Horizon Robotics is spending heavily to secure its future? On March 19, Horizon Robotics released its 2025 annual report, showing that the company's revenue surged to 3.758 billion yuan last year, a significant increase of 57.7% year-on-year. However, it recorded a substantial loss of 10.469 billion yuan for the year, shifting from profit to loss.
The most direct cause of the loss, according to the financial report, was a sharp increase in research and development investment. Yu Kai, founder and CEO of Horizon Robotics, stated during the earnings conference that this was a proactive strategic choice by the company. R&D investment of 5.15 billion yuan was heavily allocated to cloud AI training, the new-generation BPU "Riemann Architecture," and future-oriented physical AI foundational models. Yu Kai emphasized, "We are not afraid of high R&D investment; we believe it can create a technological gap in the future." In the spring of 2026, amid fierce competition in the smart vehicle sector, Yu Kai is leading the company in a high-stakes gamble for future influence. As of March 20, Horizon Robotics' stock closed at HK$7.34 per share, with a total market capitalization of HK$107.5 billion.
From Profit to Major Loss: What Went Wrong? If we look only at revenue, Horizon Robotics appears to be a textbook example of a growth company. In 2025, the company reported revenue of 3.758 billion yuan, a year-on-year increase of 57.7%, with a comprehensive gross profit margin of 64.5%. Its automotive business accounted for 94.6% of revenue, achieving a high gross profit margin of 67.2%. This growth is closely tied to the rapid development of the industry. Financial report data indicates that 2025 saw a major breakthrough in the intelligent transformation of China's passenger vehicle market. The penetration rate of passenger vehicles equipped with intelligent driving assistance functions reached a historic high of 67.6%. Notably, the proportion of new smart vehicles equipped with mid-to-high-level intelligent driving assistance functions rapidly increased from 21.6% in 2024 to 42.6% in 2025. As a result, for every three passenger vehicles sold in the Chinese market in 2025, two were equipped with intelligent driving assistance functions, with nearly one featuring mid-to-high-level systems. Meanwhile, in 2025, Horizon Robotics maintained its leading position in the basic ADAS solutions market for major automakers, with a market share of 47.7%. It also entered the first tier in the emerging mid-to-high-level intelligent driving assistance market with a 14.4% share. In the mainstream vehicle market under 200,000 yuan, Horizon Robotics held a 44.2% share in mid-to-high-level intelligent driving solutions, ranking first.
However, despite rapid market growth and a dominant market position, Horizon Robotics incurred a massive loss of 10.469 billion yuan, a sharp decline compared to the net profit of 2.347 billion yuan in 2024. The primary culprit behind increased revenue without increased profit was R&D. In 2025, Horizon Robotics' R&D expenses reached 5.154 billion yuan, a year-on-year increase of 63.3%, accounting for 137.1% of revenue. This means that for every 1 yuan earned, the company invested 1.37 yuan in R&D. The increase in R&D expenses was mainly due to three factors: higher cloud service and technology procurement fees for the full-scenario urban NOA solution HSD and the Journey®6 chip high-level ADAS solution development; increased R&D personnel compensation (including share-based payments); and higher chip tape-out and material costs. Despite the continuous increase in R&D investment, its proportion of revenue remained stable, at 132.4% in 2024. In addition to rising R&D investment, sales and marketing expenses in 2025 increased by 54.2% year-on-year to 632 million yuan, primarily due to intensified market promotion, brand advertising, and increased sales and marketing employee benefits (including share-based compensation). However, the proportion of sales and marketing expenses to total revenue decreased from 17.2% in 2024 to 16.8% in 2025.
Average Annual Salary of 1.32 Million Yuan Per Employee It is evident that the increases in R&D, sales, and marketing expenses include rises in R&D personnel compensation or sales and marketing employee benefits. Horizon Robotics employees have long been the envy of many workers. Even compared to peers, the company's salary levels are highly competitive. According to its IPO prospectus, during its IPO in 2023, Horizon Robotics had 1,478 employees, with total employee compensation of 1.435 billion yuan, resulting in an average annual salary of 971,000 yuan per person. This was second only to Hesai Technology, listed on Nasdaq, which had an average annual salary of 993,000 yuan, ranking second in the industry. In October 2024, Horizon Robotics listed on the Hong Kong Stock Exchange. By the end of that year, the company had 2,078 employees, with an average annual salary of approximately 1.1778 million yuan, an increase of over 21%. By 2025, Horizon Robotics' employee salaries had risen again. The annual report shows that as of December 31, 2025, the company had 2,215 full-time employees, with total employee compensation expenses (including share-based compensation expenses) reaching 2.918 billion yuan. This means that the average annual salary per employee at Horizon Robotics in 2025 was approximately 1.3172 million yuan, an increase of nearly 12% compared to the previous year.
