Yahoo Finance

Peter Cirino

Thank you, Ziyu, and good day to, everyone. I am pleased to report that we delivered another strong quarter of operational execution and continued global expansion, building on momentum established in 2024. Our strategic initiatives continue to translate into robust growth, deeper customer relationships, and our rapidly expanding footprint, both in China and international markets.
In the first quarter, we shipped 684,000 units. We now serve 18 OEMs across 28 brands globally, a testament to our growing scale and the trust global automakers place on us. A key highlight this quarter was the successful delivery of our first digital cockpit sample to the Volkswagen Group.
We achieved this milestone within weeks, demonstrating our ability to deliver high-quality, customized solutions with speed and precision. This project is a significant step in our global expansion, as it marks the first time our Antora 1000 computing platform and Cloudpeak software architecture will power vehicles in the Brazilian and Indian markets, highlighting our ability to customize solutions for both Chinese and international markets.
We also secured eight new project wins from Geely for their next-generation models under their new foundational E/E architecture. Six of these will utilize our Venado computing platform, while the two remaining will be built on the Antora series. These wins further deepen our partnership with Geely and reinforce our position as a core technology provider for their future roadmap.
Our technology continues to power some of the most exciting new launches in the market. During the quarter, the Galaxy E8 launched with our Skyland Pro ADAS solution, integrated into the core of Geely's unified intelligent driving system, G-Pilot.
The Galaxy Xingyao 8 PHEV sedan was also recently launched and is the first Galaxy to integrate our full stack solution, including the Antora 1000, Skyland Pro, and copies, delivering a seamless intelligent cockpit and driving experience that test the new benchmark for luxury safety and user's ventured design.
Our solutions are powering premium FAW models, such as the Hongqi Tiangong 05 and 06, both equipped with tailor-made solutions that feature Antora 1000 Pro platform, customized Hongqi FAW OS built on Cloudpeak framework, and ECARX AutoGPT to be launched soon through OTA.
An ADAS solution is also currently in development for five additional Hongqi vehicles with start-up production anticipated for the third quarter. We expect similar solutions to be replicated and scaled across future Hongqi models, providing a cost-effective streamlined solution that aligns seamlessly with the evolving E/E architecture.
These launches highlight the flexibility and scalability of our product portfolio, which offers global automakers' solutions that can be deployed across the entire vehicle spectrum from entry-level to premium models for both cockpit and ADAS applications. Our product portfolio has evolved to align with these flexible needs, with our intelligent cockpit solutions now focusing on our flagship Antora family, ranging from the single-chip Antora 1000 to the latest and most cutting-edge and Antora SPB version.
We also maintain a significant volume of Qualcomm-based solutions, spanning from the basic 8155 to the 8295 platform with the [A3] series plan for future deployment design for a centralized EE/ architecture.
For intelligent driving product lines, we successfully mass-produced our Skyland Pro solutions while maintaining the flexibility to shift to more advanced solutions by leveraging NVIDIA platforms when customer requirements man higher performance. This flexible approach ensures we can serve diverse market needs efficiently and effectively.
The Volkswagen Group project was monumental for us in this regard, generating significant interest internationally for our flexible and scalable solutions regardless of market. We are currently in discussions with multiple global automakers and have built a robust pipeline of our fuse, as new business opportunities continue to come in from both China and the global market. This momentum is a direct result of our ability to deliver high-quality, cost-effective solutions at speed, and our proven track record of successful global deployments.
Innovation remains at the core of our strategy. During the quarter, we achieved a major milestone with the integration of intelligent cockpit driving and parking capabilities into the Antora 1000 SPB. This solution has already passed road testing on the Galaxy E5, combined ADAS cockpit and parking functionalities into a single cost-effective platform. Powered by the seven nanometer SE 1000 SoC, the platform delivers high performance computing and AI capabilities, enabling automakers to accelerate the deployment of next-generation vehicles with enhanced safety and an improved user experience.
We also recently introduced the ECARXperience, our advanced generative in-vehicle HMI system, powered by our proprietary AutoGPT AI large model application. ECARXperience transforms the driving experience with a dynamic, real-time interface that adapts to user needs, delivering smarter, safer, and more personalized interactions. To build up this momentum, we just showcased a demo of our cloud integrated AutoGPT on the sidelines of the Shanghai Auto Show, further underscoring our leadership in AI-driven vehicle intelligence.
A week ago, we announced a partnership with HERE Technologies to co-develop the next-generation AI-powered in-vehicle navigation system for global automakers. By integrating the HERE SDK and compliant global location data, this solution enables global automakers to significantly shorten development cycles and time-to-market for their vehicles, while ensuring seamless compliance with international data regulations. Continued innovation strengthens our growing intellectual property portfolio, which has expanded to 705 registered patents and 778 patent pending applications globally as of March 31, 2025.
As I have mentioned before, to support our global ambitions, we are building to closed-loop systems, one for China and the other for the overseas market, each spanning intellectual property, R&D procurement, manufacturing and delivery. We're developing plans to set up a global supply chain center and international engineering center in Singapore, which will help us navigate the geopolitical landscape and better serve our international customers.
We plan on having more than 100 employees there by the end of 2026. This will be directly supported by our Malaysian presence, which serves as our Southeast Asia product compliance and adaptation center, further strengthening our ability to localize and scale solutions for global markets.
In summary, the first quarter of 2025 was marked by strong shipment growth, major project wins, successful product launches, and significant innovation milestones. Our expanding global footprint, robust pipeline, and relentless focus on operational excellence position us well to capture the opportunities ahead.
We remain confident in our ability to deliver sustainable growth and value for our global customer base. As we continue to execute on our strategy to drive the industry's transition to software defined intelligent vehicles.
With that, I will now turn the call over to Phil, who will review our financial results.

