ECARX (ECX) Q2 2025 Earnings Call Transcript

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Date

Tuesday, Aug. 26, 2025 at 8 a.m. ET

Call participants

Chief Executive Officer — Ziyu Shen

Chief Operating Officer — Peter W. Cirino

Chief Financial Officer — Phil Zhou

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Takeaways

Total revenue-- Total revenue (GAAP) was $156 million in Q2 2025, cited as impacted by seasonality and timing of contract recognition.

Sales of goods revenue-- Sales of goods revenue totaled $131 million in Q2 2025, representing a 1% year-over-year increase; driven by double-digit customer demand but offset by strategic price reductions.

Software license revenue-- Software license revenue was $1.2 million in Q2 2025, reflecting an 85% year-over-year decrease due to lower per-vehicle and IP license revenue.

Service revenue-- Service revenue was $23 million in Q2 2025, attributed to reduced non-recurring engineering services but partially offset by growth in overseas connectivity services.

Gross profit-- Gross profit was $70 million in Q2 2025, a 58% year-over-year decline; gross margin was 11% in Q2 2025, down 12 percentage points from the prior year period, impacted by lower software/service mix and pricing to gain market share.

Operating expenses-- Reduced by 20% year over year.

Adjusted EBITDA loss-- Adjusted EBITDA loss was $30 million in Q2 2025, due to decreased gross profit, partially offset by reduced expenses and higher other income.

Cash and restricted cash-- Cash and restricted cash totaled $99 million at the end of the quarter, described as supporting global expansion and technology investment.

Unit shipments-- 532,000 units were shipped in Q2 2025; first-half 2025 shipments totaled approximately 1,200,000 units, with management guiding for 1,400,000 to 1,500,000 units in the second half of 2025.

Cumulative installed base-- Over 9,300,000 vehicles equipped with ECARX Holdings technology as of June 2025.

Revenue guidance-- Contingent on significant vehicle programs scheduled for SOP in the second half of 2025.

Adjusted EBITDA breakeven target-- Management reaffirmed the adjusted EBITDA breakeven goal for each remaining quarter and the full year 2025.

Antora, Venato, and Skyland platform contribution-- These in-house platforms generated 56% of sales of goods revenue.

Antora series shipments-- 135,000 units of the Antora series solution were delivered in Q2 2025.

Overseas contracted lifetime revenue-- Over $1 billion secured, per management, as part of global expansion with 14 active projects, eight automaker relationships, and four project wins in the EU.

Business mix by geography-- China OEMs comprised 60% of business, global OEMs accounted for 40%.

OEM customer base-- Serving 18 OEMs and 28 brands globally; Geely brand sales were highlighted, with Galaxy reaching 1,000,000 accumulated sales as the fastest milestone for an NEV brand as of Q2 2025.

Plant utilization-- The Fujian facility reached 80% utilization as of Q2 2025, meeting its 1,000,000 unit annual capacity ahead of schedule.

Patent portfolio-- There were 724 registered patents and 825 pending globally as of June 30, 2025.

Robotics sector entry-- Design win for proprietary LiDAR with a leading robotic lawnmower developer; mass production planned for 2026.

Summary

ECARX Holdings(NASDAQ:ECX) reported second-quarter results reflecting revenue of $156 million, with seasonality and pricing strategy weighing on margins. The company shipped 532,000 units in Q2 2025, contributing to a cumulative installed base exceeding 9,300,000 vehicles as of June 2025. Management emphasized the expanding international footprint, citing business from 18 OEMs globally, multiple project wins in Europe, and over $1 billion in contracted lifetime overseas revenue as of Q2 2025. New product adoption was led by the Antora platform, and a major LiDAR design win in Q2 2025 extended ECARX Holdings’ reach into the robotics sector.

With second-half 2025 volume expected to reach 1,400,000 to 1,500,000 units.

Operating expense discipline drove a 20% year-over-year reduction in Q2 2025, enabling management to maintain an adjusted EBITDA breakeven objective for the remainder of the year.

