Hesai Group (HSAI) Q3 2026 earnings review
Hesai core sensor profit jumps, but sales miss its plan
Hesai Group, the Chinese maker of laser sensors for cars and robots, missed its third-quarter sales target while its core sensor business became much more profitable. Revenue rose 34% from a year ago to RMB 1,068 million, falling short of the company's plan as robotics sensor shipments dropped from the second quarter. However, finance chief Andrew Fan forecast fourth-quarter sales that slow growth to 12% at the middle of the range, which by our math leaves core sensor sales up only 1%.
| Revenue | RMB 1,068M +34% from a year ago; missed RMB 1,100–1,150M plan |
|---|---|
| Core lidar operating profit | RMB 145M +88% from a year ago as sensor prices steadied |
| Related-party share of SGI sales | 99.8% RMB 90.3M of RMB 90.5M total SGI revenue by our math |
| Fourth-quarter revenue outlook | RMB 1,100–1,150M middle of the range: 12% growth from a year ago |
⚖️ Verdict: 🔴 Bearish
The story got worse because the new robotics division relies almost entirely on an insider buyer while core growth is stalling. Although chief executive Yifan Li highlighted new software deals and doubled the new division's sales from last quarter, a line on the income statement shows that 99.8% of that revenue came from a related party. On the bright side, average lidar prices rose 3% from the second quarter after a year of drops, lifting core lidar operating profit by 88%.
The question now is whether outside customers will pay for the new robotics products before car sensor growth flattens out. Either third-party sales show up alongside higher fourth-quarter shipments, or the new division remains an uncollected bill to a founder-affiliated startup while core revenue stalls. Fourth-quarter segment and related-party disclosures will settle it.
🐂 Bull Case
Lidar Prices Stopped Falling and Lifted Core Profit 88%
Hesai makes laser sensors, called lidar, that help cars and robots see their surroundings. For four straight quarters, average selling prices fell about 10% every three months as cheaper mass-market sensors grew faster than high-end units. Chief executive Yifan Li still argued that "Our lidar business remains a scaled, profitable cash engine."
This quarter, the price slide paused. By our math, lidar revenue per unit rose 3.2% from the second quarter to RMB 1,340, though it remains 25.6% lower than a year ago. Core lidar operating profit jumped 88.0% from a year ago to RMB 145.5 million, lifting the division's operating margin by 5.2 percentage points to 14.9%.
One quarter of stable pricing eases our concern about endless price cuts, even though total company operating margin fell 3.9 percentage points because government subsidies and patent fees in other operating income shrank by 5.0 points of revenue. Meanwhile, spending on research, sales, and administration grew slower than revenue.
What to watch: fourth-quarter lidar revenue per unit in the full-year report. A second straight quarter near RMB 1,300 would prove that new premium sensors are offsetting automaker price cuts.
Automakers Are Buying Multi-Lidar Systems and Export Models
To keep revenue growing while sensor prices fall, the Shanghai-based group needs carmakers to install several sensors on each car and put them on cheaper vehicles. In the third quarter, shipments of advanced driver-assistance sensors rose 67.6% from a year ago to 638,055 units.
Hesai won orders for its premium ET-series main sensors from five carmakers, including Cadillac, Geely, Great Wall Motor, and a major European brand, totaling over 1 million units. Leapmotor and the European brand also ordered FT-series blind-spot sensors for multi-sensor cars, while Wuling ordered AT-series units for budget models and seven brands picked Hesai for export cars.
What to watch: the start of mass production for the Great Wall Motor ET-series program in late 2026. On-time delivery will show whether this 1-million-unit order book turns into 2027 revenue.
🐻 Bear Case
Nearly All New Robotics Revenue Comes From One Related Party
Hesai is pitching Strategic Growth Initiatives (SGI), its new division selling robotic joints and the Kosmo 3D data software, as its next big business. Supporters point out that SGI sales doubled from last quarter to RMB 90.5 million as actuator shipments rose 96.8% to 23,405 units. About Kosmo, Li said, "Within just months of demo shipments, this category-defining innovation has already begun generating revenues and securing real-world deployments with best-in-class global players, including Pixar’s RenderMan."
The income statement table tells a different story. A single line notes that total sales are stated "including revenue from a related party of nil, and RMB90,323 for three months ended September 30, 2025 and 2026, respectively" (in thousands).
- Third-quarter SGI revenue: RMB 90.51 million, versus RMB 90.32 million from the related party (99.8% by our math)
- Nine-month SGI revenue: RMB 135.45 million, versus RMB 135.27 million from the related party (99.9% by our math)
- Third-quarter SGI operating loss: RMB 82.89 million, up from RMB 64.04 million in the second quarter
- Amounts due from related parties on the balance sheet: RMB 164.34 million, versus zero at year-end
Because the related party is Sharpa, a robotics firm co-founded by Li, outside customers generated at most RMB 0.19 million of SGI sales this quarter. Furthermore, the unpaid related-party bill of RMB 164.3 million exceeds all related-party sales recorded this year, so Hesai has not collected the cash.
What to watch: SGI segment revenue minus related-party revenue in the fourth-quarter report. Until that gap exceeds a few million renminbi, the new division relies on one insider buyer.
