Key Highlights

  • Revenue rose 10% to USD 241 million but fell well short of the USD 315.2 million estimate.
  • Gross Margin fell to 7% from 22% a year earlier as memory prices outpaced pricing pass-through.
  • Adjusted EBITDA was a USD 37.7 million loss, with about USD 30 million tied to lower gross margin.
  • Cash fell to USD 53.7 million from USD 165.5 million after paying USD 191.5 million toward Flyme.

ECARX (NASDAQ:ECX) reported third quarter Revenue of USD 241 million, up 10% from a year earlier and 7% from the second quarter, but short of the USD 315.2 million estimate. Loss per share came in at USD 0.13 against an estimate of a USD 0.01 profit. Shipments were about 721,000 units, up 31% sequentially and about 8% year over year, in a China automotive market that declined sharply.

Revenue Composition and Customers

Sales of goods revenue rose 23% year over year and 14% sequentially to USD 223 million. Software license and services revenue fell 53% year over year to USD 18 million, which management tied to the timing of production launches. Founder and CEO Ziyu Shen said the underlying Business remains healthy, while the chief operating officer said entry-level programs added significant Volume and higher-end solutions kept growing in absolute terms.

The company began mass production of 21 new models across five brands in the quarter, six of them for markets outside China such as Korea. Its technology now runs in more than 12 million vehicles across 18 automakers, 28 brands and 159 markets, with more than 1.4 million new deployments in the first nine months. The CEO put Geely's share of revenue at roughly 75%, with the remaining 25% from other customers. Prior-period figures were retroactively adjusted to include the Flyme software business, acquired from a company under common control.

Margins, Costs and Cash Position

Gross profit was USD 17 million, a 7% margin against 22% a year earlier. The chief financial officer said rising memory prices outpaced what could be passed through to customers, and the company absorbed a larger share of the increase to secure volume and protect partnerships. Operating expenses fell 3% year over year to USD 53 million, and were USD 158 million year to date, down 17%.

Adjusted EBITDA was a loss of USD 37.7 million compared with a USD 0.9 million loss a year earlier, with about USD 30 million of the sequential change from lower gross margin. Cash totaled USD 53.7 million at September 30, against USD 165.5 million at June 30. During the quarter the company paid USD 191.5 million of the Flyme purchase consideration ahead of closing, funded by cash and USD 67.8 million of bank financing. After quarter end it paid a USD 10 million fee to end the remaining convertible note Facility and repaid the balance.

Strategic Steps and Guidance

The Flyme Acquisition closed on September 30. Flyme Auto runs in more than 3.5 million vehicles, and management described it as a source of recurring software revenue not tied to hardware volume. The company also signed a memorandum of understanding with Arm on next-generation physical AI platforms, and is finalizing a joint cockpit AI lab with a European luxury automaker.

ECARX reaffirmed full year 2026 revenue guidance of USD 1.0 billion to USD 1.1 billion, tied to fourth quarter program launches and its order backlog. It gave no quarterly guidance and no 2027 outlook, and said the 2027 budget process has started. The company targets 50% of revenue from outside China by 2030, and a VW program launch is set for 2027.

Guidance Versus Reported Results

Third quarter revenue of USD 241 million compares with the full year guide of USD 1.0 billion to USD 1.1 billion. Gross margin of 7% compares with 22% a year earlier, and quarterly operating expenses of USD 53 million compare with USD 158 million for nine months. Cash of USD 53.7 million compares with USD 165.5 million at the end of the second quarter.