Management highlighted the global business mix, with China and international OEMs constituting 60% and 40% of business, respectively, in Q2 2025, and anticipated further diversification.

The Fujian manufacturing plant’s 80% utilization milestone was reached ahead of schedule, supporting future production ramp.

Expansion into the robotics industry through LiDAR technology positions ECARX Holdings for multi-industry applications.

Patent portfolio growth, ISO certifications, and the opening of the Singapore headquarters were cited as key achievements supporting global operational scaling.

Industry glossary

SOP: Start of production, referring to the launch of commercial manufacturing for new vehicle programs or products.

OEM: Original equipment manufacturer; in this context, refers to automakers that integrate ECARX Holdings technologies into their vehicles.

PHEV: Plug-in hybrid electric vehicle.

NOA: Navigation on autopilot, denoting advanced driver automation functionality.

ADAS: Advanced driver-assistance system, comprising hardware and software for semi-autonomous vehicle features.

OpEx: Operating expenses, which encompass a company’s ongoing costs excluding cost of goods sold.

Full Conference Call Transcript

Ziyu Shen: Thank you, Rene. Hello, everyone, and thank you for joining us today. During the quarter, we continued to build up the strong momentum achieved throughout 2024 and early 2025. Despite seasonal headwinds, we made solid progress securing key new projects, expanding partnerships, and strengthening the foundation for future growth. Our results this quarter reflect the distinct execution of our lean operating strategy and reinforced our path towards growth and EBITDA breakeven in each of the remaining quarters and full year 2025. In quarter two, we shipped 532,000 units bringing the total number of vehicles on the road with ECARX Holdings, Inc. technology to over 9,300,000 as of June 2025.

These achievements testify to the sustained operational excellence and reliability that have become hallmarks of our execution even during these challenging times. As is typical for our industry, Q2 was impacted by seasonality and the timing of certain contracts with revenue reaching $156 million on the back of strategic investments and pricing initiatives to drive future growth. The distinct execution of our lean operating strategy helped lower operating expenses by 20% to $57.2 million with several significant new projects expected to launch in the second half. We remain on track to reach EBITDA breakeven and generate close to 20% revenue growth. The breadth of our global partnerships with automakers continues to anchor our position as a core technology provider.

By quarter two, I'm excited to share our current contract win already secured over $1 billion of lifetime revenue for overseas revenue. Besides our strong position in the China market, we are very confident in our strong position in the global market as well. Shipments of Antora series solution surged 112% year over year to 135,000 units during the quarter, providing ample fuel to sustain growth momentum going forward. Our broad portfolio of solutions, especially the flagship Antora platform integrated with Flyme Auto, are driving the success of several Geely best-selling models, including the Galaxy brand, which has a positive 1,000,000 accumulated sales milestone this year. This is the fastest NEV brand has ever achieved this.

Following our first project award from Volkswagen Group in March 2025, I had the pleasure of accepting Volkswagen Brazil's technical development and innovation award on behalf of ECARX Holdings, Inc. at their partnership celebration in Brazil earlier this month. This award reflects Volkswagen's confidence in our technological innovation capabilities and the growing impact our innovative solutions are having on the global automotive industry. Notably, we also began monetizing our automotive R&D investments across new high-growth sectors with a leading developer of robotic lawnmowers selecting our LiDAR technology during the quarter.

With mass production planned for 2026, this partnership will broaden our horizon beyond the automotive sector, validate the application of our cutting-edge technologies, and help pave the way for future opportunities in the vast robotics market. As part of our global expansion strategy, our new global headquarters in Singapore is set to open in 2025 where it will accelerate our global IP management, R&D collaboration, and supply chain optimizations, enabling us to better serve our maker across global markets. In summary, despite the impact of seasonality, our results this quarter underscore the strength and momentum we are building through operational discipline and expanding pipeline of projects, growing global presence, diversified applications, and investment in technology and infrastructure.

We are well-positioned to drive the industry's transition to software-defined intelligent vehicles and also to hit our breakeven target. I will now pass the call over to Peter, who will go through the operating results of the quarter in more detail.

