[Executive Summary](index=1&type=section&id=Executive%20Summary) Mobileye's Q1 2024 results reflect an anticipated supply chain reset, with significant progress in ADAS design wins and advanced product pipelines [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Mobileye's CEO noted Q1 2024 results align with anticipated supply chain reset, emphasizing progress in design wins and advanced program execution - Q1 2024 financial results reflect a supply chain reset as excess customer inventory is consumed, with recovery on track as laid out in January[3](index=3&type=chunk) - Q1 was productive in generating traction across multiple waves of future growth, including record ADAS design wins and expansion of SuperVision and Chauffeur development pipelines, partly due to the Volkswagen Group design win[3](index=3&type=chunk) - The main focus for 2024 is to successfully execute current advanced programs and convert unprecedented opportunities into series production awards[3](index=3&type=chunk) [Q1 2024 Financial & Business Highlights](index=1&type=section&id=Q1%202024%20Financial%20%26%20Business%20Highlights) Mobileye reported a **48% revenue decrease** to **$239 million** in Q1 2024 due to inventory drawdown, yet maintained strong financial health and secured a major Volkswagen Group award Q1 2024 Key Financial Highlights | Metric | Q1 2024 | YoY Change | | :-------------------------------- | :------ | :--------- | | Revenue | $239M | (48)% | | Diluted EPS (GAAP) | $(0.27) | - | | Adjusted Diluted EPS (Non-GAAP) | $(0.07) | - | | Net Cash from Operating Activities | $40M | - | | Cash and Cash Equivalents (as of March 30, 2024) | $1.2B | - | | Debt | $0 | - | - Inventory consumption and EyeQ SoC deliveries are on track with prior guidance[4](index=4&type=chunk) - Volkswagen Group announced a wide-ranging production award for Mobileye's advanced products, expanding the pipeline of advanced discussions with other global OEMs[4](index=4&type=chunk) [First Quarter 2024 Business Overview](index=2&type=section&id=First%20Quarter%202024%20Business%20Highlights) Mobileye advanced its core ADAS, SuperVision, Chauffeur, and Drive products, securing major design wins and progressing towards scalable self-driving systems [Core ADAS and Cloud-Enhanced ADAS Developments](index=2&type=section&id=Core%20ADAS%20and%20Cloud-Enhanced%20ADAS%20Developments) Mobileye's EyeQ6L SoC began production-candidate shipments, contributing to a record **26 million units** in Q1 design wins for core ADAS - EyeQ6L System-on-Chip achieved first production-candidate shipments and will be in production vehicles during 2024, offering incremental advanced features at a similar price[5](index=5&type=chunk) - Core ADAS business remains strong, with Q1 design wins totaling over **26 million units** in projected future volume, a record amount[5](index=5&type=chunk) [SuperVision, Chauffeur, and Drive Product Expansion](index=2&type=section&id=SuperVision%2C%20Chauffeur%2C%20and%20Drive%20Product%20Expansion) A multi-billion dollar Volkswagen Group award for SuperVision, Chauffeur, and Drive products expanded Mobileye's OEM pipeline, affirming the importance of these features - Volkswagen Group announced a potential **multi-billion dollar** production award for SuperVision, Chauffeur, and Drive products, a milestone achievement that expanded Mobileye's OEM discussion pipeline[5](index=5&type=chunk) - OEMs are increasingly recognizing SuperVision-type feature sets as critical for competitiveness in the medium and long term, supporting a scalable platform for Level 3 eyes-off driving and beyond[5](index=5&type=chunk) [Mobility-as-a-Service (MaaS) Progress](index=2&type=section&id=Mobility-as-a-Service%20(MaaS)%20Progress) Mobileye advanced its MaaS ecosystem with new production awards from Volkswagen and P3, expecting first Drive 64 ECU samples in 2024 - Progress in creating a MaaS ecosystem with multiple vehicle platforms and customers, including new production awards from Volkswagen and P3[5](index=5&type=chunk) - First samples of the Drive 64 ECU are expected to be delivered during 2024, representing a meaningful step towards a scalable self-driving system[5](index=5&type=chunk) [Advanced Technology Development](index=2&type=section&id=Advanced%20Technology%20Development) Mobileye is on track to deploy B-samples of EyeQ6H-based ECUs for next-gen SuperVision, Chauffeur, and Drive products in Q3 2024, incorporating advanced AI - B-samples of EyeQ6H-based ECUs for next-generation SuperVision, Chauffeur, and Drive products are on track for deployment in **Q3 2024**[5](index=5&type=chunk) - The software stack for these systems will include state-of-the-art novel AI systems, such as end-to-end perception and end-to-end actuation running in parallel for redundancy[5](index=5&type=chunk) [First Quarter 2024 Financial Summary and Key Explanations](index=3&type=section&id=First%20Quarter%202024%20Financial%20Summary%20and%20Key%20Explanations%20(Unaudited)) Q1 2024 financial results show significant declines in revenue and profitability due to customer inventory drawdown and SuperVision's impact on gross margins [GAAP Financial Results](index=3&type=section&id=GAAP%20Financial%20Results) Mobileye's Q1 2024 GAAP results show a **48% revenue decrease** to **$239 million**, leading to a diluted EPS of **$(0.27)** and significant declines in profitability Q1 2024 GAAP Financial Summary | U.S. dollars in millions | Q1 2024 | Q1 2023 | % Y/Y Change | | :----------------------- | :------ | :------ | :----------- | | Revenue | $239 | $458 | (48)% | | Gross Profit | $54 | $207 | (74)% | | Gross Margin | 23% | 45% | (2,260)bps | | Operating Income (Loss) | $(238) | $(81) | (194)% | | Operating Margin | (100)% | (18)% | (8,190)bps | | Net Income (Loss) | $(218) | $(79) | (176)% | | EPS - Diluted | $(0.27) | $(0.10) | (174)% | [Non-GAAP Financial Results](index=3&type=section&id=Non-GAAP%20Financial%20Results) Q1 2024 Non-GAAP results reflect a **54% decrease** in Adjusted Gross Profit to **$148 million**, resulting in an Adjusted Operating Loss of **$(65) million** and Adjusted Diluted