ECARX Holdings, Inc. (Nasdaq: ECX) ("ECARX" or the “Company”),
a global mobility tech provider, today reported financial results
for the quarter ended March 31, 2023. The Company also reaffirmed
its financial guidance for the full year 2023 following strong
execution in the first quarter.
“ECARX is off to a strong start in 2023, with our first quarter
results reflecting global demand for our automotive technology,”
said Ziyu Shen, co-founder, Chairman and CEO of ECARX. “Through
relentless innovation and a dedicated team, we're revolutionizing
mobility, setting new benchmarks for the in-car experience, and
unlocking significant growth opportunities. Our recently announced
suite of products is already driving change and moving the world
forward, demonstrating our commitment to shaping the future of
transportation. As I look forward to the remainder of the year, I
am confident ECARX’s first quarter success positions us well for
2023 and beyond."
First Quarter 2023 Financial Results:
- Total revenue of RMB762.9 million (US$111.1
million), up 16% year over year
- Sales of goods revenue of RMB594.6 million
(US$86.6 million), up 19% year over year, primarily driven by the
ramp up of new digital cockpit sales volumes and portfolio revenue
mix shift from Infotainment Head Unit (IHU) to Digital Cockpit,
which has a higher total revenue per unit
- Software license revenue of
RMB102.3 million (US$14.9 million), up 140% year over year, mostly
as a result of a new procurement framework agreement for
intellectual property licenses with a customer
- Service revenue of RMB66.0 million (US$9.6
million), down 42% year over year, primarily as a result of lower
volumes of contracts completed during the quarter compared with the
same period last year
- Total cost of revenue was RMB552.1 million
(US$80.4 million), up 7% year over year
- Gross profit of RMB210.8 million (US$30.7
million), up 52% year over year
- Gross margin of 28%, up from 21% in the same period last year,
due mostly to product mix and a continued focus on sourcing
efficiencies
- Research and development expense was RMB201.2
million (US$29.3 million), down by around a third year over year,
reflecting the cessation of our ADAS perception software
development as we continue to invest in our core product
roadmap
- SG&A expenses and others, net were
RMB173.2 million (US$25.3 million), up 27% year over year primarily
as a result of our international expansion
- Net loss of RMB194.7 million (US$28.4
million), a 33% reduction year over year
- Adjusted EBITDA (non-GAAP) loss of RMB118.5
million (US$17.3 million), a reduction of RMB108.9 million (US$15.9
million) or 48% from the same period last year
- Total cash of RMB1,016.5 million (US$148.0
million) – including RMB67.0 million (US$9.7 million) in restricted
cash) as of March 31, 2023
First Quarter 2023 Operational & Product
Updates:
- Expanding international presence
- Successfully opened a research and development facility in the
U.S. and sales and engineering center in Germany; hiring for both
operations well underway
- ECARX products deployed in around 5 million vehicles as of
March 31, 2023 – European launch in smart #1 and Lotus Eletre
- Fulfilling unmet SoC need in the EV market
- Antora 1000 partnership launched with FAW Hongqi, further
diversifying the customer base
- Antora 1000 Pro launching in Lynk & Co 08 with Flyme Auto
in Q3 2023
- Pushing the boundaries of driver experience
- Announced launch of Makalu with AMD, to be deployed in smart
brand EV vehicles in 2024
- Powering the evolution of ADAS and software-defined
vehicles
- Super Brain – development of L2+ ADAS progressing for our
"all-in-one" solution that integrates the cockpit, driving, and
vehicle control
Recent Developments:
- ECARX Cloudpeak software to power the new all-electric Volvo
EX30’s infotainment system
- ECARX E02 intelligent cockpit computing platform selected for
mass production for Changan Mazda on its CX-50 model
Financial Outlook:
The Company reaffirmed its financial outlook for FY 2023 as
follows:
US$million |
2023 |
2022 |
YoY Change |
Total Revenue |
US$700-720 |
US$515.7 |
36-40% |
Adjusted EBITDA (non-GAAP) |
Breakeven by end of 2024 |
Conference Call & Webcast Details:ECARX
will host a webcast of its earnings conference call today, Monday,
June 12, 2023, at 8:00 a.m. EDT. To access the webcast, visit the
Events & Presentations section of the ECARX Investor Relations
website, or visit the following link –
https://edge.media-server.com/mmc/p/8n7opuvw.
To join the earnings call by telephone, participants must
pre-register
at https://register.vevent.com/register/BI20fe179cc25241edad7a3f247228ffbd
to receive dial-in information.
A replay of the webcast and presentation materials will be
available on the Company’s Investor Relations website under the
results and reports section following the event.
