ECARX (ECX) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 31% year-over-year to RMB 1,425 million, with gross profit at RMB 248 million and gross margin of 17%, driven by strong hardware demand and new vehicle launches.

• Over 7.3 million vehicles globally equipped with company technology by quarter-end, with 442,000 added in Q3, serving 17 OEMs across 26 brands.

• Expanded global footprint with operations in the US, UK, Germany, Sweden, Malaysia, and multiple cities in China, and deepened relationships with OEMs through new design wins and partnerships.

• Continued investment in R&D and operational efficiency to offset margin pressures and support long-term growth.

• Launched innovative products and platforms, including Makalu Computing Platform, Antora 1000, and new vehicle models such as Geely Galaxy E5, Lynk & Co Z10, and Smart #5.

Financial highlights

• Q3 2024 revenue was RMB 1,425 million, up 31% year-over-year; hardware sales rose 61% year-over-year to RMB 1,179.9 million.

• Software license revenue was RMB 84 million, down 39% year-over-year but up 49% sequentially; service revenue was RMB 161 million, down 26% year-over-year.

• Gross profit was RMB 248 million, with gross margin at 17%, down from 23% in Q2 and Q3 2023.

• Net loss for Q3 2024 was RMB 340 million, compared to RMB 283 million in Q3 2023.

• Adjusted EBITDA loss was RMB 232.6 million, up from RMB 180.5 million a year ago.

Outlook and guidance

• Targeting overall gross margin above 20% in 2025, contingent on sales mix and cost optimization.

• Expecting increased contribution from non-Geely business, aiming for nearly 40% by 2026-2027.

• Anticipates break-even in the near term through continued revenue growth, cost control, and global expansion.

• Management expects margin pressure to be temporary, with cost optimization initiatives underway.

• Pipeline remains healthy, with products for over 40 vehicle models under development.