Peter W. Cirino: Thank you, Ziyu, and good day to everyone. As Ziyu outlined, we carefully navigated typical industry seasonality and ongoing market uncertainties during the quarter and made solid progress executing our strategic priorities. We secured several major new project wins, broadened our partnerships, developed strong and innovative products, and expanded our footprint. In the second quarter, we shipped 532,000 units, bringing in the cumulative total of vehicles equipped with our technologies to over 9,300,000 as of June 30. This growing installed base is a direct reflection of the trust we have built with automakers globally and the reliability and scalability of our solutions. We currently serve 18 OEMs across 28 brands globally.

This is a testament to our ability to meet the diverse technology and integration requirements of leading automakers across the globe. Our partnership with Geely remains foundational. And this quarter, the momentum continued. We secured 14 new project wins from Geely alone, each slated to integrate our Antora family of solutions, further embedding our technology into Geely's best-selling lineup. Notably, our solutions enabled Geely's Galaxy brand to surpass 1,000,000 units in sales, the fastest NEV brand has achieved this milestone to date. Geely Xinghua, powered by our Venato platform and Flyme Auto Lite, also led Geely's sales in the first half of the year, highlighting both the competitive edge and the value our stack provides automakers.

As we deepen our core relationships, we are also diversifying and extending our technological reach. Building on the Venato platform's success in the Geely Xinghua, we formalized the partnership to provide our Venato platform to a top five Chinese automaker for their next-generation global model. Shipments are expected to begin in 2026. We are also building a customized intelligent cockpit operating system based on Flyme Auto for a leading premium global automotive brand. This represents a major milestone in our expansion into the premium global intelligent cockpit sector and reflects the growing influence and expanding market share of Flyme Auto.

Our technical leadership is now being validated beyond the automotive sector as well, with a leading global developer of robotic lawnmowers integrating our proprietary solid-state 3D LiDAR into their products. With mass production targeted for 2026, this win demonstrates how our deep automotive R&D investments have also positioned us to capitalize on the vast potential of the robotics and AI markets, supporting our strategy of long-term multi-industry applications. Our technology was pivotal in several Geely model launches during the quarter, directly supporting and deepening partnership and further elevating our brand's market presence and technology leadership.

In April, the fourth generation 2025 Beau L was launched across China, built on Geely's GEEA 3.0 architecture and equipped with our Antora 1,000 computing platform, Cloud Peak cross-domain software stack, and Flyme Auto. The Beau L delivers a modern SUV experience with advanced AI integration. In May, the flagship Geely Galaxy M9 made its debut in Milan, where it immediately had an outsized impact with its groundbreaking combination of cutting-edge NEV technology, AI features, and luxury. Built on the GEA EVO native architecture, this is the first vehicle program to integrate our Pikes computing platform based on Qualcomm 8,295 with Flyme Auto.

In June, the Geely Galaxy A7 debuted with the Antora 1,000 platform and the custom Flyme OS offering an intuitive user interface with features such as multi-zone voice recognition and seamless voice command capabilities. Launched earlier this year, the Galaxy 8 and Xinyao 8 PHEV sedans also continue to drive strong demand. Both have our Skyland Pro ADAS solution integrated into Geely's G Pilot H1 Unified Intelligent Driving System, which provides highway and elevated road NOA functionalities. Additionally, we powered the launch of the Geely Galaxy EX5 across 26 countries, where it became one of the top-selling vehicles in Australia after just three months and the top-selling vehicle in Malaysia.

Monthly overseas sales continue to exceed 12,000 units, reflecting the value our stack drives for automakers and the differentiated experience it offers to customers. Our business development activity during the Shanghai Auto Show in Q2 included meaningful engagements with Dongfeng Nissan, the GAC R&D center, and Renault, further expanding our pipeline. In the EU market, we now have 14 active projects we are working on with eight different global automakers and we have four wins to date. Ziyu had the pleasure of accepting Volkswagen Brazil's Technical Development and Innovation Award on behalf of ECARX Holdings, Inc. at their The One Partnership celebration in Rio De Janeiro, Brazil earlier this month.

