ECARX Announces Unaudited Financial Results for the Third Quarter of 2026

London, November 4th / PRNewswire / -- ECARX Holdings Inc. (Nasdaq: ECX) ("ECARX" or "the Company") today announced its unaudited financial results for the quarter ended September 30, 2026.

ECARX CEO Shen Ziyu stated: "The third quarter was characterized by our disciplined execution in both our product pipeline and financial performance. We continued to shift towards higher-end Antora ® and Pikes ® solutions, coupled with prudent management of the supply chain and higher memory costs, which are directly supporting revenue growth."

Strategically, we continue to move upstream in the value chain by gaining control of more technology stacks. At the end of the quarter, we completed the acquisition of Flyme's software business, which gives us access to the application layer used by drivers daily and opens the door to new recurring software revenue opportunities. We have also signed a non-binding memorandum of understanding with Arm to jointly develop the next generation of AI computing systems for use in automobiles and other fields. Additionally, we are finalizing a partnership with a leading European luxury car manufacturer to establish a joint cockpit AI innovation laboratory based on Flyme OS, further driving our growth upstream in the value chain.

"Our technology has been verified in over 12 million vehicles, and the same technology stack can now bring AI from the cloud to the edge, covering a wider range of smart devices. By expanding our product portfolio, strengthening our partner ecosystem, and accelerating our penetration in global markets, we are transforming ECARX into a technology partner for even larger markets."

Financial Performance for the Third Quarter of 2026:

In this quarter, ECARX acquired 100% of the equity in Hubei Qiguang Technology Co., Ltd. (“Qiguang”). These entities are under common control. For comparable financial information, the equity method has been adopted to consolidate and restate the assets, liabilities, revenues, expenses, and equity of ECARX and Qiguang. All internal transactions and balances between the two consolidated entities have been offset.

In this quarter, the company discovered errors in the previously released consolidated financial statements that were related to the accounting treatment of certain government grants recognized in 2021 and 2022. After assessment, management believes that these errors are not material to the previously released financial statements. However, if not corrected, they would have a significant impact on the current period's financial statements. Therefore, in order to correct these errors and improve the comparability of the financial information presented, the company has made corrective adjustments to other current liabilities and equity at the beginning of the earliest reported comparative periods.

• Total revenue amounted to 240.8 million US dollars, representing a year-on-year increase of 10%.
• Sales revenue from products amounted to 222.7 million US dollars, representing a year-on-year increase of 23%. The growth is mainly attributed to price adjustments implemented to offset the impact of rising memory costs, as well as an increase in sales volume compared to the third quarter of last year.
• Software licensing revenue amounted to $400,000, a year-on-year decrease of 56%, mainly due to a decline in software licensing sales compared to the third quarter of last year.
• Service revenue amounted to $17.7 million, a year-on-year decrease of 53%. The decline is attributed to the seasonal nature of new vehicle models being launched by partners. Although the number of new models launched reached a peak in the second quarter of 2026, the pace of project initiation significantly slowed down in the third quarter.
• Total revenue and costs amounted to 223.9 million US dollars, a year-on-year increase of 30%, mainly driven by the rise in memory costs related to product sales.
• Gross profit was $16.9 million, a year-on-year decrease of 65%, with a gross margin of 7.0%. In the third quarter, the increase in costs exceeded the extent that current pricing could offset. As a result, it became more difficult to further pass on the rising costs, and the company absorbed a larger portion of these costs internally to support sales growth and maintain its contractual commitments. Therefore, memory costs continued to drag down profitability. In addition, a decline in service revenue also led to a decrease in the gross margin for services. Consequently, the gross margin dropped from 21.9% in the same period last year to 7.0%.
• R&D expenses amounted to $27.5 million, a year-on-year decrease of 12%. This is mainly due to the continuous prioritization of resources, which improved operational efficiency, as well as the synergies brought about by R&D integration and the internal deployment of AI within the business to reduce structural costs.
• Selling, general and administrative expenses, and other net amounts amounted to $25.6 million, representing a year-on-year increase of 11%. This reflects an impairment charge of $6.7 million in the third quarter of 2026 for the convertible bonds previously issued by DreamSmart. Excluding this item, the remaining expenses decreased by $4.2 million year-on-year, a decrease of 18%, mainly driven by the continuous improvement in global operational efficiency and the reduction in equity incentive expenses during this quarter.
• The net loss was $48.6 million, compared to $8.4 million in the same period last year. The change was mainly due to a decline in gross margin, as well as losses on the fair value of equity securities and an increase in financial expenses.
• After adjustment, the loss for EBITDA (not GAAP) was 37.7 million US dollars, while in the same period last year, the loss for EBITDA (not GAAP) after adjustment was 900,000 US dollars. See "Non-GAAP Financial Indicators".
• As of September 30, 2026, the total cash amount was $53.7 million, compared to $165.5 million as of June 30, 2026. During this quarter, the company paid $191.5 million for the acquisition of the Flyme software business. The funding came from cash reserves and $67.8 million in bank financing drawn during this quarter. The remaining changes mainly reflect the operating cash outflows incurred to support the launch of new projects, which were covered by $30.5 million in bank financing.
• Looking to the future, the visibility we have for the remainder of this year gives us more confidence in our strategic path:
• Based on the current backlogged orders and the accelerated progress of our business pipeline, we reaffirm our revenue guidance for the entire year of 2026 to be between $1 billion and $1.1 billion.
• We expect that global memory costs will continue to drag down gross margins and operating profitability in the coming quarters, including the fourth quarter of 2026. However, we have proactively managed this situation, and it has already been reflected in the previous quarters as well as now. We will continue to work with our customers and suppliers to mitigate the impact through price adjustments, improved operational efficiency, and optimization of our product portfolio. We still believe that these pressures are controllable and will continue to focus on protecting the long-term profitability of our business.

