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The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report. This report contains forward-looking statements. See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.
A.Operating Results
As a global mobility technology provider, we develop full stack automotive computing platforms including SoCs, central computing platforms, operating systems and software. Our current core products include infotainment head units, digital cockpits, autonomous driving control unit, vehicle chip-set solutions, a core operating system and integrated software stack.
We have established a successful track record since our inception. As of December 31, 2025, there were over 11 million vehicles on the road with ECARX products and solutions onboard. As of December 31, 2025, we had a team of over 1,400 employees based in 13 major locations in China, UK, USA, Singapore, Malaysia, Sweden and Germany, approximately 70% of whom are involved in research and development, providing the foundation for us to serve 28 vehicle brands across the globe.
In 2024, we acquired a controlling financial interest in HF Tech Europe AB, an entity under common control. Comparative financial information for 2023 is presented by combining assets, liabilities, revenues, expenses, and equity of ECARX and HF Tech Europe AB using the pooling-of-interests method. All intercompany transactions and balances between the combining entities have been eliminated. Please refer to Note 3(a) of our audited consolidated financial statements included in this annual report.
Our total revenues increased by 16.5% from US$662.2 million in 2023 to US$771.5 million in 2024, and further by 9.9% to US$847.9 million in 2025. We recorded a net loss of US$143.9 million, US$137.8 million and US$68.9 million in 2023, 2024 and 2025, respectively.
Key Factors Affecting Our Results of Operations
Our results of operations are affected by the following company-specific factors.
Our ability to continue to increase the sales of our products and services
Our results of operations depend significantly on our ability to continue to attract orders from automotive OEMs and Tier 1 automotive suppliers, which can affect our sales volume.
Since our incorporation, Geely Holding and its ecosystem OEMs have played an important role in the development of our business and revenue base. Collaboration with Geely and its affiliated brands provided a platform to demonstrate our technology, scale our solutions and establish a strong operational foundation within the global automotive industry. Building on this foundation, we have progressively expanded our customer base beyond the Geely ecosystem, securing programs with additional automotive OEMs and Tier 1 suppliers across multiple geographies. Today, our strategy is focused on broadening our global reach and serving a diversified set of automotive partners, while continuing to support leading brands within the Geely ecosystem. Our experience working closely within the Geely ecosystem has enabled us to develop proven products, deep automotive expertise and scalable technology platforms, positioning us to capture opportunities across the wider global automotive market.
Our ability to build orders for our products and services both within and without the Geely ecosystem will have a significant impact on our sales revenue and therefore the results of our business.
Continued investments in R&D and innovation
Technology is a key competing factor in our industries and our financial performance will be significantly dependent on our ability to maintain our technological leadership. As of December 31, 2025, we had a team of over 1,432 full-time employees globally, among which approximately 70% are involved in research and development.
In addition, we have and we plan to continue to explore joint ventures, acquisitions, and other forms of strategic partnerships for research and development opportunities.
Our ability to maintain and improve operating efficiency
Our results of operations are further affected by our ability to achieve and maintain operating efficiency, as measured by our total operating expenses as a percentage of our revenues. This is critical to the success of our business and our future profitability. As our business grows, we expect to achieve and improve our operating efficiency and enjoy economies of scale. Our future performance will depend on our ability to achieve such efficiency and deliver on these economies of scale.
Key Components of Results of Operations
Revenues
We generate revenues primarily through sales of goods, software licensing and services.
Sales of goods revenues. Our main products include:
•Automotive computing platform, which we supply to automotive OEMs and Tier 1 automotive suppliers to be assembled on cars with infotainment head unit or digital cockpit, and autonomous driving control unit;
•SoC core modules, where we sell standardized computing board, which integrates SoC with core integrated circuits and peripheral to automotive OEMs or Tier 1 automotive suppliers; and
•Automotive merchandise and other products, which are primarily basic electronic components such as resistor, capacitor and circuit board sold to automotive suppliers.
