Q2 FY2026
Filed Aug 11, 2026ECARX Announces Second Quarter 2026 Unaudited Financial Results
Revenue grew 45% year-over-year, gross margin increased from 10.8% to 19.8%, net loss narrowed to US$12.0 million, and adjusted EBITDA turned positive at US$0.5 million. The company reiterated full-year revenue guidance, while warning that memory costs are expected to negatively affect gross margin and operating profitability in coming quarters.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | US$225.2 million | – | 45% |
| Sales of goods revenueGAAP | US$196.4 million | – | 50% |
| Software license revenueGAAP | US$0.7 million | – | (42%) |
| Service revenueGAAP | US$28.1 million | – | 21% |
| Total cost of revenueGAAP | US$180.7 million | – | 30% |
| Gross profitGAAP | US$44.5 million | – | 165% |
| Gross marginGAAP | 19.8% | – | – |
| Research and development expensesGAAP | US$29.1 million | – | (14%) |
| Selling, general and administrative expenses and others, netGAAP | US$21.6 million | – | (8%) |
| Total operating expensesGAAP | US$50.7 million | – | – |
| Loss from operationGAAP | US$6.2 million | – | – |
| Interest incomeGAAP | US$1.3 million | – | – |
| Interest expenseGAAP | US$8.3 million | – | – |
| Others, netGAAP | US$1.1 million | – | – |
| Loss before income taxesGAAP | US$12.1 million | – | – |
| Income tax expenseGAAP | US$0.1 million | – | – |
| Net lossGAAP | US$12.0 million | – | – |
| Net loss attributable to ECARX Holdings Inc. ordinary shareholdersGAAP | US$12.2 million | – | – |
| Basic loss per share, ordinary sharesGAAP | (0.03) per ordinary share | – | – |
| Diluted loss per share, ordinary sharesGAAP | (0.03) per ordinary share | – | – |
| Adjusted EBITDAnon-GAAP | US$0.5 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Sales of goodsGrowing demand outside China, a shift in product mix toward a higher proportion of automotive computing platform products, and a pricing adjustment implemented to offset the impact of elevated memory costs. | US$196.4 million | – | 50% |
| Software licenseA decrease of sales volume for the software license compared to the second quarter last year. | US$0.7 million | – | (42%) |
| ServiceA substantial increase in design and development contract deliveries, driven by a heightened volume of new model launches in the second quarter of 2026, most notably within the China market. | US$28.1 million | – | 21% |
full-year 2026 outlook
- RevenueUS$1.0-US$1.1 billion in total revenue
- NoteWe do expect that in the coming quarters, gross margin and operating profitability will be negatively impacted by memory cost dynamics.
What drove it
- High-end Antora® and Pikes® solutions accounted for 42% of shipments, compared to 20% in the same quarter last year.
- Shipments of next-generation Antora® and Pikes® products rose 52% and over 2,000% year-on-year, respectively.
- The company shipped over 550,000 units during the quarter.
- ECARX initiated mass production for 9 new vehicle models across 4 brands deploying Pikes® and Antora® solutions combined with the Cloudpeak® cross-domain software stack and Flyme Auto.
- ECARX secured 33 vehicle design wins during Q2 2026.
- R&D expense declined through resource prioritization, R&D integration synergies, operational efficiencies, and internal deployment of AI.
- The company entered into a definitive agreement to acquire the full Flyme software business portfolio for approximately US$266 million.
- ECARX signed a binding memorandum of business cooperation with TPK Holding Co., Ltd. to co-develop the ORCA LiDAR platform for global markets.
Concerns
- Management expects global memory cost dynamics to negatively impact gross margin and operating profitability in coming quarters.
- Software license revenue declined 42% year-over-year to US$0.7 million.
- Interest expense was US$8.3 million, compared with US$5.5 million during the same period last year.
- The company reported a net loss of US$12.0 million.
What to watch
- Execution against reiterated full-year 2026 total revenue guidance of US$1.0-US$1.1 billion.
- The effect of memory cost dynamics on gross margin and operating profitability in coming quarters.
- The progress of the Flyme acquisition and the US$117.8 million reserved for purchase consideration payable.
- Continued industrialization of the Volkswagen Group program ahead of the anticipated 2027 launch for the Latin American market.
- Commercialization of the 33 vehicle design wins secured during Q2 2026.
- Mass production targeted for 2028 at TPK's manufacturing facility in Thailand for the ORCA LiDAR platform.
Balance sheet and cash flow
- Total cash as of June 30, 2026 was US$165.5 million including US$117.8 million reserved for purchase consideration payable for the Flyme acquisition.
- Cash was US$156.2 million as of June 30, 2026, compared with US$87.1 million as of December 31, 2025.
