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Serve Robotics Inc. /DE/ (SERV)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $0.440M, up 150% sequentially, with consolidated Fleet Revenues of ~$0.212M and Software Services of ~$0.229M; GAAP EPS was -$0.23 and non-GAAP EPS was -$0.16 .
  • Against S&P Global consensus, EPS beat (-$0.16 vs -$0.213*) while revenue missed ($0.440M vs $0.487M*); management guided Q2 revenue to $0.600–$0.700M, implying +35–60% q/q and delivery volume growth of +60–75% . Values retrieved from S&P Global.
  • Execution highlights: built and deployed 250 Gen3 robots, daily supply hours +40% q/q, delivery volume +75% through the quarter, footprint expansion to Miami and Dallas; households served >320k and merchants >1,500 .
  • Balance sheet catalyst: record $198M cash after raising $91.5M in Q1; decision to self‑fund the 2,000‑unit fleet eliminates ~$20M in interest and purchase option costs through 2026 .

What Went Well and What Went Wrong

What Went Well

  • “We made our key targets for the first quarter… build 250 new third‑generation robots… on track to reach our end of year target… deploy 2,000 robots.” .
  • Strong operational ramp: daily supply hours +40% q/q; delivery volume +75% from first to last week of Q1; households served >320k (+110% since Dec 2024); >1,500 restaurants (+50% q/q) while maintaining completion quality (up to 99.8%) .
  • Cost discipline and leverage: GAAP opex held near trend ($13.5M in Q1 vs $12.9M in Q4); adjusted EBITDA improved to -$7.1M from -$7.8M; Gen3 BOM reductions offset tariff exposure .

What Went Wrong

  • Revenue missed consensus and gross margin mix was pressured by early‑stage fleet operations; cost of revenues increased by ~$1M with new market start‑up .
  • Continued losses at scale: GAAP net loss and negative adjusted EBITDA persist as operations scale ahead of 2H’25 deployment; revenue remains modest relative to cash burn .
  • Limited disclosure of margin metrics in Q1 (no explicit % provided), complicating near‑term margin benchmarking; mix shift toward fleet revenues weighs on overall margin .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$0.222 $0.176 $0.440
GAAP EPS ($USD)-$0.20 —-$0.23
Non-GAAP EPS ($USD)—-$0.23 -$0.16
Adjusted EBITDA ($USD Millions)—-$7.8 -$7.1
GAAP Operating Expenses ($USD Millions)$8.3 $12.9 $13.5
Cash and Equivalents ($USD Millions)$50.9 $123.0 $198.0

Segment and revenue disaggregation:

MetricQ3 2024Q4 2024Q1 2025
Software Services ($USD)$0.0388 —$0.229
Delivery Services ($USD)$0.1123 —— (included in Fleet Revenues)
Branding Fees ($USD)$0.0705 —— (included in Fleet Revenues)
Fleet Revenues ($USD)——$0.212

KPIs:

KPIQ3 2024Q4 2024Q1 2025
Daily Active Robots (count)59 57 “>300 fleet size” (not all active)
Daily Supply Hours (hours)465 455 +40% q/q (vs Q4)
Restaurants Served (count)>400 in LA >1,000 total >1,500
Households Reached (count)—>300,000 >320,000
Delivery Completion Rate (%)——Up to 99.8%
Missed Deadline Rate (YoY)——~-65% YoY

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueQ2 2025—$0.600–$0.700M Introduced (new)
Delivery Volume GrowthQ2 2025 vs Q1—+60–75% q/q Introduced (new)
Fleet Build (Gen3 units)2H 2025“Accelerate in 2H” ≥700 by end Q3; remainder in Q4 Maintained/Specified
Annualized Revenue Run-Rate (full utilization)2026$60–$80M $60–$80M Maintained
Cash RunwayThrough 2026—Fund operations through end of 2026 Introduced (new)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
AI/technology platform monetizationMagna non‑recurring software services; phase 2 planned Formalized platform/data monetization; recurring software expected in Q2; VP hire, agreements with OEM/trucking/industrial partners Expanding scope; recurring revenue emerging
Supply chain/tariffsGlobal supply chain; minimal China exposure; monitoring policy BOM savings offset 10% tariffs; supplier diversification; no material impact observed Risk mitigated; favorable cost trajectory
Product performance (Gen3)Gen3 specs: +70% battery, 2x speed, 5x compute, ~50% cost down Built 250 units; better per‑robot operating hours; scaling and fixes before broader rollout Execution progressing; utilization rising
Regional expansionLA expansions; Dallas revealed; Wing pilot imminent Miami launched (ahead of schedule); Dallas launched; Atlanta by end of Q2 Multi‑city ramp accelerating
Regulatory/legalSidewalk legislation increasingly supportive Continued community engagement; market launches with public outreach Constructive backdrop; proactive engagement
R&D execution/costR&D largest cost; ongoing cost downs; Q4 R&D $6.8M GAAP Gen3 BOM cost reductions; opex consistent with scaling; adjusted EBITDA improving Scaling with cost discipline

