The long-term growth narrative for Horizon Robotics (09660) is becoming increasingly clear, driven by the evolution of its growth strategy. According to the company's recently released interim results for fiscal 2026, despite a challenging market environment in the first half of 2026, Horizon still achieved counter-trend growth in its core financial metrics. During the period, customer contract revenue from continuing operations increased 32.9% year-on-year to RMB 2.055 billion, while gross profit from continuing operations rose 32.9% to RMB 1.356 billion, corresponding to a gross margin of 66%.

Behind these impressive headline figures lies the deep realization of Horizon's unique "ARM+Android" open platform model. In the first half, Horizon's licensing and service business contributed RMB 1.129 billion in revenue, a substantial 52.7% year-on-year increase, accounting for 55.0% of total revenue. During the same period, the gross margin for this segment remained high at 90.4%.

The highly profitable licensing business once again delivered on its growth potential, which can be traced back to the distinctive competitive advantages of Horizon's platform model. From a holistic business perspective, Horizon's platform model can be compared to Wintel—a "standard product platform"—whose essence lies in bringing "one mature product to more terminals," realizing platform value through scale shipments and software licensing. Focusing specifically on the licensing and service business, the underlying logic resembles a composite model akin to "ARM+Android," i.e., a "underlying technology licensing platform," centered on "one set of underlying technologies spawning more products," where customers independently develop chips, systems, and terminal products on top of Horizon's foundational capabilities, and Horizon, as the platform, expands its technological boundaries through licensing and ecosystem development, thereby supporting and promoting healthy growth across the entire industry.

These two models correspond to two distinct market spaces: Wintel corresponds to "direct market share," meaning the market share held by the products themselves, while "ARM+Android" corresponds to "extended market share," which not only generates substantial IP licensing revenue but also helps build long-term, sticky partnerships between Horizon and its customers. Horizon's management stated during the earnings call that by next year, the combined "direct + extended" market share of Horizon chips plus customer self-developed chips supported by Horizon is expected to become the number one player in the high-end market. These two models complement each other, enabling Horizon to continuously evolve and gradually establish itself as the "automotive intelligence foundation" in the era of intelligent vehicles.

ADAS share surpasses 50% for the first time, poised to leap to No.1 in high-end market next year

In the first half of 2026, despite a year-on-year decline in domestic passenger car retail sales, Horizon still demonstrated strong growth resilience during a period of deep industry adjustment. Smart Today notes that the dual-engine structure driving Horizon's high-quality growth is showing a more balanced development trend: during the period, the company's products and solutions business benefited from continued market share gains, with shipment volume of the Journey series hardware growing 12.1% against the trend to 2.218 million units, driving a 14.8% revenue increase to RMB 926 million. Meanwhile, the licensing and service business, leveraging the "ARM+Android"-style underlying technology licensing model, further realized its growth momentum.

Previously, the capital markets largely viewed Horizon as a "leading intelligent driving technology company." However, as Horizon's platform model enters a period of deep realization, a more accurate positioning for the company is "automotive intelligence foundation." The transition from technology leader to infrastructure-like presence is backed by tens of millions of mass-production validations. In the first half, despite pressure on the vehicle market, Horizon's ADAS market share among domestic brands reached 50.0%, a record high; its full-stage intelligent driving chip share reached 31.9%, firmly ranking first; and its share of intelligent driving chips with city NOA functionality (high-end) reached 22.8%, jumping to second place in the market. To date, cumulative shipments of Horizon's Journey series chips have surpassed 10 million units, creating a scale effect where one in every three intelligent vehicles in China is equipped with a Horizon chip.

Regarding new developments, the J6M has just entered China's largest new energy vehicle manufacturer last year, and by the end of this year, it is expected to account for 70% to 80% of that customer's entry-level intelligent driving solution shipments. Additionally, the high-compute chip and HSD have secured the customer's high-end platform designation, with mass production and delivery beginning within the year, further solidifying the scale foundation of the platform model.

The recently announced latest collaboration between Horizon and Volkswagen Group can, in a sense, be regarded as a "showcase" for Horizon's platform model. In late July, Horizon and Volkswagen Group announced that they would further deepen technical cooperation in the field of AI foundation models through CARIZON, the joint venture between CARIAD and Horizon. CARIZON will leverage Horizon's advanced AI foundation model capabilities to independently develop and accelerate the construction of a unified AI driving solution for Volkswagen Group China. The core of this collaboration lies in the white-box licensing model—CARIZON will independently develop full-stack intelligent driving algorithms covering perception, decision-making, and control based on Horizon's AI foundation model. This serves as the perfect annotation of the "ARM+Android"-style underlying technology licensing model.