This award further underscores the momentum our international business is picking up with project wins from large and globally respected brands such as Volkswagen, reflecting the growing confidence in our innovative and mature solutions and the growing impact they are having on the sector. Our global technological thought leadership was also highlighted with the release of a Google Automotive Services integration white paper showcasing the best practices and proprietary tools we use to cut GAS certification time by over 50%. This solution can be applied to GAS on our Qualcomm-based Antora computing platforms, validated by recent launches such as the PULSAR 4. Our commitment to cutting time to market for our partners continues to strengthen.

We showcased technological achievements in generative AI and multimodal interaction at the 2025 World Artificial Intelligence Conference in Shanghai last month. Our AI-driven intelligent cockpit and driving solutions were on display at the event, reinforcing our innovation leadership. Supported by our robust hardware-software integration development capabilities, the Hongqi Tiangong-5 also recently received a major update to our ECARX Holdings, Inc. Auto GPT in-vehicle AI solution. Auto GPT now integrates DeepSeek and offers a wide array of daily high-frequency services, setting a new benchmark for user experience.

Our extensive implementation of AI goes beyond our solutions and is also significantly improving our engineering efficiency, driving a 20% reduction in OpEx and directly contributing to our breakeven target in each of the remaining quarters and full year 2025. Following the integration of intelligent cockpit, driving, and parking capabilities into the Antora 1,000 SPB platform and the completion of the road testing on the Galaxy E5 last quarter, we recently completed system software development for our five-in-one Antora solution. This is a very exciting iteration on Antora and has already secured its first commercial project win. This solution will enable automakers to accelerate the deployment of next-generation vehicles with enhanced safety and improved user experience.

As a result of these efforts, we continue to expand our IP portfolio with 724 registered patents and 825 pending applications globally as of June 30, underscoring the depth and sustainability of our innovation. Supply chain resilience is critical for global scaling. Our Fujian plant now operates at 80% utilization, hitting its 1,000,000 unit annual capacity ahead of schedule. We also deepened our partnership with Samsung to accelerate the commercialization of cutting-edge technologies across automotive intelligence, terminal devices, and smart hardware. Together, we will build a sustainable open technology ecosystem, which will also capitalize on opportunities in the rapidly growing robotics and AI application markets.

We are also collaborating with Monolithic Power Systems on automotive intelligence, robotics, and AI applications to establish a global supply chain and intelligent ecosystem spanning system integration, platform adoption, and delivery. These initiatives are being widely appreciated across the industry with our excellence in manufacturing, procurement, and delivery recognized with inclusion in the 2025 China automotive supply chain top 100 ranking. Foundational to our global expansion is our robust compliant infrastructure. Our new global headquarters in Singapore is expected to become operational in the second half of the year. This will act as a critical hub for our global IP, R&D, supply chain, procurement, and treasury activities and allow us to support automakers across global markets.

We also received three ISO certifications for quality management, environmental stewardship, and occupational health and safety last month, prerequisites for collaboration with leading automakers. Together, these achievements enhance our competitive positioning and provide a robust foundation for us to extend our technology stack into AI, robotics, and embodied intelligent applications globally. In summary, our results this quarter demonstrate the disciplined execution, global expansion, and technological leadership at the heart of our growth strategy. Despite external headwinds, we are delivering on the key enablers: innovation, operational scale, global compliance, and ecosystem collaboration that position us to accelerate the industry's transformation to software-defined intelligent mobility. 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. While Q2 brought expected seasonal softness and macroeconomic uncertainty, our team's disciplined execution on strategic initiatives partially mitigated late headwinds. Total revenue for the quarter landed at $156 million. Sales of goods revenue was $131 million, a 1% year-over-year increase. The growth was primarily driven by a double-digit increase in customer demand, which was partially offset by strategic price reductions to accelerate market penetration. Our in-house development strategy is gaining significant traction. Our Antora, Venato, and the Skyland platforms now contribute a remarkable 56% to total sales of goods revenue, more than doubling from 28% in the prior year period.

