Serve Robotics Q2 2026 earnings: Revenue rises 404% as losses widen

Serve Robotics (Nasdaq: SERV) reported Q2 2026 revenue of $3.24 million, up 404% from $0.64 million a year earlier, while GAAP basic and diluted loss per share widened to $0.80 from $0.36. Recurring revenue exceeded 50% of total sales and helped gross margin improve from Q1, but the GAAP net loss expanded to $64.13 million as operating expenses increased, and lower Uber Eats delivery volume led Serve to reduce its full-year revenue outlook.

Core financial results

Revenue increased 9% sequentially as well as 404% year over year, but expenses continued to grow much faster than the company’s current revenue base. GAAP operating expenses reached $57.29 million, compared with only $3.24 million of quarterly revenue.

The gross margin improved by approximately 30.5 percentage points from Q1, supported by a higher mix of recurring revenue. However, the company still recorded an $8.78 million gross loss, and both the GAAP net loss and adjusted EBITDA loss widened substantially from the prior year.

Business and segment performance

Fleet services was the main revenue growth driver, rising approximately 599% year over year and 18% sequentially. Software services also nearly tripled from the prior year, although revenue declined about 9% from Q1.

Advertising represented nearly 50% of food-delivery revenue, while recurring revenue exceeded 50% of total company revenue. Revenue associated with the DoorDash partnership increased nearly 50% sequentially, providing some diversification as Uber Eats delivery volume weakened.

Healthcare revenue was steady and in line with the company’s expectations. During the first half of 2026, Serve signed seven multiyear extensions with hospital customers and added two hospitals.

Reported daily active robots increased to 792 from 160 a year earlier, while daily supply hours rose to 9,809 from 1,723. Both metrics declined sequentially, however: daily active robots fell from 812 and supply hours decreased from 10,295. The 2026 figures include both indoor and outdoor fleets, limiting direct comparability with the prior-year metrics.

A better revenue mix improved gross margin, but costs still outpaced scale

Serve’s revenue mix moved in a favorable direction during Q2. Higher-margin recurring revenue grew to more than half of total revenue, helping the gross margin improve from negative 301.6% in Q1 to approximately negative 271.1%.

That improvement did not yet translate into operating leverage. Cost of revenue was $12.02 million, approximately 3.7 times quarterly revenue, while GAAP operating expenses rose to $57.29 million. General and administrative expense reached $24.84 million and research and development expense was $20.28 million.

Stock-based compensation accounted for $14.69 million of quarterly costs, but the losses were not solely attributable to noncash adjustments. Non-GAAP operating expenses were still $40.39 million—approximately 12.5 times revenue—and adjusted EBITDA was a loss of $44.47 million.

Profitability, cash flow, and balance sheet

Serve ended June with $240.4 million of liquidity, consisting of $79.11 million in cash, $156.30 million in short-term marketable securities, and $5.00 million in long-term marketable securities. That total was approximately $19.3 million below the combined cash and marketable securities balance at the end of 2025.

Cash-flow data were provided only for the first six months, not Q2 separately. Net cash used in operations was $84.74 million in the first half of 2026, compared with $25.43 million in the same period of 2025. Investing activities used another $27.71 million, including $21.45 million for acquisitions.

The liquidity position was supported by $84.92 million of net proceeds from at-the-market common-stock offerings. Shares outstanding increased from approximately 74.73 million at the end of 2025 to 86.50 million on June 30, an increase of about 16%.

Guidance

Serve reduced its full-year revenue outlook because Uber Eats delivery volume was lower than expected, including a decline during Q2. The revised forecast also removes previously projected Uber Eats demand from the second half of 2026.

At the same time, management reduced its non-GAAP operating expense range by $20 million at both ends as it concentrates fleet capacity and capital on higher-return opportunities.

With first-half revenue of $6.22 million, the updated annual range implies approximately $2.78 million to $3.78 million of total revenue in the second half. This makes delivery volumes and the pace of monetization across non-Uber revenue streams central to the updated outlook.

Management’s view

CEO Ali Kashani emphasized the expansion of Serve’s autonomous fleet across food, healthcare, grocery, and other delivery applications, along with the development of advertising, software, and recurring revenue streams. CFO Brian Read said the revised outlook reflects a deliberate decision to focus the fleet and capital on opportunities with the highest expected returns while lowering planned operating expenses.

Recent insider transactions

The supplied insider summary shows 80,000 shares purchased through four transactions and 163,436 shares sold through 31 transactions over the preceding six months, resulting in net sales of 83,436 shares. The latest ten reported entries included four zero-price director stock awards and six sales; the source did not specify the currency for the reported prices and transaction values.

These reported transactions are objective disclosures and do not, by themselves, establish insiders’ views about the company’s prospects.

Risks investors should monitor

• Lower Uber Eats delivery volume: Weakness in this partnership caused Serve to reduce revenue guidance and remove previously projected second-half demand.
• Persistently negative unit economics: The gross margin remained negative 271.1%, meaning current revenue is still well below the direct cost of providing services.
• High operating spending: Even after excluding specified GAAP adjustments, quarterly non-GAAP operating expenses were more than 12 times revenue.
• Cash burn and share issuance: First-half operating cash use reached $84.74 million, while equity offerings supplied $84.92 million and outstanding shares increased about 16% from year-end.
• Sequential operating metric declines: Daily active robots and daily supply hours both decreased from Q1, making utilization and delivery-volume trends important measures of future progress.

Summary

Serve Robotics delivered rapid year-over-year revenue growth and a better mix of recurring, advertising, and diversified delivery revenue, which helped gross margin improve sequentially. Nevertheless, direct service costs and operating expenses remained far above revenue, losses widened, and weaker Uber Eats volumes prompted a lower annual revenue outlook. The next key indicators are whether DoorDash, healthcare, advertising, and software can offset the reduced Uber contribution, whether gross margin continues to improve, and whether the lower expense plan reduces cash consumption.