Mobileye recognizes $2.7b goodwill loss

Israeli company Advanced Driving Assistance Systems (ADAS). Mobily International Company (Nasdaq: MBLY) recognized a goodwill impairment loss of $2.7 billion in the third quarter of 2024. The company explained that this is a non-cash goodwill impairment loss related to goodwill assets on its balance sheet. “This asset, which is significant in the context of Mobileye’s total assets, originally resulted from Intel’s acquisition of Mobileye in 2017 and was pushed onto our balance sheet in connection with our 2022 IPO and spin-off from Intel,” Mobileye added. If we have stated that our book equity is less than the value of our book equity, an interim impairment test has been performed.”

In fact, when Intel acquired Mobileye for $15 billion, its main asset was goodwill, and when the company held its IPO, the goodwill was put on its balance sheet. Following the recent severe decline in the company’s stock price, a situation arose in which Mobileye shares were above their market value, which required the company to conduct a goodwill impairment check in accordance with accounting rules.

Since the beginning of the year, Mobileye stock prices have fallen by 71%.

Since the beginning of the year, Mobileye’s stock prices have fallen 71% to $12.40, giving a market capitalization of $10.1 billion, compared to a market capitalization of $17 billion at the time of its initial public offering two years ago. Despite all this, the stock price rose by 7.89% in pre-market trading after publishing its financial results.

Revenue in the third quarter was $486 billion, down 8.3% from the corresponding quarter in 2023, with non-GAAP net earnings of $77 million, or EPS, of $0.10 — above analysts’ expectations. Since the beginning of 2024, Mobileye’s total revenue has been $1.16 billion, down 19.3% from the corresponding period in 2023.

The write-down of goodwill resulted in a sharp decline in GAAP operating profit with an operating loss of $2.8 billion in the third quarter and a loss of $3.6 billion since the beginning of 2024, compared to an operating profit of $8 million in the corresponding quarter of 2023 and a loss of $106. $1 million in the corresponding period of 2023. GAAP net loss of $2.7 billion in the third quarter of 2024 This compares to a net profit of $17 million in the corresponding quarter of 2023. In the first nine months of 2024, the GAAP net loss was $3.1 billion compared to a net loss of $68 million in the corresponding period of 2023. .

Mobileye also narrowed its guidance range but did not change its median forecast. Mobileye expects 2024 revenue of $1.62 to $1.66 billion, compared to $1.6 to $1.68 billion in its previous guidance. The company expects non-GAAP operating earnings to be $163 million to $190 million, compared to $152 million to $201 million in previous guidance. Due to the write-off of goodwill in Q3, GAAP operating loss will be $3.23-3.26 billion in 2023 compared to prior GAAP operating loss guidance of $531-580 million.

Mobileye Founder and CEO, Professor Amnon Shashua, said, “We remain focused on our core strategic goals for the next two years, which include maintaining and growing the position of our advanced driver assistance systems outside of domestic China, and deepening the relationship with our top 10 customers through advanced products. Wins Designs and implements an advanced product portfolio based on EyeQTM6 that leverages Mobileye’s historical competitive advantages enhanced by new AI approaches. While the near-term growth environment remains challenging, our goals are focused on mid-range opportunities “And we expect that this will become clearer in the coming months.”

Published by Globes, Israel Business News – en.globes.co.il – on October 31, 2024.

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