Al Root

Serve Robotics showed progress in deploying its fleet of artificial-intelligence-trained food delivery robots in the second quarter. Shares, however, dipped in late trading as investors digested third-quarter sales guidance.

For the second quarter, Serve reported sales of $642,000, in line with Wall Street estimates. It delivered 120 robots, up 80% year over year, also in line with estimates. Guidance for the third quarter, however, is for sales between $600,000 and $700,000. Wall Street was looking for closer to $1.7 million, getting ahead of what Serve had promised.

Shares were down 9.7% in after-hours trading at $9.56.

Guidance is light, but there is some software revenue that is no longer recurring, says CEO Ali Kashani. On the other hand, the company hasn't changed its guidance for 2,000 food delivery robots to be deployed by the end of 2025. With all robots working at capacity for Uber Eats in selected cities, annual revenue should be $60 million and $80 million. Serve expects to hit that revenue run-rate at some point in 2026.

"Serve is building the world ahead, where autonomous last-mile transportation is ubiquitous and foundational," said Kashani in a news release. "This quarter marked a major step forward as we expanded into new markets, scaled operations, and fueled our autonomy flywheel to an unprecedented degree. With every successful delivery, Serve's growing fleet gets smarter, stronger, and more efficient."

Serve's robots represent one early application for AI technology beyond chatbots such as Gemini and ChatGPT. AI computers and programming, essentially, let Serve robots deliver food autonomously, cutting the cost of delivering Uber Eats.

In the quarter, the company started service in Atlanta, its fourth city, including Los Angeles, Dallas, and Miami. Serve also announced plans for Chicago, its first Midwestern city.

"Daily active supply hours," the company's metric for usage, was 1,723 for the entire fleet of 160 robots, up about 350% year over year. Operational efficiency, or Serve's reliability rate, which is the orders picked up compared with orders completed, was 99.8% in the second quarter. (That's better than human delivery, which finishes orders at about 98%, according to Serve.)

Along with more robots delivered and plans for Chicago, the company ran a delivery pilot in Doha, Qatar, and added Little Caesars Pizza to its list of options that Serve robots can deliver.

It ended the quarter with $183 million, which Kashani is happy with. Wall Street expects the company to use about $90 million in the second half of 2025 and all of 2026, according to FactSet.

Serve stock closed at $10.59, up 1.4% in regular trading, while the S&P 500 and Dow Jones Industrial Average were down 0.1% and 0.5%, respectively.

Through Thursday trading, Serve stock was down about 26% over the past 12 months.

Write to Al Root at allen.root@dowjones.com

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August 07, 2025 17:23 ET (21:23 GMT)

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