ECARX Holdings Q1 2026 Earnings Name Transcript – ECARX Holdings (NASDAQ:ECX)

Good day and thanks for standing by. Welcome to the ECARX Q1 2026 earnings convention name. At the moment, all members are in a hear solely mode. After the speaker’s presentation, there can be a query and reply session. To ask a query through the session, you will want to press Star one and one in your phone. You’ll then hear an automatic message advising your hand is raised. To withdraw your query. Please press Star one and one once more. Alternatively, chances are you’ll submit your questions by way of the webcast. Please be suggested that in the present day’s convention is being recorded. I might now like at hand the convention over to your first speaker in the present day, Mark Hankinson, Head of Investor Relations. Please go forward. Thanks.

Good morning and welcome to Ecarx’s first quarter 2026 earnings convention name. With me in the present day from Ecarx are our founder and Chief Govt Officer Ziyu Shen, Chief Working Officer Peter Serino and Chief Monetary Officer Dylan Zheng. Following their ready remarks, they are going to all be accessible to reply your questions. Earlier than we begin, I wish to refer you to our ahead wanting statements on the backside of our earnings press launch, which additionally applies to this name. Additional info on particular danger components that might trigger precise outcomes to vary materially may be present in our filings with the SEC. As well as, this name will embody discussions of sure non-GAAP monetary measures. A reconciliation of the non-GAAP monetary measures to the GAAP monetary measures will also be discovered on the backside of our earnings launch. With that, I might like at hand over the decision to our founder and Chief Govt Officer Ziyu Shen. Ziyu, please go forward.