EPS of **$(0.07)** Q1 2024 Non-GAAP Financial Summary | U.S. dollars in millions | Q1 2024 | Q1 2023 | % Y/Y Change | | :--------------------------- | :------ | :------ | :----------- | | Revenue | $239 | $458 | (48)% | | Adjusted Gross Profit | $148 | $324 | (54)% | | Adjusted Gross Margin | 62% | 71% | (876)bps | | Adjusted Operating Income (Loss) | $(65) | $124 | *NM | | Adjusted Operating Margin | (27)% | 27% | *NM | | Adjusted Net Income (Loss) | $(55) | $115 | *NM | | Adjusted EPS - Diluted | $(0.07) | $0.14 | *NM | [Key Financial Explanations](index=3&type=section&id=Key%20Financial%20Explanations) Q1 2024 financial declines were primarily due to lower EyeQ shipments from customer inventory drawdown and SuperVision's impact on gross margins, with operating expenses remaining stable - All key operating metrics were impacted by significantly lower EyeQ shipments due to the expected large drawdown of inventory at Tier 1 customers[7](index=7&type=chunk) - Gross margin was impacted by the higher percentage of revenue attributed to SuperVision, which has lower percentage gross margin due to higher hardware content, despite generating more gross profit dollars per unit[7](index=7&type=chunk) - Operating margin was impacted by lower gross profit without an associated reduction in operating expenses, as the company remains confident in its business outlook and long-term strategy[7](index=7&type=chunk) [Revenue and Average System Price Analysis](index=4&type=section&id=Revenue%20and%20Average%20System%20Price%20Analysis) Q1 2024 revenue decreased **48% year-over-year** to **$239 million** due to lower EyeQ SoC shipments, partially offset by increased SuperVision revenue and a higher Average System Price - Revenue decreased **48% YoY** to **$239 million**, driven by a **58% decrease** in EyeQ SoC-related revenue due to Tier 1 customer inventory usage, partially offset by increased SuperVision revenue[10](index=10&type=chunk) Average System Price Trend | Metric | Q1 2023 | Q1 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Average System Price (USD) | $53.9 | $61.0 | +$7.1 | [Gross Margin Analysis](index=4&type=section&id=Gross%20Margin%20Analysis) GAAP Gross Margin declined by nearly **23 percentage points** in Q1 2024, primarily due to increased SuperVision revenue percentage and consistent amortization costs on a lower revenue base - GAAP Gross Margin declined by nearly **23 percentage points YoY**, primarily due to the increased percentage of SuperVision revenue and similar amortization costs on a significantly lower revenue base[10](index=10&type=chunk) - Adjusted Gross Margin declined by nearly **9 percentage points YoY**, primarily due to the increase in percentage of revenue attributable to SuperVision[10](index=10&type=chunk) [Operating Income (Loss) / Margin Analysis](index=4&type=section&id=Operating%20Income%20(Loss)%20%2F%20Margin%20Analysis) GAAP Operating Margin turned negative in Q1 2024 due to lower Gross Margin and operating expenses remaining similar despite a significantly reduced revenue base - GAAP Operating Margin declined to a negative margin YoY, primarily due to lower Gross Margin and similar operating expenses on a significantly lower revenue base[10](index=10&type=chunk) - Adjusted Operating Margin declined to a negative margin YoY, due to lower Adjusted Gross Margin and higher operating expenses as a percentage of the unusually low revenue base[10](index=10&type=chunk) [Operating Cash Flow](index=4&type=section&id=Operating%20Cash%20Flow) Mobileye generated **$40 million** in operating cash flow for Q1 2024, with **$22 million** used for property and equipment purchases Q1 2024 Cash Flow Highlights | Metric | Q1 2024 (USD in millions) | | :-------------------------------- | :------------------------ | | Operating Cash Flow | $40 | | Purchases of Property and Equipment | $(22) | [Financial Guidance for the 2024 Fiscal Year](index=5&type=section&id=Financial%20Guidance%20for%20the%202024%20Fiscal%20Year) Mobileye reaffirmed its full-year 2024 financial guidance, projecting revenue between **$1.83 billion** and **$1.96 billion**, with an adjusted operating income range [Full Year 2024 Outlook](index=5&type=section&id=Full%20Year%202024%20Outlook) Mobileye reaffirmed its 2024 financial guidance, projecting revenue between **$1.83 billion** and **$1.96 billion**, and an Adjusted Operating Income between **$270 million** and **$360 million** - Financial guidance for the full year 2024 remains unchanged from expectations first disclosed on January 4, 2024[11](index=11&type=chunk) Full Year 2024 Financial Guidance | U.S. dollars in millions | Low | High | | :------------------------ | :---- | :---- | | Revenue | $1,830 | $1,960 | | Operating Loss | $(468) | $(378) | | Adjusted Operating Income | $270 | $360 | - Adjusted Operating Income excludes significant non-cash expenses such as amortization of acquisition-related intangibles (**$444 million**) and share-based compensation expense (**$294 million**)[12](index=12&type=chunk)[13](index=13&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) Mobileye uses non-GAAP measures, excluding amortization and share-based compensation, to provide clearer insights into operational performance and trends [Definitions and Rationale](index=6&type=section&id=Definitions%20and%20Rationale) Mobileye uses non-GAAP measures, excluding specific non-cash expenses, to enhance transparency for investors and facilitate period-over-period performance comparisons - Non-GAAP measures (Adjusted Gross Profit/Margin, Operating Income/Margin, Net Income, EPS) exclude amortization of acquisition-related intangibles and share-based compensation expense, and related income tax effects[15](index=15&type=chunk) - These non-GAAP measures are used by management for strategic decisions, business planning, trend identification, and performance evaluation, providing greater transparency for investors and enabling comparison of financial trends[16](index=16&type=chunk) [Company Information & Disclaimers](index=7&type=section&id=Company%20Information%20%26%20Disclaimers) Mobileye, a leader in