Mobileye Global Inc. (Mobileye (MBLY)) had a mixed bag of news for investors Thursday, and the market focused on the less cheerful parts. The autonomous driving tech company beat second-quarter earnings estimates and raised its full-year outlook, but shares still fell sharply after it announced a CEO transition and warned that third-quarter revenue would slip.

By the time the closing bell neared, Mobileye stock was down about 17% at $7.28.

The Quarter That Beat Expectations

Revenue came in at $508 million, roughly flat from a year ago but well above the $481.24 million analysts had expected. The company said a 3% increase in system shipments, driven by stronger customer demand, helped offset lower average selling prices for its EyeQ chips. Those lower prices were partly due to higher-than-expected export volumes from Chinese automakers.

On an adjusted basis, earnings were $0.19 per diluted share, more than triple the $0.06 analysts were looking for. GAAP results showed a diluted loss of $0.03 per share.

Adjusted operating income jumped 46% to $155 million, and the adjusted operating margin expanded to 31% from 21% a year earlier. Adjusted net income rose 52% to $155 million.

Gross profit, however, slipped 7% to $235 million, and gross margin narrowed by 354 basis points to 46%. Adjusted gross margin fell 303 basis points to 66%. The operating loss improved to $30 million from $74 million, and operating cash flow dropped to $135 million from $213 million. The company noted that profitability got a boost from Israel's new R&D tax credit law, which helped offset higher corporate tax rates.

A Founder Steps Back

Mobileye also announced that founder and CEO Prof. Amnon Shashua plans to step down once the board appoints a successor. The company said it's entering a new phase focused on operational execution and expansion into robotaxis and humanoid robotics, and the board will hire an executive search firm to find a new chief executive.

Shashua will remain on the board and has been offered the role of chairman after the transition. Current chairman Safroadu Yeboah-Amankwah will step aside if Shashua takes the role.

Guidance: Up for the Year, Down for the Quarter

Mobileye raised its full-year 2026 revenue guidance to a range of $1.97 billion to $2.02 billion, up from its previous forecast of $1.935 billion to $2.015 billion. That compares with the analyst consensus of $1.983 billion. The company also boosted its adjusted operating income guidance to $365 million to $425 million from $185 million to $235 million.

But the third quarter looks softer. Mobileye expects revenue to decline about 5% to 6% year over year because of shipment volume adjustments.

Shashua said long-term growth will be driven by expanding demand in India and China, higher exports by Chinese automakers, new customer wins, and broader adoption of advanced driver-assistance systems (ADAS). Chief Communications Officer Dan Galves added that exports from Chinese automakers like Geely and Chery have accelerated, with most exported vehicles using Mobileye technology. That trend has helped the company outpace the broader automotive market while encouraging legacy automakers to increase ADAS adoption in emerging markets.

Robotaxis: The Big Bet

Shashua also highlighted progress in the robotaxi space. Mobileye recently secured a high-volume 2027 ADAS program with Stellantis that will support cloud-enhanced, hands-free highway driving. And Volkswagen Group's MOIA robotaxi business is already conducting public testing with safety drivers in Hamburg, using Mobileye's autonomous driving system.

Mobileye plans to launch a fully vertically integrated robotaxi service in at least one U.S. city in 2027. The company said it intends to operate more of the value chain, giving it the flexibility to run its own service, partner with third-party platforms, or sell vehicles to robotaxi operators while generating recurring revenue from rider fares.

As part of that push, Mobileye is repositioning its Moovit business to support the robotaxi strategy, including a rebranding effort aimed at improving consumer recognition.

For now, though, investors are focused on the near-term headwinds and the leadership change. The question is whether the long-term robotaxi story will be enough to get the stock back on the road.