Kandi Technologies Group, Inc. Q2 FY2025 earnings call

• Core business adjustments and upgrades: Entered a new phase of refined operations with goals of steady high-quality growth, improving profitability and cash flow management through efficient resource allocation, inventory optimization, and cost control.
• Product sales: Focus on retail channel inventory management led to gross margin of 45.2% in H1 2025, up 13.5 percentage points from 2024; optimized production structure to enhance manufacturing efficiency and delivery reliability.
• Sales channels: Created balanced and strategic distribution layout, reinforced partnerships with major retailers like Lowe's, expanded dealer network with dealer to retail sales mix improving from 129 to 228, and explored direct-to-consumer, e-commerce, and distributor channels.
• New product development: Proactively accelerated design and development of new products, with design schematics finalized and anticipation of launch by mid-next year to provide growth momentum and enhance market competitiveness.
• Emerging business segments: In intelligent equipment, collaborated with Deep robotics on intelligent golf equipment and quadruped robots; in new energy infrastructure, advanced battery swapping technology, became supplier of heavy truck battery swapping station equipment to CATL and secured first order for its 10,000 stations plan.

In the first half of 2025, net revenues were $36.3 million, down 39.3% from $59.8 million in the same period of 2024. Cost of goods sold was $19.9 million, a decrease of 51.3% from $40.9 million in the same period of 2024. Gross profit was $16.4 million compared with $19.0 million in the same period of 2024. Gross margin improved significantly to 45.2% up from 31.7% in 2024, driven by more favorable product mix and regional revenue distribution as well as increased sales of previously impaired inventory. Research and development expenses were $2.5 million, up 48.5% from $1.7 million in the same period of 2024. Selling and marketing expenses were $4.5 million, down 35.8% from $7.0 million in the same period of 2024. General and administrative expenses were $11.3 million, down 22.6% from $14.6 million in the same period of 2024.

The company is confident in its dual engine strategy, balancing stable cash flow businesses with growth incubation businesses. Through disciplined execution and continuous innovation, it will strengthen its position in the off-road vehicle sector while strategically expanding into intelligent equipment and new energy markets, maintaining competitive edge and creating long-term value for shareholders.

The global macroeconomic landscape remains clouded by considerable uncertainty, creating real headwinds for the business.