autonomous driving technologies, provides company background and cautions on forward-looking statements due to inherent risks and uncertainties [About Mobileye Global Inc.](index=7&type=section&id=About%20Mobileye%20Global%20Inc.) Mobileye Global Inc. is a leader in autonomous driving and driver-assistance technologies, with approximately **170 million vehicles** globally incorporating its innovations since 1999 - Mobileye leads the mobility revolution with autonomous driving and driver-assistance technologies, utilizing computer vision, AI, mapping, and data analysis expertise[17](index=17&type=chunk) - Pioneered technologies include REM™ crowdsourced mapping, True Redundancy™ sensing, and Responsibility Sensitive Safety (RSS), with approximately **170 million vehicles** worldwide built with Mobileye technology[17](index=17&type=chunk) - Mobileye listed as an independent company separate from Intel in 2022, with Intel retaining majority ownership[17](index=17&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) Mobileye's forward-looking statements are subject to risks and uncertainties, including market trends, product development, and geopolitical factors, and are not guarantees of future performance - Statements regarding business outlook, guidance, and future expectations are forward-looking and subject to risks, uncertainties, and assumptions, and are not guarantees of performance[19](index=19&type=chunk) - Important factors affecting forward-looking statements include future business performance, market trends, consumer demand, product and technology development, regulatory frameworks, cost and pricing trends, production capacity, and adverse conditions in Israel due to war and geopolitical conflict[20](index=20&type=chunk) - Estimates for future production volumes and sales prices are based on OEM projections and management estimates, but actual results may deviate, and achieving design wins is not a guarantee of revenue[21](index=21&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited Q1 2024 financial statements detail significant declines in revenue and net income, alongside a stable cash position and total assets [Condensed Consolidated Statements of Operations](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) The Q1 2024 statements show a net loss of **$(218) million**, driven by a **48% revenue decrease** and increased operating loss, despite stable operating expenses Condensed Consolidated Statements of Operations (Q1 2024 vs Q1 2023) | U.S. dollars in millions | March 30, 2024 | April 1, 2023 | | :------------------------------------------ | :------------- | :------------ | | Revenue | $239 | $458 | | Cost of revenue | 185 | 251 | | Gross profit | 54 | 207 | | Research and development, net | 243 | 235 | | Sales and marketing | 34 | 33 | | General and administrative | 15 | 20 | | Total operating expenses | 292 | 288 | | Operating income (loss) | (238) | (81) | | Net income (loss) | (218) | (79) | | Earnings (loss) per share: Basic and diluted | (0.27) | (0.10) | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20sheets%20(unaudited)) As of March 30, 2024, Mobileye maintained **$1.223 billion** in cash and cash equivalents, with total assets of **$15.342 billion** and total equity of **$14.763 billion** Condensed Consolidated Balance Sheets (March 30, 2024 vs Dec 30, 2023) | U.S. dollars in millions | March 30, 2024 | December 30, 2023 | | :-------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $1,223 | $1,212 | | Trade accounts receivable, net | 120 | 357 | | Inventories | 456 | 391 | | Total current assets | 1,931 | 2,066 | | Total non-current assets | 13,411 | 13,511 | | TOTAL ASSETS | $15,342 | $15,577 | | TOTAL LIABILITIES | $579 | $653 | | TOTAL EQUITY | 14,763 | 14,924 | [Condensed Consolidated Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Cash%20Flows%20(unaudited)) Mobileye generated **$40 million** in operating cash flow in Q1 2024, with cash and cash equivalents increasing by **$12 million** to **$1.238 billion** by period-end Condensed Consolidated Cash Flows (Q1 2024 vs Q1 2023) | U.S. dollars in millions | March 30, 2024 | April 1, 2023 | | :------------------------------------ | :------------- | :------------ | | Net cash provided by operating activities | $40 | $171 | | Net cash used in investing activities | $(22) | $(26) | | Net cash used in financing activities | $(4) | $(3) | | Increase in cash, cash equivalents and restricted cash | $12 | $138 | | Balance of cash, cash equivalents and restricted cash, at end of period | $1,238 | $1,173 | [Reconciliation of Non-GAAP Financial Measures](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20(Unaudited)) This section reconciles GAAP to Non-GAAP financial measures, highlighting the impact of non-cash expenses like amortization and share-based compensation on profitability [Gross Profit and Margin Reconciliation](index=13&type=section&id=Reconciliation%20of%20GAAP%20Gross%20Profit%20and%20Margin%20to%20Non-GAAP%20Adjusted%20Gross%20Profit%20and%20Margin%20(unaudited)) Q1 2024 GAAP Gross Profit of **$54 million** was adjusted to Non-GAAP Adjusted Gross Profit of **$148 million** by adding back **$94 million** in amortization of acquired intangible assets Q1 2024 Gross Profit and Margin Reconciliation | U.S. dollars in millions | Q1 2024 Amount | Q1 2024 % of Revenue | Q1 2023 Amount | Q1 2023 % of Revenue | | :---------------------------------- | :------------- | :------------------- | :------------- | :------------------- | | Gross Profit (GAAP) | $54 | 23% | $207 | 45% | | Add: Amortization of acquired intangible assets | 94 | 39% | 116 | 25% | | Add: Share-based compensation expense | — | —% | 1 | —% | | Adjusted Gross Profit (Non-GAAP) | $148 | 62% | $324 | 71% | [Operating Income and Margin Reconciliation](index=13&type=section&id=Reconciliation%20of%20GAAP%20Operating%20Income%20and%20Margin%20to%20Non-GAAP%20Adjusted%20Operating%20Income%20and%20Margin%20(unaudited)) Q1 2024 GAAP Operating Loss of **$(238) million** was adjusted to a Non-GAAP Adjusted Operating Loss of **$(65) million**, primarily by adding