SAN FRANCISCO - Serve Robotics Inc. (Nasdaq: SERV), a company specializing in autonomous sidewalk delivery, announced the launch of its third-generation delivery robot, which is expected to bolster its operations across the U.S. The new robots are designed to enhance delivery efficiency and safety while reducing manufacturing costs.
The latest model from Serve Robotics is set to enter service in 2025, with plans to deploy 2,000 units on the Uber (NYSE:UBER) Eats platform across various U.S. markets. These robots are engineered to carry more goods and perform deliveries at higher speeds and over longer distances. They can operate for extended hours, approximately doubling their field time each day.
Technical upgrades include the integration of Nvidia (NASDAQ:NVDA)'s Jetson Orin module, which increases on-board computing power by five times, and Ouster's new REV7 digital lidar, along with substantial improvements to the robots' sensor suite. These advancements allow the robots to process Serve's most potent AI model architecture, enhancing their autonomy and decision-making speed.
The third-generation robots feature a larger cargo bin capable of holding four large 16-inch pizzas, a 15% increase in volume compared to their predecessors. A new drivetrain with suspension ensures smoother and faster movement, maintaining the quality of goods during transit. Additionally, improved water resistance allows the robots to operate confidently under diverse weather conditions.
Serve's commitment to safety is also emphasized with the inclusion of fail-safe mechanical braking and autonomous collision avoidance. The new robots introduce enhanced emergency braking, stopping 40% more quickly than before.
Dr. Ali Kashani, CEO and co-founder of Serve Robotics, highlighted the engineering achievements, stating, "Producing a cutting-edge robot that can drive faster and further while running 5 times more AI and slashing costs by half is a true engineering feat." Euan Abraham, Chief Hardware & Manufacturing Officer, added that mass manufacturing has begun in collaboration with Magna International (NYSE:MGA), ensuring high quality and performance.
The company aims to deploy its latest robots in Los Angeles and another new metro market in the coming months. This press release statement is based on information provided by Serve Robotics Inc. The company, which spun off from Uber in 2021, has already completed tens of thousands of deliveries for partners such as Uber Eats and 7-Eleven and holds multi-year contracts for its delivery services.
In other recent news, Seaport Global Securities has initiated coverage on Serve Robotics with a Buy rating, citing the company's potential to dominate the last-mile delivery sector. The firm also expects Serve Robotics to achieve significant long-term revenue growth and EBITDA margins exceeding 30%. In terms of recent developments, Serve Robotics has secured approximately $35 million in private placement transactions facilitated by Aegis Capital Corp.
The company has also announced strategic partnerships, including one with Wing Aviation LLC to extend its delivery reach by integrating ground and aerial autonomous technologies, and another with Shake Shack Inc (NYSE:SHAK). to use its autonomous robots for food deliveries via Uber Eats in Los Angeles.
Furthermore, Serve Robotics is expanding its operations into Koreatown, Los Angeles, and upgrading its robotic fleet's sensors through an agreement with Ouster, Inc. In leadership changes, Euan Abraham has been promoted to Chief Hardware & Manufacturing Officer, while Sarfraz Maredia and David Goldberg have been elected as Class I directors, serving until the 2027 annual meeting of stockholders. Lastly, Serve Robotics has solidified its partnership with Magna International through an exclusive contract manufacturing agreement.
InvestingPro Insights
As Serve Robotics Inc. (Nasdaq: SERV) gears up for the launch of its third-generation delivery robots, investors may find value in examining the company's financial metrics and market performance. According to InvestingPro data, SERV has experienced significant revenue growth, with a 732.06% increase in the last twelve months as of Q2 2024. This aligns with the company's expansion plans and the anticipated deployment of 2,000 new robots on the Uber Eats platform.
Despite the impressive revenue growth, it's worth noting that SERV is not currently profitable, with a negative operating income margin of -1788.83% in the same period. This reflects the company's heavy investment in research and development, as evidenced by the advanced features of their new robots.
InvestingPro Tips highlight that SERV holds more cash than debt on its balance sheet, which could provide financial flexibility as the company scales its operations. Additionally, analysts anticipate sales growth in the current year, which is consistent with the planned rollout of the new robot fleet.
The stock has shown volatility, taking a significant hit over the last week with a -14.26% return. However, it has demonstrated strong performance over the last three months, with a remarkable 263.87% price total return. This volatility may be attributed to the company's position as a niche player in its industry and the market's reaction to its growth prospects.
For investors seeking a deeper understanding of SERV's potential, InvestingPro offers 13 additional tips that could provide valuable insights into the company's financial health and market position.
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