Software license revenue decreased 85% year over year to $1.2 million, primarily from a decline in per vehicle software license revenue coupled with lower intellectual property licenses revenue. Intellectual property licenses contributed $3.9 million revenue in the same period last year. Service revenue came in at $23 million, down 34% year over year, mainly due to lower revenue from non-recurring engineering services contracts for automotive computing platforms compared to the same period last year, which was partially offset by growth in overseas connectivity service revenue. Gross profit for the quarter was $70 million, a decline of 58% year over year with a gross margin of 11%, a 12% decrease compared with the prior year period.

This was chiefly attributable to strategic pricing initiatives to accelerate computing platform market penetration combined with the lower software license service revenue mix and the higher cost for the completed and non-recurring engineering projects in the current quarter. We achieved significant progress in operating expense management, reducing costs by 20% year over year to $57 million, reflecting our strong execution on operational and R&D efficiency improvements. Adjusted EBITDA loss landed at $30 million, a slight decline compared to the loss of $29 million in the same period last year. This was primarily attributable to decreased gross profit partially offset by a lower level of operating expenses and equity investment losses alongside higher other income.

Moving on to our balance sheet, as of the end of the quarter, we had $99 million cash and restricted cash, which provides ample liquidity to fund the global expansion and next-generation technology development. We continue to strengthen working capital and profitability alongside these strategic investments. In summary, our second quarter financial results faced temporary market headwinds. They demonstrate the effectiveness of our product strategy, cost discipline, and operational execution. With several significant vehicle programs scheduled for SOP in the second half, we expect to see full-year revenue recover strongly and grow by close to 20% year over year, driven by volume growth and improved product mix.

With our scale growing significant pipeline and disciplined operating expense controls, we remain confident in achieving adjusted EBITDA breakeven in each of the remaining quarters and the full year 2025, a significantly improved full-year financial performance. We have full confidence in our ability to deliver on these targets through our focused execution and operational excellence. That concludes our remarks today. I would now like to hand the call back to the operator to begin the Q&A section.

Operator: Thank you. We will now go to our first question. One moment, please. And your first question today comes from the line of Danlin Ren from CICC. Please go ahead.

Danlin Ren: Hello? Can you hear me?

Peter W. Cirino: Yes. Hello, Danlin. We can hear you well.

Danlin Ren: Okay. Good evening, everyone. This is Danlin Ren from CICC Auto team. Thanks for the presentation and congrats on your results and all improvements in the first half. Now I have like three follow-up questions for you. My first question is about your non-automotive business layout, because we found that you secured a design win for robotic lawnmowers in the LiDAR domain before, right? How do you expect the development of non-automotive applications in the future? And my second question is about your progress in overseas expansion, because since we secured VW design win, what advancements have been made in acquiring international clients or establishing overseas R&D or production facilities?

And my last question is could you please update on the progress of your in-house chip development? That's all my questions. Thank you.

Peter W. Cirino: Hey, Danlin, thank you for the question. This is Peter W. Cirino. Let me try to address some answers here. I'll take them one by one. With the non-automotive business, we secured this win in the past quarter to bring our LiDAR forward on the robotics solution. So we're quite excited about that. Fundamentally at the technology level, I think that the capabilities that we're bringing into vehicles can be similarly leveraged in the industrial space, especially as automation increases there. So whether it's SoC sensors and software, we think if they get applied to a wider range of smart devices that there is potential to further expand our business in that space.

LiDAR was a technology that we've been developing for some time and it was at a point that it could be quickly developed for the application and we're very optimistic about the potential in the future in the robotics space. Your second question was about our growth on a global level. So as you know, ECARX Holdings, Inc. has been building our capabilities throughout Europe and other international markets for many years now, starting with our efforts with Volvo Car in Sweden as early as 2021. So earlier this year, we were super excited to be able to announce the Volkswagen program as our next milestone in that space.

