ECARX Holdings Inc. Q1 FY2025 earnings call

• Global vehicle sales fell 5.6% YOY, but China market grew 12.9% YOY. Shipments surged to 684,000 units, with over 8.7 million vehicles on the road with ECARX technology by end of March.
• Achieved significant milestones like successful integration of intelligent car driving and parking capabilities into Antora 1000 Super Brain, and partnership with HERE Technologies. Secured eight new project wins under Geely's new foundation E/E architecture.
• Delivered first digital cockpit sample to Volkswagen Group, highlighting global expansion. Innovation continued with ECARX experience, an advanced generative in-vehicle HMI system.
• Plan to set up global supply chain center and international engineering center in Singapore by end of 2026, with over 100 employees there.

Total revenue for the quarter landed at RMB1.2 billion, an increase of 30% year-over-year. Sales of goods revenue was RMB879 million, up 16% year-over-year. Software license revenue was RMB187 million, surging 148% year-over-year. Service revenue was RMB157 million, up 49% year-over-year. In-house developed platforms Antora Series, Makalu and Venado contributed approximately 39% to the total sales of goods revenue. Gross profit for the quarter was RMB243 million, up 19% year-over-year, translating into a gross margin of 19.8%.

• Confident in capturing opportunities ahead with robust pipeline of new projects, growing suite of innovative solutions, and clear path to profitability.
• Positive outlook for 2025 with a strong start, aiming to continue global expansion and drive towards profitability.

Q: Could you please give us a quick update on Skyland's recent orders and its profitability? And my second question is, has there been any additional pressure for annual cost starting this year? And third question is, have we been involved in the [indiscernible] X3 program? And will X3 become Geely's mainstream autonomous driving solution?

A: Skyland got large orders in Q1 due to China ADAS demand, gross margin is okay. We are competitive in China market with Antora platform and have achieved yearly cost down from OEMs. We are close partners with Geely ADAS roadmap, and ECARX is closely involved with Geely's future plans.

Q: Regarding our SPB, your centralized computing platform. Do you have any new business you can announce with any automakers?

A: Announced partnership with Volkswagen Group, using Antora platform in Brazil and Indian markets. Galaxy E5 already uses SPB platform in Geely's 2.0 architecture.

Q: Regarding the impact of US tariffs, whether it's to our supply to Volvo vehicles or to our chip supply?

A: ECARX doesn't have in-house manufacturing, uses contract manufacturing. We work with partners to find suitable contract manufacturing in regions like Mexico, US, Canada to handle US tariffs.

Q: Given the Chinese macroenvironment and growth in peer sales, how do we view the outlook for partnerships with international OEMs? And could you share updates on our collaboration with Volkswagen and are there any potential impacts from the [indiscernible]? And second question: plan to establish a supply chain and engineering center in Singapore. Could you share more on this and how will it synergize with your existing supply chain?

A: Global automakers are interested in strong partners for intelligent solutions. Volkswagen program will launch in Brazil and India, with no large impact from tariffs. The Singapore supply chain center will serve as a global hub for supply chain activities, synergizing with existing networks by holding IP and servicing global markets from there.

Q: Related to the ADAS trend of integration of driving and cabin into one box. Since ECARX has both, the cockpit and ADAS ability, how can we enjoy the trend in the near future? Maybe do we see any first product in this year or next year? And second question: we are glad to see that the Geely Galaxy demand is quite good, which helps to improve our earnings momentum. How do we see the sustainable demand into the following quarters?

A: Antora platform integrates cabin and ADAS features, with Galaxy E5 already deploying digital connectivity, parking, and gateway features. Front view ADAS feature for Antora is coming soon. Geely Galaxy demand is strong, with sustainable demand expected as the company continues to deliver innovative solutions and maintain strong partnerships.

Q: How many different car models you plan on equipping this year and can you break down how many unique Geely car models you're going to ship into this year and then how many non-Geely? And another one on tariffs. Wondering if that's impacted the customer conversations, specifically with US customers and then from a timing perspective when might we see ECARX as an option for the large US automakers when you guys see that sort of expansion to the US?

A: Launch pipeline is robust with eight wins announced, including Geely and Volkswagen projects. Tariffs don't significantly impact current business as we use contract manufacturing. Engaged with US automakers, expecting to ramp up engagement by end of this year and next year, with revenue from US market expected a few years later.