Horizon Robotics' growth engine shifts to technology licensing

First-half revenue rose 32.9% to RMB 2.06 billion even as China's car market shrank by a fifth, with licensing and services out-earning chip sales for the first time.

Horizon Robotics turned in a counter-cyclical first half: revenue climbed 32.9% year on year to RMB 2.06 billion with a 66% gross margin, even as China's passenger-vehicle retail volume fell 20.2%. Of the RMB 509 million in added revenue, roughly three-quarters came from licensing and services rather than chip sales — the first time the chip designer's heavily promoted licensing model has emerged as the company's main growth driver.

The core chip business held firm. Horizon cites third-party data putting it first among domestic brands with a 31.9% share of smart-driving chips, and its city-NOA share rose from 17.9% to 22.8%, moving it into second place behind Nvidia. The mix still skews cheap, with average chip pricing near RMB 420, but CEO Yu Kai guided to more than 5 million units shipped for the full year. The company's HSD urban-driving software has landed design wins from all five best-selling Chinese brands plus Toyota and Volkswagen, and all six of China's biggest vehicle exporters carry its chips — 24 brands and over 60 export models in total.

Licensing and services revenue jumped 52.7% to RMB 1.13 billion and now accounts for 55% of the total, reversing last year's ranking when chips out-earned licensing. The offering bundles Horizon's BPU compute architecture, chips, foundation models, algorithms and toolchain so automakers can develop their own systems. Volkswagen is the showcase: the Carizon joint venture's Journey 6- and HSD-based high-level driving suite is in production across seven new EVs, L3 capability arrives in the second half of 2027, and VW has converted bonds into a 9.9% stake. Yu Kai said other licensees include the "world's largest new-energy vehicle maker", China's biggest joint-venture automaker and a leading international parts group — none of them named yet.

Management reiterated targets of breakeven around 2028 and full-year revenue above RMB 5 billion, with combined R&D, sales and administrative costs growing 23.3%, slower than revenue. City NOA is the next battleground: Nvidia kept the top spot but shed nearly 10 points of share over the past year as Horizon closes in. A robotics push through associate company D-Robotics — 400-plus customers across more than 100 robot categories — remains off the consolidated books for now, a long-term bet rather than current earnings.