ECARX Holdings, Inc. Q1 FY2026 earnings call

• Global Expansion & Governance

  • Targeting 50% of total revenue from international markets by 2030, with the ~$200 million in capital raised in late 2025/early 2026 actively deployed to build a German R&D hub, South American operational infrastructure, and a new Singapore regional office
  • Updated governance to align with global best practices: separated Chairperson and CEO roles, appointed Lona Schach (experienced in automotive, tech, and finance) as new Chairperson; added new CFO Dylan Zhang based in Singapore, and Head of Investor Relations Mark Hankinson based in London alongside the CEO and COO
  • Volkswagen Group Latin America program, which deploys both high-end (Antora 1000) and entry-level (Antora 500) solutions, moved successfully into the industrialization phase in Q1, on track for 2027 launch

• Commercial Milestones

  • Secured a new open-market contract from a leading non-Geely ecosystem Chinese automaker, with production expected to start in 2026, validating the standalone competitiveness of eCarX's solutions
  • Announced a strategic framework agreement with May Mobility, a leading U.S. autonomous vehicle company, to develop and deliver thousands of autonomous-enabled vehicles for May Mobility's next-generation robotaxi system, marking eCarX's first entry into the global robotaxi market
  • Began mass production of four new vehicle models across three brands in Q1, all using next-generation Pikes/Antora solutions integrated with the CloudPeak cross-domain software stack
  • Cumulative shipments of vehicles with eCarX technology surpassed 11 million units, up 30% year-over-year, powering 28 brands across 18 global OEMs

• Technology & R&D Strategy

  • Exploring a potential strategic minority stake and IP acquisition from DreamSmart Technology, developer of the Flyme Auto operating system. Flyme Auto would add a critical application and interaction layer on top of eCarX's CloudPeak middleware, enabling seamless interoperability between intelligent vehicles, smartphones and emerging smart devices to create a fully integrated cross-domain ecosystem
  • Debuted the Zenith computing platform at CES 2026, a breakthrough single-box integrated cabin-to-ADAS system powered by the Snapdragon Elite automotive platform that runs mixed-criticality workloads (5K digital cockpit + Level 2++ ADAS) on a single SoC, reducing OEM architectural complexity and costs. Zenith is on track for mass production in 2027
  • Recorded a $40 million gain from divesting a small portion of its shareholding in SciEngine (a silicon design firm incubated by eCarX) to a third-party investor. eCarX remains SciEngine's largest shareholder and maintains deep technological integration, demonstrating the company's ability to incubate and monetize technology while retaining its strategic edge

• Cost Discipline & Profitability

  • Maintained robust lean operating strategy, reducing R&D expenses by 32% year-over-year to $24 million via resource prioritization, R&D integration synergies, and AI-driven efficiency gains; reduced SG&A by 24% year-over-year to $18 million via improved global operating efficiencies and lower share-based compensation
  • Achieved positive adjusted EBITDA for the third consecutive quarter, with a full structural turnaround from early 2025 performance

eCarX reports three primary revenue streams for Q1 2026: 1) Sales of goods: $114 million, a 6% year-over-year decrease, representing ~92% of total Q1 revenue of $132 million. The decline stems from intentional phase-out of lower-margin legacy platforms, seasonal Q1 industry weakness, and policy headwinds, but was partially offset by mix shifts to high-value products and price adjustments to counter memory component inflation. 2) Software revenue: $2 million, consistent with the 1-2 million quarterly run rate established in 2025, representing ~1.5% of total Q1 revenue. Q1 2025 had an anomalous $26 million one-time software license that created a difficult year-over-year comparison. 3) Service revenue: $16 million, down from $21 million in Q1 2025, representing ~12.1% of total Q1 revenue. The decline is attributed to typical timing lags for design and development contract deliveries tied to vehicle launch cycles, with acceleration expected in later quarters. Overall profitability metrics: Gross profit of $28 million (21.4% gross margin, up from prior year), operating loss narrowed to $13 million from $25 million year-over-year, and positive adjusted EBITDA of $4 million (from negative $15 million year-over-year). On a product segment basis, high-end Pikes and Antora solutions shipments grew 73% year-over-year, while total overall shipments (including legacy) were 360,000 units, reflecting the strategic mix shift to higher-margin products.

• Management reiterates its full-year 2026 total revenue guidance of $1 billion to $1.1 billion, with no upward or downward revision from prior guidance
• Volume is expected to follow typical seasonal patterns, with Q1 representing the seasonal low point, and a significant volume pickup expected from Q2 onward as new vehicle launches ramp up
• Gross margin and operating profitability are expected to face downward pressure in coming quarters due to ongoing elevated global memory component costs, which have increased over 300% since September 2025. Full-year 2026 profitability at the operating profit and adjusted EBITDA levels will depend on how memory cost dynamics evolve through the year
• Management maintains confidence in its ability to hit full-year targets, expecting tailwinds from new vehicle model launches, continued operational efficiency gains, and strengthening demand for automotive technology as market conditions improve

• Persistent memory component inflation, with DDR costs increasing over 300% since September 2025, creating ongoing margin headwinds that are expected to negatively impact gross margin and operating profitability in coming quarters
• Broad industry headwinds including shifting government automotive policies, delayed vehicle launches, and typical Q1 seasonality that suppresses volume and revenue in the first quarter
• The potential minority stake and IP acquisition of Flyme Auto is still at an exploratory stage, with no certainty of completion or final terms
• Uncertainty around global market conditions and supply chain dynamics that could cause actual results to differ from management's forward-looking guidance

Q: The company reiterated 2026 full-year revenue guidance of $1-1.1 billion. Can management provide volume guidance, and an outlook for margin trends across the rest of the year? / A: Management does not provide specific ASP or detailed volume guidance, but confirms that volume will follow typical seasonal patterns, with Q1 as the seasonal low and a significant pickup in shipments and vehicle launches expected starting in Q2. Management reiterates that gross margin and operating profitability will be negatively impacted by ongoing global memory cost dynamics in coming quarters, and full-year 2026 profitability will depend on how these cost trends evolve. The team will maintain strict cost controls and prioritize R&D on high-impact projects through the year.

Q: Can management share additional details on the regions of operation and product scope for the new May Mobility collaboration? / A: May Mobility is a leading U.S.-based autonomous vehicle and robotaxi developer. Under the agreement, eCarX will develop and deliver thousands of autonomous-enabled vehicles, including a customized central computing platform, full-stack autonomous driving system kit, and complete sensor suite for May Mobility's next-generation Level 4 autonomy system. The partnership validates eCarX's full-stack intelligent driving expertise, marks the company's first entry into the high-potential global robotaxi market, and significantly expands eCarX's total addressable market. Additional details will be shared at May Mobility's analyst event the following day.