Thanks Mark Howdy, everybody, and thanks for becoming a member of us in the present day. The primary quarter was outlined by continued disciplined execution and persevering with momentum in our international technique. Our imaginative and prescient for ECARX stays clear. push the boundaries of automotive intelligence globally and lead the business’s transition from function centric to intelligence centric experiences. We’re constructing the excessive efficiency computing platforms or clever manufacturers, that energy software program outlined automobiles. We’re uniquely positioned to to capitalize on the rising international demand for larger worth software program and bodily AI throughout automotive business. We’ve made sturdy progress on our strategic aims because the begin of 2026, constructing upon the momentum we gained final 12 months. All through the primary quarter we executed relentlessly on our core priorities for the 12 months. Accelerating our globalization technique, investing in our R and D roadmap and optimizing our lean working technique to maintain profitability. First, on our international enlargement, we proceed to construct out of our international footprint and governance construction underscored by vital fairness and board appointments. Crucially the practically 200 million US greenback in capital we raised later final 12 months and early this 12 months is now being actively deployed. That is fueling the construct out of our R and D hub in Germany and our operational infrastructure throughout South America and in our workplace in Singapore. Second, the worldwide enlargement is being fueled by our business execution and steady funding in our R and D roadmap. We proceed to make strong progress driving additional technical innovation and profitable new enterprise. A important element of accelerating this innovation is our broader ecosystem of strategic partnerships. Third, we introduced a serious milestone in autonomous driving. ECRX expects to develop and ship hundreds of autonomous enabled automobiles for Important Mobility’s subsequent technology Autonomy system. This marks ecarx first entry into the Robotaxi market, a market with vital international potential. Lastly, we’re sustaining sturdy price self-discipline, decreasing our working prices to maintain profitability. Our outcomes for the quarter show the disciplined execution driving this subsequent section of development and the way we’re actively accelerating that transformation to construct a very international enterprise. Our outcomes for the quarter demonstrated this disciplined execution driving this subsequent section of development. They show how we’re actively accelerating that transformation to construct a very international enterprise and maintain this momentum. Whereas the primary quarter is historically impacted by seasonality, the broad market additionally navigated micro headwinds together with shifting authorities insurance policies and reminiscence element inflation. Nonetheless, our sturdy mission pipeline and the sturdy backlog allowed us to largely mitigate the influence of those dynamics. Consequently, we delivered gross sales of products income of 140 million US greenback famous a 6% lower 12 months over 12 months. This demonstrates the underlying resilience of our core enterprise. Crucially, our disciplined execution translated into significant profitability enhancements. Total gross revenue was 28 million US greenback driving and enlargement elevated margin to 21.4%. We additionally considerably narrowed our working loss to 13 million US greenback, practically halving the 25 million US greenback loss reported in the identical interval final 12 months. Maybe most notably, we achieved constructive alter ebitda for the third straight quarter, delivering US$4 million in comparison with detrimental US$15 million in the identical quarter final 12 months. This sturdy efficiency permits us to confidently repeat our 4 12 months 2026 income steering of 1 to 1.1 billion US greenback. This monetary resilience isn’t any accident. It’s the direct results of the strategic framework we established later final 12 months. Let me dive a bit deeper into how we’re executing in opposition to these priorities. Beginning with our international enlargement, we stay centered on our goal of fifty% of whole income from worldwide markets by 2030. To drive the execution of this, we spent the primary quarter actively fortifying our company governance and international Management workforce As ECARX quickly scales, it’s essential that we undertake high tier international governance requirements to match our increasing business footprint. Final month we appointed Loner Shark as our new Chairperson. This separates the roles of Chairperson and CEO to strengthen governance and align the worldwide Greatest Practices Loner has in depth expertise throughout automotive know-how and finance sectors. This can be invaluable as we scale and speed up the enlargement of our Central Computing Cockpit and ADA resolution throughout Europe, the Americas and Asia. I am additionally happy to formally welcome our new Chief Monetary Officer, Dylan Zheng. Dylan joined us in March to drive international monetary self-discipline from our newly operationalized Singapore workplace. Mark Hexen, who spoke in the beginning of this name, joined us as Head of Investor Relationships and Company Improvement and it is based mostly alongside myself and Peter in London. Commercially, our international partnerships proceed to deepen. Every car rolling of accomplice manufacturing traces demonstrates the repeatability and scalability of our options. This distinctive capability to scale throughout numerous manufacturers and markets is completely demonstrated by our strategic relationship with Volkswagen Group in Latin America. Peter will converse extra about this later. At this time we’re excited to announce a serious milestone in autonomous driving by means of our Strategic Framework settlement with Important Mobility, a number one US based mostly autonomous car firm. Beneath settlement, ECARTX is predicted to develop and ship hundreds of autonomous enabled automobiles to Important Mobility. It will embody custom-made central computing tables, a full stack autonomous driving system equipment and an entire sensor swimsuit for Important Mobility’s subsequent technology autonomy system. This collaboration brings collectively ECAI’s deep experience in Full Stack Clever Driving resolution and Important Mobility business main autonomous driving system. It’s going to enable us to leverage the most effective of each corporations core competence in clever {hardware} and software program growth. That is precisely the type of self-discipline excessive worth business execution that can drive our continued development and profitability, positioning us as a key participant in the way forward for autonomous mobility. This marks ECAR as first entry into the robotaxis market, a market with vital international potential. Supporting our international enlargement is our sturdy R and D roadmap. We’re persevering with to spend money on the event of subsequent technology options. This permits us to seize nice worth throughout our know-how stack and capitalize on alternatives in adjoining sectors like robotics to speed up and strengthen our long run product and technological capabilities. We just lately introduced a preliminary plan to probably purchase a minority stake and sure in IP rights from Dream Sensible Know-how and associates and the develop of the FlyMe auto working system. It is a extremely strategic alternative for ecarx. Whereas our Cloud Peak Cross Area Software program stack handles the underlying middleware FlyMe Auto act because the important utility and interplay layer integrating this know-how deeper into our options. Unlocks a strong aggressive benefit. It will allow true seamless interoperability between the clever automobiles, smartphones and rising good units like good glasses. These are absolutely built-in cross area ecosystem. It equips automakers with options which might be simply change succesful throughout car line ups to totally different actuality. They’re driving expertise in a extremely aggressive market. We view FlyMe Auto as a essentially strategic piece of our full stack ecosystem, capturing this important utility layer above our cloud peak, middleware, sports activities or potential funding even throughout a interval of strict price self-discipline. Whereas this potential acquisition stays at its precedence stage, it underscores our ambition to personal essentially the most important software program layers of the intelligence centric car Expertise Staying with Know-how Silicon is a elementary functionality for us. We accomplice with suppliers like Qualcomm and Syengine to exactly specify by the necessities for our silicon chips to make sure efficiency and effectivity. These transcend the usual chip customization. These are differentiated or remotely optimized SOC core modules akin to Sanjin 7 nanometer excessive efficiency SE1000 chipset which powers our extremely profitable Antora Thousand computing platform. This isn’t plug and play or assembled know-how. It is a extremely specialised and built-in full stack know-how. One other instance of our silicon excessive web page is the facet engine itself. This was established by Ecarx alongside Armchina earlier than turning into an unbiased enterprise. Through the first quarter we acknowledged a 40 million US greenback achieve from divesting a small portion of our shareholding in SignEngine to a brand new third social gathering investor. This isn’t only a one time monetary recreation, it values our capability to incubate, combine and monetize the worth of our know-how. This transaction permits SignEngine to diversify its shareholder base for its subsequent stage. Whereas we stay its largest shareholder and keep our deep technological integration, it proves we are able to create inverse worth whereas sustaining our technological edge. That is precisely the type of disciplined capital allocation and the lean operations that can maintain our profitability and business management. In abstract, we entered 2026 with a transparent roadmap and we’re efficiently executing in opposition to it. We’re increasing globally, we’re capturing larger worth alternatives and we’re optimizing our operations to make sure we are able to capitalize on the large alternative forward of us because the automotive business includes. I’ll now go the decision over to Peter Serino to debate our operational progress in additional element.

