ECX - Earnings call 4 2023 | ECARX Holdings, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the ECARX Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your first speaker today, Rene Du. Please go ahead.

Rene Du

Thank you, operator. to Call. Quarter welcome XXXX Full and Conference Earnings morning, ECARX and Fourth Year Good today ECARX Cirino; me they questions Shen; Officer, With during for Zhou.Following will Chief Officer, Chief Phil session to Operating Ziyu all Executive the be Officer, answer prepared Q&A Peter their and available Financial are Chief remarks, Chairman your and follows. that earnings you the call start, applies call. I to our refer we bottom also is at would statements recorded.Before to release, being today's forward-looking to note Please our which press of like this actual specific to in Further factors SEC.In include measures. information on risk with certain filings materially that addition, found could be of cause call will financial discussions results can this the differ non-GAAP our measure bottom to at also A reconciliation can to call of be of I'd like earnings the the release.With hand that, the Ziyu. over GAAP found non-GAAP our to measure ahead. go Please

Ziyu Shen

you, road high their Thank Global penetration and to gain become value grow ] that XX you the participating our benefit uniquely XX last million X exported creating to [indiscernible] with X.X in over the tandem.According with to pivotal quarter in innovative XXXX, topped to a auto ] CAGR are everyone, our XXXX supporting offer EVs fourth offered hitting by variance as grow equipped they X% continue for auto a USD industry. Across market December. and will XX% share same automotive was brands are another globally, forecast at PCG, sales from, road [ period China from year. year our at XXXX significant There XXXX With billion, for the Japan thank technology. from market Rene. XX% vehicles in platforms the world Hello, in vehicles quarter opportunity call. software million by automotive OEM positioned XX exporter. China's vehicles we product for on vehicles customers.ECARX year market in increased a for million of portfolio. record demand last full expanding and incorporate XX the our with that XX% global EVs on top normal [ are car now to earnings software of

our starting the X.XX vehicles are for year solid record our year-over-year, we out competition RMB pipeline next XX ] includes models technology.This quarter an XXXX, a where the of the expected on reflected that during a XX that hit ]. We X.XX to road present [ launch expect growth of with year and results ] strongly fourth the incorporate into in X growth increased financial despite to enormous up over million which pressure revenue opportunities additional months, translate high [ the vehicle continues employee RMB year-over-year.The intensity hit our XX% XX% while billion, billion, [ sector revenue up for is

as profitability we supply towards [ continue growth, business working build future across in our we operating to simultaneously to improve to grows scale. to sustainable our a long-term are intensity chain While our invest ] path

Service, showcased of full ] the we Polestar also winning vehicles internationally.All strategic on our mass-market and strengthen these We well-known Both in and narrowed ECARX a brand to to are to scale continues ] key month, Cloudpeak significant ] project the projects equipped customer in our the support XXXX.Our Chinese with X Last the to top Vegas.Quarter for stack. customized increasingly addition continues Las our proposition motive portfolio recognize partnership the China's X to showcase December launch with ] global within launch grow net [ This in software growth. awareness at our of Google unique and our ecosystem them. the X one through of as customer collaboration CES wins highlights year saw is which and number driver billion OEMs [ Auto X.X for international new based brand OEMs the [indiscernible] be Flyme automotive EXXX, OS of expanding alongside met Geely automotive global OEM quarter.Our base. Ecosystems OS, both during their and EV one the loss Automotive [ at added Polestar automotive our success. services significantly a and new OEMs of RMB in all Japanese the with our X that and Our to Car the which RMB compared continues ability base deploy offer solution vehicles the automotive billion to value with [ Volvo our

pleased our addition through pass year the enormous to quarter the in our better results Polestar to quarter the on ahead.I Peter, to with and to cutting-edge to partnership X.I'm products the from in with strong the will with [ intelligent This on and ecosystem. of over growth X, the extremely be with During solution. benefit now new ] Mobileye We embarked go on our we strength venture for the progress existing the growing with will joint to we develop ] in automotive which intelligent position more April smart launch partnership is operating with internationally, driving Sesame call partnerships collaborate [ Black a have made was detail. our profile couldn't who further throughout Xth our the opportunities

