- Hesai achieved its fourth consecutive profitable quarter with LiDAR shipments rising over 140%.
- Mercedes-Benz selected Hesai as a strategic LiDAR supplier for L3 autonomous vehicle programs.
Hesai Group reported strong first-quarter 2026 financial results as rapid LiDAR shipment growth supported higher revenues and continued profitability. The Chinese LiDAR manufacturer posted a net income of 18.3 million yuan ($2.7 million) for the quarter ended March 31, marking its fourth straight quarter of GAAP profitability. In the corresponding period last year, the company recorded a net loss of 17.5 million yuan. Quarterly net revenues increased 29.6% year-on-year to 680.6 million yuan, driven primarily by rising demand for advanced driver assistance and robotics applications.
The company’s shipment momentum remained a major contributor to its quarterly performance. Total LiDAR shipments climbed 140.9% year-on-year to 471,723 units during the quarter. ADAS LiDAR shipments reached 353,441 units, reflecting a 141.9% increase compared to the previous year. Robotics LiDAR shipments also expanded sharply to 118,282 units, representing a 137.8% rise. The substantial shipment growth highlights increasing adoption of LiDAR technologies across passenger vehicle automation and intelligent robotics applications.
Hesai Expands Strategic Partnership with Mercedes-Benz
During the earnings announcement, Hesai CEO Li Yifan confirmed a major business milestone involving Mercedes-Benz. Hesai has been selected as a strategic LiDAR partner and confirmed supplier for future Mercedes-Benz models supporting Level 3 autonomous driving capabilities. The agreement will support vehicle programs in both Europe and China, strengthening Hesai’s position within the premium automotive autonomy market. Production support for these programs will come from the company’s Galileo manufacturing facility located in Thailand.
The collaboration with Mercedes-Benz represents an important validation of Hesai’s automotive-grade LiDAR technology and manufacturing scale. As automakers accelerate the deployment of higher-level autonomous driving systems, demand for reliable and high-performance sensing technologies continues to increase. Hesai’s inclusion in global Level 3 vehicle programs positions the company to benefit from broader commercialization of autonomous driving platforms over the coming years.
Hesai Introduces Spatial Intelligence Business Strategy
Alongside its financial performance, Hesai announced a strategic transition aimed at expanding beyond traditional spatial perception technologies. The company stated that it is evolving its business focus toward “spatial intelligence,” reflecting broader ambitions in physical AI infrastructure and intelligent sensing ecosystems. To align with this direction, Hesai reorganized its financial reporting into two major segments: “LiDAR Business” and “Strategic Growth Initiatives (SGI).”
As part of this transformation, Hesai introduced its first spatial intelligence product named Kosmo during its April 2026 Tech Day event. The device is designed to help create real-world 3D data infrastructure intended for future AI-driven applications. Management expects the Strategic Growth Initiatives business to contribute approximately 100 million yuan in net revenues during 2026. The company indicated that this entirely new revenue stream is expected to begin contributing from the second quarter of the year.
Q1 2026 Hesai Financial and Shipment Performance
| Metric | Q1 2026 | Year-on-Year Change |
|---|---|---|
| Net Income | 18.3 million yuan | Improved from 17.5 million yuan loss |
| Net Revenues | 680.6 million yuan | Up 29.6% |
| Total LiDAR Shipments | 471,723 units | Up 140.9% |
| ADAS LiDAR Shipments | 353,441 units | Up 141.9% |
| Robotics LiDAR Shipments | 118,282 units | Up 137.8% |
| Gross Margin | 39.1% | Down from 41.7% |
Picasso Chip and ETX LiDAR Production Plans
Hesai also announced a new technology development called Picasso, described as the world’s first 6D full-color ultra-sensitive chip. The company plans to integrate this technology into its high-end ETX LiDAR product line. Hesai expects the ETX model to enter mass production during the second half of 2026. The introduction of advanced sensing chips is intended to strengthen the company’s performance capabilities in autonomous driving and high-precision environmental perception applications.
Despite strong shipment growth and rising revenues, the company’s gross margin declined to 39.1% from 41.7% in the prior-year period. Hesai stated that the decline was primarily caused by a higher contribution from lower-margin products within its revenue mix. Even so, the company maintained profitability while significantly scaling shipments and expanding strategic partnerships across the automotive sector.
Hesai Expects Continued Revenue Growth in Q2 2026
Looking ahead, Hesai provided an optimistic outlook for the second quarter of 2026. The company expects quarterly net revenues to range between 850 million yuan and 900 million yuan. This guidance represents anticipated year-on-year growth of approximately 20% to 27%. Continued expansion in ADAS LiDAR adoption, robotics applications, and new spatial intelligence initiatives are expected to support the company’s growth trajectory through the remainder of the year.
Frequently Asked Questions
What drove Hesai’s profit growth in Q1 2026?
Hesai’s Q1 2026 profit growth was primarily driven by strong LiDAR shipment expansion across ADAS and robotics applications. The company achieved higher revenues through increasing demand from automotive and intelligent sensing markets. Total LiDAR shipments increased by more than 140% year-on-year, while net revenues rose nearly 30%. Strong production scale, growing automotive partnerships, and rising deployment of autonomous driving technologies also contributed to the company achieving its fourth consecutive quarter of GAAP profitability.
What is Hesai’s partnership with Mercedes-Benz about?
Hesai has become a strategic LiDAR supplier for future Mercedes-Benz vehicles supporting Level 3 autonomous driving capabilities. The agreement covers vehicle programs in Europe and China and will utilize production support from Hesai’s Thailand manufacturing facility. The partnership strengthens Hesai’s position in the premium autonomous driving segment and demonstrates growing industry confidence in its automotive-grade LiDAR technologies. The collaboration is expected to support future deployment of advanced driver assistance and higher-level autonomous systems.
What is Hesai’s new spatial intelligence strategy?
Hesai is expanding its business focus from spatial perception to spatial intelligence to support broader AI-driven infrastructure applications. The company reorganized its reporting structure into LiDAR Business and Strategic Growth Initiatives segments. As part of this strategy, Hesai introduced Kosmo, a new spatial intelligence device designed to create real-world 3D data infrastructure for physical AI applications. Management expects the new business segment to begin generating revenues from the second quarter of 2026 onward.
Why did Hesai’s gross margin decline despite revenue growth?
Hesai’s gross margin declined to 39.1% in Q1 2026 mainly because of a larger contribution from products with relatively lower margins. Although revenues and shipment volumes increased significantly, the changing product mix affected overall profitability margins. The company still maintained positive net income while expanding production and supporting higher shipment volumes. Management continues focusing on long-term scale growth, advanced product development, and expansion into new intelligent sensing business segments to support future profitability.
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