Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 001-41541

Mobileye Global Inc.

(Exact name of registrant as specified in its charter)

Delaware		88-0666433
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
c/o Mobileye B.V. Har Hotzvim, 1 Shlomo Momo HaLevi Street Jerusalem 9777015, Israel		+972-2-541-7333
(Address of principal executive offices) (Zip Code)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered
Class A common stock, par value $0.01		MBLY		The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 99,548,127 shares of Class A common stock, $0.01 par value, outstanding at July 31, 2024.

Table of Contents

MOBILEYE GLOBAL INC.

FORM 10-Q

For the quarterly period ended June 29, 2024

TABLE OF CONTENTS

		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Changes in Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	41
Part II.	OTHER INFORMATION	42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	43
	Signatures	44

Table of Contents

In this report, references to “we,” “us,” “our,” our “company,” “Mobileye,” the “Company,” and similar terms refer to Mobileye Global Inc. and, unless the context requires otherwise, its consolidated subsidiaries, except with respect to our historical business, operations, financial performance, and financial condition prior to our initial public offering, where such terms refer to Mobileye Group, which combines the operations of Cyclops Holdings Corporation, Mobileye B.V., GG Acquisition Ltd., Moovit App Global Ltd., and their respective subsidiaries, along with certain Intel employees mainly in research and development. References to “Moovit” refer to GG Acquisition Ltd., Moovit App Global Ltd., and their consolidated subsidiaries.

We have a 52 or 53-week fiscal year that ends on the last Saturday in December. Fiscal year 2023 was a 52-week fiscal year; fiscal year 2024 is also a 52-week fiscal year. Certain amounts, percentages, and other figures presented in this report have been subject to rounding adjustments. Accordingly, figures shown as totals, dollars, or percentage amounts of changes may not represent the arithmetic summation or calculation of the figures that precede them.

Table of Contents

Part 1: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MOBILEYE GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	June 29,		December 30,
U.S. dollars in millions	2024		2023
Assets
Current assets
Cash and cash equivalents	$	1,203	$	1,212
Trade accounts receivable, net		204		357
Inventories		485		391
Other current assets		115		106
Total current assets		2,007		2,066
Non-current assets
Property and equipment, net		456		447
Intangible assets, net		1,831		2,053
Goodwill		10,895		10,895
Other long-term assets		118		116
Total non-current assets		13,300		13,511
TOTAL ASSETS	$	15,307	$	15,577
Liabilities and Equity
Current liabilities
Accounts payable and accrued expenses	$	171	$	229
Employee related accrued expenses		91		87
Related party payable		53		39
Other current liabilities		31		48
Total current liabilities		346		403
Non-current liabilities
Long-term employee benefits		55		56
Deferred tax liabilities		137		148
Other long-term liabilities		50		46
Total non-current liabilities		242		250
Contingencies (see note 11)
TOTAL LIABILITIES	$	588	$	653
Equity
Class A common stock: $0.01 par value; 4,000,000,000 shares authorized; shares issued and outstanding: 97,736,898 as of June 29, 2024 and 94,652,348 as of December 30, 2023		1		1
Class B common stock: $0.01 par value; 1,500,000,000 shares authorized; shares issued and outstanding: 711,500,000 as of June 29, 2024 and December 30, 2023		7		7
Additional paid-in capital		14,985		14,886
Retained earnings (accumulated deficit)		(274)		30
TOTAL EQUITY		14,719		14,924
TOTAL LIABILITIES AND EQUITY	$	15,307	$	15,577

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

Table of Contents

MOBILEYE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	Three months ended				Six months ended
	June 29,		July 1,		June 29,		July 1,
U.S. dollars in millions, except per share amounts	2024		2023		2024		2023
Revenue	$	439	$	454	$	678	$	912
Cost of revenue		230		230		415		481
Gross profit		209		224		263		431
Research and development, net		256		211		499		446
Sales and marketing		28		29		62		62
General and administrative		19		17		34		37
Total operating expenses		303		257		595		545
Operating income (loss)		(94)		(33)		(332)		(114)
Other financial income (expense), net		13		15		30		23
Income (loss) before income taxes		(81)		(18)		(302)		(91)
Benefit (provision) for income taxes		(5)		(10)		(2)		(16)
Net income (loss)	$	(86)	$	(28)	$	(304)	$	(107)
Earnings (loss) per share attributed to Class A and Class B stockholders:
Basic and diluted	$	(0.11)	$	(0.04)	$	(0.38)	$	(0.13)
Weighted-average number of shares used in computation of earnings (loss) per share attributed to Class A and Class B stockholders (in millions):
Basic and diluted		806		805		806		803
Net income (loss)		(86)		(28)		(304)		(107)
Other comprehensive income (loss)		—		—		—		9
TOTAL COMPREHENSIVE INCOME (LOSS)	$	(86)	$	(28)	$	(304)	$	(98)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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MOBILEYE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)


