Why Autonomous Driving Software Company Mobileye Shares Are Shooting Higher Today

Mobileye Global Inc MBLY shares are trading higher after it decided to wind down its aftermarket solutions unit that provides retrofitted advanced driver assistance technology.

The company said it took the decision after a thorough review of the unit’s business prospects and investment needs.

The demand and future addressable market for retrofitted ADAS solutions has declined since the automakers increased the rate at which integrated ADAS solutions are installed on new vehicles.

Thus, this division has seen its revenues decline meaningfully to roughly $40 million on an annual basis and has not positively contributed to Mobileye profitability.

The move is expected to focus Mobileye’s resources on the opportunities for delivering more advanced forms of driver assist technologies and autonomous driving. 

The company will work to support about 130 employees affected by the shutdown worldwide over the near term. The action is not expected to have any material impact on Mobileye’s 2024 results.

“Unfortunately, the success of Mobileye’s built-in ADAS solutions has diminished the opportunities for retrofit solutions to the point where it is no longer viable to continue the retrofit solutions activity,” said President and CEO Amnon Shashua.

Meanwhile, the company remains committed to satisfying the needs of existing IMS customers over the medium-term.

Mobileye said it will also continue offering and servicing customers of its General Safety Regulation (GSR) solutions for commercial vehicle manufacturers.

Price Action: MBLY shares are trading higher by 4.36% at $28.95 on the last check Monday.