Good day and thank you for standing by. Welcome to the eCarX Q1 at 2026 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Alternatively, you may submit your questions via the webcast. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Mark Hankinson, Head of Investor Relations. Please go ahead.

Thank you, Operator. Good morning and welcome to ECARX's first quarter 2026 earnings conference call. With me today from eCarX are our Founder and Chief Executive Officer, Ziyu Shen, Chief Operating Officer, Peter Serino, and Chief Financial Officer, Dylan Zheng. Following their prepared remarks, they will all be available to answer your questions. Before we start, I would like to refer you to our forward-looking statements at the bottom of our earnings press release which also applies to this call. Further information on specific risk factors that could cause actual results to differ materially can be found in our filings with the SEC. In addition this call will include discussions of certain non-GAAP financial measures. A reconciliation of the non-GAAP financial measures to the GAAP financial measures can also be found at the bottom of our earnings release. With that I'd like to hand over the call to our Founder and Chief Executive Officer, Ziyu Shen. Ziyu, please go ahead. Thank you, Mark.

Hello, everyone, and thank you for joining us today. The first quarter was defined by continued discipline, execution, and continuing momentum in our global strategy. Our vision for ECAR-X remains clear. Push the boundaries of entrepreneurial intelligence globally and lead the industry's transition from feature-centric to intelligence-centric experiences. We are building the high-performance computing platforms or intelligent brands that power software-defined vehicles. We are uniquely positioned us to capitalize on the surging global demand for higher value software and physical AI across the automotive industry. We have made a strong progress on our strategic objectives since the start of 2026, building upon the momentum we gained last year. Throughout the In the first quarter, we executed relentlessly on our core priorities for the year, accelerating our globalization strategy, investing in our R&D roadmap, and optimizing our lean operating strategy to sustain profitability. First, on our global extension, we continue the build out of our global footprint and the government structure, underscored by significant escutche and board appointments. Culturally, the nearly 200 million U.S. dollar in capital we raised later last year and early this year is now being actively deployed. This is fueling the build out of our R&D hub in Germany and our operational infrastructure across South America and in our office in Singapore. Second, the global expansion is being fueled by our commercial execution and continuous investment in our R&D roadmap. We continue to make solid progress, driving further technical innovation and winning new business. A critical component of accelerating this innovation is our broader ecosystem of strategic partnerships. Third, we announced a major milestone in autonomous driving. E-Car X expects to develop and deliver thousands of autonomous-enabled vehicles for May Mobility's next-generation autonomy system. This marks E-Car X's first entry into the robot taxi market, a market with significant global potential. Finally, we are maintaining robust cost discipline, reducing our operating costs to sustain profitability. Our results for the quarter demonstrate the discipline execution driving this next phase of growth, and how we are actively accelerating that transformation to build a truly global business. Our results for the quarter demonstrate this distinct execution driving this next phase of groups. They demonstrate how we are actively accelerating that transformation to build a truly global business and sustain this momentum. While the first quarter is traditionally impacted by seasonality, The broad market also navigated micro-headwinds, including shifting government policies and memory component inflation. However, our strong project pipeline and robust backlog allowed us to largely mitigate the impact of these dynamics. As a result, we deliver the sales of goods revenue of $140 million, a more than 6% decrease year-over-year. This demonstrates the underlying resilience of our core business. Crucially, our disciplined execution translated into meaningful profitability improvements. Overall gross profit was $28 million, driving an expansion improved margin to 21.4%. We also significantly narrowed our operating loss to $13 million, nearly halving the $25 million loss reported in the same period last year. Most notably, we achieved positive adjust EBITDA for the third straight quarter, delivering US$4 million compared to negative US$15 million in the same quarter last year. This robust performance allows us to confidently repeat our four-year 2016 revenue guidance of 1 to 1.1 billion US$. This financial resilience is no accident. It is the direct result of the strategic framework we established later last year. Let me dive a bit deeper into how we are executing against these priorities, starting with our global expansion. We remember focusing on our target of 50% of total revenue from international markets