Phil Zhou

Thank you, Peter, and hello, everyone. We started the year strongly. The momentum we built during 2024 has continued to accelerate as we progress into the first quarter of 2025.
Total revenue for the full quarter landed at RMB1.2 billion, an increase of 30% year-over-year. Sales of goods revenue was RMB879 million, up 16% year-over-year as customer demand continued to grow for both computing platform products and SoC core modules.
In Q1, our in-house developer platform and Antora series, [makaru], and Venado contributed approximately 39% to the total sales of goods revenue compared to 20% for the same period last year. Please reinforce our in-house development strategy.
Software license revenue came in at one to RMB187 million, surging 148% year-over-year, supported by an increase in operating software license demand and a one-time software license authorization contract. Service revenue was RMB157 million, up 49% year-over-year, primarily impacted by the design and development contracts delivery and the booking schedule, as well as overseas cloud and connectivity services business growth.
Gross profit for the quarter was RMB243 million, up 19% year-over-year, translating into a gross margin of 19.8%. Total cost of revenue increased 34% year-over-year, mainly driven by increasing sales volume of automotive for computing platform products as well as SoC core modules and a software license revenue growth.
Operating expenses during the quarter decreased 9% year-over-year, supported by continued improvement in global operating efficiencies and the synergies achieved, that's R&D, resources, reallocation, and the integration.
Adjusted EBITDA loss for the quarter was RMB105 million, a significant improvement compared to a loss of RMB224 million during the same period last year, which primarily driven by the increase in gross profit supported by an increase in software license revenue and subscriber growth. The reduction in total operating expenses, as well as the decrease in equity investment loss during the quarter compared with the same period last year. Loss per share was RMB0.57 for the quarter compared to RMB0.85 for the same period last year.
Moving on to our balance sheet. As of the end of the quarter, we had RMB933 million of cash and restricted cash. Together with the capital raise completed recently, we will have to allocate the resources to accelerate the global expansion and the key initiatives along [matt], while we continue to improve our working capital and the profitability enhancement.
In summary, our first quarter financial performance reflects the effectiveness of our portfolio management, disciplined cost and expense controls, and the exclusion of our operational strategy. Looking forward, we will remain focused on expanding our customer base, improving our cost structure, and driving operational efficiency to improve our financial performance and the sustainability of our business in the long run.
That concludes our remarks today. I would now like to hand the call back to the operator to begin the Q&A session.

