for Nvidia’s DRIVE Hyperion 10 platform.
• These developments mark a significant shift in the company's go-to-market approach, enabling scalable turnkey solutions and enhancing its global footprint.

Cost Management and Margin Resilience:

• Hesai maintained a healthy gross margin of over 40% and reduced operating expenses by CNY 88 million despite substantial revenue growth in 2025.
• This was achieved through disciplined cost management, efficiency gains enabled by AI, and operational leverage from scaling production volumes.

Sentiment Analysis:

Overall Tone: Positive

• Management described 2025 as a 'defining year' and 'pivotal year,' achieving 'industry-first full-year GAAP profitability' and 'record net revenues.' The tone was optimistic about 2026, calling it a 'pivotal year for the evolution of intelligence' and a 'year of acceleration and transformation.' The company raised its 2026 shipment outlook, highlighted 'record-setting orders,' and expressed confidence in maintaining 'profit growth trajectory' and 'strong demand.'

Q&A:

• Question from Tina Hou (Goldman Sachs): Can you give more details about the different verticals (robotaxi, robovan, humanoid robot) in the robotics business and how you see them panning out in 2026 and beyond?
  Response: Management sees 2026 as a 'ChatGPT moment for physical AI,' with lidar as a critical bridge. It is ranked #1 across major robotics submarkets: humanoid robots (expect 5-digit shipments in 2026), robotaxi (world's largest supplier, expects 5-10 lidars per vehicle), robovan (market scaling from 5 to 6 digits, expects 2-6 lidars per vehicle), and robotic lawnmowers (secured 10M unit order). Robot lidar shipments are expected to at least double in 2026.

• Question from Tim Hsiao (Morgan Stanley): How should we view the relationship between Hesai and Sharpa, and is there any opportunity for business cooperation?
  Response: Hesai and Sharpa are fully independent entities with no equity or operational ties. Management is open to future strategic collaborations on market-based terms but emphasizes they will only contribute a small portion to Hesai's business. The focus remains on Hesai's core strategy of lidar leadership and new product expansion.

• Question from Jeff Chung (Citi): Can you give more color on the Q1 volume guidance and provide guidance for Q1 and full-year gross margin and operating margin?
  Response: Q1 2026 revenue guidance is CNY 650-700M ($93-100M), up 24%-33% YOY, with shipments of 400,000-450,000 lidar units. There will be a sequential decrease in deliveries due to seasonality but expecting sequential growth throughout 2026. Gross margin is expected to remain resilient. Full-year 2026 lidar shipments raised to 3-3.5 million units.

• Question from Aaron Wang (Jefferies): Will the company provide a full-year net income guidance for 2026?
  Response: Due to differences in U.S. and Hong Kong listing rules, the company will not provide specific full-year net income guidance. However, management is fully confident in maintaining the growth trajectory of revenues, shipments, and profits in 2026.

• Question from Nora Min (UBS): What is the master plan behind the non-auto, non-lidar new product, and can you share more detail on timeline and progress?
  Response: Management is launching two groundbreaking products in the coming months targeting CNY trillion markets: 'eyes' for enhanced perception and 'muscles' for motion control. Initial revenue contributions are expected as early as 2026, with the business expected to rival or surpass the lidar segment within five years and scale tenfold within a decade.

• Question from Jessie Lo (BofA Securities): Following the NVIDIA partnership, what are the next steps and what differentiates Hesai in this collaboration?
  Response: Being selected as the exclusive lidar partner for NVIDIA's DRIVE Hyperion 10 platform provides a significant advantage. It simplifies the validation process for customers and leverages years of collaborative data and model training. Management views this as a 'smartest way to push the autonomy' with a unified, proven solution.

• Question from Dan Lin (CICC): What's your outlook on the trend of your ASP decline, and can you share more color on methods for further cost reduction?
  Response: Blended ASP decline is driven by product mix (ADAS products taking larger share), not pricing pressure. Future declines are expected to narrow. Cost reduction will come from scale (3-3.5M units in 2026), proprietary chip technology (FMC 500 SoC integrating components), in-house SPAD integration, and highly automated manufacturing.

