Horizon's gross profit exceeded 2.4 billion last year. Yu Kai: Confident in maintaining a gross profit margin of over 60%

Ask AI · How does Horizon respond to the competition from Nvidia and Qualcomm in the autonomous driving sector?

According to a report by The Beijing News Shell Finance (Reporter Chenweicheng) on the evening of March 19, Horizon released its 2025 performance announcement, showing an annual revenue of 3.76 billion yuan, a year-on-year increase of 57.7%; gross profit reached 2.43 billion yuan, maintaining a high gross margin of 64.5%. The adjusted operating loss was 2.37 billion yuan, mainly due to increased R&D investment.

Horizon shipped over 4 million chip solutions throughout the year, a year-on-year increase of 38.8%. Among them, the shipment of mid-to-high-end autonomous driving chip solutions reached 1.8 million sets, nearly five times that of the same period in 2024, accounting for 45% of total shipments and contributing over 80% of the revenue from products and solutions.

Both of Horizon’s main business segments achieved rapid growth, with revenue from product solutions soaring to 1.62 billion yuan, a year-on-year increase of 144.2%, rising from 28% in 2024 to 43%; revenue from licensing and services reached 1.94 billion yuan, a growth of 17.4%.

With memory prices rising significantly this year, how does Horizon maintain a high gross margin? Horizon’s founder and CEO, Yu Kai, stated during the earnings call that based on an average revenue growth rate of 60% over the next few years, the company is confident in maintaining a high gross margin level of over 60%, with chip margins between 40%-50% and software licensing close to 100%. They have locked in memory supply prices by the end of 2025, so fluctuations in memory prices this year will not further affect their gross margin.

In recent months, to concentrate AI resources and reduce costs, they have shifted from single-point functions to systematic AI capabilities. More and more automakers are gradually integrating their autonomous driving and cockpit departments; how is Horizon positioning itself? Yu Kai believes that, from a trend perspective, the integration of cockpit and driving is an inevitable result of technological evolution, providing a more seamless experience. Furthermore, with the rapid development of AI agents, there is hope to leverage greater computing power and a wider variety of hardware to evolve cars into AI Agents that surpass smartphones.

In Yu Kai’s view, due to industry cost pressures, the integration of cockpit and driving will become an emerging trend this year. After the integration, there are fewer competitors—Horizon and Nvidia are moving from the driving domain into the cockpit domain, while Qualcomm is also striving to transition from the cockpit to autonomous driving. This is not a hardware issue; it’s a software ecosystem issue. Transitioning from autonomous driving to the cockpit generally feels like a more significant leap than moving from the cockpit to autonomous driving.

Editor: Yang Juanjuan

Proofreader: Chen Diyuan