Question and Answer Session

Operator

(Operator Instructions) Xue Deng, CICC.

Xue Deng

Hi.
Can you hear me?
Yes.
So we can't hear you as I think, main area along as it is many of them from Scientific Outotec.
And thanks for sharing our insights.
And I have three more questions for you at the first one.
Could you please give us a quick update on Sky And then switching routing and its profitability?
And then my second question is, has there been any additional pressure for annual cost on starting this year?
And third question is how we've been involved in that, Tammy, how hand iX three program and will add three to come to this means between autonomous driving floater solution of all my questions.

Ziyu Shen

Okay, good.
Did you do speaking?
Okay.
Thank you for questions.
So the first one and yes, so I got on a got on the order quite good in Q1 because of, you know, the China market all using a DOS, yellow arrow.
So also the gross margin perspective, I think we are we are getting very fair market gross margin.

Xue Deng

Got it.
Okay.

Ziyu Shen

And also, we have called we got to continue to keep the goals of Thailand part along our UGD. gravity and the oil industry as well.
Also you stayed, although you are seeing we announced the partnership with a video slot plan with vigor.
And I would believe that we'll be at all volatile are very soon in terms of the pressure of the pricing on.
I believe we are still very competent in China market because of law and to our Prime Foam and we are very robust DeParle.
So we already achieved the year yearly cost data from OEM customer, and we are keeping working very closely this year to try to do the better before you truck.
Yes.
And then last one so on I cannot remember what is x three, whatever, but I want to say we are very cold partner with GD eight, our roadmap also, you understand saw a lot of the key call at the Company are buying gene.
Just now on the 81 fellow associates at right now, we are very important Panvel as well as and or are we will go investment.
And also we were very close with GDS well in the per unit in near future.
I have a question and answer from coil questions here of octane all quite kept.

Xue Deng

Thank you and thank you, Al.
one moment for our next question.

Operator

Bin Wang, Deutsche Bank.

Bin Wang

Hello can handle at all.
Hi.
Thanks for taking my questions.
two questions.
So my first question is regarding our US TV Essentials computing platform.
Do you have any new business which we can announce within automakers?

Ziyu Shen

Yes, I'll call.
So as you know, we announced the partnership with was above the growth also.
Actually, we used to try and hold up tempo Adacel, Berendsen, I trade at PV panels developing.
So that's very cost-competitive.
Welcome big and very strong competition in global market.
Yes.
Also in China, are you already seeing good performance from GDGACEFI. and ongoing tax, our favorite guys product line from J.D.
I think that's already being very important hero products and the hero yellow part of dirt that competition for G. the cutbacks or a.
Yes.

Bin Wang

So a percentage of a General Electric Power Line will also at some point argue some SCIT products.

Ziyu Shen

Yes.

Bin Wang

So aggregates in fire already already ESTV. patentable already including the gateway parking?
And did you cobble them together already?

Ziyu Shen

Fda 3.0 architecture.

Bin Wang

Understood.
And my second question is, can you maybe comment a bit on the impact of U.S. tariffs, whether it's to our supply to Volvo vehicles or to our chip supply?

Ziyu Shen

Okay.
So you had tire free trial.
Orange are in very significant for the industry.
But from a client point of view, you know, we do we have in-house manufactured.
So we always contract manufacturing, always part of our global our database.
So that's why like global comp worldwide sale also, we are very closely working together to find the right partner.
We can very easily lending.
Our Mexico, U.S. or Canada, you know, die area or region from our contract manufacturing.