by 2030. To drive the execution of this, we spent the first quarter actively fortifying our corporate governance and global leadership team. As ECARX rapidly scales, it is crucial that we adopt top-tier global governance standards to match our expanding commercial footprint. Last month, we appointed Lona Shark as our new chairperson. This separates the roles of chairperson and CEO to strengthen governance and align global best practices. Lona has extensive experience across automotive technology and finance sectors. This will be invaluable as we scale and accelerate the expansion of our central computing, corporate, and ADA solutions across the Euro, the Americas, and Asia. I'm also pleased to officially welcome our new Chief Financial Officer, Dylan Zheng. Dylan joined us in March to drive global financial discipline from our newly operationalized Singapore office. Mark Hexen, who spoke at the start of this call, joined us as Head of Investor Relationships and Corporate Development and is based alongside myself and Peter in London. Commercially, our global partnerships continue to deepen each vehicle lowering of partner production lines demonstrates the repeatability and scalability of our solutions. This unique ability to scale across diverse brands and markets is perfectly demonstrated by our strategic relationship with Volkswagen Group in Latin America. Peter will speak more about this later. Today, we are excited to announce a major milestone in autonomous driving through a strategic framework agreement with Maine Mobility, a leading U.S.-based autonomous vehicle company. Under agreement, ECR-X is expected to develop and deliver thousands of autonomous-enabled vehicles to Maine Mobility. This will include customized central computing panels, a four-stack autonomous driving system kit, and a complete sensor suit for May Mobility's next-generation autonomy system. This collaboration brings together ECHAR's deep-enforced-stack intelligent driving solution and May Mobility's industry-leading autonomous driving system. It will allow us to leverage the best of both companies' core competence in intelligent hardware and software development. This is exactly the kind of discipline, high-value commercial execution that will drive our continued growth and profitability, position us as a key player in the future of autonomous mobility. This marks ECAR as the first entry into the global tax market, a market with significant global potential. Supporting our global expansion is our robust R&D roadmap. We are continuing to invest in the development of next-generation solutions. This allows us to capture great value across our technology stack and capitalize on opportunities in adjacent sectors like robotics. To accelerate and strengthen our long-term products and technological capabilities, we recently announced a preliminary plan to potentially acquire a minority stake at a certain in IP rights from DreamSmart technology, an affiliate and the developer of the Flyme auto-operating system. This is a highly strategic opportunity for EconX. While our cloud peak cross-domain support stack handles underlying middleware, Flyme Auro acts as the critical application and the interaction layer. Integrating this technology deeper into our solutions unlocks a powerful competitive advantage. This will enable true seamless interoperative probability between the intelligent vehicles, smartphones, and emerging smart devices like smart graphics. These are fully integrated cross-domain ecosystems. It equips automakers with solutions that are easily replaceable across vehicle lineups to differentiate their driving experience in a highly competitive market. We view Fannie Orl as a fundamental non-dimensional strategic piece of our four-stack ecosystem. Capturing this vital application layer above our curve-peak middleware spots of potential investment, even during a period of strict cost discipline, while this potential acquisition remains at an exploratory stage. In with technology, Silicon is a fundamental capability for us. We partner with providers like Qualcomm and SkyEngine to persistly specify the requirements for our Silicon chips to ensure performance. Another example of our Silicon in China before becoming an independent business. During the first quarter, we recognized a $40 million U.S. dollar gain from the banking system. This is not just a one-time financial gain. It benefits our ability to monetize the value of our technology. This transaction allows SignGin to diversify its shareholder base for its next stage, while we remain its largest shareholder and maintain our deep technological integration. It proves we can create inverse value while maintaining our technological edge. This is exactly the kind of displaying the capital allocation and the lean operations that will sustain our profitability and industry leadership. In summary, we entered the 2026 with a clear roadmap, and we are successfully executing against it. We are expanding globally. We are capturing higher value opportunities, and we are optimizing our operations to ensure we can capitalize on the enormous opportunity ahead of us as the automotive industry involves. I will now pass the call over to Peter Savino to discuss our operational progress in more detail.

