Serve Robotics' Top Line Gains Traction: Can It Sustain the Momentum?

Serve Robotics Inc. SERV is starting to gain early revenue traction as its autonomous delivery model scales. In the first quarter of 2025, the company posted revenues of $440,000, reflecting a surge of 150% sequentially.

Serve Robotics’ recent ramp stems from a strategic deployment of 250 Gen 3 delivery robots. These robots were launched across new high-potential markets like Miami and Dallas, enabling the company to increase delivery volume by over 75% during the quarter. This expanding footprint helped Serve Robotics grow its restaurant network to more than 1,500 partners, a 50% rise from its last update.

During the first quarter, Software services contributed $229,000, while fleet revenues (including delivery and branding) accounted for $212,000, up 20% quarter over quarter. The improved revenue mix was supported by rising robot utilization and deeper merchant engagement.

Gross margins improved 40% quarter over quarter, though the ramp in fleet operations and early-stage market launches increased the cost of revenues by $1 million in the first quarter. Although SERV is in scale expansion mode, with an adjusted EBITDA loss of $7.1 million in the first quarter, its strong cash position of $198 million offers runway to push for scale. As utilization climbs, the company anticipates favorable operating leverage, particularly given the higher-margin software component and improved unit economics of Gen 3 robots.

Looking ahead, Serve Robotics expects second-quarter 2025 revenues to be in the range of $600,000-$700,000, indicating growth of 35%-60% quarter over quarter. Management reiterated its longer-term target of reaching a $60 million-$80 million annualized run rate once its 2,000-robot fleet is fully deployed, likely by 2026.

Peer Positioning

Serve Robotics appears to be drawing strategic inspiration from industry giants, mirroring key growth tactics employed by companies like Uber Technologies, Inc. UBER and Amazon.com, Inc. AMZN.

Serve Robotics’ model echoes elements of Uber, which recently reported 14% year-over-year growth in monthly active users and a record $2.3 billion in free cash flow in the first quarter of 2025. Uber’s delivery segment, in particular, achieved a 3.7% EBITDA margin, backed by operational leverage, strong advertising monetization and geographic expansion. Serve is taking a similar approach — building out multi-market reach while monetizing platform services beyond core deliveries.

Likewise, Amazon delivered $155.7 billion in first-quarter 2025 revenues, up 8.6% year over year, aided by record Prime delivery speeds and retail footprint expansion. Serve Robotics may be playing in a narrower vertical, but its strategy — regional scaling, fleet efficiency and digital monetization — shares Amazon’s core formula of cost-optimized infrastructure feeding top-line gains.

SERV’s Price Performance, Valuation & Estimates

Shares of Serve Robotics have surged 97.2% in the past three months compared with the industry’s growth of 16.1%.

From a valuation standpoint, SERV trades at a forward price-to-sales ratio of 24.76, significantly higher than the industry’s average of 19.49.

The Zacks Consensus Estimate for SERV’s 2025 earnings implies a year-over-year downtick of 38.8%. The loss per share estimates for 2025 have widened in the past 60 days.

SERV stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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