	Common Stock					Accumulated		Retained
				Additional		Other		Earnings		Total
	Number of			paid-in		Comprehensive		(Accumulated		Shareholders’
U.S. dollars in millions, except per share amounts	shares	Amount		capital		Income (Loss)		deficit)		Equity
Three Months Ended
Balance as of March 30, 2024	806	$	8	$	14,943	$	—	$	(188)	$	14,763
Net income (loss)	—		—		—		—		(86)		(86)
Share-based compensation expense	—		—		62		—		—		62
Recharge to Parent for Share-based compensation	—		—		(20)		—		—		(20)
Issuance of common stock under employee share-based compensation plans	3		—		—		—		—		—
Balance as of June 29, 2024	809	$	8	$	14,985	$	—	$	(274)	$	14,719

Balance as of April 1, 2023	802	$	9	$	14,800	$	—	$	(22)	$	14,787
Net income (loss)	—		—		—		—		(28)		(28)
Tax sharing agreement with Parent	—		—		5		—		—		5
Share-based compensation expense	—		—		55		—		—		55
Recharge to Parent for Share-based compensation	—		—		(18)		—		—		(18)
Issuance of common stock under employee share-based compensation plans	4		—		—		—		—		—
Secondary offering	—		*		—		—		—		*
Balance as of July 1, 2023	806	$	8	$	14,842	$	—	$	(50)	$	14,800

Six Months Ended
Balance as of December 30, 2023	806	$	8	$	14,886	$	—	$	30	$	14,924
Net income (loss)	—		—		—		—		(304)		(304)
Share-based compensation expense	—		—		124		—		—		124
Recharge to Parent for Share-based compensation	—		—		(25)		—		—		(25)
Issuance of common stock under employee share-based compensation plans	3		—		—		—		—		—
Balance as of June 29, 2024	809	$	8	$	14,985	$	—	$	(274)	$	14,719

Balance as of December 31, 2022	802	$	9	$	14,737	$	(9)	$	57	$	14,794
Net income (loss)	—		—		—		—		(107)		(107)
Other comprehensive income (loss), net	—		—		—		9		—		9
Share-based compensation expense	—		—		127		—		—		127
Recharge to Parent for Share-based compensation	—		—		(22)		—		—		(22)
Issuance of common stock under employee share-based compensation plans	4		—		—		—		—		—
Secondary offering	—		*		—		—		—		*
Balance as of July 1, 2023	806	$	8	$	14,842	$	—	$	(50)	$	14,800

*Rounding of Class A and Class B share amounts due to Secondary offering.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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MOBILEYE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six months ended
	June 29,		July 1,
U.S. dollars in millions	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(304)	$	(107)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation of property and equipment		30		15
Share-based compensation		124		127
Amortization of intangible assets		222		251
Exchange rate differences on cash and cash equivalents		5		5
Deferred income taxes		(11)		(10)
Interest with related party, net		—		16
(Gains) losses on equity and debt investments, net		1		—
Other		(1)		—
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts receivable		133		29
Decrease (increase) in other current assets		8		21
Decrease (increase) in inventories		(94)		(150)
Increase (decrease) in accounts payable, accrued expenses and related party payable		(52)		3
Increase (decrease) in employee-related accrued expenses and long term benefits		3		(2)
Increase (decrease) in other current liabilities		5		(2)
Decrease (increase) in other long term assets		(2)		1
Increase (decrease) in other long term liabilities		3		—
Net cash provided by (used in) operating activities		70		197
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(46)		(58)
Purchases of debt and equity investments		(18)		—
Net cash provided by (used in) investing activities		(64)		(58)
CASH FLOWS FROM FINANCING ACTIVITIES
Share-based compensation recharge		(11)		(12)
Net cash provided by (used in) financing activities		(11)		(12)
Effect of foreign exchange rate changes on cash and cash equivalents		(5)		(5)
Increase (decrease) in cash, cash equivalents and restricted cash		(10)		122
Balance of cash, cash equivalents and restricted cash, at beginning of year		1,226		1,035
Balance of cash, cash equivalents and restricted cash, at end of period	$	1,216	$	1,157
Supplementary non-cash investing and financing activities:
Non-cash purchase of property and equipment	$	10	$	8
Non-cash share based compensation recharge		14		10
Supplemental cash flow information:
Cash received (paid) for income taxes, net of refunds	$	(15)	$	(29)
Interest received from related party		—		16