Third-Quarter Sales Missed the Plan and Q4 Slows to 12%
Three months ago, management forecast third-quarter revenue of RMB 1,100 million to RMB 1,150 million on 800,000 to 850,000 lidar units. Finance chief Andrew Fan said third-quarter sales grew 34.3% "despite headwinds in the broader automotive market."
Actual revenue landed at RMB 1,068.3 million on 729,673 lidar units, missing the bottom of both targets. For the fourth quarter, Hesai expects revenue of RMB 1,100 million to RMB 1,150 million, the exact range it just missed.
At the middle of the range, fourth-quarter revenue growth slows to 12.5% from a year ago, down from 34.3% in the third quarter. Because Fan kept the full-year SGI sales target at RMB 200 million to RMB 300 million, our math leaves RMB 114.5 million of SGI revenue for the fourth quarter and implies core lidar revenue will grow just 1.0% from a year ago.
What to watch: fourth-quarter core lidar revenue against last year's RMB 1,000.5 million. A reading near RMB 1,010 million would confirm that core automotive sensor revenue has stalled.
Robotics Lidar Shipments Dropped 36% From Last Quarter
Robotics lidar — sensors sold for robotaxis, delivery vans, and automated lawn mowers rather than passenger cars — had been Hesai's fastest-growing volume driver, nearly tripling from a year ago in the second quarter. In the third quarter, Hesai announced a partnership with retailer JD.com, which plans to deploy more than 4 million robots and robovans over five years.
Despite that announcement, third-quarter robotics lidar shipments fell 35.6% from the second quarter to 91,618 units, and year-on-year growth slowed from 193.4% to 51.1%. That leaves nine-month shipments at 352,271 units, requiring 147,729 units in the fourth quarter to reach the 500,000-unit annual target management set earlier this year — a target the press release did not repeat.
What to watch: fourth-quarter robotics lidar unit shipments. A figure below 147,729 units would mean Hesai missed its full-year robotics target and that warehouse and lawn-mower sensor orders are cooling.
Risks this quarter didn't answer
Several standing legal and competitive concerns received no update in the third-quarter earnings release.
- US Defense Department blacklist appeal: oral arguments took place in March 2026, and the annual report will show whether the court has ruled.
- US shareholder class action: a judge allowed parts of the lawsuit to proceed in February 2026, with the next status update due in the annual filing.
- Domestic market share and dual-sourcing: China long-range automotive lidar share stood at 43% in September, compared with 44% in June and 55% in March, according to Gasgoo data cited by the company.
💲 Other KPIs
Unsold inventory and unpaid customer bills both grew much faster than revenue. Inventory rose 69.3% from a year ago to RMB 1,088.0 million. Accounts receivable plus RMB 164.3 million owed by a related party reached RMB 1,636.3 million, up 45.3% from a year ago against 34.3% sales growth, tying up cash in working capital.
Reported net profit dropped 68.5% from a year ago because the third quarter of 2025 included a one-time RMB 185.1 million gain from selling an investment and patent rights. Excluding that one-off gain, net profit rose 13.7% by our math, with RMB 49.8 million of bank interest income providing over half of pre-tax profit.
The average number of diluted shares rose 13.7% from a year ago, adjusted for July's 1-for-8 stock split, because the sensor maker issued new stock in its September 2025 Hong Kong listing. That larger share count caused earnings per share excluding share-based pay to fall 64.0%, compared with a 58.6% drop in the matching profit figure.
🔮 Guidance
New. The plan calls for fourth-quarter sales to grow 12.5% from a year ago and 5.3% from the third quarter at the middle of the range. That is the slowest quarterly growth rate in the sensor group's recent history, and the target range is identical to the third-quarter plan that Hesai just missed by RMB 56.7 million.
Unchanged. Fan reaffirmed the full-year target for the new robotics and 3D data division, which he had raised from RMB 100 million last quarter. With RMB 135.5 million booked in the first nine months, our math leaves RMB 64.5 million to RMB 164.5 million for the fourth quarter, or RMB 114.5 million at the middle of the range.
❓ Key Questions
How much SGI revenue came from non-Sharpa customers?
Related-party sales were RMB 90.32 million while total SGI revenue was RMB 90.51 million. Investors need to know if Pixar or any other third-party customer paid more than RMB 0.19 million for Kosmo or actuators this quarter.
Why are related-party bills higher than related-party sales?
Amounts due from related parties jumped from zero at year-end to RMB 164.34 million, which exceeds the RMB 135.27 million of nine-month related-party revenue. Management has not explained the payment terms or why no cash has been collected.
Does the 3-to-3.5 million lidar shipment target still stand?
Hesai shipped 1.83 million lidar units in the first nine months and dropped the full-year 3.0–3.5 million unit target from the press release. Reaching the bottom of that range would require shipping 1.17 million units in the fourth quarter.
Why did robotics lidar shipments drop 36% from Q2?
Robotics lidar volume fell from 142,371 units in the second quarter to 91,618 in the third. Management did not say whether automated lawn-mower orders paused for the season or if US rules hurt overseas robot shipments.