Shares of Pony AI Inc (NASDAQ: PONY) plummeted 8.60% in pre-market trading on Tuesday following the release of its fourth quarter and full year 2024 financial results. The autonomous mobility company's performance fell short of investor expectations, triggering a significant sell-off.

The company reported a non-GAAP net loss of $0.31 per share for Q4 2024, wider than the $0.20 loss per share in the same period last year. Total revenues for the quarter plummeted 29.8% year-over-year to $35.5 million, down from $50.6 million in Q4 2023. This sharp decline was primarily attributed to the timing of project-based revenue recognition, particularly in the licensing and applications segment.

Despite ongoing expansion in robotaxi and robotruck services, Pony AI faced challenges in its overall financial performance. The company's gross margin contracted to 21.0% in Q4 2024 from 33.9% in the prior-year quarter, mainly due to changes in revenue mix. Operating expenses surged 313.9% to $180.6 million, largely driven by increased research and development investments and share-based compensation expenses related to the company's IPO. Consequently, the loss from operations widened significantly to $173.1 million, compared to $26.5 million in Q4 2023.

While Pony AI highlighted strategic partnerships and regulatory approvals in various markets, investors appear to be focusing on the company's financial challenges and the substantial increase in losses. The pre-market plunge reflects growing concerns about the company's path to profitability in the highly competitive autonomous driving sector, despite its technological advancements and market expansion efforts.