Bin Wang

Thank you.
I think it adversely impact us one on.

Operator

Thank you.
one of them are from our next question.
Our next question comes from Catherine Sun with BOC.
Either your line is open.

Yes, Paul.
Neville core handle.
Yes, I hear you.
Yes.
Thank you for taking my question.
Some of the question about are also operation from the first quarter of 11 or 12 a macro level on a couple more on pure sales Holcomb wallboard outflow promotion, our international partners who share our of our P&L from the sale was slicing and there are no substantial.
How much was flat on my side as of now, are you guys mentioned you plan to establish approach or overall content into Singapore Air Show more on both how it can work out or exit also of wet process?

Ziyu Shen

Okay.
Thank you for the question.
First of all, as we look at the market, we see a lot of interest from the global automakers.
We had a number of very strong meetings around the Shanghai Auto Show as they visited China.
And so many of the latest trends, we continue to see that the China market in terms of feature set really leading the industry in the intelligent cockpit and intelligent driving areas where we where we are also engaged in that leading market and that the global automakers are definitely looking for our strong partners that can bring great technology to them.
On a global scale.
Specifically, you asked about the Volkswagen program.
As we mentioned in our in our press release where we announced that program, that program will first launched in the Brazil market and eventually translate into the Indian market, we hope to expand to additional markets as well into the future.
But those are the two largest markets and we don't see a large impact from tariffs on those two supply chain structures.
As you mentioned, we use a contract manufacturing, respectively, set up a great supply chains that are able to deliver to those two reasons.
Could you repeat your second question again, you got broke up as you were a as you were going to that question, I want to make sure to answer all elements of it.

Okay, sure.
My question is, As August mentioned, abolition of cultural overall exposure in Singapore.
So could you elaborate for us, however, hold us accountable for its first full support of all?

Ziyu Shen

Thank you.
And certainly.
So as part of our strategy in throughout this year to serve the global market, we're establishing our global supply chain center out of Singapore.
And as I mentioned in my remarks, between Singapore and Malaysia, we're building a deep engineering team that helped drive our global technology and fundamentally hold all of our IP for the international market.
So that center will add to our existing footprint, give us a wonderful place to drive all of our supply chain activities from that can service the entire world from that location.
And then it's very important to our long-term ability to serve the dollar markets with our technology stack, as will move and maintain our software IP from that location, which allows us to effectively service both Europe and North America from that site with the capable engineering staff.
So we're quite excited, as I said, that side of this year and continue to grow our capabilities there.
Sir.

Thank you.
That's very clear.
Thank you, Warren.
So we've gotten very good question.
one moment for that question.

Operator

Our next question comes from Sachin with SPSPTBI.
Your line is open.

Okay.
Thank you.
Here you can access management has assessed only send that from SD. international on.
I've got two questions here.
First was the question is related to see industrial of integration of driving on heading into one box since EX. has both the corporate and aid us ability.
How can we enjoy a change in trend in the near future, maybe in the CNY. our first first product in this year or next year is a nice first a question.
And my second question is that we are glad to see that that Geely Galaxy amount is quite good, which helps to improve our earnings momentum.
How do we see as sustainable amount into into the following quarters as these are my two questions.