Peter W. Cirino

the and in diversifying you, day, business significant partners and good Thank Ziyu, gained everyone. We during quarter. momentum our

As customer of China's multiple the throughout brand with collaboration wins for up a our base to project Japanese top one Ziyu EV picked added our groups OEM of recently models production with mass-market generates or solutions, expected and automotive shows which significant the QX, over by mentioned, we boost ] [ our in momentum of XXXX.To with cities attendees. China early engagement this across sustain had of X the XXXX in X,XXX end visibility we and start tech X

from ] X [ Geely customers existing QX. the within projects and We also new brands Ecosystem Group during won

the automotive of strength high-performance Antora parking platform portfolio solutions. needed our cockpits on computing of production technology.I'll market progress intelligent unit MCU, of on a deployed function the including of integrated TOPS opportunity start for underscores integrates high driving series series, QX half engines.Building the cockpit with Antora series on benchmark of for features. such our Makalu recent strengthen XD a truly has the with begin requirements Skyland Skyland of with combined XXX. and unique to more remote the security hardware Pro, assist information world's of driving its as first QX The the we X OEM view XXXX innovative in a Our and customers available programmable end AI computing debut become Antora the most with architecture, pipeline.The embodies first the experience. is solution. users platform safety power significant islands a ultra the with integrated of ECARX our automotive on and cockpit multiple fundamental digital our the MPU the about.ECARX was built-in very with unparalleled Lincoln for platform features SoC, advanced expected the LiDAR in September. the The X-nanometer first-generation parking control don't leading this which a safe bird's-eye be virtualization the able mass the one computing our autonomous XXX which solutions, which computing seamless perception.Its and our intelligent car launch entertainment Antora the excited grade and market Lincoln high-performance Lincoln and loyalty models, plus X a product high-performance The NoA XXX into last SEXXXX, with providing is ADAS Pro acceleration and production of Makulu vehicle. to TOPS stack and the our saw full year to ECARX powerful graphics, platform version that software Highway number LX to are capabilities, XXX, require integrated models is support vehicle while With platform and solutions updated in-car power car safety

the innovation. for of drivers on our focus been growth One ECARX key has

pipeline continue This us we curve.As had and patent keeps technologies applications a XXX in XXXX, We XX, to XXX registered patents cutting-edge globally. December invest development steady the of to for products. research our ensure of pending ahead features and of and

also ambitious EXXX partner clear supercomputing navigation box designs a product Play.Of our into solution Polestar which the of level from OS their wireless the with It we a co-develop on in-house genesis deepen smart excited way note, where cutting-edge Auto, Services. highly ecosystem. connections the and launch will make avoidance premium bring Volvo Cloudpeak EXXX presence from is and in our SaaS in operating is as the unique with alerts assist, also into driver about roadmap as leverages have feature ability views. modular pilot the a traffic also OEMs. one to in camera that starting platforms XXX help of in an apps operating and instructions new quarter objectives.Our fully In and the meet and partners It integration created we market. a of I'll we internationally and to iconic ECARX grow This comes systems OEMs XX drivers with during Vegas road.The as software was sought build to on from ecosystem stack systems integrates the our the mitigation, significantly industry.We we our global platform [ offerings integrated December, we put was and other seamless and debut partnership including equipped brand a a We globally quarter. developed with across assist CES more models share formed our produced assist, particular continues suppliers, share locally first Google of ADAS the ECARX Android Flyme assist will Volvo vehicle's new entry-level Las and with to us a the change highlights significant suite into over We for with profile and the next-generation launch X based smart a including our previously technologies key year experiences wireless to and is develop partnership our customized intelligent platform latest to model our in from was the with the needs, market solutions X of new at which for to this cross-domain market for it develop we with and operating launched comprehensive to worked Google productive powerful our the the automotive showcased accomplish time recognition automakers.Polestar close during key solution an great in provide The for state-of-the-art able collaboration.We information is Google Cloudpeak are onto boost collision to our solutions ], year's X road. ADAS automotive hands-free and milestone key with customers the Cloudpeak advanced and integrate markets brand successful mass a ability events.Lastly, a companies week customized OEMs. and Google XX hit for addition on for earlier map venture line full vehicles strong to couple all technology technology to lane spans our Smart in smart features, networked testament within flexible infotainment Black driver Polestar joint plans of with to Automotive Auto. a Sesame, partnership Mobileye. The to automotive driver this custom vehicles. can pave is also today.This system system OS of advanced technology Assistant product for Cloudpeak system CarPlay door to Volvo a what sidelines us strengthened were XXXX, a to ability updates the also manages the later global first with of this marked intelligent opening had EXXX collaboration global