• Question from Frank Tao (CMBI): What is your outlook for operating expenses in 2026?
  Response: Overall OPEX is expected to increase modestly in the mid-teens in 2026, primarily due to CNY 200M investment in new 'eyes and muscles' products. Excluding this new business spend, OPEX is expected to be flat or down slightly, supported by AI-driven cost management.

Contradiction Point 1

Robotics Shipment Growth Outlook

Guidance on robotics shipment growth is inconsistent between quarters.

Tina Hou (Goldman Sachs) - Tina Hou (Goldman Sachs)

2025Q4: Robotics shipments (after ~240k in 2025) expected to at least double in 2026. - [Peng Fan](CFO) and [Dan Lin](CEO)

Could you provide an update on the robotics business across verticals (robotaxi, robovan, humanoid robot) and the expected development trajectory by 2026 and beyond? - Tim Hsiao (Morgan Stanley)

2025Q1: [The Infinity Eye platform] gross margin is expected to remain stable and healthy, not fluctuating significantly with product mix changes. - [Yifan Li](CEO) and [Peng Fan](CFO)

Contradiction Point 2

Timeline for New Product Revenue Contribution

2025Q4 brings forward the timeline for new business revenue from 5-year to as soon as 2026.

Jeff Chung (Citi) - Jeff Chung (Citi)

2025Q4: Two new products... will begin contributing revenue in 2026... Within 5 years, this business could rival... the lidar segment. - [Peng Fan](CFO) and [Dan Lin](CEO)

Can you provide more color on the Q1 2026 volume guidance and expectations for Q1 and full-year gross margin and operating margin? - Jia Lou (BOCI Research Limited)

2025Q3: Explores several large-TAM areas... over the next decade. - [Yifan Li](CEO)

Contradiction Point 3

2026 Revenue and Shipment Guidance

Guidance for 2026 shipments and revenue growth appears inconsistent.

Jeff Chung (Citi) - Jeff Chung (Citi)

2025Q4: Full-year 2026 outlook: Shipments raised to 3-3.5 million units (ADAS and robotics lidars each expected to roughly double YoY). Revenue guidance for Q1 2026 is CNY 650-700 million ($93-100 million), up 24%-33% YoY. - [Peng Fan](CFO) and [Dan Lin](CEO)

Can you provide more details on the Q1 2026 volume guidance and expectations for Q1 and full-year gross margin and operating margin? - Tim Hsiao (Morgan Stanley)

2024Q4: Full-year 2025 guidance: shipments of 1.2-1.5 million units, with revenue of RMB3-3.5 billion (USD411-480 million). - [Andrew Fan](CFO)

Contradiction Point 4

Robotics Market Size and Margin Expectations

The characterization of the robotics market's long-term size and margin profile has shifted.

Tina Hou (Goldman Sachs) - Tina Hou (Goldman Sachs)

2025Q4: Long-term TAM for robotics is several times larger than ADAS. - [Peng Fan](CFO) and [Dan Lin](CEO)

Could you provide details on the robotics business across robotaxi, robovan, and humanoid robot, and their development through 2026 and beyond? - Tina Hou (Goldman Sachs)

2024Q4: The robotics market is expected to be several times larger than the passenger vehicle business. - [Andrew Fan](CFO) and [David Li](CEO)

Contradiction Point 5

ASP/Margin Trajectory and Cost Structure

The drivers and outlook for ASP declines and margin resilience have changed.

Dan Lin (CICC) - Dan Lin (CICC)

2025Q4: Blended ASP may decline due to product mix (more lower-priced ADAS units) and modest price declines for strategic OEMs. Gross Margin: Expected to remain resilient in 2026 despite increased ADAS shipments, supported by cost optimizations and the FMC 500 SoC. - [Peng Fan](CFO) and [Dan Lin](CEO)

What is the outlook for the trend of ASP decline and the methods for further cost reduction? - Jessie Lo (BofA Securities)

2024Q4: ASP declines in the past were due to scaling; current $200 (ATX) and $500+ (Level 3) prices are considered stable. Gross profit margin is expected to remain healthy at ~40% even with ASP declines, thanks to cost management and scale. - [David Li](CEO) and [Andrew Fan](CFO)