It is reported that CARIZON's full-scenario advanced driving assistance solution has entered the mass production stage and will be progressively deployed starting in the third quarter of this year across seven new electric models from three of Volkswagen Group's joint ventures in China. According to plans, Volkswagen Group's L3 autonomous driving capabilities are expected to commence delivery as early as the second half of 2027. Data shows that Volkswagen, Toyota, and Honda together account for 50% of all joint venture automaker sales, and through partners such as CARIZON, Denso, and Astemo, Horizon has effectively opened up this portion of growth space. From product collaboration upgrading to AI underlying technology collaboration, Volkswagen has cast the most significant vote of confidence in Horizon's platform model through the largest-scale globalization validation.

For Horizon, which aspires to become the "automotive intelligence foundation," the more ecosystem partners and applications there are, the higher the value of its platform. To date, based on its long-standing open Tier 2 positioning, Horizon has connected with over 200 ecosystem partners, including Bosch, Denso, ZF, and Continental, forming a vast industrial ecosystem alliance.

Sustained saturated R&D investment to unlock deterministic growth space

The interim results have already validated the realization capability of the platform model, but this is only the beginning. The ecosystem positioning of "automotive intelligence foundation" will help Horizon open up broader, more deterministic growth space in the future.

Horizon's certainty first stems from the "technology ecosystem stickiness" fostered by its platform model. Currently, Horizon's platform capabilities have penetrated deeply into chips, algorithms, compilers, toolchains, testing, and mass production processes. Once automakers establish their R&D systems around Horizon, switching underlying platforms would necessitate a complete overhaul of algorithm migration, code adaptation, and test validation, resulting in extremely high switching costs. Taking the licensing of automotive chip BPU as an example, intelligent driving algorithms and BPU are tightly coupled. Self-developed chips from automakers adopting BPU naturally achieve better adaptation with HSD and toolchains in subsequent stages, deepening customer stickiness with each product generation.

It should be noted that the value Horizon brings to automakers as an "automotive intelligence foundation" is comprehensive. From a cost perspective, under the HSD Together model, automakers can significantly reduce both manpower investment and computing power consumption in product development. From an efficiency standpoint, Horizon's mature chips, algorithms, and toolchains can substantially shorten mass production cycles. More importantly, after the standardization of underlying technologies, automakers can concentrate more resources on scenario functions, user experience, and brand definition, truly achieving "innovation standing on Horizon."

From an industry perspective, the first half of intelligent driving is "making it happen," while the second half is "scaling it." As high-end intelligent driving descends from the RMB 300,000-class flagship segment to RMB 100,000-class family vehicles, and as city NOA becomes an increasingly standard feature across more models, the industry will inevitably shift from "every automaker reinventing the wheel" to a division of labor model centered on "professional platforms doing R&D once, with multiple reuses."

The reason Horizon can become an irreplaceable "automotive intelligence foundation" largely lies in the company's sustained high-intensity R&D investment. Data shows that the company's R&D investment in the first half of this year reached RMB 2.755 billion. First-mover advantages, scale advantages, and continuous saturated R&D investment have firmly positioned Horizon as the most critical infrastructure in the era of intelligent vehicles.

In terms of next-generation product layout for L3/L4, development of the Journey 7 chip is progressing smoothly, with an expected market launch in 2027, and it has already attracted active outreach from multiple leading automakers and Tier 1 suppliers. Meanwhile, the company plans to launch an L4 Robotaxi pilot project in several cities together with a leading technology platform within this year, further validating the application potential of its underlying technology in high-level autonomous driving scenarios.

In broader domains, Horizon has empowered over 100 downstream robot categories and more than 400 customers through its associated company, Diji Robot, covering more than half of China's embodied intelligence enterprises. From automotive to robotics, the underlying capabilities of the platform model are being replicated across the broader physical world.

Finally, looking back at this interim report, one easily overlooked value point is that the company's operating expenses grew 23.3% year-on-year during the period—a growth rate notably lower than that of revenue and gross profit. This indicates that Horizon's operating leverage effect is currently being steadily released. Looking ahead, as the platform model enters a period of deep realization, the release of scale effects and operating leverage will inevitably accelerate the conversion of Horizon's long-term investments into long-term competitive advantages. In other words, regardless of how the market environment evolves going forward, Horizon's growth trajectory is unlikely to undergo significant changes. On the contrary, the company's investment certainty will be further reinforced as the industry enters the "platform competition" stage.