Recent Business Development Highlights and Updates:

Expand global footprint and cooperate with vehicle manufacturers

• As of September 30, 2026, over 12 million vehicles equipped with ECARX technology have been on the roads around the world, covering 18 OEM, 28 brands, and 159 markets, with several new cooperation discussions also in progress.
• From January to September 2026, Flyme Auto achieved the deployment of over 1.2 million vehicles, bringing the cumulative deployment volume of Flyme Auto under ECARX to exceed 3.5 million units.
• We are in the process of finalizing a collaboration with a leading European luxury automobile manufacturer to establish a joint AI Innovation Laboratory based on Flyme OS. This laboratory will develop the next generation of intelligent cockpit systems for the manufacturer's vehicles in China.
• Volkswagen Group's projects continue to advance steadily, with engineering efforts, supply chain development, and support for infrastructure construction in Latin America proceeding as planned, in preparation for projects expected to commence in 2027.

Deepen the innovation-driven R&D ecosystem

• On September 30, 2026, the company completed the acquisition of the Flyme software business, expanding its capabilities from hardware to higher-value software ecosystem services. Flyme will operate as an independent software division.
• Tencent Cloud's WorkBuddy AI intelligent work assistant will be integrated into Flyme AIOS, expanding the AI capabilities within the Flyme ecosystem.
• The company has signed a non-binding memorandum of understanding with Arm to jointly develop the AI computing platform for automotive applications. This collaboration is built upon years of partnership with Arm in China, where ECARX has previously collaborated with Arm in China to incubate SiEngine.

Technical Progress and Product Releases

• This quarter, the shipment volume was approximately 721,000 units, of which high-end Antora ® solutions accounted for 30% of the total shipments, which is higher than the 25% from the same period last year.
• The company has launched mass production of 21 new vehicle models across 5 brands, of which 6 are targeted at markets outside of China, such as South Korea.
• This quarter, the company secured orders for 23 vehicle models, further strengthening its business pipeline and long-term revenue momentum.

Details of the teleconference and online live broadcast

ECARX will hold a live webcast of its earnings conference at 8:00 a.m. on Wednesday, November 4, 2026, Eastern Time. To watch the live broadcast, please visit the News and Events section of the ECARX investor relations website, or follow the link: https :// edge.media-server.com / mmc /p/ e4i8peb6 / lan / en

To participate in the performance meeting by phone, participants must register in advance at https :// register-conf.media-server.com / register / BI9ffd14a76c2a4f01aa0a3d8d55eed7b0 to obtain the dial-in information.

Live webcast replays and presentation materials will be published in the Performance and Reports section of the company's investor relations website after the event is over.

