Per Capita Annual Salary of 1.32 Million Yuan at Horizon, Yet Losses Exceed 10.4 Billion—Where Did the Money Go?

Horizon Robotics “Spending Money” for the Future?

Author | Yu Xing

Editor | Gao Yan

Source | Yema Finance

As automakers fiercely compete in intelligent driving, Horizon Robotics (9660.HK), which provides “brain” systems for vehicles, has become the first to bleed.

On March 19, Horizon Robotics (referred to as “Horizon”) released its 2025 annual report. The financials show that last year’s revenue soared to 3.758 billion yuan, a 57.7% increase year-over-year; however, the annual loss reached 10.469 billion yuan, turning from profit to loss.

The report indicates that the most direct reason for the loss is a sharp increase in R&D investment.

Horizon founder and CEO Yu Kai stated at the earnings conference that this was a strategic choice. The 5.15 billion yuan in R&D spending heavily focused on cloud AI training, the next-generation BPU “Riemann architecture,” and future-oriented physical AI foundational models. Yu Kai emphasized, “We are not afraid of high R&D costs. We believe this will lead to future technological advantages.”

In the spring of 2026, amid the “battle to the death” in the smart car sector, Yu Kai is leading the company in a “high-stakes gamble” for future dominance.

As of March 20, Horizon Robotics closed at HKD 7.34 per share, with a total market value of HKD 107.5 billion.

From Profit to Massive Loss

Where did the problem arise?

If we only look at revenue, Horizon is almost a textbook growth company. In 2025, the company recorded revenue of 3.758 billion yuan, up 57.7% year-over-year, with a gross profit margin of 64.5%. Automotive business accounted for 94.6% of revenue, with a high gross margin of 67.2%.

This growth is driven by the rapid development of the industry. Data shows that in 2025, China’s passenger car market achieved a major breakthrough in intelligent transformation. The penetration rate of passenger cars equipped with intelligent assisted driving features hit a record high of 67.6%.

Notably, in terms of new car sales, the proportion of vehicles equipped with mid-to-high level intelligent assisted driving increased sharply from 21.6% in 2024 to 42.6% in 2025. As a result, in 2025, two out of every three passenger cars sold in China were equipped with intelligent assisted driving, nearly one of which had a mid-to-high level system.

Meanwhile, in 2025, Horizon maintained its leading position in the basic assisted driving solutions (ADAS) market for mainstream brands, with a market share of 47.7%. It also ranked first in the emerging mid-to-high level intelligent assisted driving market with a 14.4% share; in the mainstream vehicle market under 200,000 yuan, Horizon’s mid-to-high level intelligent driving solutions held a 44.2% market share, ranking first.

However, despite rapid market growth and dominant market share, Horizon suffered a net loss of 10.469 billion yuan, a significant decline from the 2.347 billion yuan profit in 2024.

The culprit behind the increased revenue but decreased profit is directly linked to R&D spending. In 2025, Horizon’s R&D expenditure reached 5.154 billion yuan, up 63.3% year-over-year, accounting for 137.1% of revenue. This means that for every 1 yuan earned, Horizon invests 1.37 yuan in R&D.

The growth in R&D costs is driven by three main factors: first, increased cloud service and technology procurement expenses for full-scenario urban NOA solutions HSD and the high-end ADAS chip Journey®6; second, rising salaries (including stock-based compensation) for R&D personnel; third, increased costs of chip tape-outs and materials. Despite continuous R&D investment, its proportion of revenue remained stable, at 132.4% in 2024.

In addition to R&D, in 2025, Horizon’s sales and marketing expenses grew 54.2% to 632 million yuan, mainly due to increased marketing, brand promotion, and employee benefits (including stock-based compensation). However, the ratio of sales and marketing expenses to total revenue slightly decreased from 17.2% in 2024 to 16.8% in 2025.

Average Annual Salary of 1.32 Million Yuan

It’s clear that the increases in R&D and sales & marketing expenses are largely due to rising employee compensation and benefits.

Horizon’s employees have long been envied by many workers. Even compared to peers, Horizon’s salary levels are highly competitive.

The IPO prospectus shows that in 2023, during the IPO, Horizon had 1,478 employees, with total employee compensation of 1.435 billion yuan, averaging 971,000 yuan per person annually. This ranks second in the industry, just behind Hesai Technology listed on Nasdaq (993,000 yuan).

In October 2024, Horizon was listed on the Hong Kong Stock Exchange, and by the end of that year, the company had 2,078 employees, with an average annual salary of about 1.1778 million yuan, an increase of over 21%.