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - GENERAL

Background

Mobileye Global Inc. (“Mobileye”, “the Company” or “we”) is a leader in the development and deployment of advanced driver assistance systems (“ADAS”) and autonomous driving technologies and solutions, aimed to provide the capabilities required for the future of autonomous driving, leveraging a comprehensive suite of purpose-built software and hardware technologies.

Intel Corporation (“Intel” or the “Parent”) directly or indirectly hold all of the Class B common stock of Mobileye, which as of June 29, 2024, represents approximately 87.9% of our outstanding common stock and 98.6% of the voting power of our common stock.

Operations in Israel

On October 7, 2023, Hamas launched a series of attacks on civilian and military targets in Southern and Central Israel, to which the Israel Defense Forces have responded. In addition, Hezbollah has attacked military and civilian targets in Northern Israel, to which Israel has responded. Further, on April 13, 2024, Iran launched a series of drone and missile strikes against Israel, to which Israel has responded. How long and how severe the current conflict in Gaza, Northern Israel or the broader region becomes is unknown at this time and any continued clash among Israel, Hamas, Hezbollah, Iran or other countries or militant groups in the region may escalate in the future into a greater regional conflict. To date our operations and financial results have not been materially affected, although as of July 31, 2024 approximately 3.6% of our employees have been called to reserve duty in the Israel Defense Forces. We expect that the current conflict in the Gaza Strip and the security escalation in Israel will not have a material impact on our business results in the short term. However, since this is an event beyond our control, its continuation or cessation may affect our expectations. We continue to monitor political and military developments closely and examine the consequences for our business, results of operations and financial condition.

Other events during the reporting period

On March 18, 2024, the Company announced the winding down of the Aftermarket Solutions Unit that provides retrofitted advanced driver assistance technology. This decision was made following a thorough review of this unit’s business prospects and investment needs showing that since automakers and other vehicle manufacturers have steadily increased the rate at which integrated ADAS solutions are installed on new vehicles, the demand and future addressable market for retrofitted ADAS solutions has declined. As a result, this division has seen its revenues decline meaningfully, and in recent years has not positively contributed to Mobileye’s profitability. The plan for winding down of the Aftermarket Solutions Unit includes a reduction in workforce of over 100 employees worldwide. The affected employees are entitled to additional termination costs in the amount of approximately $4 million, which was recognized as an expense in the six months ended June 29, 2024.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information.

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MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

We have a 52- or 53-week fiscal year that ends on the last Saturday in December. Fiscal year 2023 was a 52 week fiscal year; fiscal year 2024 is also a 52 week fiscal year.

The results of operations for the three and six months ended June 29, 2024 shown in this report are not necessarily indicative of the results to be expected for the full year ending 2024. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 30, 2023.

There have been no material changes in our significant accounting policies as described in our consolidated financial statements for the fiscal year ended December 30, 2023, except as detailed below regarding accounting for investments. For further detail, see Note 2 in the audited consolidated financial statements for the fiscal year ended December 30, 2023.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts and events reported and disclosed in the condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions and factors, including the current economic environment, that we believe to be reasonable under the circumstances. Actual results could differ from those estimates.

On an on-going basis, management evaluates its estimates, judgments, and assumptions. The most significant estimates and assumptions relate to useful lives of intangible assets, impairment assessment of intangible assets and goodwill and income taxes.

Investments

Debt Investments

Marketable debt securities consist of highly liquid U.S. government bonds with maturities of up to six months when purchased. These debt investments are classified as Available For Sale investments and measured at fair value with unrealized gains and losses, net of tax, recorded in accumulated other comprehensive income (loss). We consider all highly liquid debt investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. Debt investments with original maturities of greater than three months and less than one year, are classified within other current assets.

