ECARX Holdings, Inc.

Total revenue increased 45% year over year and 71% sequentially in Q2 2026. Sales of goods revenue was $196 million, up 73% sequentially and 50% year over year; software revenue was $0.7 million, down 42% year over year; and service revenue was $28 million, up 21% year over year. Gross profit was $44.5 million and gross margin was 19.8%, compared with 10.8% in the prior-year quarter. Shipments were approximately 550,000 units, up 51% quarter over quarter and 2% lower year over year. Adjusted EBITDA was positive for a fourth consecutive quarter at $0.5 million, down from $4 million last quarter due to a one-time $14 million SiEngine monetization in Q1. Management reaffirmed full-year 2026 revenue guidance of $1 billion to $1.1 billion and said the second half should benefit from a heavier launch cadence, order backlog, and seasonality.

Ziyu Shen framed Q2 as proof that ECARX is becoming a more global, higher-value software and physical AI business. He emphasized disciplined execution, operating leverage, and strategic expansion, pointing to the Flyme acquisition, the Volkswagen build-out for a 2027 launch in Latin America, the TPK LiDAR partnership, and the Qualcomm Ventures share exchange as key milestones. His tone was confident and upbeat, especially around the company’s ability to grow profitably despite a challenging China market and rising memory costs.

Dylan Jeng highlighted the financial rebound and operating leverage: revenue rose 45% year over year, gross profit reached $44.5 million, gross margin expanded to 19.8%, and operating expenses declined 11% year over year even as revenue surged. He said sales of goods revenue was $196 million, software revenue was $0.7 million, and service revenue was $28 million, with the mix shift toward Antora and Pikes and memory cost pass-through supporting revenue quality. He also noted adjusted EBITDA of $0.5 million, explaining that last quarter’s $4 million included a one-time $14 million SiEngine gain, and reaffirmed full-year revenue guidance of $1 billion to $1.1 billion.

Analysts focused on gross margin durability, asking whether Q2’s strong hardware margin reflected lower-cost inventory and whether margins would come under more pressure in the second half as memory costs flow through. Management said memory cost pass-through can pressure margins, but it is actively managing supply chain and pricing, and Ziyu Shen argued most of the increase is passed on to customers, with strong inventory and supply partnerships helping support the business. Questions also centered on the mix shift into Antora and Pikes and ASP trends; management declined to give a specific ASP forecast but said higher-end platforms should continue to lift ASP over time as older products roll off. On software and services gross margin, management said the software line is small and volatile quarter to quarter, and that the movements are mainly normal business dynamics tied to new product launches and platform specifications.