Ziyu Shen

Okay.
The first question and thank you, David speaking.
So the first question I would like to share with you.
So our and Tor op tempo, that's a very classic planful for inhibition of the cabins, March and your core eight U.S. feature to gather type of sale because our USD it does the prosthetic I engine, including eight tough into eight AI. processing side.
So that's why we are already all for these painful to the market.
And many customers are very interested in are also already selected Pavel for the major or they are part of the CapEx comps station.
So point, I would like GACEY. for your question.
So we are deployed a digital copy to you, Peter and also parking meter and their gateway feature to be what that's all right?
So although we are trying to promote the fund, will aid us feature arguing and Toro and the forecast the various, if that's the client can show you how do I get paid at the beginning.
So although we offer and total one Solium and bone to Volkswagen Group already, we announced these are at February already.
So that's why I believe that's also very important.
Pam4 RG go the global market as well.
Yes, there are no further questions at the first answer to your point.
And Tony, maybe I'd add to the use comments.
I mean, we as you know, the Shanghai Auto Show is in progress.
And we had a lot of large number of meetings with many leading local automakers in China that are both looking to serve the market and expire and internationally as well as many of our global partners.
And probably every one of those meetings we talked about that single box solution and our capabilities in that space.
And in many of them, we showed off our prototype up gas E. five, where we have the level two functions deployed on that vehicle and operating.
So we can take automakers on test drives and show how well that system runs and can navigate the streets of Shanghai.
So it's a it's a bright future for us in that space.
And if you both very good about our technology and our capabilities.

Okay, perfect.
Thank you.
Strength.

Operator

Derek Soderberg, Cantor Fitzgerald.
Your line is open.

Derek Soderberg

Yes.
Hey, guys.
Thanks for taking the questions.
Are just taking a step back.
I might have missed the curious how many different car models you plan on equipping this year?
And can you break down how many unique gearing car models are going to ship into this year?
And then how many non-GE on can you update us on that?
And then as my follow-up question, Justin, another one on tariffs.
Wondering if that impacted the customer conversations specifically with U.S. customers?
And then from a timing perspective of what might be what might we see e-commerce as an option for the large US automakers when you guys see that sort of expansion to the US plants?
Yes, there are we doing well today?

Ziyu Shen

Glad to have your question.
Yes, I think we didn't completely announced in our view for the whole year, but I would definitely say our launch pipeline is very robust.
We certainly announced I think it was about eight wins earnings announcement and went through with the JV family groups with additional vehicles on she Of course, we talked about the win with BW that that will be a launch a few years from now is in the international development pipeline that will come out this year.
But we look across our our pipeline of vehicles this year.
Our engineering team is very busy across a broad set of port of portfolio of projects that will drive robust, a lot more capability this year for sure, as we look at your second question was around tariffs.
So as you look at it and tariffs with the portfolio of our business today, we certainly don't see a significant impact in many of the tariff regime, especially those now coming out of US, we have a flexible model in that we engage with contract manufacturers.
So as we continue to have a dialogue with some of the North American OEMs, I think we'll make sure we adapt the final supply chains that support how these tariff structures will evolve over time.
Here.
And then lastly, looking at are up and our loss at our business development pipelines were engaged already with a few opportunities in the U.S. market.
I think you'll probably see us ramp that up as we get to the back end of this year and into next year in terms of engaging with the with those automakers.
So that'll that'll type we expect that would translate into with into a revenue of years later.
We're quite engaged with the European automakers right now.
We've got a very strong pipeline there.
And then once we have, I think, continued to digest those opportunities will pivot to the U.S. market.
And we see a lot of opportunity there space as well.

Derek Soderberg

That's helpful.
Thanks.

Operator

And I'm not showing any further questions at this time.
I'd like to turn the call back over to Dick Rx management for any closing remarks.

Ziyu Shen

Yes.
Thank you, our first of all, I just wanted to say thank you, everyone, for joining the call and the great questions.
As again, as we said in our prepared remarks, because we look at our first quarter results, we had a very strong shipments with over 600,000 units shipped in the quarter, and we continue to see that number of units grow quarter by quarter.
We had major product wins with the JV family with additional makers in China continue to diversify our revenue stream there as well as your big milestones in the US in the global local marketplace.
And we continue to expect that our progress there will accelerate.
And then we had a very solid financial performance, as you see in our first quarter results with strong revenue growth as well as a market growth.
And all these are really supporting our long-term strategy and the ability to continue to develop Rx into a significant global technology provider to the automotive space.
So thank you, everyone.

Operator

Ladies and gentlemen, this does conclude today's presentation.
You may now disconnect and have a wonderful day.