Available for sale debt investments are subject to a periodic impairment review. For investments in an unrealized loss position, we determine whether a credit loss exists. We recognize an allowance for credit losses, up to the amount of the unrealized loss when appropriate, and write down the amortized cost basis of the investment if it is more likely than not we will be required or we intend to sell the investment before recovery of its amortized cost basis.

Equity Investments

Equity investments consist of investments in marketable equity securities. Equity investments are measured and recorded at fair value with changes in fair value, whether realized or unrealized, recorded in the statement of operations. Equity investments are classified within other current assets.

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MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Cash, cash equivalents and restricted cash

The following is a reconciliation of cash, cash equivalents and restricted cash as of each period end:


	As of
U.S. dollars in millions	June 29, 2024		December 30, 2023
Cash	$	50	$	58
Short term deposits		224		222
Money market funds		927		932
U.S. Government bonds		2		—
Restricted cash (within other current and other long-term assets)		13		14
Cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows	$	1,216	$	1,226

Fair value measurement

The carrying value of short term deposits classified as cash equivalents approximates their fair value due to the short maturity of these items.

The Company’s investment in money market funds is measured at fair value within Level 1 of the fair value hierarchy because they consist of financial assets for which quoted prices are available in an active market. Interest income related to money market funds for the three months ended June 29, 2024 and July 1, 2023 amounted to $12 million and $12 million, respectively; and $24 million and $20 million for the six months ended June 29, 2024 and July 1, 2023, respectively.

The Company’s investment in U.S. government bonds is measured at fair value within Level 1 of the fair value hierarchy because they consist of U.S. government bonds for which quoted prices are available in an active market.

The Company’s marketable equity investments are measured at fair value within Level 1 of the fair value hierarchy because they consist of investments in marketable equity securities for which quoted prices are available in an active market.

The carrying amounts of trade accounts receivable and accounts payable approximate fair value because of their generally short maturities.

Research and development, net

Research and development expenses are expensed as incurred, and consist primarily of personnel, facilities, equipment, and supplies for research and development activities.

The Company occasionally enters into best-efforts nonrefundable, non-recurring engineering (“NRE”) arrangements pursuant to which the Company is reimbursed for a portion of the research and development expenses attributable to specific development programs. The Company does not receive any additional compensation or royalties upon completion of such projects and the potential customer does not commit to purchase the resulting product in the future. The participation reimbursement received by the Company does not depend on whether there are future benefits from the project. All intellectual property generated from these arrangements is exclusively owned by the Company.

Participation in expenses for research and development projects are recognized on the basis of the costs incurred and are netted against research and development expenses in the condensed consolidated statements of operations and comprehensive income (loss). Research and development reimbursements of $12 million and $16 million were offset against research and development costs in the three months ended June 29, 2024 and July 1, 2023, respectively; and $48 million and $33 million were offset in the six months ended June 29, 2024 and July 1, 2023, respectively.

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MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Derivatives and hedging

Beginning in 2021, as part of Intel’s corporate hedging program, Intel hedges forecasted cash flows denominated in Israeli Shekels (“ILS”) related to the Company. ILS is the largest operating expense currency of the Company. Intel combines all of its ILS exposures, and as part of Intel’s hedging program enters into hedging contracts to hedge Intel’s combined ILS exposure. Derivative gains and losses attributed to these condensed consolidated financial statements are recorded under accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects the statement of operations.

During the fourth quarter of 2022, the Company de-designated its remaining cash flow hedges for forecasted operating expenses denominated in ILS and no longer participates in the hedging services agreement with Intel. As the hedged transactions and cash flows related to the outstanding instruments were expected to occur as originally forecasted, the associated gains and losses deferred in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheet were reclassified into earnings in the same period or periods during which the originally hedged transactions affect earnings. Any subsequent changes in the fair value of the outstanding derivative instruments after the de-designation and termination of hedge accounting were immediately reflected in operating expenses.