back amortization and share-based compensation Q1 2024 Operating Income and Margin Reconciliation | U.S. dollars in millions | Q1 2024 Amount | Q1 2024 % of Revenue | Q1 2023 Amount | Q1 2023 % of Revenue | | :---------------------------------------- | :------------- | :------------------- | :------------- | :------------------- | | Operating Income (Loss) (GAAP) | $(238) | (100)% | $(81) | (18)% | | Add: Amortization of acquired intangible assets | 111 | 46% | 133 | 29% | | Add: Share-based compensation expense | 62 | 26% | 72 | 16% | | Adjusted Operating Income (Loss) (Non-GAAP) | $(65) | (27)% | $124 | 27% | [Net Income Reconciliation](index=14&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20to%20Non-GAAP%20Adjusted%20Net%20Income%20(unaudited)) Q1 2024 GAAP Net Loss of **$(218) million** was reconciled to a Non-GAAP Adjusted Net Loss of **$(55) million**, after accounting for amortization, share-based compensation, and tax effects Q1 2024 Net Income Reconciliation | U.S. dollars in millions | Q1 2024 Amount | Q1 2024 % of Revenue | Q1 2023 Amount | Q1 2023 % of Revenue | | :---------------------------------- | :------------- | :------------------- | :------------- | :------------------- | | Net Income (Loss) (GAAP) | $(218) | (91)% | $(79) | (17)% | | Add: Amortization of acquired intangible assets | 111 | 46% | 133 | 29% | | Add: Share-based compensation expense | 62 | 26% | 72 | 16% | | Less: Income tax effects | (10) | (4)% | (11) | (2)% | | Adjusted Net Income (Loss) (Non-GAAP) | $(55) | (23)% | $115 | 25% | [Supplemental Financial Data](index=14&type=section&id=Supplemental%20Financial%20Data) Supplemental data reveals an increase in Average System Price to **$61.0** in Q1 2024, driven by a higher proportion of SuperVision revenue despite fewer units shipped [Average System Price Trend](index=14&type=section&id=Supplemental%20Information%20-%20Average%20System%20Price%20(unaudited)) Mobileye's Average System Price increased to **$61.0** in Q1 2024, driven by a higher proportion of SuperVision revenue despite a significant decrease in units shipped Average System Price and Shipments Trend | Metric | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | EyeQ and SuperVision revenue (USD in millions) | $438 | $430 | $507 | $611 | $219 | | Number of systems shipped (in millions) | 8.1 | 8.3 | 9.4 | 11.6 | 3.6 | | Average system price (USD) | $53.9 | $51.7 | $53.8 | $52.7 | $61.0 | [Additional Information](index=6&type=section&id=Additional%20Information) This section provides details on the Q1 2024 earnings conference call and contact information for investor and media relations [Earnings Conference Call Webcast Information](index=6&type=section&id=Earnings%20Conference%20Call%20Webcast%20Information) Mobileye hosted a conference call on **April 25, 2024**, to discuss Q1 2024 results and provide a business update, with a webcast replay available online - Mobileye hosted a conference call on **April 25, 2024, at 8:00 am ET** to review Q1 2024 results and provide a business update, with a webcast replay available on ir.mobileye.com[14](index=14&type=chunk) [Contacts](index=14&type=section&id=Contacts) Contact information for Mobileye's Investor Relations and Media Relations is provided for inquiries - Contact information for Investor Relations (Dan Galves) and Media Relations (Justin Hyde) is provided[30](index=30&type=chunk)

Mobileye Global (MBLY) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.The ...

Move over, Nvidia! These fast-paced artificial intelligence (AI) stocks can more-than-double in value, based on the Street-high price targets of three analysts.For more than a year, no investment trend on Wall Street has captivated investors' attention quite like artificial intelligence (AI). Utilizing software and systems in place of humans, and giving these systems the ability to learn over time without human intervention in order to become more proficient at their tasks, gives AI a use case in almost eve ...

The company possesses impressive technology, but management expects revenue to slump in 2024.The explosion in artificial intelligence (AI) technology last year brought the possibility of fully self-driving vehicles closer to reality. One of the companies working to bring autonomous cars to the masses is Mobileye Global (MBLY -3.89%).Founded in 1999, the company possesses decades of experience with advanced driver assistance systems (ADAS), technology that helps drivers avoid accidents. It has built an impre ...

The maker of autonomous driving solutions made favorable comments at an industry conference, and announced a high-profile customer win.Shares of autonomous driving software and semiconductor company Mobileye Global (MBLY -2.58%) rallied 26.2% in March, according to data from S&P Global Market Intelligence.Mobileye was perhaps poised for a rally at the beginning of the month. In early January, the company warned that its first-quarter revenue would decline about 50% sequentially, and eventually recover but s ...

Shares of autonomous driving technology company Mobileye Global (NASDAQ:MBLY) are rising after the firm won an expanded agreement with Volkswagen (OTCMKTS:VWAGY). The agreement is set to bring Mobileye features to Volkswagen vehicles, as well as the Audi, Bentley, Lamborghini and Porsche brands. MBLY stock is trading today at around $29.60 per share, up more than 4% from its close on March 19. Mobileye has a market capitalization of almost $24 billion.Still, Mobileye stock is down more than 25% so far in 20 ...

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Mobileye Global. The Motley Fool has a disclosure policy.Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Mobileye Global (MBLY) shares rallied 11.4% in the last trading session to close at $27.81. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.3% loss over the past four weeks.Shares of Mobileye popped yesterday following optimistic remarks from the company's executives at Morgan Stanley's Technology, Media, and Telecom conference. MBLY reiterated that the sales volumes of EyeQ is estimated at 3.4 million unit ...

