Arbe Q2 2026 earnings: Revenue rises as operating loss narrows

Arbe Robotics (NASDAQ: ARBE) reported Q2 2026 revenue of $0.7 million, up from $0.3 million a year earlier, while diluted loss per share narrowed to $0.07 from $0.09. Lower operating expenses reduced the GAAP loss, but adjusted EBITDA improved only slightly and operating cash use remained nearly unchanged at $11.9 million.

Core financial data

Revenue growth came from increased chipset sales to automotive Tier suppliers, radar-system sales for defense and civilian programs, and engineering and development services. Arbe did not disclose how much each category contributed.

Gross loss narrowed to just $6,000, while operating expenses declined by $1.5 million. The company attributed the expense reduction mainly to lower share-based compensation and reduced headcount, partly offset by unfavorable exchange-rate effects.

Adjusted EBITDA is a non-GAAP measure that excludes share-based compensation, depreciation, financing items, and certain other expenses.

Business and program progress

Arbe ended the quarter with a $1 million backlog. Management said its effort to expand beyond automotive chipset sales into complete radar systems and markets with shorter sales cycles contributed to the quarter’s revenue growth, although the company did not provide revenue by end market.

In defense and homeland security, Arbe signed a framework collaboration agreement covering three projects with a global system integrator and began delivering radar systems from its production line. Additional shipments are expected as production ramps, but Arbe did not disclose order values or delivery schedules.

Automotive programs continued moving through testing rather than broad production. Arbe-equipped robotaxi vehicles began on-road trials, and the company remained involved in bids with other robotaxi operators. HiRain, Arbe’s Tier 1 partner in China, said production for a previously announced L4 OEM order is currently planned for early 2027.

Arbe also continued supplying chipsets to Sensrad for defense and commercial applications. Sensrad announced a collaboration with VirtuRail to integrate imaging radar into automated service vehicles used in underground tunnel construction.

Lower stock compensation improved GAAP losses more than cash use

Share-based compensation declined to $1.0 million from $2.3 million, accounting for most of the $1.5 million year-over-year reduction in operating expenses. This helped the GAAP operating loss narrow by $1.6 million, but the adjusted EBITDA loss improved by only $0.2 million.

Cash flow showed an even smaller improvement in the underlying spending profile. Net cash used in operating activities was $11.9 million, slightly above the prior-year period, despite the lower net loss. Management expects the full effect of an approximately 15% expense reduction initiated in Q1 2026 to appear in Q3 and is targeting quarterly cash burn below $7 million.

Arbe reported $41.9 million in cash, cash equivalents, and short-term bank deposits as of June 30, along with $40.5 million in shareholders’ equity. Current liabilities included $24.0 million of convertible bonds. The company said it remained in compliance with the bonds’ financial covenants and held cash above the required minimum threshold.

Guidance

Arbe reaffirmed the full-year 2026 outlook originally issued in February, leaving both revenue and adjusted EBITDA ranges unchanged. The guidance incorporates management’s expectations for continued revenue growth and the effects of its cost-reduction measures.

Arbe expects additional automotive OEM design wins over time, but said OEM adoption cycles are taking longer than previously anticipated. It therefore did not provide guidance for the timing of future design wins.

Risks investors should monitor

• Customer programs may take longer to generate material revenue. Several automotive opportunities remain in road trials, evaluations, RFIs, or RFQs, while HiRain’s planned production start is not until early 2027.
• Revenue remains small relative to the cost base. Q2 revenue was $0.7 million, compared with $0.7 million of cost of revenue and $9.8 million of operating expenses.
• Cash-burn reduction still needs to be demonstrated. Q2 operating cash use was $11.9 million, while management is targeting quarterly cash burn below $7 million after the expense cuts take fuller effect.
• Foreign-exchange movements can offset cost savings. Arbe said unfavorable exchange-rate effects increased expenses during the quarter, although lower headcount offset that pressure.

Summary

Arbe’s Q2 2026 results showed early revenue contributions from automotive chipsets, defense and civilian radar systems, and engineering services. Lower expenses narrowed GAAP losses, but much of the improvement came from reduced share-based compensation, while operating cash use remained elevated. The next indicators are whether system deliveries and automotive programs convert into larger revenue, and whether the cost reductions move quarterly cash burn toward management’s target.