Software licensing. We generate revenues by licensing our customers the rights to the intellectual property of bundled software. Such bundled software is configured into standardized in-vehicle operating system by us to support the overall in-vehicle software framework and infrastructure of automotive OEMs.
Service revenues. We generate revenues by providing the following services:
•Automotive computing platform design and development service;
•Connectivity service, which enables automobiles access to the internet for end-users; and
•Other services, including technical consulting services provided to automotive companies.
The following table sets forth a breakdown of revenues by type both in absolute amount and as a percentage of our revenues for the periods indicated.
For the Year Ended December 31,
2023 2024 2025
US$ % US$ % US$ %
(in thousands, except percentages)
Revenues
Sales of goods revenues 467,403 70.6 611,245 79.2 703,093 82.9
Software license revenues 62,796 9.5 42,455 5.5 29,698 3.5
Service revenues 132,027 19.9 117,830 15.3 115,067 13.6
Total 662,226 100.0 771,530 100.0 847,858 100.0
Cost of revenues
Our cost of revenues can be categorized as cost of goods sold, cost of software license and cost of services, which are the costs and expenses that are directly related to providing our products, licenses and services to customers including overheads. These cost and expenses primarily include (i) costs of raw materials, production labor costs, processing fee charged by outsourced factories, (ii) warehousing and transportation costs of inventories, (iii) staff costs of the quality control and supply chain departments, including share-based compensation expenses, and (iv) others, primarily consisted of depreciation, warranty cost, and license fees of software purchased from suppliers.
The following table sets forth a breakdown of our cost of revenues by nature both in absolute amount and as a percentage of our revenues for the periods indicated.
For the Year Ended December 31,
2023 2024 2025
US$ % US$ % US$ %
(in thousands, except percentages)
Cost of revenues
Cost of goods sold 385,929 58.3 537,620 69.7 610,285 72.0
Cost of software license 16,978 2.5 17,783 2.3 17,193 2.0
Cost of services 80,701 12.2 56,028 7.2 59,118 7.0
Total 483,608 73.0 611,431 79.2 686,596 81.0
Gross profit and gross margin
Our gross profit represents our revenues less cost of revenues. Gross margin represents our gross profit as a percentage of revenue. In 2023, 2024 and 2025, our gross profit was US$178.6 million, US$160.1 million and US$161.3
million, respectively, and our gross margin was 27.0%, 20.8%, and 19.0%, respectively. The following table sets forth our gross profit and gross margin by types of revenue for the periods indicated.
For the Year Ended December 31,
2023 2024 2025
Gross Profit Gross Margin Gross Profit Gross Margin Gross Profit Gross Margin
US$ % US$ % US$ %
(in thousands, except percentages)
Sales of goods 81,474 17.4 73,625 12.0 92,808 13.2
Software License 45,818 73.0 24,672 58.1 12,505 42.1
Service 51,326 38.9 61,802 52.5 55,949 48.6
Total 178,618 27.0 160,099 20.8 161,262 19.0
Operating expenses
Our operating expenses consist of (i) research and development expenses, (ii) selling, general and administrative expenses, (iii) other income, and (iv) others, net.
The following table sets forth a breakdown of our operating expenses both in absolute amount and as a percentage of our revenues for the periods indicated.
For the Year Ended December 31,
2023 2024 2025
US$ % US$ % US$ %
(in thousands, except percentages)
Operating expenses
Research and development expenses 177,679 26.8 174,864 22.7 123,337 14.5
Selling, general and administrative expenses 131,717 19.9 108,195 14.0 93,841 11.1
Other income (1,009) (0.2) — — — —
Others, net 247 — (64) — (1,143) (0.1)
Total 308,634 46.5 282,995 36.7 216,035 25.5
Our research and development expenses primarily consist of direct material cost, outsourced development expenses, payroll and related costs including share-based compensation related to research and development of new technologies and expenses associated with the use by these functions of facilities and equipment, such as rental and depreciation.
