Hesai Technology (NASDAQ: HSAI; HKEX: 2525) reported Q1 2026 financial results on May 19 that signal sustained profitability and market expansion. The lidar leader achieved 681 million yuan in quarterly revenue, a 29.6% year-over-year increase marking its eighth consecutive quarter of growth, and posted net profit of 18.3 million yuan—a turnaround from an 17.5 million yuan loss in the same period last year. This represents the company's first Q1 GAAP (Generally Accepted Accounting Principles) profitability in its history. The results come amid headwinds in China's automotive market, where cumulative retail sales of passenger vehicles fell 17.4% year-over-year in Q1 2026, with new energy vehicles declining 21.1% in the same period. Hesai's CFO Fan Peng attributed the company's resilience to the structural opportunity in autonomous driving: with lidar penetration at only 8% across China's 3 million-plus annual vehicle sales, and global penetration at approximately 3% of nearly 100 million vehicles worldwide, the addressable market remains vast.
Q1 Lidar Shipments and Full-Year Guidance
Hesai shipped 471,700 lidar units in Q1 2026, up 140.9% year-over-year. The company issued full-year 2026 guidance of 3 to 3.5 million lidar units. Fan Peng noted that multiple automakers' advanced autonomous-driving models are launching sequentially and will ramp production in the second half of 2026, positioning Hesai's shipments to accelerate in that period. To date, Hesai has secured production orders from 40 global automotive brands across 160+ vehicle models, covering all top-ten Chinese automakers by sales volume.
Strategic Partnerships and Global Expansion
On May 19, Hesai announced it has become a strategic lidar partner to Mercedes-Benz and was confirmed as a supplier for the brand's L3 autonomous-driving vehicles. The following day, May 20, Hesai disclosed a separate agreement with a European automaker, securing over 1 million lidar units for its China joint-venture brands across more than ten vehicle models. Fan Peng stated that the global automotive market encompasses nearly 100 million vehicles annually, with lidar adoption at approximately 3% globally, describing the overseas market as a "vast blue ocean." He added that long-term industry consensus points to autonomous or advanced autonomous-driving capabilities becoming mainstream, though he acknowledged that overseas lidar markets will eventually become a competitive arena among Chinese manufacturers.
Strategic Growth Business Segment
Hesai has reorganized its business into two divisions: "Lidar Business" and "Strategic Growth Business." The Strategic Growth Business focuses on foundational infrastructure for physical-world AI, encompassing Kosmo—a 3D spatial intelligent AI perception hardware product—and an additional, unspecified business line launching later. Fan Peng disclosed that the Strategic Growth Business will begin generating revenue in Q2 2026, with approximately 100 million yuan expected in 2026 and projected revenue of 500 million yuan by 2027.