Thank you, ZEU. Good morning, everyone. As ZEU outlined, we are rapidly accelerating our clear vision for automotive intelligence. Operationally, the first quarter demonstrated our ability to execute on this vision at scale as we continue to drive our global expansion, deepen key partnerships, and innovate new solutions from our R&D roadmap. Our defining competitive advantage is our ability to seamlessly integrate our full-stack hardware and software into a competitive platform, allowing us to execute on complex global programs across diverse vehicle lineups and markets. By delivering highly integrated solutions, we are translating our technological leadership into compounding commercial momentum globally. Demand for our innovative solutions continues to be strong, with over 360,000 units shipped this quarter. While this represents a lower absolute volume compared to the same period last year, it reflects a deliberate and strategic shift towards a high-end product mix. As a reminder, we made the strategic decision in the second quarter last year to actively phase out our lower-margin legacy platform business. While this intensely moderates our shipment volumes, it vastly improves our overall revenue quality. Validating this strategy, shipments of our high-end pikes and entourage solutions were up approximately 73% year-on-year. This brings the cumulative total number of vehicles shipped with ECARX technologies to over 11 million vehicles, up nearly 30% from the same period last year. Today, our solutions power 28 distinct brands across 18 leading OEMs globally. This growing scale demonstrates our reliability and reputation as a trusted partner, which we are capitalizing on to unlock higher value growth opportunities from existing new partnerships globally going forward. Our global expansion is leveraging this momentum and continues to make solid progress during the quarter. Our partnership with Volkswagen Group is progressing smoothly and serves as the perfect example of our ability to strategically execute projects on a global scale and how we are leveraging that to develop future large-scale revenue opportunities across EMEA, the Americas, and other emerging markets. This program utilizes the full flexibility of our portfolio to meet diverse market needs. deploying our high-performance Antora 1000 integrated with our Cloud Peak software stack and Google Automotive Services, alongside our cost-effective Antora 500 for entry-level segments. I am pleased to report that during the first quarter, we successfully moved this comprehensive program into the industrialization phase, keeping us firmly on track ahead of the anticipated launch in 2027. While the first quarter is typically a quiet period for vehicle launches, We began mass production for four new models, all of which are using our next-generation Pikes and Antora Series solutions. Combined with our Cloud Peak cross-demain software stack and next-generation architecture that is compatible with Google Automotive Services and Find Me Auto, they will power next-generation AI cost-based experiences and enable the delivery of in-vehicle AI agents at scale, offering a truly unique, intelligent-centric experience. Looking at business development, despite a seasonally quiet quarter in 2.1, our pipeline continues to convert. We recently secured a new contract win from a leading Chinese automaker outside the ecosystem. This program, expected to begin production in 2026, represents another key step in diversifying our revenue base and actively validates the standalone technological superiority of our solutions in the open market. Innovation remains the bedrock of our long-term growth and our strongest competitive moat. We are actively focusing on our R&D roadmap to deliver highly scalable centralized automotive intelligence architectures that global automakers urgently need. A prime example of this is the debut of our Zenith computing platform at CES earlier this year. Powered by the upcoming Snapdragon Elite Automotive platform, Zenith represents a breakthrough in integrated single-box cabin-to-ADAS systems. By seamlessly running mixed-criticality workloads, such as powering immersive 5K digital conference alongside level 2++ ADAS on a single SOC, we are significantly reducing the architectural complexity and cost pressures facing our global partners. Zenith not only underscores our deep, long-standing capability to commercialize industry-leave-viewed technologies at scale, but also provides a highly modular, upgradable foundation for software-defined vehicles of the future. With Zena firmly on track for mass production in 2027, we are ensuring we remain at the absolute forefront of the intelligence-centric revolution. In closing, our operational execution in the first quarter provides a resilient and highly scalable foundation for the year ahead. We have a growing portfolio of diverse and replicable solutions and a rapidly advancing global footprint and a disciplined operational strategy to continue to capture growth opportunities and delivering long-term value to our shareholders. With that, I will turn the call over to our new CFO, Dylan Zhang, to review our financial performance. Welcome to your first E-CarX earning call, Dylan. The floor is yours.

