EHang Holdings Limited Q1 FY2026 earnings call

### Regulatory and Industry Development - China's low-altitude economy now has a formal legal foundation: the revised Civil Aviation Law was passed in January 2026 and will take effect July 1, formally recognizing the low-altitude economy for the first time. - A new 2-tier governance model has been established, with a dedicated CAAC low-altitude safety bureau, NDRC top-level coordination, and a planned basic industry standard system by 2027. Clear regulation is viewed as a positive development that accelerates industry growth, and EHang's first-mover certification experience creates long-term competitive advantages. - Low-altitude economy is designated as one of six emerging strategic pillar industries in China's 15th 5-Year Plan, with accelerating investment from state-owned enterprises and local governments, and expanding ecosystem maturity.

### Core Strategic Progress 1. **Commercial operations for EH216-S (top priority):** EHang has secured all required TC, PC, and AC certifications, and its two operators hold OCs. The company is in the final stage of CAAC review for public ticketed commercial service, having refined the full end-to-end operational chain including ticketing, insurance, maintenance, infrastructure, and command and control. - As of May 2026, the EH216-S fleet has accumulated over 90,000 safe flights across 21 countries. The two certified operators in Hefei and Guangzhou have completed over 3,000 trial flights with a 0-accident, 0-violation safety record, and are ready for launch once approved. - Aerial media operations have grown noticeably, with GD 4.0 drones setting a Guinness World Record for 22,580 formation flights, and operational experience from this segment directly supports EH216-S commercialization. 2. **Global expansion:** The Thailand AAM Sandbox program is advancing, with battery cooling testing complete, and the company working toward the first overseas EH216-S operating license. EHang has completed the first human-carrying eVTOL flight in Mexico, and secured trial flight permits in Japan, South Korea, the Middle East, and Spain. The 2026 top priority for overseas markets is obtaining Validation of Type Certificates (VTC) via existing bilateral airworthiness agreements, with Thailand as the first flagship market. 3. **VT35 and new product development:** VT35, EHang's longer-range pilotless human-carrying eVTOL for intercity mobility, is in the certification basis definition stage with the CAAC, with critical ground and flight tests advancing as planned. Non-human-carrying products for firefighting and logistics are in active development to expand addressable market: firefighting aircraft R&D is on track for launch in H2 2026, and inland waterway logistics test route site selection is complete at Guangzhou Port. 4. **Industrial chain and operational upgrades:** Upgrades to EH216-S have addressed hot-climate operational pain points: a dedicated battery cooling vehicle doubles aircraft utilization by cutting cooldown time, and an independent cabin air conditioning system improves passenger comfort without impacting critical flight functions. Two command and control centers (Guangzhou and Hefei) are now operational, providing integrated management for scaled low-altitude operations. EHang is integrating R&D, manufacturing, and supply chain to improve delivery efficiency and scale.

### Financial Highlights - Overall gross margin was 62.5% in Q1 2026, stable year-over-year and slightly up sequentially, reflecting improving manufacturing efficiency and supply chain management. - Adjusted operating loss was RMB 77.1 million in Q1 2026, up from RMB 42.6 million in Q1 2025, driven by increased R&D investment, commercialization, and global expansion spending. - Cash and cash equivalents totaled RMB 1.03 billion as of March 31, 2026, supporting ongoing strategic execution. The board approved a USD 30 million ADS share repurchase program over the next 12 months.