tremendous with offer OEMs.In compelling automotive opportunities us will synergies incorporating are of to intelligent conclusion, cutting-edge solution our technologies to this stack rich to positions lots China the growing and into our and growth and leading software-defined have technology and partner their Sesame driver us ideally and vehicles products, a the by ecosystem in enable globally. We full the EV momentum, seize Black commercial created of

we XXXX, of in ambitious we progress While our with that are we've plan now our confidence recognize journey ahead go we a we at stages call the share to of for future.I financial goals. usually in With will market our with work us all-time to the still early will lot who pleased our the meet to made execute vision are look and highs, Phil, of results. through the our forward over turn

Phil Zhou

Thank for momentum RMB revenue revenue closed continues you, year-over-year, everyone. improve. digital up sales year financials a We billion, for Peter, driven the X.XX XX% billion, hello, our increases vehicle to the cockpit quarter grow strong hardware increase volume XX% of out Total programs. and business Computing X.XX our in was by as with significant goods year-over-year. was new RMB and

of an over year-over-year RMB million. revenue.As EXXX products going service in increase will cost medium Polestar profit into last remain Volvo improving transition, the our momentum, primarily license which driven the due revenue on at XXX and pressure in software sales.Service X% strong RMB of call, year-over-year, year-over-year, operating property gross of term, on up by RMB increase pipeline.Our and strategic a by This hardware million, to continue discussed earnings Software focus XX% a decrease remarkable enhancing architecture XX.X%. due was was industry-wide enhanced revenue and margin our the digital in of million, intellectual the of launch have XX XX% to maintained volume sales Total translates XX% expected evolution the we an ] of primarily growth X volume in to revenue and [ margin customer pricing the efficiency. we cockpits primarily surging of forward the competition, and adaptability license on decrease and progress quarter.Gross revenues booking of increase driven business acquisitions of year-over-year sequentially, XX% EE timing a during and was came XXX

around expansion. mostly We EBITDA and profitability and an X.XX expense RMB margins.Operating of XX% investments strategically expenses.Adjusted will to RMB well our increased investments. sheet. efficiency Full primarily expenses finished due to loss we share-based revenue EBITDA of continued as year-over-year expansion balance driving year, XX% between attributable optimized The this year-over-year. product development. due billion, value our impact This and XX the footing, in during do international X.XX increase in up RMB to further ] million costs last operating by [ improvement decrease year-over-year, of last decreased mitigate growth, of XXX year-over-year, to on X.XX allow share gross RMB of same change million X.XX us solutions sequentially lower investment.Loss with profit the by RMB a RMB during compared growth with new any will on our the equity operating giving billion, XX% fair products loss as the period year XX% [ increase targeted balance seasonality was Having was up in an minus RMB a line year-over-year million, RMB primarily adjusted to cutting and impact from The year. the XX.X%.Throughout at XXX technology road and on minus per of the in a million, year strike core prioritizing full in making XX% a year.Moving and investments period was as gross ] our to XXXX potential solid of came quarter improved of well decreased XXX top global due as map year margin was the and compensation from same R&D year, loss sequential last

XXX cash, resources gives had cash accelerate RMB which we our million sufficient invest restricted us of XXXX, and XX, December to future of and in As growth.

opportunities. and we our long-term forward, in expenses strategies.On particular growth will to sales to Going supply operating the will focus a manufacturing side, mid- product chain further to R&D with optimize we drive on and product, continue invest

will sales engaging products a model.To focus to will of products. the automotive ] management transition [indiscernible], further supply the both and China This in from and summarize in internationally.And [ partners, On on manufacturing balanced support portfolio components. finally, structure area of wider with we focus side, a of cost on improve strategy ODM OEM and premium new and we higher-margin optimize an our the OEM will also chain a strategic

do systems, acquisition.We from process will system Lastly, in make impact for GCAR mitigate environment, upgrades delivery. the the over global to reflect of investments to supply strategic To to markets. closed mature, loop past want X Each so, [ time challenging closed will in business acquisition and order to careful loop this sustainability proactively strategic the geopolitical nature we investments presence expanding R&D and and model.The the ensuring of build are of chain of an span other critical customer ADAS take the had few the and strategically increasingly global that entire are R&D both approach. ] China to for one have our we our acquisitions, to and for but the quarters