About ECARX:ECARX (Nasdaq: ECX) is a global
mobility-tech provider partnering with OEMs to reshape the
automotive landscape as the industry transitions to an all-electric
future. As OEMs develop new vehicle platforms from the ground up,
ECARX is developing a full-stack solution – central computer,
System-on-a-Chip (SoCs) and software to help continuously improve
the in-car user experience. The Company’s products have been
integrated into more than 5 million cars worldwide, and it
continues to shape the interaction between people and vehicles by
rapidly advancing the technology at the heart of smart
mobility.
ECARX was founded in 2017 and today we have around 1,500 team
members. The co-founders are two automotive entrepreneurs, Chairman
and CEO Ziyu Shen, and Eric Li (Li Shufu), who is also the founder
and chairman of Zhejiang Geely Holding Group – one of the largest
automotive groups in the world, with ownership interests in
international brand OEMs including Lotus, Lynk & Co, Polestar,
smart and Volvo Cars.
Forward-Looking Statements: This release
contains statements that are forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. These statements are based on management’s beliefs and
expectations as well as on assumptions made by and data currently
available to management, appear in a number of places throughout
this document and include statements regarding, amongst other
things, results of operations, financial condition, liquidity,
prospects, growth, strategies and the industry in which we operate.
The use of words “expects,” “intends,” “anticipates,” “estimates,”
“predicts,” “believes,” “should,” “potential,“ “may,”
“preliminary,” “forecast,” “objective,” “plan,” or “target,” and
other similar expressions are intended to identify forward-looking
statements. These forward-looking statements are not guarantees of
future performance and are subject to a number of risks and
uncertainties that could cause actual results to differ materially,
including, but not limited to statements regarding our intentions,
beliefs or current expectations concerning, among other things,
results of operations, financial condition, liquidity, prospects,
growth, strategies, future market conditions or economic
performance and developments in the capital and credit markets and
expected future financial performance, and the markets in which we
operate.
For a discussion of these and other risks and uncertainties that
could cause actual results to differ materially from those
expressed in any forward-looking statement, see ECARX’s filings
with the U.S. Securities and Exchange Commission. ECARX undertakes
no obligation to update or revise and forward-looking statements to
reflect subsequent events or circumstances, except as required by
applicable law.
Translation of results into U.S. dollarsThis
announcement contains translations of certain Renminbi (RMB)
amounts into U.S dollars (US$) at a specified rate solely for the
convenience of the reader. Unless otherwise noted, the translation
of RMB into US$ has been made at RMB6.8676 to US$1.00, the noon
buying rate in effect on March 31, 2023 as set forth in the H.10
Statistical Release of The Board of Governors of the Federal
Reserve System. We make no representation that any Renminbi or U.S.
dollar amounts could have been, or could be, converted into U.S.
dollars or Renminbi, as the case may be, at any particular rate, or
at all.
Non-GAAP Financial Measure:The Company uses
adjusted EBITDA (non-GAAP) in evaluating its operating results and
for financial and operational decision-making purposes. Adjusted
EBITDA is defined as net loss excluding interest income, interest
expense, income tax expenses, depreciation of property and
equipment, amortization of intangible assets, and share-based
compensation expenses.
The Company presents the non-GAAP financial measure because it
is used by the management to evaluate the Company’s operating
performance and formulate business plans. The Company believes that
the non-GAAP measure helps identify underlying trends in its
business that could otherwise be distorted by the effects of
foreign currency translation and certain expenses that are included
in net loss. The Company also believes that the use of the non-GAAP
measure facilitates investors’ assessment of its operating
performance. To calculate revenue growth rates in constant
currency, the Company converts actual net sales from local currency
to U.S. dollars using constant foreign currency exchange rates in
the current and prior period.
Adjusted EBITDA (non-GAAP) should not be considered in isolation
or construed as alternatives to net loss or any other measures of
performance or as indicators of the Company’s operating
performance. Investors are encouraged to compare the Company’s
historical adjusted EBITDA (non-GAAP) to the most directly
comparable GAAP measure, net loss. Adjusted EBITDA (non-GAAP)
presented here may not be comparable to similarly titled measures
presented by other companies. Other companies may calculate
similarly titled measures differently, limiting their usefulness as
comparative measures to the Company’s data. The Company encourages
investors and others to review the financial information in its
entirety and not rely on a single financial measure.
For more information on the non-GAAP financial measure, please
see the table captioned “Unaudited Reconciliation of GAAP and
Non-GAAP Results” set forth at the end of this press release.