Thanks Ziyu Good morning everybody. As Ziyu outlined, we’re quickly accelerating our clear imaginative and prescient for automotive intelligence operationally. The primary quarter demonstrated our capability to execute on this imaginative and prescient at scale. As we proceed to drive our international enlargement, deepen key partnerships and innovate new options from our R and D roadmap. Our defining aggressive benefit is our capability to seamlessly combine our full stack {hardware} and software program right into a aggressive platform, permitting us to execute on advanced international applications throughout numerous car lineups and markets. By delivering extremely built-in options, we’re translating our technological management into compounding business momentum globally. Demand for our revolutionary options continues to be Sturdy with over 360,000 models shipped this quarter. Whereas this represents a decrease absolute quantity in comparison with the identical interval final 12 months, it displays a deliberate and strategic shift in direction of a excessive finish product combine. As a reminder, we made the strategic choice within the second quarter final 12 months to actively section out our decrease margin legacy platform enterprise. Whereas this intensely moderates our cargo volumes, it vastly improves our total income high quality, validating the technique. Shipments of our excessive finish pikes and into our options have been up roughly 73% 12 months on 12 months. This brings the cumulative whole variety of automobiles shipped with Ecarx applied sciences to over 11 million automobiles, up practically 30% from the identical interval final 12 months. At this time, our options energy 28 distinct manufacturers throughout 18 main OEMs globally. This rising scale demonstrates our reliability and repute as a trusted accomplice which we’re capitalizing on to unlock larger worth development alternatives from current new partnerships globally. Going ahead, our international enlargement is leveraging this momentum to and proceed to make strong progress through the quarter. Our partnership with Volkswagen Group is progressing easily and serves as the right instance of our capability to strategically execute tasks on a worldwide scale and the way we’re leveraging that to develop future massive scale income alternatives throughout emea, the Americas and different rising markets. This program makes use of the total flexibility of our portfolio to fulfill numerous market wants, deploying Our excessive efficiency Antora 1000 built-in with our Cloud Peak software program stack and Google Automotive Companies alongside Our price efficient Antora 500 for entry degree segments. I’m happy to report that through the first quarter we efficiently moved this complete program into the industrialization section, retaining us firmly on observe forward of the anticipated launch in 2027. Whereas the primary quarter is usually a quiet interval for car launches, we started mass manufacturing for 4 new fashions throughout three totally different manufacturers, all of that are utilizing our subsequent technology Pikes and Antora sequence options mixed with our Cloud Peak Cross area software program stack and subsequent technology structure that’s suitable with Google Automotive Companies and Fly Me Auto. They may energy subsequent technology AI cockpit experiences and allow the supply of in car AI brokers at scale, providing a very distinctive intelligence centric expertise enterprise growth Regardless of a seasonally Quiet Quarter in Q1, our pipeline continues to transform. We just lately secured a brand new contract win from A number one Chinese language automaker outdoors the GEELY ecosystem. This program, anticipated to start manufacturing in 2026, represents one other key step in diversifying our income base and actively validates the stand alone technological superiority of our options within the open market. Innovation stays the bedrock of our long run development and our strongest aggressive moat. We’re actively specializing in our R and D roadmap to ship extremely scalable centralized automotive intelligence architectures that international automakers urgently want. A first-rate instance of that is the debut of our Zenith computing platform at CES earlier this 12 months. Powered by the upcoming Snapdragon Elite automotive platform, Zenith represents a breakthrough in built-in single field cabin to ADAS techniques. By seamlessly operating blended criticality workloads akin to powering immersive 5K digital cockpits alongside degree 2 ADAs on a single SoC, we’re considerably decreasing the architectural complexity and price pressures dealing with our international companions. Zenith not solely underscores our deep lengthy standing functionality to commercialize business lead applied sciences at scale, but in addition supplies a extremely modular, upgradable basis for software program outlined automobiles of the long run. With Zenith firmly on observe for mass manufacturing in 2027, we’re guaranteeing we stay on the absolute forefront of the intelligence centric revolution. In closing, our operational execution within the first quarter supplies a resilient and extremely scalable basis for the 12 months forward. We’ve a rising portfolio of numerous and replicable options and a quickly advancing international footprint and a disciplined operational technique to proceed to seize development alternatives and delivering long run worth to our shareholders. With that, I’ll flip the decision over to our new CFO Dylan Jiang to evaluation our monetary efficiency. Welcome to your first Ecarex incomes name. Dylan, the ground is yours.