We call more would over XXXX remarks the the finish strong today. enormous our in In easily a ahead be sustainable back the are to operator look position we session. healthier concludes prepared will pleased now to to and us.That forward I Q&A will of business like opportunities and to ensure the the to with our conclusion, the begin hand long-term.

Operator

question of from from first the Soderberg Derek line Fitzgerald. And the Instructions] [Operator comes Cantor

Derek Soderberg

mark. the million reaching vehicle X Congrats on

EBITDA efficiencies. How expectations on And talk for profitability? margins that gross do trend the So will throughout gross impact your margins hit guys you how will when year? talked about think you bit about a operational Can you'll you XXXX?

Phil Zhou

I'm address you. questions. This thank Derek, to happy your is Phil.

in many [ ] I Tier decrease faster we the to [ are having the communicated [ foresee entire the the profit erosion, mean we X ] pricing our erosion. serve industry, that while earlier ] that is cost right? players pricing optimization competition behind pricing So had due we

still ] the So of [ at heart we're product their profitability.

the on face content do program order strategy with which through sustainable enable will overseas through the full big the the we a most ] markets stack the advanced expand growth. software-defined implement pricing unique will quarters as Volvo of and [ pressure highly our Lotus, in portfolios, solutions. focuses profit are same smart, features. continue and to able industry our We also cost okay? software, keeps We acquisitions the in and Cloudpeak of us the as brands the head Volvo in -- vehicle cross-domain market we And increasing our support few in we in pricing we the Google example. to the embrace want serve of coverage customers. global share in to players deploy drive business is time, [ our XX and globally.So in mitigate high And our integrated diversify strong.And the structure impact, [ markets. our to Automotive pipeline.So dedicated are to consistent ability and we in Services the EV to to diversified upcoming in cost ADAS flagship we so Polestar. into we very footprint evolution new of as with our the are also the and typical wallet to also a Volvo proactive a will headwinds names continued development in the is like vehicle EXXX and strategic customer And structure OEM provide with Lots our launch both ] China improving competition proactive see to at And keeps business our improve And bond ] way, activities. in result, a of the And

portfolio word, and the will service products focus drive from So, and Derek, fulfillment selling in efficiencies. reduction, our maintain product other on ECARX supply service, cost chain solutions and we software growth,

investments We to top on impact. line will growth and margin and stay new between very mitigate disciplined profitability balance

Derek Soderberg

about of new new allocating you about pressure, see content you you trend? to should content software? average Anything talk bit additionally, from your do XXXX talk innovate, partnerships. guys how the more that the vehicle software What's a the rates You feature element can side? expect standpoint, the be on there And sets? the the on to on sign an continually per trending And like per the content we continue a software revenue little you R&D vehicle? just on as just Or you And it how maybe within of continue add talk side through think the how what's pricing And add vehicle? per attach you some how today? helpful. bit seems would that to per about features. guys Can vehicle you're software And about

Phil Zhou

Yes. Sure, Derek.

numbers, our So allocate the how I question the per talk vehicle per about can software, how the maybe content vehicle will profitability and improvement. to you to through Peter, regarding address content increase

the vehicle So we from range per RMB Derek, of product content our portfolio XX,XXX wide and a have solutions car. per X,XXX to RMB

have take end and we high to Last example. want And demand programs. We solution. discussed customer full vehicle on just their covering our it's for time stack almost the to XX, end low Lincoln solutions different meet

we X,XXX that developed And driving around. that XX,XXX provide software per also provide that solutions.And RMB our functionality, example, our ] the launch we solution. on Solution, Lincoln will X,XXX platform. content -- the our We ], Pro, EXXX, the helped [ operating us cross-domain in And and saw provide provide newly Skyland [ definitely, the improve vehicle Flyme our RMB ADC is unique autonomous then well. RMB XX,XXX take Antora the to autoplex for market. also the to profitability And first it's we Volvo as Auto Cloudpeak the and our also computing Pro increase system You XX

can the maybe And you more are on you. with can numbers Peter, information. these add share So I

