Why Is Pony AI Stock Falling Thursday?

Pony AI Inc. (NASDAQ:PONY) delivered a split fourth quarter, with explosive growth in its robotaxi business overshadowed by an overall revenue decline and weakening margins.

Revenue Declines Despite Robotaxi Surge

Pony AI reported fourth-quarter revenue of $29.1 million, down 18% year-over-year due to timing in licensing and applications revenue.

Street analysts expected a quarterly revenue of $23.94 million.

Robotaxi services revenue climbed 159.5% Y/Y to $6.7 million in the quarter. Fare-based revenue jumped more than 500% year over year, driven by strong order growth following the Gen-7 fleet launch, while improved fleet operations and premium services further increased demand and overall revenue.

Meanwhile, Robotruck’s services revenue rose 1.2% Y/Y to $13.1 million.

Margins Contract As Costs Rise

Gross profit of $3.7 million decreased from $7.5 million Y/Y.

Gross margin was 12.7% in the fourth quarter of 2025, compared to 21.0% in the fourth quarter of 2024.

The decrease was primarily due to increasing revenue contribution from Robotruck services.

Net income of $75.5 million for the quarter compared to a net loss of $181.1 million Y/Y.

Adjusted net loss of $49.0 million for the quarter of 2025, compared to $41.3 million Y/Y, primarily driven by higher operating expenses incurred to support our ongoing business expansion and enhance our R&D capabilities.

Adjusted EPS loss of 12 cents per share, down from 23 cents loss in the prior year’s quarter. The Street had projected an EPS of 22 cents.

As of December 31, 2025, cash and cash equivalents, short-term investments, and restricted cash stood at $1.51 billion.

Expansion Plans And Industry Momentum

Pony AI Chairman and CEO James Peng said the company significantly expanded revenue, fleet size, operations, and user base in 2025 while achieving unit economics breakeven in several tier-one Chinese cities.

He added that the company plans to accelerate growth in 2026 by scaling its fleet to over 3,000 vehicles, expanding into more than 20 cities globally, and leveraging its partnership with Toyota Motor Corp. (NYSE:TM) to support mass production of Gen-7 robotaxis.

CFO Leo Wang said the company delivered strong fourth-quarter growth, driven by robotaxi operations, with revenue rising sharply alongside a surge in fare-based income.

He noted that this momentum helped achieve repeated unit economics breakeven and the company’s first quarterly GAAP net profit, adding that Pony AI is continuing to invest upfront to accelerate commercialization while maintaining a strong financial position.

PONY Price Action: Pony AI shares were down 2.11% at $11.15 during premarket trading on Thursday, according to Benzinga Pro data.

Image via Shutterstock