Thanks Peter and Howdy everybody. The primary quarter of 2026, whereas seasonally difficult, clearly highlights the resilience of our enterprise mannequin and disciplined execution in navigating advanced market circumstances. Regardless of dealing with vital business headwinds, we made significant progress in optimizing our price construction and bettering our operational effectivity, which is a transparent indication of our strategic concentrate on constructing a sustainable basis for long run worthwhile development. On the highest line, our gross sales of Items income in Q1 was 114 million, a modest 6% lower 12 months over 12 months. This efficiency displays three important drivers. First, we navigated and anticipated a difficult market atmosphere characterised by coverage adjustments and delayed car launches throughout the broader automotive sector throughout Q1. Second, as Peter famous earlier, our deliberated strategic choice in Q2 final 12 months was to actively section out our decrease margin legacy platform enterprise created a excessive base impact when in comparison with Q1 2025. Whereas this deliberately influence our high line. It vastly improves our income high quality and blend as seen by the expansion in shipments of our latest Antora and Pikes options this quarter. Third, we efficiently balanced considerably larger reminiscence prices we skilled on this quarter, which is structurally supported. Our high line income turning to software program income was 2 million this quarter. That is structurally in keeping with the normalized run charges we established in quarters 2 by means of 4 final 12 months of round 1 to 2 million per quarter. For context, the 26 million reported in Q1 final 12 months mirrored a selected one time software program license authorization contract acknowledged on this quarter. Service income was 16 million, down from 21 million in Q1 final 12 months. Companies income primarily displays the timing of the design and growth contracts, deliveries and reserving schedules and as such it usually tracks the car launch cycles in Q1, however which we absolutely count on to speed up it in subsequent quarters. Now turning to our profitability metrics, regardless of the income headwinds, we demonstrated a robust operational self-discipline and price administration all through the quarter. Gross revenue reached 28 million, which gross margin increasing to 21.4%. This margin enchancment, achieved regardless of vital DDR price pressures that elevated by over 300% since September 2025, straight demonstrates our capability to handle provide chains in challenges successfully. Crucially, this margin resilience was supported by worth adjustment and product combine optimization which greater than partially offset the margin headwinds attributable to the one time software program license authorization contract acknowledged in Q1 2025. Our lean working technique delivered substantial effectivity beneficial properties through the quarter. Working bills decreased by 29% 12 months over 12 months to 41 million. Analysis and growth bills have been decreased by 32% to 24 million, pushed by continued useful resource prioritization that enhanced operational effectivity and synergies from R and D integrations and the interior deployments of AI throughout our enterprise to drive innovation whereas decreasing structural price. Promoting normal and administrative bills decreased by 24% to 18 million, primarily pushed by the continued enchancment in international working efficiencies and decrease share based mostly compensation bills incurred through the quarter. Our operational efficiency demonstrates resilience regardless of seasonality and the difficult total market atmosphere. Our working loss got here out at 13 million for the quarter, a big enchancment from the 25 million loss reported in Q1 2025. Most notably, adjusted EBITDA was constructive for the third consecutive quarter, coming in at 4 million in comparison with detrimental 15 million in the identical quarter final 12 months. This represents an entire construction turnarounds from thirtieth 2025 and it was pushed by our concentrate on price self-discipline that was complemented by the 14 million partial monetization of our holdings in SignEngine, which is you spoke about earlier. Trying forward, our visibility into the rest of the 12 months provides us the arrogance round our strategic trajectory. Primarily based on our present backlog and accelerating business pipeline, we’re reiterating our full 12 months 2026 steering of 1 billion to 1.1 billion in whole income. With respect to profitability, our margin profiles will naturally be influenced by the continuing dynamics and uncertainty round international reminiscence prices in addition to the cadence of our strategic investments. We do count on that within the coming quarters, gross margin and working profitability can be negatively impacted by reminiscence price dynamics. In abstract, whereas Q1 represents a seasonally slower interval for the business, we’re extremely inspired by the underlying energy of our enterprise mannequin and the progress we’ve made operationally. For the remainders of 2026, we count on to learn from the launch of latest automobiles fashions within the quarters forward, continued operational effectivity beneficial properties from our lean working technique and disciplined price administration, strengthening demand drivers for automotive know-how because the market atmosphere improves. Most significantly, we keep our full confidence within the resilience of our enterprise mannequin and our capability to navigate market cycles successfully. Our focus stays on delivering sustainable development and creating long run worth for our shareholders. That concludes our remarks in the present day. I might now like at hand the decision again to the operator to start the Q and A session.