Investor Contacts:Adam Kay, +44 (0)7796 954086,
ir@ecarxgroup.com Media
Contacts:ECARX-Media@teneo.com
ECARX Holdings Inc.Condensed Balance Sheets
|
|
|
|
|
December 312022 |
|
March
312023(Unaudited) |
Millions, otherwise noted |
RMB |
|
RMB |
US$ |
|
|
|
|
|
ASSETS |
|
|
|
|
Current
assets |
|
|
|
|
Cash |
737.4 |
|
949.5 |
138.3 |
Restricted cash |
41.0 |
|
67.0 |
9.7 |
Accounts receivable – third
parties, net |
418.2 |
|
264.1 |
38.5 |
Account receivable – related
parties, net |
483.0 |
|
381.5 |
55.5 |
Notes receivable |
145.4 |
|
327.4 |
47.7 |
Inventories |
131.6 |
|
120.8 |
17.6 |
Amounts due from related
parties |
911.6 |
|
91.1 |
13.3 |
Prepayments and other current
assets |
412.9 |
|
552.7 |
80.5 |
Total current
assets |
3,281.1 |
|
2,754.1 |
401.1 |
|
|
|
|
|
Non-current
assets |
|
|
|
|
Long-term investments |
489.8 |
|
474.9 |
69.2 |
Operating lease right-of-use
assets |
85.3 |
|
79.9 |
11.6 |
Property and equipment,
net |
118.4 |
|
111.6 |
16.2 |
Intangible assets, net |
36.7 |
|
31.0 |
4.5 |
Other non-current assets –
third parties |
26.0 |
|
25.3 |
3.7 |
Other non-current assets –
related parties |
213.7 |
|
216.3 |
31.5 |
Total non-current
assets |
969.9 |
|
939.0 |
136.7 |
Total
assets |
4,251.0 |
|
3,693.1 |
537.8 |
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current
liabilities |
|
|
|
|
Short-term borrowings |
870.0 |
|
870.0 |
126.7 |
Accounts payable - third
parties |
1,024.2 |
|
820.6 |
119.5 |
Accounts payable - related
parties |
239.9 |
|
123.0 |
17.9 |
Notes payable |
168.4 |
|
184.5 |
26.9 |
Amounts due to related
parties |
191.2 |
|
330.0 |
48.1 |
Contract liabilities, current
- third parties |
4.7 |
|
4.9 |
0.7 |
Contract liabilities, current
- related parties |
316.7 |
|
336.1 |
48.9 |
Current operating lease
liabilities |
24.1 |
|
21.6 |
3.2 |
Accrued expenses and other
current liabilities |
738.6 |
|
503.6 |
73.3 |
Income tax payable |
21.6 |
|
21.6 |
3.1 |
Total current
liabilities |
3,599.4 |
|
3,215.9 |
468.3 |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Contract liabilities,
non-current - third parties |
0.1 |
|
0.1 |
0.0 |
Contract liabilities,
non-current - related parties |
282.1 |
|
243.6 |
35.5 |
Convertible notes payable, non
current |
439.9 |
|
439.1 |
63.9 |
Operating lease liabilities,
non-current |
59.5 |
|
61.8 |
9.0 |
Warrant liabilities,
non-current |
16.5 |
|
24.8 |
3.6 |
Other non-current
liabilities |
30.7 |
|
33.4 |
4.9 |
Total non-current
liabilities |
828.8 |
|
802.8 |
116.9 |
Total
liabilities |
4,428.2 |
|
4,018.7 |
585.2 |
|
|
|
|
|
ECARX Holdings Inc.Condensed Balance Sheets
(continued)
|
|
|
|
|
December 312022 |
|
March
312023(Unaudited) |
Millions, otherwise noted |
RMB |
|
RMB |
US$ |
|
|
|
|
|
SHAREHOLDERS'
DEFICIT |
|
|
|
|
Ordinary Shares |
- |
|
- |
- |
Class A Ordinary Shares |
- |
|
- |
- |
Class B Ordinary Shares |
- |
|
- |
- |
Treasury Shares, at cost |
- |
|
- |
- |
Additional paid-in
capital |
5,919.7 |
|
5,967.5 |
868.9 |
Accumulated deficit |
(5,711.0) |
|
(5,905.6) |
(859.9) |
Accumulated other
comprehensive loss |
(385.9) |
|
(387.5) |
(56.4) |
Total deficit
attributable to ordinary shareholders |
(177.2) |
|
(325.6) |
(47.4) |
Non-redeemable non-controlling
interests |
- |
|
- |
- |
Total shareholders'
deficit |
(177.2) |
|
(325.6) |
(47.4) |
Liabilities and
shareholders' deficit |
4,251.0 |
|
3,693.1 |
537.8 |
|
|
|
|
|
ECARX Holdings Inc.Condensed Consolidated
Statement of Operations
|
|
|
Three Months Ended March 31
(Unaudited) |
|
2022 |
|
2023 |
Millions, except loss per share and share data |
RMB |
|
RMB |
US$ |
|
|
|
|
|
Revenue |
|
|
|
|
Sales of goods revenue |
499.3 |
|
594.6 |
86.6 |
Software license revenue |
42.7 |
|
102.3 |
14.9 |
Service revenue |
113.9 |
|
66.0 |
9.6 |
Total
revenue |
655.9 |
|
762.9 |
111.1 |
Cost of goods sold |