Peter W. Cirino

sure. Yes,

doing impact capabilities mentioned few to where we're with top software. and But and portfolio OEMs complete With it's base-level OEMs build from very engage how Lincoln silicon very then to Co software we some platform So capabilities, certainly, dependent be -- confident that that with -- Phil product few working with OEM-specific a just and on Others the topic. a I software the we're think of the Volvo a stack it. to a tends some stack.So examples, of the providing comments This on base OEM perspective we we think unique very mine them. their cloud, and can proposition value I we're on bring can the all really value make to that customers with a from sure up very -- model OEM we and the ECARX work we with strategy and our to closely markets. those drive in

Operator

And from the the of [indiscernible] next line comes question from Jefferies.

Unknown Analyst

regarding for My IQ cooperation there It details first on with question was a have And collaboration be moment? at IQ is Mobileye curious I'm will are platform. that to project the Mobileye. mentioned ECARX provided with X we more the just X if

Peter W. Cirino

question. Yes. Peter. This address is I'll that

we with number platforms. of we Mobileye on collaborating were I a think announced different

years will one later the out a the would and launch. few to Polestar expect first be Chauffeur more in come with we system, The then XXXX one mentioned, advanced you

collaboration vehicles.So go-forward a from adapt needs and OEMs' those to the solutions with are partnered very pretty them we the can the excited we're our a system. where value bring unique They've we've into got think basis to different we in excited integrate customize propositions what on across about with great Mobileye see we systems table and we a I we're Mobileye. into the as the brands. with And number So help a specific of way able requirements, as can

Unknown Analyst

the second regarding is And expansion. progress overseas my of question

term? proportion by overseas do we market? like revenue longer do we each what expect And of we do have breakdown So what -- any

Peter W. Cirino

we I ago. sure. you our Yes, started as years international a few mean, expansion know,

to the Automotive bring of across I marks think ease XX and world. significant markets EXXX different the north event the Volvo on we're with Services top of this year very Google a throughout that launch able that

a the able a continue that throughout demonstrate European hopefully, OEMs. further make we few as this great move it's announcements -- go forward, ECARX to industry we'll to number engagements of to for cycles big a year. capability.As So very we're -- Design milestone be a with I we significant number able think be having in a And can to be years.

quite this we programs it of to those the different before we see start be launch to terms we're large potential I about we're traction think demonstrate customers, clear could capability. financial and time up We're volume, excited of that numbers. on is ramp approaching continue But the there. in seeing the movement as and So of develop period a meaningful number now

Operator

And the from Financial line Soochow Limited. Securities from Ivan the of comes question Holdings [indiscernible] next

Unknown Analyst

Congratulations it on ] our the know company? already challenge an IPC a [ Antora the on My is performance. to I first to question [ if Therefore, impact any like is, ]. there applied call a would or has opportunity? Is

Peter W. Cirino

Thank Yes. you for the question.

-- set changes think environment. we'll the I if throughout AI we look think at impact, broad entire the I see a of

our have to drive the of experience into capability projects as through show we and our well. vehicle, of and the some We've a effectiveness significant application, in go development capability our time got the lines. we've the company, provide as operate inside AI we quickly got ability the the throughout can projects our strong effectively AI a to deploying see we events deliver enhanced, processes can inside experience as the development the software.I use at pipeline opportunities also will programs more as by on, and And that software our capabilities look be back-end -- our tight solutions number using speech But large what deliver fairly You capabilities and user number that very the internal of of detail to enhance capability to in the quarter. market we in think anticipate think to especially plus both vehicle we a user of see capability providing details. our to that rapidly even efficiency I and AI significant a very internally this better accelerate automotive can vehicle great systems improve even

Unknown Analyst

next the the like on question And know collections impact I to how company? rate our would exchange is, we view of

