ECARX Holdings Inc. Q4 FY2024 earnings call

• 2024 was a remarkable year with revenue up 4% QOQ and 18% YOY, EBITDA breakeven in Q4, and total shipments reaching a record high of 2 million, up 33% YOY.
• Secured a milestone project win with Volkswagen Group, expanding global customer base to 18 automakers across 28 brands.
• New vehicles launched include Geely Galaxy EX5 (overseas version of Galaxy E5) and Hongqi Tiangong 05, with the latter deploying an AI-driven intelligent cockpit.
• Cloudpeak hypervisor received ISO 26262 ASIL-D certification, and AutoGPT in-vehicle AI large language model application was showcased at events like CES.
• Fuyang smart facility production ramped up, with over 60,000 Antora units produced in December 2024.

Total revenue for the quarter was RMB1.9 billion, up 4% YOY and 36% QOQ. Sales of goods revenue was RMB1.5 billion, up 16% YOY, with Antora series and Makalu accounting for approximately 29% of sales of goods revenue. Software license revenue was RMB90 million, down 3% YOY but up 7% QOQ. Service revenue was RMB326 million, down 31% YOY but up 102% QOQ. Full year 2024 total revenue was RMB5.6 billion, up 18% YOY; gross profit was RMB1.2 billion, down 9% YOY with a gross margin of 20.8%.

• Targeting positive EBITDA for full year 2025.
• USD 20 million share repurchase program announced in December 2024.
• Focus on improving operating expenses and product costs through optimization of procurement, supply chain, and manufacturing strategy.
• Aim to further penetrate Geely and its ecosystem and grow global automaker customer base.

• Geopolitical uncertainties that could impact business operations and expansion.
• Pricing pressure on hardware products due to industry-wide competition, which may challenge mid-term margins.
• Intense market competition requiring continuous innovation to stand out.

Q: Could you share the company’s global production capacity layout and how you expect to pace the implementation of global orders in the coming years?

A: Peter Cirino mentioned ramping up Fuyang facility in China and using EMS/contract manufacturing partners for global expansion, leveraging engineering capabilities to serve global audience.

Q: What’s your current plan for ADAS or AD products, which clients are you working with? And where do you see growth opportunities in your collaboration with Geely?

A: Ziyu Shen stated Skyline Pro ADAS product is in use with Lynk & Co models, working on AD1000 SoC with FAW, and ADAS portfolio to be key for growth, with Antora platform continuing to deploy across Geely models.

Q: Can the management share some color or guidance for revenue, gross margin, and also the breakeven point of 2025?

A: Phil Zhou said focus on breakeven in 2025, expecting top-line growth with volume scaling, operational efficiency improvement, and cost optimization to achieve breakeven; gross margin recovery in Q4 2024 reflects portfolio selling and cost-down efforts, with similar strategy continuing in 2025.

Q: Could you please provide a revenue breakdown by clients for ‘24, and maybe share your outlook for your current mix for the next 5 years to 10 years?

A: Peter Cirino said ~80% of 2024 revenue came from Geely and Geely ecosystem, 20% from non-Geely; outlook is to diversify, with significant revenue from FAW in 2025 and Volkswagen in later years, aiming for 50% GD revenue by 2027-2028.

Q: Can you maybe give us the Geely’s share of your total revenue in 2024?

A: Phil Zhou said ~80% of 2024 revenue came from Geely and Geely ecosystem.