It’s another green day in the stock market, with many tech stocks leading the way higher. Investors in Mobileye (NASDAQ:MBLY) have seen some of the most significant gains, with MBLY stock surging more than 11% this afternoon. This sees MBLY recovering some of the losses the company has seen since the beginning of the year.This move follows some bullish commentary from the company’s management team during a presentation at Morgan Stanley’s (NYSE:MS) Technology, Media and Telecom conference this morning. Mobi ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) Mobileye is a global leader in Advanced Driver Assistance Systems (ADAS) and autonomous driving solutions, leveraging its EyeQ™ System-on-Chip products and a comprehensive technology platform [Company Overview](index=5&type=section&id=Company%20Overview) Mobileye leads ADAS and autonomous driving, with solutions in 800 vehicle models and 170 million SoCs shipped, showing strong financial performance and system shipments - Mobileye is a leader in the development and deployment of ADAS and autonomous driving technologies, building on over 20 years of experience[16](index=16&type=chunk) - As of December 30, 2023, Mobileye's solutions were installed in approximately **800 vehicle models**, with SoCs deployed in about **170 million vehicles**. The company works with over **50 OEMs** worldwide[21](index=21&type=chunk) Key Financial Performance (2021-2023) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenue** | $2.1 billion | $1.9 billion | $1.4 billion | | **Net Loss** | $27 million | $82 million | $75 million | | **Adjusted Net Income (Non-GAAP)** | $659 million | $605 million | $474 million | System Shipments (2021-2023) | Year | Systems Shipped (millions) | | :--- | :--- | | **2023** | 37.4 | | **2022** | 33.7 | | **2021** | 28.1 | [Technology Platform](index=6&type=section&id=Technology%20Platform) Mobileye's platform relies on five pillars: advanced sensing, REM™ mapping, True Redundancy™ sensor fusion, next-gen imaging radars, and the RSS safety framework - The company's technology platform is built on five fundamental pillars: advanced sensing/perception, REM™ high-precision mapping, True Redundancy™ sensor fusion, next-gen imaging-radars, and the RSS safety framework[23](index=23&type=chunk) - The EyeQ™ family of SoCs is fundamental to Mobileye's ADAS leadership, offering a scalable architecture from basic ECUs to multi-SoC central compute units[26](index=26&type=chunk) - Road Experience Management (REM™) is a cloud-based system that creates high-definition AV maps (Mobileye Roadbook™) from crowd-sourced data from millions of REM™-equipped vehicles[28](index=28&type=chunk) - The True Redundancy™ architecture employs two independent perception subsystems—one camera-based and one radar-lidar based—to enhance safety and validation, aiming to make autonomous systems affordable for privately-owned vehicles[34](index=34&type=chunk) - Responsibility-Sensitive Safety (RSS) is a formal, machine-interpretable model for safe driving decisions, which has inspired global standardization efforts like IEEE 2846[36](index=36&type=chunk) [Our Solutions](index=12&type=section&id=Our%20Solutions) Mobileye offers a range of ADAS and AV solutions, from foundational Driver Assist to advanced hands-off systems like SuperVision™, Chauffeur™, and Drive™ - Mobileye offers a spectrum of ADAS and AV solutions, from foundational Driver Assist to advanced hands-off systems[42](index=42&type=chunk) - The solution portfolio includes: - **Driver Assist**: Core safety features like emergency braking and alerts[45](index=45&type=chunk) - **Cloud-Enhanced Driver Assist**: Utilizes REM™ mapping for enhanced path accuracy and foresight[47](index=47&type=chunk) - **Mobileye SuperVision™ Lite**: A highway-only, eyes-on/hands-off assisted driving solution[48](index=48&type=chunk) - **Mobileye SuperVision™**: A premium, point-to-point assisted driving solution using 11 cameras, with over **200,000 systems** delivered through the end of 2023[50](index=50&type=chunk) - **Mobileye Chauffeur™ & Mobileye Drive™**: Eyes-off/hands-off solutions for consumer AV and commercial/AMaaS applications, respectively, built on the True Redundancy™ architecture[53](index=53&type=chunk)[54](index=54&type=chunk) [Growth Strategies](index=21&type=section&id=Growth%20Strategies) Mobileye aims to grow by leveraging regulatory changes, expanding cloud-enhanced features, driving premium ADAS adoption, and commercializing next-gen autonomous solutions - Benefit from regulatory and safety rating changes promoting base ADAS adoption[88](index=88&type=chunk) - Capitalize on Cloud-Enhanced Driver Assist features by expanding AV map coverage and offering OTA upgrades[89](index=89&type=chunk) - Drive adoption of Premium Driver Assist solutions like SuperVision™, which saw shipments of over **100,000 units** in 2023 and has a future launch pipeline of approximately **30 models**[90](index=90&type=chunk) - Innovate and commercialize next-generation autonomous solutions like Chauffeur™, which secured its first design wins in 2023 with Polestar, FAW, and a major global western OEM[94](index=94&type=chunk) - Expand collaboration with OEMs through customizable platforms like DXP and EyeQ Kit™[95](index=95&type=chunk) - Benefit from opportunities in large emerging markets like China and India through partnerships with OEMs such as Geely, Great Wall Motors, SAIC, and Mahindra & Mahindra[100](index=100&type=chunk) [Customers and Partnerships](index=23&type=section&id=Customers%20and%20Partnerships) Mobileye collaborates with over 50 OEMs and Tier 1 suppliers, maintaining key partnerships with STMicroelectronics for SoC manufacturing and Intel for technology access - Mobileye works with over **50 OEMs** worldwide, supplying them directly or through Tier 1 automotive suppliers like Aptiv, Magna, Valeo, and ZF[102](index=102&type=chunk)[103](index=103&type=chunk) - The company has a long-standing partnership with STMicroelectronics for the co-development and manufacturing of all six generations of EyeQ™ SoCs[105](index=105&type=chunk) - The relationship with parent company Intel provides access to unique technologies like silicon photonics for lidar development, mmWave technologies for radar, and potential collaboration on central compute platforms using Intel Foundry Services[106](index=106&type=chunk) [Competition](index=26&type=section&id=Competition) Mobileye faces competition in ADAS and AV markets from Tier 1 suppliers, silicon providers, in-house OEM solutions, and robotaxi companies, with its subsidiary Moovit competing in urban mobility - In the ADAS and consumer AV market, Mobileye competes with Tier 1 suppliers (Bosch, Continental), silicon providers (NVIDIA, Qualcomm, NXP), and in-house OEM solutions (Tesla, Mercedes-Benz)[125](index=125&type=chunk) - In the AMaaS market, competitors include technology companies and robotaxi providers such as Waymo, Cruise, and Baidu[126](index=126&type=chunk) - Moovit, a subsidiary, competes with urban mobility applications like Google Maps, Apple Maps, and Citymapper, as well as on-demand service providers like