Serve Robotics Reports 53% Revenue Decline and $13.22 Million Net Loss in Q1 2025

Serve Robotics Inc. reported a significant decline in financial performance for the first quarter of 2025, with revenues totaling $440,465, a decrease of 53% from $946,711 in the same period of 2024. The company attributed this drop primarily to a reduction in software services revenue, although fleet services revenue increased to $211,618 from $95,610, reflecting a larger operational fleet. The cost of revenues surged to $1.91 million, up 442% from $352,438, largely due to scaling up operations and launching in new markets, resulting in a gross loss of $1.47 million compared to a gross profit of $594,273 a year earlier.

Operating expenses also rose sharply, totaling $13.54 million, a 63% increase from $8.31 million in the prior year. This increase was driven by a 371% rise in general and administrative expenses, which reached $4.75 million, primarily due to higher stock-based compensation and increased headcount. Research and development costs remained relatively stable, increasing slightly to $6.88 million from $6.64 million. The net loss for the quarter was $13.22 million, a 46% increase from the $9.04 million loss reported in the same quarter of 2024.

In terms of operational metrics, Serve Robotics reported an increase in daily active robots to 73 from 39, and daily supply hours rose to 648,300, indicating improved operational capacity. The company continues to rely heavily on two major customers, Magna and Uber, which accounted for 83% of total revenue in the latest quarter, down from 95% in the previous year. This concentration poses risks, as the loss of either customer could significantly impact future revenues.

Strategically, Serve Robotics has made notable advancements, including a public offering in April 2024 that raised approximately $35.8 million, allowing the company to list on the Nasdaq under the ticker "SERV." The company also entered into a Master Services Agreement with Magna, enhancing its operational capabilities in robotic delivery. As of March 31, 2025, Serve Robotics held $197.76 million in cash and cash equivalents, which management believes will be sufficient to fund operations for at least the next twelve months, despite ongoing losses.

Looking ahead, Serve Robotics faces challenges related to market demand for last-mile delivery, inflationary pressures, and potential regulatory changes. The company is focused on expanding its operational footprint and increasing the utilization of its robotic fleet, while also navigating the complexities of customer concentration and economic conditions that could affect discretionary spending.