Our selling, general and administrative expenses primarily consist of payroll, employee benefits, share-based compensation, travelling and general expenses, professional service fees, advertising costs, rental, depreciation and amortization expenses.
Other income represents recharges of certain management expenses to a related party.
Taxation
Cayman Islands
The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains or appreciation. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.
Hong Kong
Our subsidiaries incorporated in Hong Kong are generally subject to Hong Kong profits tax at a rate of 16.5%. For the years 2018 and onwards, the first HK$2,000 of profits generated by an entity incorporated in Hong Kong is taxed at a rate of 8.25%, while the remaining profits will continue to be taxed at 16.5% tax rate. In December 2022, a refined Foreign Sourced Income Exemption (“FSIE”) regime was published in Hong Kong and took effect from January 1, 2023. Under the new FSIE regime, certain foreign soured income would be deemed as being sourced from Hong Kong and chargeable to Hong Kong Profits Tax, if the recipient entity fails to meet the prescribed exception requirements. Certain dividends, interests, intellectual property income and disposal gains, if any, received by us and our Hong Kong subsidiaries may be subject to the new tax regime.
Mainland China
Under the PRC Enterprise Income Tax Law effective from January 1, 2008 and last amended on December 29, 2018, our mainland China subsidiaries, and consolidated affiliated entities and their subsidiaries are subject to the statutory rate of 25%, subject to preferential tax treatments available to qualified enterprises in certain encouraged sectors of the economy. Enterprises that qualify as “high and new technology enterprises” are entitled to a preferential rate of 15% subject to renewal every three years. In December 2023, ECARX Hubei was certified as a high and new technology enterprise ,or HNTE. and is entitled to benefit from a preferential income tax rate of 15% for a period of three years from 2023 to 2025 if HNTE status is satisfied in the relevant year. In November 2024, JICA Intelligent Robotics Co., Ltd. was certified as a high and new technology enterprise and is entitled to benefit from a preferential income tax rate of 15% for a period of three years from 2024 to 2026 if HNTE status is satisfied in the relevant year.
We are currently subject to value-added tax, or VAT, at rates of 6% and 13% on the products and services we provide, less any deductible VAT we have already paid or borne. We are also subject to surcharges on VAT payments in accordance with the law of mainland China.
Dividends paid by our wholly foreign-owned mainland China subsidiary to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the Hong Kong entity satisfies all the requirements under the Arrangement between mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the tax authority. If our Hong Kong subsidiary satisfies all the requirements under the tax arrangement and receives approval from the tax authority, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%.
If our company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—If we are classified as a mainland China resident enterprise for purposes of income tax in mainland China, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders.”
Results of Operations
The following table sets forth our results of operations with line items in absolute amount and as a percentage of our revenues for the periods indicated.