Uber and Lyft[128](index=128&type=chunk) [Intellectual Property](index=29&type=section&id=Intellectual%20Property) Mobileye protects its proprietary technology through a portfolio of U.S. and European patents, along with reliance on copyright and trade secret laws - As of December 30, 2023, Mobileye held **334 U.S. patents** and **48 European patents**, with numerous additional applications pending worldwide[137](index=137&type=chunk) - The company also relies on copyright and trade secret laws to protect its proprietary rights, using agreements with customers, suppliers, and employees[138](index=138&type=chunk) [Relationship with Intel](index=29&type=section&id=Relationship%20with%20Intel) Intel maintains controlling ownership and voting power in Mobileye, influencing corporate actions and governing the ongoing relationship through intercompany agreements - As of December 30, 2023, Intel beneficially owns all Class B common stock, representing approximately **88.3% of outstanding common stock** and **98.7% of the voting power**[140](index=140&type=chunk) - Due to its ownership stake, Intel controls all matters submitted to stockholders for approval, requiring its consent for major corporate actions until its ownership drops below **20%**[140](index=140&type=chunk) - The ongoing relationship is governed by Intercompany Agreements, including a Master Transaction Agreement, which outlines provisions for registration rights, potential future distributions, product sales, and cross-indemnities[142](index=142&type=chunk)[143](index=143&type=chunk) [Executive Officers](index=31&type=section&id=Executive%20Officers) This section lists the key executive officers, including the CEO, CFO, and heads of R&D and technology Executive Officers | Name | Age | Position | | :--- | :--- | :--- | | Amnon Shashua | 63 | Chief Executive Officer, President, and Director | | Moran Shemesh Rojansky | 43 | Chief Financial Officer | | Gavriel Hayon | 54 | Executive Vice President, Research and Development | | Shai Shalev-Shwartz | 48 | Chief Technology Officer | | Nimrod Nehushtan | 34 | Executive Vice President Business Development & Strategy, Co-Manager REM | [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) Mobileye faces substantial risks related to its business operations, including intense competition, reliance on a limited number of customers and a single supplier for its EyeQ™ SoCs (STMicroelectronics), and the long, uncertain cycle of OEM design wins [Risks Related to Our Business](index=35&type=section&id=Risks%20Related%20to%20Our%20Business) Mobileye faces significant business risks including intense competition, reliance on a single SoC manufacturer, customer concentration, and dependence on its CEO - The company operates in a highly competitive market against Tier 1 suppliers (Bosch, Continental), silicon providers (NVIDIA, Qualcomm), and OEMs developing in-house solutions (Tesla, Mercedes-Benz)[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - Mobileye is dependent on STMicroelectronics as the sole manufacturer of its EyeQ™ SoCs, creating significant supply chain risk, further compounded by STMicroelectronics' reliance on TSMC in Taiwan[184](index=184&type=chunk) - A limited number of Tier 1 customers account for a substantial portion of revenue, with ZF, Valeo, and Aptiv accounting for **30%**, **24%**, and **14%** of revenue respectively in 2023[202](index=202&type=chunk) - The business is highly dependent on the services of its President and CEO, Professor Amnon Shashua, who does not devote his full time to the company[206](index=206&type=chunk) - In late 2023, the company became aware of significant excess inventory held by its Tier 1 customers, which is expected to be utilized in Q1 2024, impacting near-term orders[200](index=200&type=chunk) [Risks Related to Privacy, Data, and Cybersecurity](index=46&type=section&id=Risks%20Related%20to%20Privacy%2C%20Data%2C%20and%20Cybersecurity) The company is exposed to risks from IT system interruptions, cybersecurity incidents, and non-compliance with evolving global data privacy regulations - The company faces risks of interruptions to its IT systems and cybersecurity incidents from malicious actors, which could disrupt operations and compromise sensitive data[219](index=219&type=chunk)[221](index=221&type=chunk) - Security breaches of in-vehicle systems could impact end-user safety, lead to unauthorized control of vehicle functions, and reduce confidence in the company's solutions[224](index=224&type=chunk)[226](index=226&type=chunk) - Failure to comply with complex and evolving global data privacy laws (e.g., GDPR, CCPA) could result in significant expenses, legal proceedings, and damage to reputation[228](index=228&type=chunk)[229](index=229&type=chunk) [Risks Related to Our Industry](index=53&type=section&id=Risks%20Related%20to%20Our%20Industry) Mobileye's business is vulnerable to the cyclical nature of the global automobile industry and market acceptance challenges for ADAS and autonomous driving technologies - The business is directly affected by the cyclical nature of the global automobile industry, with economic downturns, inflation, and supply chain issues potentially reducing vehicle production and demand for its solutions[247](index=247&type=chunk) - Market acceptance of ADAS and autonomous driving is crucial for growth and can be adversely affected by safety incidents, cost, and regulatory hurdles[248](index=248&type=chunk) [Risks Related to Operations in Israel](index=56&type=section&id=Risks%20Related%20to%20Operations%20in%20Israel) Mobileye's operations are concentrated in Israel, exposing it to geopolitical instability, potential employee reserve duty calls, and risks to tax benefits - The company's headquarters and R&D center are in Israel, making its operations vulnerable to political, economic, and military conditions, including the ongoing conflict that began on October 7, 2023[261](index=261&type=chunk) - As of January 31, 2024, approximately **10.5% of employees** had been called to reserve duty in the Israel Defense Forces, which could disrupt operations if the situation escalates[261](index=261&type=chunk)[264](index=264&type=chunk) - Eligibility for tax benefits under Israeli law, such as the "Special Preferred Technology Enterprise" status, requires meeting specific conditions, and failure to meet these could increase the company's tax rate[265](index=265&type=chunk) [Risks Related to our Relationship with Intel and our Dual Class Structure](index=57&type=section&id=Risks%20Related%20to%20our%20Relationship%20with%20Intel%20and%20our%20Dual%20Class%20Structure) Intel's controlling ownership and the dual-class stock structure limit Class A stockholder influence and create potential conflicts of interest - The dual-class stock structure concentrates approximately **98.7% of voting power** with Intel, limiting the ability of Class A stockholders to influence corporate matters[268](index=268&type=chunk)[269](index=269&type=chunk) - As a "controlled company" under Nasdaq rules, Mobileye is exempt from certain corporate governance requirements, such as having a majority of independent directors[271](index=271&type=chunk) - Potential conflicts of interest with Intel exist regarding business opportunities, transactions, and intellectual property licenses, including limited licenses from Intel for lidar and radar technology[274](index=274&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) [Unresolved Staff Comments](index=70&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) None - The company reports no unresolved staff comments[325](index=325&type=chunk) [Cybersecurity](index=70&type=section&id=Item%201C.