Thanks. If you want to ask a query, you will want to press Star one and one in your phone and wait on your identify to be introduced. And to withdraw your query, please press Star one and one once more. Or in case you want to ask a query by way of the webcast, please sort it into the field and click on Submit. Please stand by whereas we compile the Q and A roster. Thanks. We’ll now take our first query in the present day. That is from Wei Huang from Deutsche Financial institution. Please go forward.

Hello, thanks for taking my query. That is Wei from Deutsche Financial institution. I’ve two questions, so the primary given concerning steering,. So that you instructed us that you simply count on 2026 to ebook one to $1.1 billion in income. Are you able to give us quantity steering as effectively? And concerning margin, I do know you talked about that it is going to be extremely depending on reminiscence pricing all year long. Are you able to give us some steering on how they might pattern within the following quarters and for your entire 12 months? And the second query is, are you able to perhaps give us extra particulars on the principle collaboration concerning for instance, which areas it will function in, which platform will provide? Thanks. Hello, thanks. That is Dylan. Nicely, you have got heard the calls that we reiterating our earlier steering across the income which we count on to be within the 1 to 1 billion vary as beforehand guidanced. So we do not usually present any particular ASP steering however we do count on quantity phrases that the 12 months will progress as it’s typical for our markets with the Q1 representing the seasonal low factors for volumes and we do count on vital pickup from Q2 each when it comes to car launches and shipments and we when it comes to a income. We’re additionally reiterating our earlier income that we talked about, however when it comes to profitability

Q1 was a robust efficiency within the profitability phrases with us with the ability to develop the gross margin and ship our third worthwhile quarters on the EBITDA degree. And going ahead we do count on that our margin profiles will affect by ongoing market dynamics and uncertainty across the international reminiscence price in addition to the cadence of our strategic funding. So we do count on that within the coming quarters the gross margin and working profitabilities will negatively influence by reminiscence price dynamics and likelihood for 2026 on the working earnings and EBITDA ranges can be relies on how this dynamics performs out within the coming quarters. So we stay centered on the fee controls and focusing our R&D on the very best impacts tasks and we are going to stay centered for this throughout 2026.

Thanks. Hey Approach, that is Peter Serino. I am going to reply your query on the Might Mobility matter. So thanks for the query. Total we’re extraordinarily enthusiastic about this strategic partnership. Might is a number one US based mostly autonomous car and robotaxic firm and underneath the settlement we’re anticipated to develop and ship hundreds of Autonomy associated automobiles which embody a custom-made central computing platform and a Full Stack sensor suite for Might Mobility’s subsequent technology Autonomy system. We see this as being chosen for the partnership by Might Mobility as an enormous validation of our experience in Full Stack clever driving options. It actually leverages we see the partnership as leveraging the strengths of each corporations. We carry improbable core competency in central structure and software program. Outlined car and Important mobility brings sturdy functionality and Autonomy and their Stage 4 software program stack may be very spectacular when it comes to its efficiency. ECARX It is an enormous development alternative for us. It permits us to increase into the robo taxi market with this partnership and total it completely improves our whole accessible market very considerably. I am excited to be on the Might Mobility analyst day tomorrow and we’ll add extra shade to the partnership at that stage. Thanks very a lot.

Thanks very a lot and thanks everybody on your attendance and a focus in the present day and on your continued curiosity in Ecarex. Please do attain out to me, Mark Hankinson by way of electronic mail if in case you have questions or if you want to fulfill with administration over the approaching weeks. We’re scheduled to attend numerous investor conferences within the coming months throughout Europe and the US we might after all be very completely satisfied to fulfill with you at these occasions, so please do contact us if you would like to schedule a gathering. Peter talked about that he can be attending tomorrow, the Might Mobility Analyst Day in Arlington, Texas. With that, we are going to conclude the decision. Thanks.

Disclaimer: This transcript is supplied for informational functions solely. Whereas we attempt for accuracy, there could also be errors or omissions on this automated transcription. For official firm statements and monetary info, please consult with the corporate’s SEC filings and official press releases. Company members’ and analysts’ statements replicate their views as of the date of this name and are topic to alter with out discover.