The change in accumulated other comprehensive income (loss) relating to gains (losses) on derivatives used for hedging was as follows:


	Three Months Ended				Six Months Ended
U.S. dollars in millions	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Amounts reclassified out of accumulated other comprehensive income (loss)		—		—		—		10
Tax effects		—		—		—		(1)
Other comprehensive income (loss), net	$	—	$	—	$	—	$	9

Income Tax

The provision for income tax consists of income taxes in the various jurisdictions where the Company is subject to taxation, primarily the United States and Israel. For interim periods, the Company recognizes an income tax benefit (provision) based on the estimated annual effective tax rate, calculated on a worldwide consolidated basis, expected for the entire year. The Company applies this rate to the year-to-date pre-tax income. The overall effective tax rate is influenced by valuation allowances on tax assets for which no benefit can be recognized due to the Company’s recent history of pretax losses sustained. Tax jurisdictions with forecasted pretax losses for the year for which no benefit can be recognized are excluded from the calculation of the worldwide estimated annual effective tax rate, and any associated tax provision or benefit for those jurisdictions is recorded separately.

During the periods presented in the condensed consolidated financial statements, certain components of the Company’s business operations were included in the consolidated U.S. domestic income tax return filed by the Company’s Parent. The Company also files various foreign income tax returns on a separate basis, distinct from its Parent. The income tax provision included in the Company’s condensed consolidated financial statements has been calculated using the separate return method, as if the Company had filed its own tax returns.

The Company has entered into a Tax Sharing Agreement with its Parent that establishes the amount of cash payable for the Company’s share of the tax liability owed on consolidated tax return filings with its Parent. Any differences between taxes payable to the Company’s Parent under the Tax Sharing Agreement and the current tax provision computed on a separate return basis, is reflected as adjustments to additional paid-in capital in the condensed consolidated statement of changes in equity and financing activities within the condensed consolidated statement of cash flows (see also Note 7).

The Company reflects tax loss and tax credit carry-forward attributes under the separate return method approach. Such tax attributes may not be benefited in the same period as the Company’s Parent on a consolidated tax return. As a result, there are inherent differences between the Company’s separate tax return method approach and certain actual tax returns filed on a consolidated basis with Intel.

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MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Concentration of credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, which include: short-term deposits, money market funds and U.S. government bonds; and also trade accounts receivable.

The majority of the Company’s cash and cash equivalents are invested in banks domiciled in the U.S. and Europe, as well as in Israel. Generally, these cash equivalents may be redeemed upon demand. Short term bank deposits are held in the aforementioned banks. The money market funds consist of institutional investor money market funds and are readily redeemable to cash, and the U.S. government bonds are also highly liquid. Accordingly, management believes that these bank deposits, money market funds and U.S. government bonds, have minimal credit risk.

The Company’s accounts receivables are derived primarily from sales to Tier 1 suppliers to the automotive manufacturing industry located mainly in the U.S., Europe, and China. Concentration of credit risk with respect to accounts receivables is mitigated by credit limits, ongoing credit evaluation, and account monitoring procedures. Credit is granted based on an evaluation of a customer’s financial condition and, generally, collateral is not required. Trade accounts receivable are typically due from customers within 30 to 60 days.

The Company performs ongoing credit evaluations of its customers and has not experienced any material losses in the periods presented. The Company recognizes an allowance for credit losses for any potential uncollectible amounts. The allowance is based on various factors, including historical experience, the age of the accounts receivable balances, credit quality of the customers, and other reasonable and supportable information. This allowance consists of an amount based on overall estimated exposure for the receivable portfolio and amounts identified for specific customers. Expected credit losses are recorded as general and administrative expenses in the Company’s condensed consolidated statement of operations and comprehensive income. As of June 29, 2024 and December 30, 2023, the credit loss allowance of trade accounts receivable was not material. For the three and six months ended June 29, 2024 and July 1, 2023, the charge-offs and recoveries in relation to the credit losses were not material.

Customer concentration risk

The Company’s business, results of operations, and financial condition for the foreseeable future will likely continue to depend on sales to a relatively small number of customers. In the future, these customers may decide not to purchase the Company’s products, may purchase fewer products than in previous years, or may alter their purchasing patterns. Further, the amount of revenue attributable to any single customer or customer concentration generally may fluctuate in any given period. In addition, a decline in the production levels of one or more of the Company’s major customers, particularly with respect to vehicle models for which the Company is a significant supplier, could reduce revenue. The loss of one or more key customers, a reduction in sales to any key customer or the Company’s inability to attract new significant customers could negatively impact revenue and adversely affect the Company’s business, results of operations, and financial condition. See Note 9 related to customers that accounted for more than 10% of the Company’s total revenue and more than 10% of the total accounts receivable balance for each of the periods presented in these condensed consolidated financial statements.