%20Cybersecurity) Mobileye's cybersecurity risk management is an integral part of its enterprise risk program, based on industry standards like ISO 27001, with oversight from the Audit Committee - The company's cybersecurity risk management program is based on industry standards, including ISO 27001 and the automotive industry's TISAX standard[326](index=326&type=chunk) - Oversight is provided by the board of directors, which delegates responsibility to the Audit Committee to ensure management has processes to identify, assess, and manage cybersecurity risks[334](index=334&type=chunk) - In 2023, the company did not identify any cybersecurity risks that have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition[335](index=335&type=chunk) [Properties](index=71&type=section&id=Item%202.%20Properties) Mobileye owns its principal offices in Jerusalem, Israel, a new campus totaling approximately 1,377,781 square feet, and leases office space globally - The company owns its principal offices at Shlomo Momo HaLevi Street 1, Jerusalem, Israel, totaling approximately **1,377,781 square feet**[336](index=336&type=chunk) - Construction of the new Jerusalem campus was substantially completed, and the company moved its principal offices there in Q1 2024[337](index=337&type=chunk) [Legal Proceedings](index=72&type=section&id=Item%203.%20Legal%20Proceedings) Mobileye is involved in two notable legal actions: a putative class action securities lawsuit alleging misstatements about excess inventory and a patent infringement lawsuit - On January 16, 2024, a putative class action lawsuit was filed against Mobileye and certain officers, alleging violations of the Securities Exchange Act of 1934 related to misstatements about excess customer inventory[340](index=340&type=chunk) - On January 26, 2024, Facet Technology Corp. sued Mobileye for alleged infringement of two patents, seeking unspecified damages and a permanent injunction[341](index=341&type=chunk) [Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - This item is not applicable to the company[342](index=342&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=73&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Mobileye's Class A common stock trades on Nasdaq under "MBLY," while Class B is unlisted, and the company does not anticipate paying cash dividends in the foreseeable future - The company's Class A common stock is listed on Nasdaq under the symbol "MBLY", while the Class B common stock is not traded on any exchange[345](index=345&type=chunk) - Mobileye intends to retain future earnings and does not anticipate declaring or paying any cash dividends in the foreseeable future[347](index=347&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal year 2023, Mobileye's revenue grew 11% to $2.08 billion, driven by EyeQ™ volume, with gross profit increasing 14% to $1.05 billion, despite an operating loss of $33 million [Results of Operations](index=81&type=section&id=Results%20of%20Operations) Mobileye's 2023 revenue grew 11% to $2.08 billion, with gross profit increasing 14% to $1.05 billion, while R&D expenses rose due to new product development Consolidated Results of Operations (2021-2023) | U.S. dollars in millions | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenue** | $2,079 | $1,869 | $1,386 | | **Gross profit** | $1,047 | $922 | $655 | | *Gross margin* | *50%* | *49%* | *47%* | | **Operating income (loss)** | $(33) | $(37) | $(57) | | *Operating margin* | *(2)%* | *(2)%* | *(4)%* | | **Net income (loss)** | $(27) | $(82) | $(75) | - **2023 vs. 2022**: Revenue increased by **$210 million (11%)**, primarily due to an **11% increase in EyeQ™ volume**[404](index=404&type=chunk) - Gross profit rose by **$125 million (14%)**, and gross margin improved from **49% to 50%**[406](index=406&type=chunk) - R&D expenses increased by **$100 million (13%)**, driven by share-based compensation and new product development[408](index=408&type=chunk) - **2022 vs. 2021**: Revenue increased by **$483 million (35%)**, driven by a **28% increase in EyeQ™ SoC sales** (7% ASP increase, 19% volume increase) and the ramp-up of SuperVision™ sales[413](index=413&type=chunk) - Gross profit grew by **$267 million (41%)**[415](index=415&type=chunk) - R&D expenses increased by **$245 million (45%)** due to higher headcount and new product development[417](index=417&type=chunk) [Liquidity and Capital Resources](index=84&type=section&id=Liquidity%20and%20Capital%20Resources) Cash from operating activities decreased in 2023 due to increased inventories, with primary fund uses directed towards R&D headcount, new product development, and capital expenditures Consolidated Cash Flow Data (2021-2023) | U.S. dollars in millions | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $394 | $546 | $599 | | **Net cash provided by (used in) investing activities** | $(98) | $1,187 | $(157) | | **Net cash provided by (used in) financing activities** | $(100) | $(1,317) | $91 | - Cash from operating activities decreased by **$152 million** in 2023 compared to 2022, mainly due to a planned increase in inventories to rebuild strategic stock of EyeQ chips[428](index=428&type=chunk) - Primary uses of funds have been for R&D headcount, new product development, and capital expenditures, which were **$98 million** in 2023, mainly for the construction of new sites and its new campus[424](index=424&type=chunk) [Non-GAAP Financial Measures](index=86&type=section&id=Non-GAAP%20Financial%20Measures) Management uses non-GAAP measures, excluding amortization and share-based compensation, to evaluate performance, with Adjusted Gross Margin and Operating Margin decreasing in 2023 - Management uses non-GAAP measures (Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income) to make strategic decisions and evaluate performance, excluding amortization of acquired intangible assets, share-based compensation, and certain IPO-related expenses[442](index=442&type=chunk)[443](index=443&type=chunk) Reconciliation of GAAP to Non-GAAP Measures (2023) | U.S. dollars in millions | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **Gross Profit** | $1,047 | $408 | $1,455 | | **Operating Income (Loss)** | $(33) | $726 | $693 | | **Net Income (Loss)** | $(27) | $686 | $659 | - Adjusted Gross Margin decreased from **75% in 2022 to 70% in 2023**, primarily due to the increased cost of EyeQ™ SoCs, which was passed through to customers on a zero-margin basis[447](index=447&type=chunk) - Adjusted Operating Margin decreased from **37% in 2022 to 33% in 2023**, primarily due to the decrease in Adjusted Gross Margin[453](index=453&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=91&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Mobileye's primary market risks are foreign currency exchange rates, particularly the New Israeli Shekel, and interest rates on its investments - The company's primary market risks are foreign currency exchange rates and interest rates[480](index=480&type=chunk) - A significant portion of operating expenses, mainly payroll, are denominated in New Israeli Shekels (ILS), and a hypothetical **10% strengthening of the ILS** against the U.S. dollar would have decreased cash flows by approximately **$43 million** in 2023[484](index=484&type=chunk)[486](index=486&type=chunk) - Interest rate risk is related to investments in money market funds (**$932 million** as of Dec 30, 2023) and short-term deposits (**$222 million**), with the primary objective to preserve principal[481](index=481&type=chunk)[482](index=482&type=chunk) [Financial Statements](index=93&type=section&id=Item%208.