ECARX (ECX) Q2 2024 earnings summary

Executive summary

• Achieved 31% year-over-year revenue growth to RMB 1,258 million in Q2 2024, with robust expansion in both domestic and international markets and products now in over 6.9 million vehicles across 17 OEMs and 26 brands.

• Secured five new design wins, including a major European automaker and several overseas projects, and expanded partnerships with Tencent Smart Transportation and DXC Luxoft.

• Major launches included Lynk & Co 07, 08, Z10, Geely Galaxy E5, smart #5, and LEVC L380, all featuring advanced computing platforms.

• Global presence spans China, USA, UK, Sweden, Germany, and Malaysia, with strengthened global partnership ecosystem.

• Opened new manufacturing facility in Fuyang, enhancing vertical integration and cost control.

Financial highlights

• Q2 2024 revenue: RMB 1,258 million, up 31% year-over-year; gross profit: RMB 292 million, gross margin 23%.

• Sales of goods revenue rose 41% year-over-year to RMB 944 million, led by Antora series and ADCU sales.

• Service revenue increased 45% year-over-year to RMB 257 million, mainly from new vehicle program launches and overseas TSP business.

• Software license revenue declined 50% year-over-year to RMB 57 million due to lower IP license sales.

• Net loss for Q2 2024 was RMB 306.4 million, compared to RMB 189.9 million in Q2 2023, with adjusted EBITDA loss at RMB 209.5 million.

Outlook and guidance

• Targeting at least 40% of revenue from international OEMs by 2026–2027, with aggressive investment in global R&D and manufacturing.

• Expect continued pricing pressure in hardware, but plan to maintain gross margins around 20% through cost optimization and global expansion.

• Anticipate further growth in premium product sales and service revenue to offset hardware margin challenges.

• Management expresses high confidence in driving significant growth and long-term shareholder value in the second half of 2024 and beyond.