Phil Zhou

question. you for Thank the

hedge hedging also monitoring cash, -- in RMB do China could chose currency. in be the companies is decide to business mainly also cost benefit. expense carefully, for the we trend So costs are And our not same while the operations operating of not multinational their the yen, in and reason.And the to revenue any of RMB, that many considering not because RMB but are foreign of observed we than our Chinese higher are XX% the

of to cost. reinventing in are order we the in we my contract foreign potential script. China, in risks, outside rate for is have fluctuations.And and to procurement the mitigate exchange mitigate called the sales ECARX the So as Cost meanwhile, I

loop delivery. overseas closed tactics, including impact. we will ForEx proactive market increasing, And overseas systems to to treasury with customer form launch currency hedging in will the mix the from production stabilize We revenue R&D,

Operator

question the from CICC. line the from And next comes Chang Xing of

Chang Xing

Big the for year strong for revenue the a congralutions very XXXX. having team for

have I questions. X So

is going first a year we be And evolution gross the for the the one are the in for experiencing margin more fierce there's to is fierce of XXXX ]. on seen XXXX. gross margin. also we have The The regarding and going definitely competition trend that there's [ trend China

more the margin actions profit So will you margin, the could improve a is, us give question, to software first what gross the that's team forecast in please. XXXX? my guys And on question my example, So quarterly take the for have to content? are

Phil Zhou

a the for pricing second has [ a are 'XX is service, fierce our as portfolio are And managing Well, Thank through and we software, balance compressed. entire Yes, do drove selling while the maintain ] value and to we a the chain product, in throughout profits goal XXXX, our that since aggressively as as and good initiatives XX%-ish protection pricing industry margin well premium Yes. you still profitability of cost down, question. plan, product our the gross half the earlier, achievements.And I we observed the revenue reduction ECARX going solutions. cost we well. growth very launched to mentioned and good between unique proactive competition as also XXXX, launching, in

erosion improvement full-stack our drive That pricing average to -- mitigate mitigation our Lincoln will EXXX. solutions, margin our for profitable to example deliver and our selling our what margin [ margin the to support basically continue and the diversified We and cost increase Co-XX we can fight erosion, XXXX. ] with path price impact demonstrates will margin content stabilization pricing to improvement. our is per we growth.Again, proactive of about continue or like The the this structure ecosystem successful Volvo vehicle. will or approach pricing The and the competition of in launch activities

Chang Xing

second my So design win the question the project Japanese is regarding with company.

Chinese congratulations more is with how manage into to project And insights project be the into the OEM? you us this win. to So this it's secure design on a or to you going provide this market? global Japanese Could phase did

Peter W. Cirino

we customer for new our you as excellence lot question. We've continue and inside energy with top execute I Thank to onboard would sure. one put customer it's the organization a broaden diversification. base, our to priorities with closely Yes, work towards certainly very then of of the say clients them.

customers. These of beyond go rest onboarding where think quite X of with the we to I quarter. engage we can similar have the grow progress amount as to here inside and made deeply outside as work of those of think I markets continued organization. year, put more initially we announcements through both XXXX our China focus we gone China and of today an closely as the continue about we'll tremendous in in in significant as markets partnership And -- I we're So think advancements with see we've new as customers, will well world. in market new with talked to the Today continuing opportunity China, through broaden in the some as well.So got -- we've start the grow that to customers of through end last we

Chang Xing

definitely Yes, important. the very engagement

questions. regarding Mobileye's from previous is actually question second the [indiscernible] my So

we indication on give a the So clear the more could of ] domain boundary maybe [ cetera? Are collaborations? Mobileye's to of controller us GCAR's the or to controller, develop et going Mobileyes are going you develop -- domain

Peter W. Cirino

implement sure. those a Mobileye well as collaboration I mean, as systems. our with Yes, really Mobileye as we engagement ECARX quite capabilities tight is capabilities of

think as solution overall to certainly perception bring as bringing fantastic both in the of in overall like chain system well set and that best that other inject software in integration system software brings of vehicle together. an also our technology to the spaces we well.And the their for software their portfolio some help that inside vehicles. to sensor key in we the we're capability supply in Mobileye partnership, SoCs, I some their brings ECARX stack, So decision that's as driving capabilities parking automakers. terms functions organizations

So vehicle. and we I systems them on great bring with into collaborate to with a to great discussion work closely had we'll opportunities think the the in Mobileye team quite and CES, continue