Dependence on a single supplier risk

The Company purchases all its System on Chip (“EyeQ™ SoC”) from a single supplier. Any issues that occur and persist in connection with the manufacture, delivery, quality, or cost of the assembly and testing of inventory could have a material adverse effect on the Company’s business, results of operations and financial condition. See below regarding a shortage in EyeQ™ SoCs that the Company experienced during 2021 and 2022 and may experience in the future, including in ECUs for SuperVision™ and other components for our products.

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MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Supply chain risk

During the fiscal years 2022 and 2021, the semiconductor industry experienced widespread shortages of substrates and other components and available foundry manufacturing capacity. Furthermore, STMicroelectronics, the Company’s sole supplier, was not able to meet our demand for EyeQ™ SoCs during 2022, causing a significant reduction in the Company’s inventory levels. Starting in late 2022 and early 2023, such supply chain disruptions, raw material shortages and manufacturing limitations abated and during 2023, we successfully increased levels of EyeQ™ SoC inventory on hand, mitigating the potential for future supply constraints to cause a shortfall of chips. However, in the event of a reoccurrence of supply chain constraints, and subject to the duration and severity thereof, we may be required to operate with minimal or no inventory of EyeQ™ SoCs or SuperVision™ ECUs on hand. As a result, we are substantially reliant on timely shipments of EyeQ^TM SoCs from STMicroelectronics and ECUs from Quanta Computer (or other suppliers) to fulfill customer orders and if such a shortfall of chips of ECUs were to occur, we may be unable to offset future supply constraints through the use of inventory on hand. Our results of operations in the three and six months ended June 29, 2024 have not been impacted by any shortfall of chips. Although we cannot fully predict the length and the severity of the impact these pressures would have on a long-term basis, we do not anticipate that our current supply chain constraints would materially adversely affect our results of operations, capital resources, sales, profits, and liquidity on a long-term basis.

New Accounting pronouncements

Accounting Pronouncements effective in future periods

In December 2023, the FASB issued ASU 2023-09 Improvements to Income Tax Disclosures. The ASU improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024. The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU improves reportable segments disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

NOTE 3 - OTHER FINANCIAL STATEMENT DETAILS

Inventories


	As of
U.S. dollars in millions	June 29, 2024		December 30, 2023
Raw materials	$	40	$	46
Work in process		—		1
Finished goods		445		344
Total inventories	$	485	$	391

Inventory write-downs and write-offs totaled $1 million for the three and six months ended June 29, 2024 and were not material for the three and six months ended July 1, 2023.

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MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Property and equipment


	As of
U.S. dollars in millions	June 29, 2024		December 30, 2023
Computers, electronic equipment and software	$	192	$	167
Vehicles		14		14
Office furniture and equipment		11		11
Buildings		319		315
Leasehold improvements		40		37
Total property and equipment, gross	$	576	$	544
Less: accumulated depreciation		(120)		(97)
Total property and equipment, net	$	456	$	447

Depreciation expenses totaled $16 million and $8 million for the three months ended June 29, 2024 and July 1, 2023, respectively; and $30 million and $15 million for the six months ended June 29, 2024 and July 1, 2023, respectively. During the six months ended June 29, 2024, the Company derecognized the cost and accumulated depreciation of fully depreciated assets in the amount of $7 million.

NOTE 4 - EQUITY

A.Share-based compensation plans

Mobileye Plan

Following the Mobileye IPO in October 2022, the Company’s employees are incentivized and rewarded through the grant of the Company’s equity awards under the Mobileye Global Inc. 2022 Equity Incentive Plan (“the 2022 Plan”), which are granted for Class A shares and vest upon the satisfaction of a service-based vesting condition, mostly over service periods of three years.