%20Financial%20Statements) This section presents the company's audited consolidated financial statements for 2021-2023, including the independent auditor's report and extensive notes on accounting policies and related-party transactions [Consolidated Balance Sheets](index=96&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity as of December 30, 2023, and December 31, 2022 Key Balance Sheet Items (As of Dec 30, 2023 vs. Dec 31, 2022) | U.S. dollars in millions | Dec 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $2,066 | $1,516 | | Cash and cash equivalents | $1,212 | $1,024 | | Inventories | $391 | $113 | | **Total Non-current Assets** | $13,511 | $13,925 | | Goodwill | $10,895 | $10,895 | | Intangible assets, net | $2,053 | $2,527 | | **TOTAL ASSETS** | **$15,577** | **$15,441** | | **TOTAL LIABILITIES** | **$653** | **$647** | | **TOTAL EQUITY** | **$14,924** | **$14,794** | [Consolidated Statements of Operations](index=97&type=section&id=Consolidated%20Statements%20of%20Operations) This section provides the company's financial performance, including revenue, gross profit, operating income, and net income for 2021-2023 Key Income Statement Items (2021-2023) | U.S. dollars in millions | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenue** | $2,079 | $1,869 | $1,386 | | **Gross profit** | $1,047 | $922 | $655 | | **Operating income (loss)** | $(33) | $(37) | $(57) | | **Net income (loss)** | $(27) | $(82) | $(75) | | **Basic and diluted EPS** | $(0.03) | $(0.11) | $(0.10) | [Consolidated Statements of Cash Flows](index=99&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities for 2021-2023 Key Cash Flow Items (2021-2023) | U.S. dollars in millions | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $394 | $546 | $599 | | **Net cash provided by (used in) investing activities** | $(98) | $1,187 | $(157) | | **Net cash provided by (used in) financing activities** | $(100) | $(1,317) | $91 | [Notes to Consolidated Financial Statements](index=100&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, segment information, related-party transactions, and other financial disclosures - The company's two operating segments are Mobileye and Moovit, with Mobileye being the only reportable segment and Moovit included in "Other"[715](index=715&type=chunk) - The company purchases all of its EyeQ™ SoCs from a single supplier, creating a concentration risk[606](index=606&type=chunk) Revenue by Geography (Ship-to Location) | U.S. dollars in millions | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **China** | $640 | $551 | $270 | | **USA** | $437 | $472 | $363 | | **Germany** | $353 | $268 | $263 | | **Rest of World** | $649 | $578 | $490 | Major Customer Revenue Concentration | Customer | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Customer A** | 30% | 38% | 35% | | **Customer B** | 24% | 18% | 19% | | **Customer C** | 14% | 15% | 17% | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=130&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) None - The company reports no changes in or disagreements with accountants on accounting and financial disclosures[726](index=726&type=chunk) [Controls and Procedures](index=130&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 30, 2023, a conclusion confirmed by the independent auditor - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[726](index=726&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 30, 2023[731](index=731&type=chunk) - The independent registered public accounting firm, Kesselman & Kesselman (a member of PwC), has audited and issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 30, 2023[494](index=494&type=chunk)[732](index=732&type=chunk) [Other Information](index=131&type=section&id=Item%209B.%20Other%20Information) During the fourth quarter of 2023, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the three months ended December 30, 2023[733](index=733&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=131&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) Not applicable - This item is not applicable[734](index=734&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=132&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The information required for this item is incorporated by reference from the company's 2024 definitive Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[736](index=736&type=chunk) [Executive Compensation](index=132&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item is incorporated by reference from the company's 2024 definitive Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[737](index=737&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=132&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) The information required for this item is incorporated by reference from the company's 2024 definitive Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[738](index=738&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=132&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The information required for this item is incorporated by reference from the company's 2024 definitive Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[739](index=739&type=chunk) [Principal Accountant Fees and Services](index=132&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The information required for this item is incorporated by reference from the company's 2024 definitive Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[740](index=740&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=133&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K, with all financial statement schedules omitted as they are not applicable or included elsewhere - This section lists the financial statements and exhibits filed with the report[742](index=742&type=chunk)[743](index=743&type=chunk) - All financial statement schedules have been omitted because they are not applicable or the required information is already included in the financial statements or notes[742](index=742&type=chunk) [Form 10-K Summary](index=135&type=section&id=Item%2016.%20Form%2010-K%20Summary) Not applicable - This item is not applicable[747](index=747&type=chunk)