Operator

And comes Megan line the question the from Macquarie. from of Jin next

Megan Jin

our I start also -- U.S., our and there One been in to in growth X I on the is how from questions. on plans transitioning? plan. ] of business, transition have more EV competitive our delay to is the Mercedes on this I'm question. And of for player the versus deadline like our this wondering the announcing Continental the year would of business. OEM? X Bosch business? we when Benz orders like seems overseas has noticed get Europe first trend established that this advantage in impact what Tier the And demand to are outlook [ the year also That's overseas slow, the my this try and

Peter W. Cirino

Yes. Thank you.

a think question. I great that's

continue for a at to all, look the first technologies. on market of market, outlook You in we opportunities lot our significant of see the

in undergoing As advance you these to investment. -- continue significant definitely we in this as industry, spaces vehicle are the

focused not exclusively. often they tend think I be EVs, but on to

number platforms somewhat those EV driving, vehicle, launch the same OEMs they're for to help tended concerning autonomous opportunities they vehicle but efficiently, the because and great they as exclusive have the investments those inside industry. experience connectivity vehicle, digital work EV make a technologies driver. the the not to software-enabled So in agnostic electrification experience the new.But of those these that There's the are can certainly, provide systems drivetrain big

we to as go as customers. the continue ECARX the ] market we of carmakers So do technologies. all talk very fairly markets, brings space. see, I growing you our we'll as do of large market, at in significant capabilities we ECARX ECARX and think through [ future with investments new And number both these our that we to and making cycles.When into are -- capabilities, continue And look unique a the in opportunity we the scan

think solution. the stack first our I we frequently, one very full highlight

in So, joint very a as ventures we strategic ecosystem, partnership that's look across tight or -- through whether deep collaborations. us our

today, able way all very to X customers system company wide with we've since take premium at capability bring operating extremely into rapid of piece, road, to calls is We're I with drive to that to at We brands that automotive a substantially. the these platforms that we competitive mean, as from talking XXXX, new with for strong customer. quite XX% a rapid cost very speed. the about that a talk capabilities.And the customers. brands only unique that about something I in Last a cloud very number million on unique as and safety, systems growth we to platforms, to think, full to and we're on think, of of a operate we're Again, that through ] the on a I speed services an cost operate big last to pace. variety a built capability, vehicles understanding and And got build international [ operate XX% with customers the that throughout are we the number is capabilities pipeline vehicles and and ECARX able customized, very self-developed very those you extremely you set then unique scale in of been conscious And ECARX.The the each solution having market. well extremely launches operate is wide think year, impressive. capability able scale. and already as deliver that's entire vehicles of at an bringing vehicles.So of I with us to growth the are We're and see high grow These number continues that very quality. speed broad at saw to on full very second year, breadth we to those stack the helps customers, deep differentiators a are stack in silicon solution talk our be our existing a and the

Megan Jin

the move the is market? our the the that that I on I'm features more in China. think lower My was to maybe how installed cheaper business? cheaper model do advanced and noticed and Especially, how into second there how have in market. end think China's we about do this and I impacts wondering more more And the in fast-growing question the we trend as about trend product competition of also

Peter W. Cirino

do in very we something within see years There advancing react quality very global special less capability think is that and be at months. market I certification, for is is the very will dynamic fantastic it to something technologies is XX a the than level ECARX.I this done new our that. a I trends think, Customers a that very we to very to a the think market China and conceive move This can quality And evolved very into and and bring we right? market industry. demonstrate a fast job the in this and China continue ECARX diverse. vehicle market, company in X dynamic we and with -- unique has times And executing are a market, that quickly. over high continue do

lot our cost. there's sure, but competing that a of lot of existence. on pressure There's here, been a X successful years on has in X, ECARX competition For environment in of very pressure

I in think to continue do environment. we'll that very well

Operator

from comes [Operator Instructions] next the of Michell from Liu And HSBC. the question line

Michel Liu

Hardware first the the with the next domestic map the and investors' regarding few years the the one global what pipeline models in X, market? year this following is equipped the both roughly you our in out And well? smart customer. Could questions. market in is have I just previous as And

Peter W. Cirino

kind -- we're we environment mean hyper launches on don't always see 'XX, capped for in, had a EXXX the launch. off with sure, coming, don't I Volvo specific great get in the of I we we we've but that Yes, especially think