- Restricted cash was US$9.3 million as of June 30, 2026, compared with US$6.1 million as of December 31, 2025.
- Short-term investments were US$46.7 million as of June 30, 2026, compared with US$31.2 million as of December 31, 2025.
- Inventories were US$126.2 million as of June 30, 2026, compared with US$62.3 million as of December 31, 2025.
- Short-term borrowings were US$444.8 million as of June 30, 2026, compared with US$310.7 million as of December 31, 2025.
- Long-term borrowings were US$111.8 million as of June 30, 2026, compared with US$5.6 million as of December 31, 2025.
- Convertible notes payable-current were US$24.7 million as of June 30, 2026, compared with US$38.8 million as of December 31, 2025.
- Convertible notes payable, non-current were US$101.6 million as of June 30, 2026, compared with US$60.3 million as of December 31, 2025.
- Total assets were US$986.0 million as of June 30, 2026, compared with US$662.5 million as of December 31, 2025.
- Total liabilities were US$1,237.1 million as of June 30, 2026, compared with US$945.9 million as of December 31, 2025.
- Total shareholders' deficit was US$(265.9) million as of June 30, 2026, compared with US$(283.4) million as of December 31, 2025.
- The issuance capacity of the 2025 Convertible Notes increased from US$100 million to US$130 million, with an existing institutional investor subscribing for an additional US$15 million note.
Analysis
ECARX reported a materially improved second quarter. Total revenue was US$225.2 million, up 45% year-over-year, led by US$196.4 million in sales of goods revenue, up 50%. Management attributed goods growth to demand outside China, a richer mix of automotive computing platform products, and pricing adjustments intended to offset elevated memory costs. Service revenue rose 21% to US$28.1 million on increased design and development contract deliveries, while software license revenue declined 42% to US$0.7 million on lower sales volume.
The mix and pricing actions drove a substantial profitability improvement. Gross profit rose 165% to US$44.5 million and gross margin increased from 10.8% to 19.8%. Total cost of revenue increased 30%, below revenue growth, despite the effect of higher memory costs. Research and development expenses declined 14% to US$29.1 million, while selling, general and administrative expenses and others, net declined 8% to US$21.6 million. Consequently, loss from operation narrowed to US$6.2 million from US$40.4 million, net loss narrowed to US$12.0 million from US$45.4 million, and adjusted EBITDA improved to a US$0.5 million gain from a US$29.8 million loss.
Product mix remains central to the operating improvement. ECARX shipped over 550,000 units, and high-end Antora® and Pikes® solutions represented 42% of shipments compared with 20% a year earlier. The company also initiated mass production for 9 new vehicle models across 4 brands and secured 33 vehicle design wins during Q2 2026. These developments support its stated commercial pipeline, alongside continued industrialization of the Volkswagen Group program ahead of an anticipated 2027 Latin American launch.
The balance sheet reflects both funding activity and acquisition commitments. Total cash was US$165.5 million, including US$117.8 million reserved for Flyme acquisition purchase consideration. Short-term borrowings were US$444.8 million and long-term borrowings were US$111.8 million as of June 30, 2026. ECARX also increased issuance capacity for its 2025 Convertible Notes from US$100 million to US$130 million. The company entered into a definitive agreement to acquire the full Flyme software business portfolio for approximately US$266 million, positioning it to control the operating-system layer above its Cloudpeak® software stack.
Management reiterated full-year 2026 total revenue guidance of US$1.0-US$1.1 billion. The principal near-term qualification is margin: management stated that global memory cost dynamics and the cadence of strategic investments will influence the margin profile, and it expects gross margin and operating profitability to be negatively impacted in coming quarters. Investors should focus on whether pricing and higher-value product mix continue to offset memory costs while the company executes the Flyme acquisition and converts its design wins into revenue.
Management, verbatim
Despite a challenging automotive backdrop, ECARX delivered a strong second quarter in both financial and strategic terms.
Ziyu Shen, ECARX CEO
Our lean operating framework allowed us to translate this revenue growth into sustained profitability at the adjusted EBITDA level: overall operating costs were down despite higher revenue, and we were able to implement R&D cost savings due to operational efficiencies and the deployment of AI technologies.
Ziyu Shen, ECARX CEO
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so prior-guidance comparisons are unavailable.
- Operating cash flow was not reported in the provided filing text.
- Free cash flow was not reported in the provided filing text.
- Share repurchases were not reported in the provided filing text.
- Dividends were not reported in the provided filing text.
- Quarter-over-quarter comparisons were not reported for the Q2 2026 income-statement metrics.
- Quantitative gross margin, operating expense, and tax rate guidance were not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.