About ECARX

ECARX (Nasdaq: ECX) is headquartered in London and is a leading global automotive intelligence company. ECARX provides the intelligent "brains" that drive the next generation of software-defined vehicles and AI define these vehicles. The company offers end-to-end, full-stack solutions that encompass advanced SoC hardware, high-performance central computing platforms, intelligent cockpit technologies, advanced driver assistance systems, cloud connectivity, and physical AI, as well as customized vehicle software and intelligent operating systems.

As vehicle manufacturers transition to a software-first and AI-first vehicle architecture, ECARX helps them simplify integration, reduce system complexity, and optimize long-term cost efficiency. The mature technology of ECARX has been deployed in approximately 12 million vehicles worldwide, and currently, it is collaborating with 18 global vehicle manufacturers and 28 automobile brands to jointly shape the future of intelligent transportation.

ECARX was established in 2017 and went public on NASDAQ in 2022. It operates in 15 major international locations across Europe, the Americas, and Asia, with a global workforce of over 1,400 people.

Forward-looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on management’s beliefs and expectations, as well as current data and assumptions, and appear throughout this document, including statements regarding operating results, financial condition, liquidity, prospects, growth, strategy, and the industry in which the company operates. The use of words such as “expects,” “intends,” “proposes,” “estimates,” “projects,” “believes,” “should,” “potential,” “possible,” “preliminary,” “forecast,” “target,” “plans,” or similar expressions is intended to identify forward-looking statements. Forward-looking statements, including those regarding our views on operating results, financial condition, liquidity, prospects, growth, strategy, future market conditions or economic performance, as well as developments in capital and credit markets and expected future financial performance, and our intentions, beliefs, or current expectations regarding the market in which we operate, do not constitute guarantees of future performance and are subject to various risks and uncertainties. Actual results may differ significantly from these forecasts.

For discussions regarding these and other risks and uncertainties that may lead to significant differences between actual results and those expressed in any forward-looking statements, please refer to the documents submitted by ECARX to the U.S. Securities and Exchange Commission. Except as required by applicable laws, ECARX does not undertake any obligation to update or revise forward-looking statements to reflect subsequent events or circumstances.

Non-GAAP financial indicators

The company uses adjusted EBITDA (not GAAP) when evaluating business performance and making financial and operational decisions. Adjusted EBITDA is defined as net loss, after deducting interest income, interest expenses, income tax expenses, depreciation of fixed assets, amortization of intangible assets, and equity incentive expenses.

The company discloses this non-GAAP financial indicator because management uses it to evaluate the company's performance and to formulate business plans. The company believes that this non-GAAP indicator helps to identify potential trends within the business, which may be distorted by certain expenses that are included in net losses. The company also believes that using this non-GAAP indicator assists investors in assessing its performance.

After adjustment, EBITDA (not GAAP) should not be viewed in isolation, nor should it be interpreted as a substitute for net loss or any other performance indicator, or as a measure of the company's operational performance. Investors are advised to compare the company's historical adjusted EBITDA (not GAAP) with the most directly comparable GAAP net loss indicator. The adjusted EBITDA (not GAAP) presented here may not be comparable to the indicators with the same name listed by other companies. Other companies may use different methods to calculate indicators with the same name, which limits their usefulness for comparison with the company's data. The company recommends that investors and others review its financial information comprehensively and not rely on a single financial indicator.

For more information on non-GAAP financial indicators, please refer to the table at the end of this press release titled "Unaudited GAAP and Non-GAAP Performance Adjustment Table."

Unaudited GAAP and non-GAAP performance adjustment statements

We use the adjusted EBITDA when evaluating business performance and making financial and operational decisions. The adjusted EBITDA is defined as net loss, after deducting interest income, interest expenses, income tax expenses, depreciation of fixed assets, amortization of intangible assets, and equity incentive expenses.

After adjustment, EBITDA should not be viewed in isolation, nor should it be interpreted as a substitute for net loss or any other performance indicator, or as a measure of our operational performance. Investors are advised to compare our historically adjusted EBITDA with the most directly comparable net loss indicated by the GAAP indicator. The adjusted EBITDA presented here may not be comparable to similar indicators listed by other companies. Other companies may use different methods to calculate these indicators, which limits their usefulness for comparison with our data. We recommend that investors and others review our financial information comprehensively and not rely on a single financial indicator.