Hesai Group's Q3 2025 Earnings Call: Clashing Signals on Shipment Guidance, Tariff Impact, L3 Adoption, and Revenue Projections

Date of Call: November 11, 2025

Financials Results

• Revenue: $112M (RMB 795M), up 47% YOY
• Gross Margin: 42% (Q3)

Guidance:

• Q4 revenue expected RMB 1.0–1.2bn (USD 140–169M); full-year 2025 revenue ~RMB 3.0–3.2bn.
• Q4 shipments ~600,000 units; ATX ~80% of Q4 volume; full-year GAAP net income raised to RMB 350–450M (normalized excl. equity gains remains within prior range).
• 2026 shipments forecast at least 2–3 million units; blended ASP may decline but gross margins expected to remain relatively stable; robotics volumes could double in 2026.

Business Commentary:

* Revenue Growth and Profitability: - Hesai Group reported a record net revenue of RMB 795 million (USD 112 million) for Q3 2025, up 47% year-over-year. - The company delivered a record quarterly GAAP net income of RMB 256 million (USD 36 million), achieving their full-year profit target of RMB 200 million to RMB 350 million well ahead of schedule. - The growth was driven by strong demand for LiDAR in passenger vehicles and expanding applications in the robotics sector.

Sentiment Analysis:

Overall Tone: Positive

• Management reported Q3 net revenue surged 47% to RMB 795M and record GAAP net income of RMB 256M; they raised full-year GAAP net income guidance to RMB 350–450M, provided Q4 revenue guidance of RMB 1.0–1.2bn, and completed a Hong Kong IPO raising ~USD 640M, all signaling strong execution and confidence.

Q&A:

• Question from Tina Hou (Goldman Sachs Group, Inc., Research Division): As we go into the last quarter of this year and enter into price discussion with customers next year, could you give color on pricing for next year considering annual price cuts and competitor dynamics? Second, on volume: do you see OEM customers accelerating LiDAR adoption next year, when will the takeoff point be for mass market models to have LiDAR as a standard option? Any color on your 4Q as well as 2026 guidance or any kind of color on volume?
  Response: CFO: Q4 revenue guidance RMB 1.0–1.2bn (bringing full-year to ~RMB 3.0–3.2bn), Q4 shipments ~600k with ATX ~80% of volume, expect 2026 shipments of 2–3M+, blended ASP may decline due to mix/pricing but gross margins should remain healthy (~40%) and full-year GAAP net income raised to RMB 350–450M.

• Question from Tim Hsiao (Morgan Stanley, Research Division): Competitors in China launched new products to undercut ATX—how should we think about peers' mainstream products vs. ATX? And on technology: what are the advantages of SPAD-based digital LiDAR and any updates?
  Response: CEO: Hesai maintains leadership via a disciplined product roadmap and execution—ATX is market-leading on performance, volume and margins—and will adopt SPAD cautiously, as SPAD's high sensitivity brings noise/false-trigger risks that Hesai is addressing with in-house mitigation before broad automotive deployment.

• Question from Ming Chung (Citigroup Inc., Research Division): Any sign of improved product mix and LiDAR per car for L3, views on Level 3 legislation in China and Europe? Also, could you explain why 4Q guidance is optimistic (revenue up ~39–67% YOY) and confidence behind it?
  Response: Management: China's regulatory push toward L3 and OEM multi‑LiDAR launches point to 3–6 LiDARs per L3 vehicle (USD 500–1,000 content), and Q4 guidance reflects expected >RMB1bn revenue, seasonal shipment ramp and inclusion/exclusion of one‑off equity gains supporting confidence in full‑year targets.

• Question from Yu Jie Lo (BofA Securities, Research Division): Could you share color on BYD's 2026 LiDAR order timing, LiDAR adoption on mass market models and Hesai's wallet share and pricing strategy for such a high-volume customer?
  Response: CFO: Hesai is in mass production with BYD since Q1 2025 (supplying AT128P and ATX, ATX leading volumes), holding a strong share across double‑digit BYD models with SOPs in 2025–2026; pricing reflects scale, ASIC cost advantages and collaborative OEM relationships.

• Question from Weijie Wang (Jefferies LLC, Research Division): Could you share more color on robotic shipments in 2026 and the next few years, end‑market proportions and product mix in Robotics?
  Response: CFO: Robotics carries higher ASPs/margins, Hesai holds ~60–70% robotaxi market share, shipped ~40–50k robotics JT units per quarter in 2025, and expects robotics LiDAR volumes to about double in 2026 with strong global and non‑auto opportunities.

• Question from Chunsheng Xie (Huatai Securities Co., Ltd., Research Division): Which OEMs will be key ADAS customers next year and what demand scale/volume do you expect?
  Response: CFO: Key ADAS customers include Li Auto, Xiaomi, BYD, Leapmotor, Zeekr and Great Wall (with Geely and Chery starting SOPs into 2026), providing broad, high‑volume platforms that underpin continued adoption and volume growth.

• Question from Jiaqi Huang (SPDB International Holdings Limited, Research Division): For the top European OEM project is everything on track? More color on overseas updates, potential customers/design wins and expected overseas revenue contribution over 2–3 years?
  Response: CFO: International momentum includes an exclusive European OEM design win, an exclusive supply arrangement with Motional and a >USD 40M multiyear U.S. robotaxi deal, plus wins with five China JV global OEMs (VW, GM, Audi, Toyota, Ford), positioning growing overseas revenue contribution in the next 2–3 years.