Can Losses Buy Future Space? During the earnings conference, Yu Kai appeared quite composed about the situation. He explained the massive loss as a proactive bet on the future: "We proactively and firmly increased relevant R&D investment, particularly for cloud service-related training costs. We are not afraid of high R&D investment; on the contrary, we believe that continuous R&D investment will不断完善 Horizon's AI foundational models and build a deep moat." This logic of "trading losses for future space" has convinced most investors. After the release of the loss-heavy financial report, the company's stock price actually rose by 1.24% on March 20. However, Horizon Robotics' pressures are clearly not limited to financial data. Over the past few years, the company has burned through tens of billions in R&D expenses to achieve process breakthroughs from 14nm to 7nm. Yet, compared to current international giants like NVIDIA and Qualcomm, which are advancing with more advanced processes (4nm/5nm), Horizon faces stiff competition. More critically, former allies are becoming self-reliant: BYD has adopted a hybrid model using "Horizon chips + self-developed algorithms," and Li Auto's self-developed intelligent driving chip "M100" has entered the road testing phase. Clients turning into competitors have severely squeezed Horizon Robotics' market space. To sustain intense technological competition, the company has had to frequently seek funding from the market. In 2025, Horizon raised over 15 billion yuan through its Hong Kong IPO and subsequent placements. However, even so, one financing round of 5.8 billion yuan once caused a single-day market capitalization evaporation of 11.3 billion yuan.
During the earnings conference, Yu Kai attempted to alleviate market concerns about profitability. He suggested that although the average selling price of chips in 2025 was less than $60, with the mass production of high-end solutions like urban NOA (HSD), "the contribution of product price increases to our revenue growth in the coming years may even exceed that of shipment volume." He revealed that HSD shipments are expected to reach 400,000 units this year, with plans to trial Robotaxi operations jointly with ecosystem partners in the third quarter.
Founder Worth 15.5 Billion Yuan "Staying at the Table" To understand why Horizon Robotics dares to incur such losses, one must consider the entrepreneurial philosophy of its founder, Yu Kai. Rewind to 2015: 39-year-old Yu Kai left Baidu and plunged into the then-desolate intelligent driving chip sector. The scientist, who had established Baidu's Institute of Deep Learning, harbored an unconventional ambition from the start: to create a "chip + operating system" for robots and become an infrastructure company like Intel or Qualcomm. Yu Kai described the first five years of entrepreneurship as "dark and endless." At that time, the smart vehicle industry had not yet exploded, and the team relied on AIoT businesses like smart cities and smart retail to fund automotive chip R&D. In 2019, faced with bloated business lines, Yu Kai made a painful decision: to cut all businesses except intelligent driving, reducing the team from 1,200 to 700 people. In hindsight, Yu Kai believes that without that layoff, the company "would certainly have died." A turning point came in 2020. At that time, Li Auto was struggling because Mobileye could not meet the algorithm optimization needs for specific Chinese scenarios, with only eight months left before the release of the Li ONE facelift. Yu Kai led hundreds of Horizon engineers to move directly into Li Auto's R&D center, providing an open "white-box" solution and round-the-clock support, managing to complete a project that typically takes 18-24 months in just eight months. After the Li ONE launched, achieving monthly sales exceeding 10,000 units, Horizon Robotics made a name for itself. Reflecting on this experience in an interview with "China Business Manager," Yu Kai stated that the meaning of work is to create value—"making clients more successful through your products and services." Subsequently, Volkswagen's 2.4 billion euro investment and partnerships with over 40 automakers propelled Horizon to the throne of China's intelligent driving chip industry. Yu Kai once famously stated, "Staying at the table is more important than quick success." At a media meeting in early 2026, he reiterated, "Horizon does not want to become arrogant; what truly matters is remaining undefeated." Today, thanks to Horizon Robotics, Yu Kai's wealth has soared. The 2025 Hurun Rich List showed Yu Kai with a fortune of 15.5 billion yuan, ranking 430th, up 64 places from the previous year. For Horizon Robotics, the 10-billion-yuan loss in 2025 is not the end of the story but a阶段性 settlement in a high-stakes gamble for future influence in intelligent driving. Can Yu Kai lead Horizon Robotics to ultimately prevail in this prolonged game? Share your thoughts in the comments.