As we mentioned in our prepared remarks, we have a broad set of pipeline and portfolio that we're pursuing that has more than $1 billion worth of lifetime revenue on programs we've already won. In total, we've got about 14 active programs with eight different carmakers and four wins to date, obviously VW being the one that we won. And then you can look at the announcements that we made this quarter as continued significant milestones in that space. Ziyu mentioned the award that we won from the Volkswagen team in Brazil. We were quite honored to be recognized with that award.

I think that's a demonstration of the company's technology robustness and program delivery capability that soon after winning the Geely program were recognized on our innovation capabilities. And then the Google white paper that we announced continues to demonstrate our ability for high-quality, extremely fast software development in the automotive space. So we've I think we continue to progress on the global business and we'll anticipate seeing additional activities as the year goes on. And we also mentioned the software program in China with a leading global luxury OEM that I think is another key milestone that we'll build on with that organization as well.

And then relative to our internal capabilities on SoCs, we announced many times the continued growth of our Antora platform, which is built on that capability. And we continue to find applications and opportunities to grow the Antora platform both in building additional market share as that product grows quite substantially across a number of different OEMs and then also growing the capabilities of that platform as we continue to develop software-defined vehicle applications.

In addition to that, we're continuing in this quarter or in this year, we'll be launching the Qualcomm A295 product into the market and we continue to have a broad set of products both on Qualcomm and other industry solutions as well as our own development solution with Cyanogen. So hope that answers your questions.

Danlin Ren: Thank you, Peter. That's all my questions. Very clear. Thank you.

Operator: Thank you. We will now go to the next question. And your next question today comes from the line of Wei Huang from Deutsche Bank. Please go ahead.

Wei Huang: Hi. This is Wei from DB. Can you hear me?

Peter W. Cirino: Yes, Wei. We hear you very clearly.

Wei Huang: Thank you. Thanks for taking my question. So my first question is, in the first half, we saw roughly 1.2 million new vehicles equipped with our solutions. Can you give us a volume guidance for the second half of the year?

Phil Zhou: Hey, Wei, this is Phil speaking. Thank you for your question. So let me address your question. Yes, it has we keep making traction in volume and the market share growing. And in the second in the first half, we already achieved the 20% year-over-year growth in terms of volume and the momentum will continue. So as Peter just mentioned in his session, we have so many progress for the SOP in the second half of the year in 2025. So I'd love to see the volume in the second half. In the second half, we'll continue to grow. It's like 1,400,000 to 1,500,000 vehicles. That is pretty under our confidence level.

And in terms of where we are able to deliver nearly 2.5 to 2,600,000 vehicles. That is also about 30% year-over-year growth.

Wei Huang: Understood. That is very clear. My second question is regarding pricing. You talked a bit about the pressure in pricing in the first half. So for some calculations in the second quarter, the content per car actually improved quarter over quarter. Can you just talk a bit about that? Is it that the impact from the government's anti-dilution policy against all the competition in the auto space? Thank you.

Phil Zhou: Yes, sure. Thank you. So yes, we appreciate the government's confirmation on the so-called anti-dilution moves. But we also have a bit of lack of the entire industry has realized the challenge caused by the dilution and we expect this pattern will continue in the near term. So I mean, in the industry pricing cost and productivity actions will mitigate the impact and give us some room in terms of margin and recovery. So our pricing strategy is very clear. We always provide flexibility in terms of volume and market share acquisition. We always would like to maintain a share, stabilize the business, and boost up the volume, which drives our revenue growth.

And to support the profitability improving, we now are taking several actions. Number one, we will keep driving our cost optimization activity. So our relentless efforts in recent quarters, we already achieved cost reduction about 20%. And then that is really helpful for us to mitigate the so-called pricing erosion due to the fierce price the market competition. And the second thing is, we really need to manage a good portfolio of solution selling. So the software is really key, all right? And which is a very good enablement to our OEM customers, including global OEM customers. So for example, you already have won a nomination of one famous OEMs regarding the Flyme Auto Corporation.