I Polestar the think launch of about talked we certainly inside China.

broad see talked at we set through already that. to vehicle that global scale a of about We'll continue as launches. XXXX. launch will We've go We

new we've think I X discussed customers.

probably into of great some with to we're are launched those them having we platforms see towards so could end the go we more least think start get earlier, specific one as this on that that launches produce some in XXXX. mentioned customers dialogue We at of will Europe year, even coming.I can vehicles I

So development tight that the that I said continue ECARX across see as global launch window well And I in environment. to is think will the earlier, extremely I shortening of cycle executed market.

And in markets. see So to our a pace. rapid grade I very, a automotive see think the very deliver and fast that we lot global we're that at great ability value excited pressure add you at solutions quality come of to to can

Unknown Analyst

software computation cost. And we is digital importance kind not including more of the driving environment previous one ] on that functions, and to is this the hardware But willingness functions. you And the that this of the we in cockpit attaching for Obviously, questions. the year, regarding smart pay is also, the [ fierce on or note autonomous the see second this smart very and touched customers strong. customers

of year, cost. that XX% the OEM cut their they're going smart their in to the of call last hardware earnings [indiscernible] So mentioned

we of in as the cost reduction smart overall hardware our how do trajectory coming cost the reduction project as years? well So

Phil Zhou

This very is a good question. also

of â€“ So features the the loss for because our cost, full provides platform, covering to ECARX ones customers. computing our and stack solution software that

the our drive activities cost will regarding down -- are for driving hardware we aggressively. we sure, So solution, and

boundary no the about always cost there's optimization. of So

scale. large a have we So

can can time, with heavily the from well. we actually, All negotiation our have [ structure time, And price We solution. software up build of And the can time we premium. lot And we our a that, into I solutions also in that, window healthier our market. activities cost computing those right, as earlier, next-generation can of able With challenge. firstly mix the total costs solutions cost marketing us in suppliers.At for same time, launch a effective work those into and all we hardware significant a of same protection the those supply maintain we the same investing put price some the are to At service and revenue business. protect pricing our products. power gain with play.At us mix service mentioned margin lot our room also our relatively ] us on faster a can to are play as we

customer, profit can faster So our customer as those [ frame comment. time long in of to from as a link we make we satisfy we lots we ] revenue. of and can service service features can deliver We our terms still

again, have portfolio same full software, profitability coming from effective customer with our year. time, So a in we activity service driving our the and in hardware hardware, at play, the confidence balanced delivering

Peter W. Cirino

I'd to just Yes. add that. Maybe

also you OpEx that I especially in see think our results, in XXXX.

significant We in top this revenue. very line have the had growth

technology and in better that we'll 'XX. business under I tight invest as to to do OpEx that pipeline, continue scale 'XX. a produce the a at launches our We through And get control of continues an and in lot think perspective at we very cost from

see line, we also the we're think I investments of in that engineering efficiencies technology on but see and lot margin mentioned So that gross and that we the the a making. activities Phil

Phil Zhou

decrease. drove in as lean mentioned, savings and a to redeployed We the And we XX% expense, operations in a it's our expansion. Peter And very from from year-over-year for our a perspective, global it's control. just And Yes. parallel, R&D the effective business. operating SG&A our

our right future capture So opportunity. growth all to those the approach are

Operator

conference management for the over further would I There are hand closing any team no like now questions at time. ECARX remarks. this And to to

Peter W. Cirino

you, the today. All right. the everyone, questions and time all, first thank of Well, for

continued years actually continue on in the the to business we've and but expansion. execute that to making anticipate also mindset, we're behavior in the growth in focus right ECARX, quite that many to of the the have well think drive and for we've right an done competitive profitability ever well terms environment, right investments I but

new with XXXX forward new of as a think ] we new a product well activities forward launches, looking I customers. to they'd as So, use we're very exciting as number [ new in go of terms

you time So for spent the again today. with us thank you

Phil Zhou

Thank you.

Operator

you Thank today. for conference for our conclude does participating. That

Have now may day. nice a You all disconnect.

ECARX (ECX) 28 Feb 242023 Q4 Earnings call transcript