By 2025, employee salaries had risen again. The annual report shows that as of December 31, 2025, the company employed 2,215 full-time staff, with total compensation (including stock-based payments) of 2.918 billion yuan.

This means Horizon’s average annual salary in 2025 was approximately 1.3172 million yuan, nearly 12% higher than the previous year.

Can Losses Make Room for Growth?

At the earnings conference, Yu Kai appeared quite calm. He explained the massive losses as a proactive “investment” in the future: “We have actively increased R&D investment, especially in cloud service training costs. We are not afraid of high R&D costs. On the contrary, we believe that continuous R&D will improve Horizon’s AI foundational models and build a strong moat.”

This “losses for space” logic has convinced most investors. After the earnings release showing huge losses, the company’s stock price actually rose 1.24% on March 20.

However, Horizon’s pressure is not only financial. Over the past few years, Horizon has spent over 10 billion yuan on R&D, achieving process node breakthroughs from 14nm to 7nm. But compared to international giants like Nvidia and Qualcomm, which are advancing with more advanced process nodes (4nm/5nm), Horizon faces a tough challenge. Even more critically, former allies are now becoming competitors: BYD is using a “Horizon chip + self-developed algorithms” hybrid model, and Li Auto’s self-developed smart driving chip “M100” has entered road testing.

Customers turning into competitors have severely squeezed Horizon’s market space. To sustain its intense technological race, Horizon has had to frequently seek funding. In 2025 alone, Horizon raised over 15 billion yuan through IPOs and follow-up placements, but even so, a single 5.8 billion yuan financing round once caused the company’s market value to evaporate by 11.3 billion yuan in one day.

During the earnings call, Yu Kai tried to reassure the market about profitability concerns. He said that although the average chip price in 2025 was less than $60, the production of high-end solutions like urban NOA (HSD) would significantly contribute to revenue growth through product price increases in the coming years, even more than volume growth. He revealed that this year, HSD shipments are expected to reach 400,000 units, and the company plans to pilot Robotaxi operations with partners in the third quarter.

Founder’s “No-Card Table” of 15.5 Billion Yuan

To understand why Horizon dares to lose so much, it’s related to founder Yu Kai’s entrepreneurial philosophy.

Rewinding to 2015, 39-year-old Yu Kai left Baidu and plunged into the then-quiet and nearly barren smart driving chip sector. As a scientist who had built Baidu’s Deep Learning Research Institute, he had an “unconventional” ambition from the start: to create “chips + operating systems” for robots, aiming to become a foundational infrastructure company like Intel or Qualcomm.

The first five years of entrepreneurship, Yu Kai describes as “dark days.” At that time, smart cars had not yet exploded, and the team relied on AIoT businesses like smart cities and smart retail to sustain automotive chip R&D. In 2019, facing bloated business lines, Yu Kai made a painful decision: to cut all non-driving-related businesses, reducing the team from 1,200 to 700 people. Looking back, Yu Kai believes that without that cut, they would have “definitely died.”

The turning point came in 2020. At that time, Li Auto faced difficulties because Mobileye couldn’t meet the algorithm optimization needs for specific Chinese scenarios, with only 8 months before the launch of the Li ONE facelift. Yu Kai led hundreds of Horizon engineers to move directly into Li Auto’s R&D center, providing open “white-box” solutions and 24-hour dedicated service, completing what normally takes 18-24 months in just 8 months.

After the Li ONE went public and sold over 10,000 units per month, Horizon became famous. Yu Kai later recalled in an interview with “China Business Review” that the purpose of their work was to create value: “Customers become more successful because of your products and services.” Since then, investments from Volkswagen of 2.4 billion euros and cooperation with over 40 automakers have pushed Horizon to the top of China’s smart driving chip industry.

Yu Kai once proposed a famous idea: “It’s more important not to be at the card table than to succeed quickly.” At a media event in early 2026, he reiterated, “Horizon doesn’t want to be a show-off; what really matters is to stay undefeated.”

Today, with Horizon, Yu Kai’s wealth has skyrocketed. The 2025 Hurun Rich List ranks him at 430th place with a fortune of 15.5 billion yuan, up 64 places from the previous year.

For Horizon, the 10+ billion yuan loss in 2025 is not the end of the story but a stage in the “high-stakes gamble” for future dominance in intelligent driving. Will Yu Kai lead Horizon to the final victory in this long “game”? Share your thoughts in the comments.