(404.3) |
|
(469.5) |
(68.4) |
Cost of software licenses |
(22.4) |
|
(30.2) |
(4.4) |
Cost of services |
(90.3) |
|
(52.4) |
(7.6) |
Total cost of
revenue |
(517.0) |
|
(552.1) |
(80.4) |
Gross
profit |
138.9 |
|
210.8 |
30.7 |
|
|
|
|
|
Research and development
expenses |
(313.1) |
|
(201.2) |
(29.3) |
Selling, general and
administrative expenses and others, net |
(136.1) |
|
(173.2) |
(25.3) |
Total operating
expenses |
(449.2) |
|
(374.4) |
(54.6) |
Loss from
operation |
(310.3) |
|
(163.6) |
(23.9) |
|
|
|
|
|
Interest income |
1.6 |
|
7.5 |
1.1 |
Interest expenses |
(8.4) |
|
(18.1) |
(2.6) |
Share of results of equity
method investments |
(45.2) |
|
(36.5) |
(5.3) |
Change in fair value of an
equity security |
- |
|
21.5 |
3.1 |
Gains on deconsolidation of a
subsidiary |
72.0 |
|
- |
- |
Change in fair value of
warrant liabilities |
- |
|
(8.4) |
(1.2) |
Government grants |
1.6 |
|
0.9 |
0.1 |
Foreign currency exchange
(gains)/losses |
(2.7) |
|
2.2 |
0.3 |
Loss before income
taxes |
(291.4) |
|
(194.5) |
(28.4) |
Income tax expenses |
(0.3) |
|
(0.2) |
(0.0) |
Net loss |
(291.7) |
|
(194.7) |
(28.4) |
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
Foreign currency translation
adjustments, net of nil income taxes |
8.8 |
|
(1.6) |
(0.2) |
Comprehensive
loss |
(282.9) |
|
(196.3) |
(28.6) |
Comprehensive loss
attributable to non-redeemable non-controlling interests |
1.4 |
|
- |
- |
Comprehensive loss
attributable to redeemable non-controlling interests |
0.5 |
|
- |
- |
Comprehensive loss
attributable to ECARX Holdings Inc. |
(281.0) |
|
(196.3) |
(28.6) |
|
|
|
|
|
ECARX Holdings Inc.Condensed Consolidated
Statement of Operations (continued)
|
|
|
Three Months Ended March 31
(Unaudited) |
|
2022 |
|
2023 |
|
RMB |
|
RMB |
US$ |
Loss per ordinary
share |
|
|
|
|
– Basic and diluted loss per
share, ordinary shares |
(1.59) |
|
(0.58) |
(0.08) |
Weighted average
number of ordinary shares used in computing loss per ordinary
share |
|
|
|
|
– Weighted average number of
ordinary shares |
236,248,112 |
|
337,395,390 |
337,395,390 |
|
|
|
|
|
ECARX Holdings Inc.Unaudited Reconciliation of
GAAP and Non-GAAP Results
Adjusted EBITDAWe use adjusted EBITDA in
evaluating our operating results and for financial and operational
decision-making purposes. Adjusted EBITDA is defined as net loss
excluding interest income, interest expense, income tax expenses,
depreciation of property and equipment, amortization of intangible
assets, and share-based compensation expenses.
Adjusted EBITDA should not be considered in isolation or
construed as alternatives to net loss or any other measures of
performance or as indicators of our operating performance.
Investors are encouraged to compare our historical adjusted EBITDA
to the most directly comparable GAAP measure, net loss. Adjusted
EBITDA presented here may not be comparable to similarly titled
measures presented by other companies. Other companies may
calculate similarly titled measures differently, limiting their
usefulness as comparative measures to our data. We encourage
investors and others to review our financial information in its
entirety and not rely on a single financial measure.
|
|
|
Three Months Ended March 31 |
|
2022 |
|
2023 |
Millions, unless otherwise noted |
RMB |
|
RMB |
US$ |
|
|
|
|
|
Net Loss |
(291.7) |
|
(194.7) |
(28.4) |
Interest income |
(1.6) |
|
(7.5) |
(1.1) |
Interest expense |
8.4 |
|
18.1 |
2.6 |
Income tax expenses |
0.3 |
|
0.2 |
0.0 |
Depreciation of property and
equipment |
12.3 |
|
11.9 |
1.8 |
Amortization of intangible
assets |
5.8 |
|
5.7 |
0.8 |
EBITDA |
(266.5) |
|
(166.3) |
(24.3) |
Share-based compensation
expenses |
39.1 |
|
47.8 |
7.0 |
Adjusted
EBITDA |
(227.4) |
|
(118.5) |
(17.3) |
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