Horizon stands at a new milestone in mass production of intelligent driving.

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Urban NOA is evolving from a selling point limited to a few vehicle models into a configuration found in an increasing number of new vehicles. At the same time, the market is expanding, but orders are becoming more concentrated in models capable of continuous delivery.

Based on statistical data from January to June 2026, the installed capacity of Urban NOA in China’s domestic passenger car market is about 1.802 million units, with the top 10 models accounting for 45.4% of the total installations.

On July 21, Horizon announced that it expected revenue from continuing operations in the first half of 2026 to be 1.93 to 2.08 billion yuan, a year-on-year increase of 24.8% to 34.5%; gross profit would be 1.16 to 1.37 billion yuan, a year-on-year increase of 13.7% to 34.3%.

Additionally, the announcement indicates that Horizon’s estimated net profit of 3.5 to 4 billion yuan in the first half of the year mainly comes from the fair value change of convertible loans issued to CARIAD. This income is a non-cash accounting treatment, primarily originating from fluctuations in the company’s share price and has no impact on main business performance or cash flow.

Horizon’s revenue is still growing, with HSD mass production deployment and licensing services being the two supporting elements mentioned in the announcement. However, whether mass production capacity can continue to expand, whether gross profit pressure from product delivery can be alleviated, and when adjusted losses can be narrowed are now questions the company must answer next.

Horizon’s business focus is shifting from technical targeting to continuous delivery.

In 2025, Horizon achieved revenue of 3.758 billion yuan, a year-on-year increase of 57.7%. Of this, revenue from product solutions was 1.622 billion yuan, up 144.2% year-on-year; revenue from licensing and services was 1.935 billion yuan, up 17.4% year-on-year. The share of product solution revenue rose from 27.9% in 2024 to 43.2%, while licensing and service revenue still accounted for 51.4%.

HSD began mass production deployment in November 2025. According to Horizon’s disclosed data, HSD was installed in over 22,000 units in just over a month after mass production started, and received fixed points from 10 automakers and over 20 vehicle models.

These data show that HSD has moved from the demonstration phase into the delivery phase. Additionally, Horizon stated that its product solutions business is driven by HSD’s large-scale deployment, while licensing and services business comes from BPU, AI fundamental models, and toolchain authorization.

Product solutions help Horizon enter more vehicle models, while licensing and services bear the function of generating higher-margin revenue. Whether HSD can continue to drive up revenue depends on its ability to promote subsequent software licensing, toolchain services, and replication across models.

Horizon’s current revenue structure still needs to find a balance between scale and gross profit.

In 2025, the company’s overall gross margin was 64.5%, lower than 77.3% in 2024. The company explained that in order to promote mass production of HSD and integrate customers, some domain controllers and integrated products are supplied at a nominal mark-up, while market competition has also brought pricing pressure. In other words, hardware delivery helps the company get its solutions into more cars, but the profit margin for this part of the revenue is significantly lower than for licensing services.

In the first half of 2026, according to the announcement’s rough estimates, gross margin roughly corresponds to 60% to 66%, within the same range as the full year 2025. Revenue growth is in the range of 24.8% to 34.5%, and gross profit growth in the range of 13.7% to 34.3%.

Industry data has already laid out the competitive environment.

Based on statistical data from insured units, in the first half of 2026, the installed capacity of Urban NOA in China’s domestic passenger car market is about 1.802 million units, with the top 10 models accounting for 45.4% — showing a concentration trend.

Additionally, in the first half of 2026, independent third-party solution providers combined accounted for 51.4% of Urban NOA installations. This means solution providers must face competition not only from their peers but also from the continually expanding self-developed capabilities of automakers.

Horizon also has its own advantages. At the end of 2025, the company’s cash and cash equivalents were about 20.19 billion yuan, up from 15.37 billion yuan at the previous year’s end; however, trade receivables also rose from about 680 million yuan to 1.76 billion yuan, and inventory from about 590 million yuan to 1.07 billion yuan. The company still has funds to invest in R&D, support customer targeting, and expand delivery, but revenue recognition, payment recovery, and inventory turnover also need to keep pace with the rhythm of mass production.

In the second half of the year, whether HSD can enter more high-sales models will determine how far Horizon’s mass production scale can go.

Urban NOA is still expanding. Standing at this new threshold of mass production, Horizon needs to ensure its installed scale truly converts into profit and cash recovery.

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