Restricted Stock Units

The RSUs activity for the six months ended June 29, 2024 for RSUs granted to Company’s employees under the 2022 Plan was as follows:


		Weighted average grant
	Number of RSUs	date fair value
	In thousands	U.S. dollars
Outstanding as of December 30, 2023	14,778	$	29.5
Granted	1,571		26.9
Vested	(3,084)		22.4
Forfeited	(384)		30.8
Outstanding as of June 29, 2024	12,881	$	30.9

The RSUs activity for the three months ended June 29, 2024 for RSUs granted to Company’s employees under the 2022 Plan was as follows:


		Weighted average grant
	Number of RSUs	date fair value
	In thousands	U.S. dollars
Outstanding as of March 30, 2024	15,170	$	29.3
Granted	975		27.6
Vested	(3,005)		21.9
Forfeited	(259)		30.6
Outstanding as of June 29, 2024	12,881	$	30.9

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MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of June 29, 2024, the unrecognized compensation cost related to all unvested RSUs granted under the 2022 Plan, was $274 million, which is expected to be recognized as expense over a weighted-average period of 1.95 years.

Intel Plan

Prior to the Mobileye IPO, since 2017, employees of the Company had been incentivized and rewarded through the grant of Intel equity awards under Intel’s equity incentive plan which contains only a service condition. The equity awards granted generally vest over the course of three years from the grant date.

Options

Outstanding and exercisable options for Intel’s common stock under Intel’s plan as of June 29, 2024 were as follows:

Outstanding

Exercisable

Weighted average

Number of

remaining

Weighted average

Number of

Weighted average

Exercise price

options

contractual life

exercise price

options

exercise price

U.S. dollars

In thousands

In years

U.S. dollars

In thousands

U.S. dollars

$ 4.0 - 21.6

1.6

6.1

4.0

Total

1.6

6.1

4.0

The option activity for the six months ended June 29, 2024 for options granted to the Company’s employees for Intel’s common stock was as follows:


		Weighted average		Weighted		Aggregated
	Number of	remaining		average		intrinsic
	options	contractual Life		exercise price		value(1)
	In thousands	In years		U.S. dollars		U.S. dollars in millions
Options outstanding as of December 30, 2023	135		1.0	$	31.7	$	3
Exercised	(5)		—		24.3		—
Expired	(71)		—		53.6		—
Options outstanding as of June 29, 2024	59		1.6	$	6.1	$	1
Options exercisable as of June 29, 2024	52		1.6	$	4.0	$	1

The option activity for the three months ended June 29, 2024 for options granted to the Company’s employees for Intel’s common stock was as follows:


		Weighted average		Weighted		Aggregated
	Number of	remaining		average		intrinsic
	options	contractual Life		exercise price		value(1)
	In thousands	In years		U.S. dollars		U.S. dollars in millions
Options outstanding as of March 30, 2024	59	$	1.8	$	6.1	$	2
Exercised	—		—		—		—
Expired	—		—		—		—
Options outstanding as of June 29, 2024	59		1.6	$	6.1	$	1
Options exercisable as of June 29, 2024	52		1.6	$	4.0	$	1

(1)

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of Intel’s ordinary share. On June 29, 2024, Intel’s ordinary share price was $31.0. This represents the potential pre-tax amount receivable by the option holders had all option holders exercised their options as of such date.

(2)	The remaining options expected to vest as of June 29, 2024 are 7 thousand options with an average weighted exercise price of $21.6.

Table of Contents

MOBILEYE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

RSUs

The RSUs activity for the six months ended June 29, 2024 for RSUs granted to the Company’s employees for Intel’s common stock was as follows:


		Weighted average
	Number of RSUs	grant date fair value
	In thousands	U.S. dollars
Outstanding as of December 30, 2023	2,711	$	44.4
Vested	(735)		44.6
Forfeited	(63)		45.3
Outstanding as of June 29, 2024	1,913	$	44.3

The RSUs activity for the three months ended June 29, 2024 for RSUs granted to the Company’s employees for Intel’s common stock was as follows:


			Weighted average
	Number of RSUs		grant date fair value
	In thousands	U.S. dollars
Outstanding as of March 30, 2024	2,575	$	44.3
Vested	(634)		44.3
Forfeited	(28)		45.4
Outstanding as of June 29, 2024	1,913	$	44.3

Unrecognized expenses

As of June 29, 2024, the unrecognized compensation cost related to stock options and RSUs granted under the Intel 2006 Plan was $38 million, which will be recognized over a weighted average period of 0.6 years.

Share-based compensation expense summary (for both Mobileye and Intel Plans)

Share-based compensation expenses included in the condensed consolidated statements of operations and comprehensive income (loss) was as follows:


	Three months ended				Six months ended
U.S. dollars in millions	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Cost of revenue	$	1	$	1	$	1	$	2
Research and development, net

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