And I do believe that the loss of corporation can put us in incremental software business and such kind of a recurring business will continue to improve our gross margin. Okay. So, yes, and the other thing is we are expanding our footprint into the global business aggressively and by building the operations over there and by continuously enhancing operating efficiency and productivity improvement, we certainly can drive margin recovery and profitable growth from all those sectors.

Wei Huang: Thank you. That's very clear. And my last question is regarding the ADCU business. Can you maybe update us on your store-based computing platform? And would you also maybe work with Qualcomm's flex SoCs like 8,775? Thank you.

Peter W. Cirino: Maybe I can take that question, Wei. Thank you. I think when we look across our ECARX Holdings, Inc. SoC platform for the ADCUs, we definitely have the 8,775 on our roadmap. So we're exploring a few different opportunities with that platform both in the China market and in the global market. I think we see that trend of Fusion certainly happening within the marketplace. We're also, as we mentioned, actively on our Antora platform, in our Antora 1,000 SPP platform, also launching a somewhat of a Fusion platform in 2026 that will include parking and some Level 2 ADAS safety features on the vehicle. So we definitely see that fusion technology will come into the automotive space.

And we believe with our capabilities that we will we've already prototyped and we'll shortly launch on our Antora platform where we're in an extremely good position as the Qualcomm SoCs and other additional SoCs enter the marketplace.

Wei Huang: Thank you. Very clear. That's all from me.

Operator: Thank you. We will now take the next question. And your next question comes from the line of Yifei Lu from UOB. Please go ahead.

Yifei Lu: Hello, management. I'm Yifei Lu from UOB Kay Hian. I'd like to ask about the growth driver for the second half and next year. For example, the progress of new products, new business, and new orders intake. And my second question is about the customer cooperation and the expansion of overseas customers. Those are my questions.

Phil Zhou: Okay. Thank you, Yifei. This is Phil speaking. So let me address your second question first and Peter probably you can also jump into your address, customer expansion, especially from the overseas expansion perspective. So let me emphasize that we keep optimizing our business portfolio proactively. And one of our strategies is to drive a diversified customer base. So we in the second quarter, we already achieved that the business mix the business portfolio in a relatively healthy way. For example, the Geely Auto business occupied nearly 40% to 50% of our total business and the Geely Ecosystem brands occupy nearly 30% to 40% and the rest of our business came from non-Geely business, which is about 15%, all right?

And in terms of the customer structure, China versus overseas, now in the second quarter, our business already has been optimized to 60% and this just came from China OEMs and the rest of 40% came from global OEMs. Of course, those global OEMs include Volvo, Polestar, Smart, Proton, and other Geely ecosystem. Meanwhile, we are adding new names, new global OEMs into our portfolio for sure. Volkswagen, that is the one we won the nomination in Q1 2025 and we foresee more revenue, more business from the international brands will be in our portfolio. Okay.

Peter W. Cirino: Yes, I would just Phil, that's a great summary. I would just add to that. Our global activity is very robust at this stage. We're seeing activities across, as I mentioned, eight different carmakers in the global marketplace and many RFQ and RFI processes that we see having the potential to close later this year and can even start to generate revenue in late 2026. So we're very excited about the potential we continue to build in the global marketplace. And I think that we'll continue to see, I would say, more exciting announcements as the year goes on as we're able to share more of that with the investor community.

So I think the customer diversification is continuing to be very much on track and broadening and even picking up momentum.

Yifei Lu: Thank you very much. It's very clear.

Operator: Thank you. There are currently no further questions. I will hand the call back to Phil for closing remarks.

Phil Zhou: Okay. Thank you everyone for your attention to our earnings call. Look, we continue to build upon the strong momentum achieved in past several quarters and this momentum will continue for sure. And while our financial performance was impacted by typical seasonal trends, we continue to make significant progress across our business, securing key wins, broadening our partnerships, and strengthening our foundation for the future. So with the solid business foundation, disciplined execution as well as new business acquisitions, we will realize adjusted EBITDA breakeven in each quarter of the remaining year. And that concludes our earnings call today. Thank you.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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