Total Q1 2026 revenue was RMB 25.7 million, flat year-over-year compared to RMB 26.1 million in Q1 2025, and down sequentially from RMB 177.6 million in Q4 2025. The sequential decline was driven by lower eVTOL deliveries due to seasonal Chinese New Year impacts and customer delivery timing. 1. Human-carrying eVTOL segment: EHang delivered 4 units of the EH216-S series in Q1 2026, compared to 11 units in Q1 2025. For the full year 2026, this segment (including EH216-S and VT35 sales and deliveries) is expected to contribute 60% of total annual revenue. The segment has a gross profit margin above 60%. 2. Aerial Media (non-human-carrying formation drone) segment: 1,000 units of GD 4.0 formation drones were delivered, and 22 formation performances were completed in Q1 2026. This segment contributed approximately 40% of total Q1 2026 revenue, and has a gross profit margin of approximately 50%. For the full year 2026, all non-human-carrying businesses (including Aerial Media, firefighting, and logistics) are expected to contribute 40% of total annual revenue.

- EHang maintains its full-year 2026 revenue guidance of RMB 600 million, supported by diversified revenue streams, progress on domestic commercial operations, and expected overseas breakthroughs. - The expected 2026 full-year revenue mix is 60% from human-carrying eVTOL (EH216-S and VT35 sales/deliveries) and 40% from non-human-carrying businesses (aerial media, firefighting, logistics). - Overseas revenue is expected to contribute approximately 10% of full-year 2026 total revenue, with the exact amount dependent on the timing of commercial approval in Thailand. The company targets launching commercial operations in Thailand by the end of 2026, ahead of the Bangkok AAM conference. - EHang targets maintaining overall full-year gross margin above 60%.

- Actual commercial launch timing for the world's first pilotless human-carrying eVTOL service depends on final CAAC review and approval, which may be delayed due to the regulator's stricter-than-anticipated operational standards for the pioneering project. - Over 50% of 2026 full-year revenue is expected to come from new customers, with the majority of order intake and revenue recognition concentrated in the second half of the year, creating near-term revenue visibility risk. - The aerial media formation drone segment is facing increasing low-price competition, which could pressure margins if EHang cannot successfully differentiate via benchmark projects. - Overseas revenue contribution is dependent on successful VTC approval and commercial launch in Thailand, creating regulatory execution risk for international expansion targets. - Forward-looking statements carry inherent uncertainty, and actual results may differ materially from expectations due to regulatory, operational, and market risks.

Q: What is the expected 2026 full-year revenue mix, and how much will overseas markets contribute to full-year revenue? A: Management expects 60% of 2026 revenue to come from human-carrying eVTOL sales and deliveries, and 40% from non-human-carrying businesses including aerial media, firefighting, and logistics. Overseas revenue is expected to rise to ~10% of total 2026 revenue, with the final amount dependent on the timing of commercial approval in Thailand, which management targets before the end-of-year Bangkok AAM conference.

Q: What is the gross margin of the aerial media segment, and what is the update on the pipeline of overseas unit orders? A: Aerial media drone sales and performances have a gross margin of ~50%, while the human-carrying eVTOL segment has a higher margin, keeping overall company gross margin above 60% for Q1, which is the full-year target. Overseas revenue contribution will increase significantly over the medium to long term, with 2026 contribution tied to regulatory progress in Thailand, the first flagship overseas market.

Q: What is the cost breakdown for non-eVTOL aerial media and firefighting businesses, and what is the current operational status of the Hefei site? A: For aerial media, main costs are drone hardware for sales, plus depreciation of company-owned drones and personnel travel/labor for performance operations. For firefighting aircraft, costs are split evenly between carbon fiber materials, powertrain/batteries, and other components. The Hefei site is in the final stage of CAAC approval: it has 4 aircraft, supports 14 flights per day, has completed 3,000+ safe trial flights, and the ticketing system is fully operational and ready for immediate launch once approved.

Q: What is the 2026 order intake update, and what is the timeline for EH216-S crew training? A: Management remains confident in the RMB 600 million full-year revenue target, with most orders expected to come in the second half of 2026 due to typical budget approval timelines for institutional customers; over 50% of 2026 revenue is expected to come from new customers. Instructor training will wrap up by the end of June 2026, after which full-scale crew training will begin, with capacity to train 5-10 personnel per class with parallel batches to meet market demand.