ECARX Holdings 2025 Q1 Earnings Misses Targets as Net Loss Reduces 35.2%

ECARX Holdings Inc. reported its fiscal 2025 Q1 earnings on April 30th, 2025. The company saw a 30% increase in revenue, reaching $1.22 billion, yet continued to report operating losses. Despite narrowing losses year-over-year, ECARX fell short of market expectations with a net loss of $196.90 million. The guidance was optimistic, projecting continued revenue growth and improved profitability, aligning with previous expectations for achieving EBITDA breakeven by the end of 2025.

Revenue
ECARX Holdings saw its total revenue rise 30.3% year-over-year to $1.22 billion in Q1 2025. Sales of goods contributed significantly, accounting for $879.20 million. Meanwhile, software license revenue experienced robust growth, reaching $186.60 million, and service revenue added another $156.60 million. This strong performance across all segments reflects the company's strategic focus on expanding its product offerings and market reach.

Earnings/Net Income
In Q1 2025, ECARX Holdings narrowed its losses, reporting $0.57 per share, a 32.9% improvement from the previous year's $0.85 per share loss. The company reduced its net loss to $196.90 million, marking a 35.2% improvement from Q1 2024's $304 million net loss. The improved EPS reflects ongoing efforts to enhance operational efficiency.

Price Action
The stock price of ECARX Holdings jumped 13.04% during the latest trading day, surged 18.18% in the most recent full trading week, but fell 13.33% month-to-date.

Post Earnings Price Action Review
Following the earnings report, ECARX Holdings' stock experienced a decline, despite the positive revenue and net income metrics. Historical backtest data indicated a 35.29% win rate for revenue over three days, a 58.82% win rate for net income over ten days, and a 47.06% win rate for EPS over thirty days. However, the stock fell by 2.69% within three days after the earnings release, decreased by 4.62% over ten days, and dropped by 2.17% over thirty days. The maximum return observed was 1.40% over thirty days, suggesting that positive earnings do not necessarily lead to substantial stock appreciation.

CEO Commentary
Ziyu Shen, Chairman and CEO, emphasized ECARX Holdings' strong momentum in Q1 2025, with a 30% revenue increase to $1.22 billion despite global automotive market challenges. Shen noted a 30% reduction in operating losses year-over-year, attributing this to improved operational efficiency and cost optimization. He highlighted the resilience of the China market, which grew 12.9% year-over-year, contributing significantly to the company's performance. Shen reiterated the commitment to innovation, announcing successful project wins and product launches with Geely’s Galaxy E8 brand, positioning ECARX as a leader in intelligent automotive solutions.

Guidance
ECARX expects to maintain robust revenue growth, aiming for operational efficiency and profitability improvements. The company anticipates more project wins and partnerships, particularly in the international market, while planning to establish a global supply chain and engineering center in Singapore. The outlook is optimistic, targeting sustained momentum and leveraging innovations to drive future performance, with an aim to achieve EBITDA breakeven by the end of 2025.

Additional News
In recent developments, ECARX Holdings partnered with HERE Technologies to launch a next-generation in-vehicle navigation system, enhancing its global automotive tech offerings. The company also strengthened its relationship with Qualcomm to expand its product portfolio based on Snapdragon Cockpit Platforms, showcasing a commitment to technological advancement. Furthermore, ECARX unveiled ECARXperience, a revolutionary AI-powered in-vehicle interaction system, promising to redefine the driving experience with adaptive AI capabilities. These strategic moves reflect ECARX's focus on expanding global partnerships and enhancing its technological footprint.