Pony AI Earnings On Deck With Stock (NASDAQ:PONY) Underperforming

Pony AI Inc. (NASDAQ: PONY) is set to release its next earnings report this morning, before the market opens.

Analysts currently estimate an earnings per share (EPS) of -$0.52 for the fiscal year 2025, an improvement from the previous year's EPS of -$1.34. This suggests that while profitability is still some way off, the company is making progress in reducing its losses and moving towards a more sustainable financial footing.

Revenue is expected to grow ~9% during the FY, accelerating to 33% for FY26.

As of today's pre-market, PONY shares are trading at $14.85, with the stock down 2% on the year.

The company's stock performance reflects a market grappling with the long-term potential versus the short-term realities of the autonomous vehicle industry. While Pony AI boasts impressive technological advancements and strategic partnerships, profitability remains a key concern.

Recent financial results from the first quarter of 2025 revealed a mixed bag. Revenue reached $13.98 million, an 11.6% increase year-over-year, fueled by a remarkable 200.3% surge in Robotaxi services revenue, hitting $1.7 million. This substantial growth in robotaxi revenue, driven by an approximate 800% increase in fare-charging revenue, underscores the growing demand for autonomous transportation solutions.

However, the company also reported a net loss of $42.99 million for the quarter, significantly higher than the $20.6 million loss in the same period last year. This increased loss was attributed to investments in the mass production of the seventh-generation (Gen-7) Robotaxi and one-time expenses related to share awards granted during the IPO process.

A major catalyst for Pony AI is the ongoing mass production and road testing of its Gen-7 Robotaxi models, which began in July. The Gen-7 boasts a 70% reduction in bill of materials costs compared to its predecessor, a critical factor in achieving sustainable profitability. Pony AI aims to expand its fleet to 1,000 vehicles by the end of the year. Scaling the fleet size and optimizing operational efficiency are crucial for driving down costs and achieving economies of scale.

Pony AI has also been actively forging strategic partnerships to expand its reach and accelerate commercialization. Collaborations with Tencent Cloud integrate Pony AI's robotaxi services into WeChat and Tencent Maps, providing access to a massive user base of over 1.2 billion monthly active users.

Partnerships with Toyota and Uber aim to facilitate global expansion, with plans to deploy Gen-7 robotaxis in the Middle East and Europe by 2026. These partnerships are vital for accessing new markets, leveraging existing infrastructure, and building brand recognition.

On the regulatory front, Pony AI has secured a fully driverless commercial license in Shenzhen's Nanshan District, allowing operations across 2,000 square kilometers, including high-traffic areas near Bao'an International Airport. Securing regulatory approvals is a critical step in the commercialization of autonomous driving technology, providing a clear pathway for deployment and revenue generation.

Pony AI is facing an uphill battle, and markets should be prepared for the possibility that the company's ambitious goals may not be fully realized. The partnerships with Tencent and Uber are promising, but these giants are also known to be ruthless in negotiations. The value they bring may come at a significant cost to Pony AI’s long-term profitability.