ECARX Holdings Inc. Q2 FY2024 earnings call

• Market update: Global car sales mixed but positive, China's automotive sector had mixed sales in H1 2024 with strong EV sales growth. Over 6.9 million vehicles had ECARX technology, with 472,000 added in Q2.
• New design wins: Five new design wins in Q2, primarily for overseas projects, including a well-known European automaker and Geely ecosystem projects.
• Partnerships: Strengthened partnership with Tencent Smart Transportation and partnered with DXC Luxoft to develop in-vehicle capabilities.
• Product launches: Vehicles like Lynk & Co 07, LEVC L380, and Geely Galaxy E5 launched, showcasing ECARX's technology.
• Manufacturing: Fuyang facility started production in April, enhancing vertical integration and cost efficiency.

Total revenue for the quarter was RMB1.3 billion, an increase of 31% year-over-year. Computing hardware goods revenue was RMB944 million, up 41% year-over-year, contributing approximately 14% to total revenue. Software license revenue was RMB57 million, down 50% year-over-year. Service revenue increased 45% year-over-year to RMB257 million, accounting for approximately 9% of service revenue.

• Goal to have overseas sales at least 40% by 2026-2027.
• Plans for global expansion, including serving top global OEM customers and increasing presence in European market.

• Geopolitical risks: Potential bans on Chinese software in overseas markets due to national security concerns, which could impact overseas business.

Q: Expectations for overseas revenue proportion and chip procurement strategy.

A: Goal to have overseas sales at least 40% by 2026-2027, with investments in global R&D and manufacturing. Chip procurement strategy involves leveraging existing partnerships with Qualcomm, AMD, and joint ventures like SiEngine to meet local and global needs.

Q: Progress with FAW cooperation.

A: Cooperation with FAW is proceeding smoothly, focusing on advanced digital cockpit and software OS development to improve competitiveness and user experience, with plans to serve multiple vehicle programs in FAW Group by end of 2024.