• Question from Jia Lou (BOCI Research Limited): At the Hong Kong listing you mentioned Hesai will be more than a LiDAR company over the next decade—what new areas beyond LiDAR is Hesai considering?
  Response: CEO: Hesai plans to expand into advanced sensing (longer range, higher density, material/speed recognition), integrate AI/perception software on sensors, pursue 3D world capture and broader infrastructure technologies leveraging semiconductor and manufacturing capabilities.

Contradiction Point 1

Annual Shipment Guidance and Product Mix

It involves changes in financial forecasts and product strategy, which are critical for assessing the company's growth trajectory and market positioning.

Have you seen improvement in product mix and LiDAR per car, particularly for L3? - Ming Chung (Citigroup Inc., Research Division)

2025Q3: In 2026, strong ADAS LiDAR demand in passenger vehicles is expected, with L3 adoption potentially boosting multi-LiDAR setups per vehicle, lifting content value to USD 500-1000. - Yifan Li(CEO)

What is the trend for ADAS lidar ASP with the launch of new products such as AT1440 and AT128? - Jessie Lo (Bank of America)

2025Q1: Our ASP will decrease with the ramp-up of ATX mass production, but different products have varying ASPs. ATP and AT1440 will see a decline, while ATX, at $200, will be our flagship, with expected volume over 1 million units this year. While ASPs shift, overall lidar content per vehicle will remain stable at $500-$1000. - Andrew Fan(CFO)

Contradiction Point 2

Influence of Tariffs on Pricing and Production Costs

It reflects differing perspectives on the impact of tariffs on the company's financials and pricing strategy, which are crucial for investors to evaluate potential financial risks.

How will pricing dynamics evolve next year given price cuts and competitive pressures, and when do you expect mass market models to start offering LiDAR as a standard feature? - Tina Hou (Goldman Sachs Group, Inc., Research Division)

2025Q3: Despite tariffs, our blended ASP is decreasing with ATX ramp-up, but the product mix shift does not impact full year gross margin targets. - Andrew Fan(CFO)

What is the impact of tariffs on your pricing, supply chain, and production costs? - Unidentified Analyst (Guotai Haitong Securities)

2025Q1: Our U.S. market accounts for only 10% of revenue, with limited exposure to high tariffs. We are closely monitoring the situation and have several levers to manage costs, with no significant impact on our full-year gross margin or profitability. - Andrew Fan(CFO)

Contradiction Point 3

L3 Adoption and LiDAR Content per Vehicle

It involves differing expectations regarding the impact and timeline of L3 adoption on LiDAR content per vehicle, which could affect revenue projections and market positioning.

Have there been any improvements in product mix and LiDAR per car, particularly for L3? Why are Q4 revenue and earnings estimates so optimistic? - Ming Chung (Citigroup Inc., Research Division)

2025Q3: We believe L3 adoption will potentially boost multi-LiDAR setups per vehicle, lifting content value to USD 500-1000. - Yifan Li(CEO)

Can you provide guidance on quarterly volume trajectory, product mix, ASP impact, and gross margin trends for FY2025? Will Q1 2025 be profitable? - Tim Hsiao (Morgan Stanley)

2024Q4: L3 is also emerging. As this gets more prominent, our view is that there's going to be more LiDARs per car. - Yifan Li(CEO)

Contradiction Point 4

Gross Margin and Financial Projections

It involves changing projections for gross margins and profitability, which are crucial for investor expectations and financial planning.

Can you explain next year's pricing dynamics, including price cuts and competitor dynamics? When do you expect mass market models to include LiDAR as a standard feature? - Tina Hou (Goldman Sachs Group, Inc., Research Division)

2025Q3: Gross margin for the quarter was 39%, and full-year 2025 gross margin is expected to be 38%-40%. - Peng Fan(CFO)

Can you provide guidance on volume trends, product mix, ASP impact, and gross margin trends for 2025? Will Q1 2025 be profitable? - Tim Hsiao (Morgan Stanley)

2024Q4: Q1 gross margin is expected to be healthy at around 40%. - Andrew Fan(CFO)

Contradiction Point 5

Revenue Projections and Market Demand

It highlights diverging expectations regarding the level of revenue growth and market demand, which can impact strategic planning and investor confidence.

How will pricing dynamics evolve next year, factoring in price reductions and competitor actions? When will LiDAR become a standard feature in mass market models? - Tina Hou (Goldman Sachs Group, Inc., Research Division)

2025Q3: Q4 2025 revenue expected to be RMB 1.0-1.2 billion, with full-year 2025 revenues at RMB 3.0-3.2 billion, a 50% year-over-year increase. - Peng Fan(CFO)

Could you clarify the 2025 full-year quarterly volume trends, product mix, ASP impact, and gross margin outlook? Will Q1 2025 be profitable? - Tim Hsiao (Morgan Stanley)

2024Q4: Full-year guidance anticipates RMB3 billion to RMB3.5 billion in revenues. - Andrew Fan(CFO)