Thank you, Peter, and hello, everyone. The first quarter of 2026, while reasonably challenging, clearly highlights the resilience of our business model and discipline the execution in navigating complex market conditions. Despite facing significant industry headwinds, we made meaningful progress in optimizing our cost structure and improving our operational efficiency, which is a clear indication of our strategic focus on building a sustainable foundation for long-term profitable growth. On the top line, our sales of goods revenue in Q1 was $114 million, a modest 6% decrease year over year. This performance reflects three main drivers. First, we navigated and anticipated a challenging market environment, characterized by policy changes and delayed vehicle launches across the broader automotive sector during Q1. Second, as Peter noted earlier, our deliberative strategic decision in Q2 last year was to actively face out our lower margin. Legacy platform business created a high base effect when compared to Q1 2025. While this intentionally impacted our top line, it vastly improves our revenue quality and mix, as is seen by the growth in shipments of our newest Antoras and Pykes solutions this quarter. Third, we successfully balanced significantly higher memory costs we experienced in this quarter, which structurally supported our top line revenue. Turning to software, revenue was $2 million this quarter. This is structurally consistent with the normalized run rates we established in quarters 2 through 4 last year of around $1 to $2 million per quarter. For context, the $26 million reported in Q1 last year reflected a specific one-time software license authorization contract recognized in this quarter. Service revenue was $60 million down from $21 million in Q1 last year. Services revenue primarily reflects the timing of the design and development contract deliveries and booking schedules, and as such, it generally tracks the vehicle launch cycles in Q1, but which we fully expect to accelerate it in subsequent quarters. Now, turning to our profitability metrics, despite the revenue headwinds, we demonstrated a strong operational discipline and cost management throughout the quarter. Gross profit reached $28 million, with gross margin expanding to 21.4%. This margin improvement achieved despite significant DDR cost pressures that increased by over 300% since September 2025. Directly demonstrates our ability to manage supply chains in challenges effectively. Crucially, this margin resilience was supported by price adjustment and product mix optimization, which more than partially offset the margin headwinds caused by the one-time software license authorization contract recognized in Q1 2025. Our need, operating a strategy delivered substantial efficiency gains during the quarter. Operating expenses decreased by 29% year-over-year to $41 million. Research and development expenses were reduced by 32% to $24 million, driven by continuous the resource prioritization that enhance operational efficiency and synergies from R&D integrations and the internal deployments of AI across our business to drive innovation while reducing structural costs. Selling generals and administrative expenses decreased by 24% to $18 million, primarily driven by the continued improvement in global operating efficiencies and lower share the base compensation expenses incurred during the quarter. Our operational performance demonstrates resilience despite seasonality and challenging overall market environments. Our operating loss came out at $13 million for the quarter, a significant improvement from the $25 million loss reported in Q1 2025. Most notably, adjusted EBITDA was positive for the third consecutive quarter, coming in at $4 million compared to negative $15 million in the same quarter last year. This represents a complete structure turnaround from early 2025, and it was driven by our focus on cost discipline that was complemented by the $14 million partial monetization of our holdings in sign engine, which you spoke about earlier. Looking ahead, our visibility into the reminder of the year gives us the confidence around our strategic trajectory. Based on our current backlog and accelerating commercial pipeline, we are reiterating our full-year 2026 guidance of $1 billion to $1.1 billion in total revenue. With respect to profitability, our margin profiles will naturally be influenced by the ongoing dynamics and uncertainty around global memory costs, as well as the cadence of our strategic investments. We do expect that in the coming quarters, gross margin and operating profitability will be negatively impacted by memory cost dynamics. In summary, while Q1 represents a seasonally slower period for the industry, we are highly encouraged by the underlying strength of our business model and the progress we have made operationally. For the remainder of the 2026, we expect to benefit from the launch of new vehicles models in the quarters ahead, continued operational efficiency gains from our lean operating strategy and discipline the cost management, strengthening demand drivers for automotive technology as the market environment improves. Most importantly, we maintain our full confidence in the resilience of our business model and our ability to navigate market cycles effectively. Our focus remains on delivering sustainable growth and creating long-term value for our shareholders. That concludes our remarks today. I would now like to hand the call back to the operator to begin a Q&A session.