Management Commentary

  • “We made our key targets… build 250 new third‑generation robots… on track to reach our end of year target… deploy 2,000 robots.” — Ali Kashani .
  • “Revenue for the first quarter 2025 increased 150% on a sequential basis to $440,000… Beginning this quarter, we’ve consolidated delivery and branding revenue under fleet revenues.” — Brian Read .
  • “We raised an additional $91 million in Q1 and had $198 million on the balance sheet by the end of the quarter… self‑fund our 2,000‑unit fleet rather than pursue equipment financing… eliminates approximately $20 million in interest and purchase option costs through 2026.” — Brian Read .
  • “We are diligently working with Magna… expect 700 new Gen3 robots ready by end of Q3… working with Wing Aviation to kick off our multimodal delivery pilot.” — Ali Kashani .
  • “We’ve managed our robot BOM cost in such a way that the current tariffs have had so little impact on us… offset by additional savings on the BOM cost.” — Ali Kashani .

Q&A Highlights

  • Market launch playbook and speed: rapid three‑phase approach (seed, deepen, mature), Miami executed in ~3.5 weeks; community engagement emphasized .
  • Gen3 performance: more hours/day per robot, improved cargo capacity; pushing hardware/software to iron out kinks before scaling; confident in Q2 delivery volume growth .
  • Fleet activity and utilization: >300 robots in fleet at Q1 end; increasing daily active robots and utilization into Q2 including Atlanta .
  • Tariff exposure and procurement: supplier diversification and BOM savings expected to offset tariff impacts; China exposure small .
  • Revenue mix and monetization: consolidation to “fleet revenues” reflects evolving monetization across delivery and branding; focus remains on expanding these services .

Estimates Context

MetricQ1 2025 EstimateQ1 2025 Actual
Primary EPS Consensus Mean ($)-0.21333*-0.16
Revenue Consensus Mean ($USD)486,810*440,465

Values retrieved from S&P Global.
Implications: EPS beat driven by cost control and operational leverage as deployment ramps; revenue miss reflects early‑stage fleet mix and start‑up costs ahead of fuller utilization. Expect estimate revisions to reflect higher Q2 revenue guide ($0.600–$0.700M) and rising delivery volumes .

Key Takeaways for Investors

  • Sequential growth is accelerating (Q2 guide +35–60% q/q) with delivery volumes expected +60–75%; near‑term revenue visibility improving as new markets mature .
  • Balance sheet strength ($198M cash) and self‑funded fleet materially de‑risk execution and avoid ~$20M in financing costs through 2026; reduces dilution risk vs debt financing .
  • Platform/data monetization introduces a recurring software revenue leg beginning Q2; if sustained, mix shift could support margin expansion over time .
  • Operational quality indicators (99.8% completion, -65% missed deadlines YoY) suggest scaling without degrading service levels; supports branding and merchant adoption .
  • Near‑term risk: revenue still modest relative to opex; margin disclosure limited; execution hinges on successful deployment and utilization of ≥700 Gen3 in Q3 and the remainder in Q4 .
  • Medium‑term thesis: reaching 2,000 robots and target utilization by 2026 underpins $60–$80M run‑rate; multi‑modal (robots + drones) and kitchen automation adjacency (Vebu/Autocado) broaden TAM and enterprise relationships .
  • Trading angle: EPS beat vs consensus and raised near‑term revenue guide are positives; revenue miss offsets. Watch 2Q volume trajectory, Atlanta launch, and platform revenue traction for sentiment drivers .

Additional Primary Sources (Q1 2025 Press & Events)

  • Q1 2025 Earnings Press Release: Serve Robotics Announces First Quarter 2025 Results .
  • Event Release: Serve to Report Q1 2025 Results, Conference Call May 8 .

Cross-Quarter Context (Prior Two Quarters)

  • Q4 2024 call: revenue $0.176M; daily active robots 57; daily supply hours 455; cash $123M; plan for 2H’25 acceleration and further Gen3 cost reductions .
  • Q3 2024 call and press release: revenue $0.222M; daily active robots 59; daily supply hours 465; LA expansion; Dallas revealed; Wing pilot; cash $50.9M .