John Saager

John Saager asked about the expected magnitude of future U.K. restructuring costs, specifically if they would be comparable to the $28 million incurred this quarter. He then sought guidance on post-restructuring trends or ranges for used vehicle Gross Profit Per Unit (GPUs) and SG&A as a percentage of Gross Profit for both the U.K. and U.S. operations, along with the timing to achieve these targets.

Answer

Daniel McHenry, CFO, stated that future U.K. restructuring costs are not expected to be anywhere near the $28 million, as significant work like DMS integration, property portfolio adjustments, and the JLR disposal were largely completed in 2025. Daryl Kenningham, CEO, mentioned that U.S. used GPUs are higher than pre-COVID but lower than a year ago, with expected upside in U.K. used GPUs. He targeted U.K. SG&A at 80% long-range, fluctuating with plate change quarters, while Daniel McHenry, CFO, projected U.S. SG&A to be in the mid-to-high 60% range annually.

John Saager inquired about the expected magnitude of U.K. restructuring costs for 2026, comparing it to the $28 million incurred in Q4 2025, and sought guidance on future used vehicle GPU and SG&A as a percentage of GP trends for both U.K. and U.S. operations.

Answer

Daniel McHenry, CFO, stated that 2026 restructuring costs are not expected to be comparable to the $28 million in Q4 2025, as significant 'heavy lifting' and costs related to DMS, property portfolio, and JLR disposal were completed in 2025. Daryl Kenningham, CEO, noted that U.S. used GPUs are higher than pre-COVID but lower than a year ago, with expected upside in U.K. used GPUs through improved discipline. For U.K. SG&A as a percentage of GP, the long-range target is 80%, fluctuating with plate change quarters. Daniel McHenry added that U.S. SG&A as a percentage of GP is expected to be in the mid-to-high 60s annually.

John Saager asked about the near-term demand for Mobileye's Drive system (Robotaxi) for 2027-2028, given the long-term forecast of 100,000 AVs by 2033, and followed up on whether AV customers pay for R&D in advance or if Mobileye has volume protection.

Answer

Amnon Shashua (CEO and Founder, Mobileye) and Nimrod Nehushtan (EVP of Business Development and Strategy, Mobileye) explained that initial deployments will involve thousands of vehicles across six cities expanding to 60 by 2027, with hundreds of vehicles per city. Nimrod added that Volkswagen's manufacturing capacity could scale significantly beyond 100,000 units if demand materializes. For payments, Nimrod confirmed that Mobileye receives engineering budgets covering direct development costs well before commercialization, providing confidence against potential volume downsides.

John Saager asked about the near-term demand for Mobileye's Drive system for 2027-2028, including expected volumes for phase one launches, and whether AV customers pay for R&D in advance or if there's protection against lower-than-planned volumes.

Answer

Amnon Shashua, CEO and Founder, mentioned plans to expand to 60 cities by 2027, including Los Angeles with Uber, and a high-volume program with Holon. He indicated initial deployments would involve thousands of vehicles. Nimrod Nehushtan, EVP of Business Development and Strategy, clarified that the 100,000-unit forecast by 2033 represents manufacturing capacity, with demand expected to be high once the technology matures. He estimated phase one launches would involve a few hundred vehicles per city. Mr. Nehushtan confirmed that Mobileye receives engineering budgets covering direct development costs well before commercialization, providing confidence against downside volume risks.