Thank you. If you would like to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced and to withdraw your question please press star one and one again or if you wish to ask a question by the webcast please type it into the box and click submit please stand by while we compile the Q&A roster we will now take our first question today this is from Wei Huang from Deutsche Bank please go ahead hi thanks for taking my question this is

way from the bank. I have two questions. So the first, given regarding guidance, so you told us that you expect 2006 to book one to 1.1 billion in revenue. Can you give us volume guidance as well? And regarding margin, I know you mentioned that it's going to be highly dependent on memory passing throughout the year. Can you give us some guidance on how you would trend in the following in quarters and for the whole year. And the second question is, can you maybe give us more details in the main basic collaboration regarding, for example, which regions visual taxes will operate in and which platform will supply?

Hi, thanks. This is Dylan. Well, you have heard the clause that we are reiterating our previous guidance around the revenue, which we expect to be in the 1 to 1 billion range as previously, you know, guidance. So we don't generally provide any specific ASP guidance, but we do expect volume turns that the year will progress as it is typical for our markets, with the Q1 representing the seasonal low points or volumes, and we do expect significant pickup from Q2, both in terms of the vehicle launches and the shipments. And we, in terms of the revenue, we're also reiterating our previous, the revenue that we mentioned, but in terms of the probability, Q1 was a strong performance in the profit, the probability terms. With our, with us being able to grow the gross margin and deliver our third profitable quarters at the EBITDA level, And overall, we do expect that our margin profiles will influence by ongoing market dynamics and uncertainty around the global memory cost, as well as the cadence of our strategic investments. So we do expect that in the coming quarters, the gross margin and operating probabilities will negatively impact by memory cost dynamics. And probability for 2026 at the operating profits and EBITDA levels will be – depends on how this dynamics plays out in the coming quarters. So we remain focused on the cost controls and focusing our R&Ds on the highest impacts projects. And we will remain focused on the – for this during 2026. Thank you. Anyway, this is Peter Sueno.

I'll answer your question on the main mobility topic. So thanks for the question. Overall, we are extremely excited about this strategic partnership. May is a leading U.S.-based autonomous vehicle and robotactics company. And under the agreement, we're a central computing platform. We see this as being...

Thank you very much.

If you would like to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. And to withdraw your question, you can press star 1 and 1 again. Alternatively, please submit your questions via the webcast by typing it into the box and clicking Submit. There are no further questions at this time. In that case, I will hand the conference back to Mark Hankinson for closing comments.

Thanks very much. And thank you, everyone, for your attendance and attention today and for your continued interest in ECARX. Please do reach out to me, Mark Hankinson, via email. if you have questions or if you would like to meet with management over the coming weeks. We are scheduled to attend a number of investor conferences in the coming months across Europe and the US. We would, of course, be very happy to meet with you at these events, so please do contact us if you'd like to schedule a meeting. Peter mentioned that he will be attending tomorrow the May Mobility Analyst Day in Arlington, Texas. With that, we will conclude the call. Thank you.

Thank you. This concludes today's conference. Thank you for participating, and you may now disconnect. Speakers, please stand by.