For the Year Ended December 31,
2023 2024 2025
US$ % US$ % US$ %
(in thousands, except percentages)
Revenue
− Sales of goods revenues 467,403 70.6 611,245 79.2 703,093 82.9
− Software license revenues 62,796 9.5 42,455 5.5 29,698 3.5
− Service revenues 132,027 19.9 117,830 15.3 115,067 13.6
Total revenues 662,226 100.0 771,530 100.0 847,858 100.0
Cost
− Cost of goods sold (385,929) (58.3) (537,620) (69.7) (610,285) (72.0)
− Cost of software licenses (16,978) (2.5) (17,783) (2.3) (17,193) (2.0)
− Cost of services (80,701) (12.2) (56,028) (7.2) (59,118) (7.0)
Total cost of revenues (483,608) (73.0) (611,431) (79.2) (686,596) (81.0)
Gross profit 178,618 27.0 160,099 20.8 161,262 19.0
Operating expenses:
− Research and development expenses (177,679) (26.8) (174,864) (22.7) (123,337) (14.5)
− Selling, general and administrative expenses (131,717) (19.9) (108,195) (14.0) (93,841) (11.1)
− Other income 1,009 0.2 — — — —
− Others, net (247) — 64 — 1,143 0.1
Total operating expenses (308,634) (46.5) (282,995) (36.7) (216,035) (25.5)
Loss from operations (130,016) (19.5) (122,896) (15.9) (54,773) (6.5)
Interest income 4,313 0.7 3,078 0.4 3,710 0.4
Interest expense (11,239) (1.7) (18,568) (2.4) (23,772) (2.8)
(Loss) gain from equity method investments (6,142) (0.9) 5,611 0.7 1,236 0.1
Other non-operating (expenses) income, net (1,340) (0.2) (4,766) (0.6) 5,904 0.7
Loss before income taxes (144,424) (21.6) (137,541) (17.8) (67,695) (8.1)
Income tax benefit (expense) 525 0.1 (210) — (1,244) (0.1)
Net loss (143,899) (21.5) (137,751) (17.8) (68,939) (8.2)
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenues
For the Year Ended December 31,
2024 2025 Change
US$ US$ US$ %
(in thousands, except percentages)
Sales of Goods Revenues 611,245 703,093 91,848 15.0
Automotive computing platform 536,582 627,067 90,485 16.9
SoC core modules 73,944 74,910 966 1.3
Merchandise and other products 719 1,116 397 55.2
Software License Revenues 42,455 29,698 (12,757) (30.0)
Service Revenues 117,830 115,067 (2,763) (2.3)
Automotive computing platform–design and development service 78,470 69,827 (8,643) (11.0)
Connectivity service 34,112 36,834 2,722 8.0
Other services 5,248 8,406 3,158 60.2
Total Revenues 771,530 847,858 76,328 9.9
Our revenues increased by US$76.3 million from US$771.5 million for the year ended December 31, 2024 to US$847.9 million for the year ended December 31, 2025, primarily driven by an increase in the sales volume of Antora®, Venado™, and Pikes® series automotive computing platform products, partially offset by a decline in software license revenue and services revenue.
Sales of Goods Revenues. Sales of goods revenues increased by US$91.8 million from US$611.2 million for the year ended December 31, 2024 to US$703.1 million for the year ended December 31, 2025, primarily due to a US$236.1 million increase in the sales volume of automotive computing platform products, driven by an increase in the sales volume of Antora®, Venado™, and Pikes® series, partially offset by a US$145.6 million decrease from changes in the per unit price. Additionally, there was a US$6.3 million increase attributable to changes in SoC core modules unit price as a result of product mix change and a US$5.4 million decline from decreased sales volume of SoC core modules. Sales of automotive merchandise and other products increased by US$0.4 million from 2024 to 2025.
Software License Revenues. Software license service revenues decreased by US$12.8 million from US$42.5 million for the year ended December 31, 2024 to US$29.7 million for the year ended December 31, 2025, primarily driven by a decrease in intellectual property license revenue. Intellectual property license revenue was US$2.2 million in 2025 compared to US$17.2 million in 2024 as multiple projects reached mass production stage in that year generating license revenue.
Service Revenues. Service revenues decreased by US$2.8 million from US$117.8 million for the year ended December 31, 2024 to US$115.1 million for the year ended December 31, 2025, principally as a result of a decrease in the total value of design and development contracts for automotive computing platforms completed during the year.
Cost of revenues
For the Year Ended December 31,
2024 2025 Change
US$ US$ US$ %
(in thousands, except percentages)
Cost of revenues
Cost of goods sold 537,620 610,285 72,665 13.5
Cost of software licenses 17,783 17,193 (590) (3.3)
Cost of services 56,028 59,118 3,090 5.5
Total 611,431 686,596 75,165 12.3
Our cost of revenues increased by US$75.2 million from US$611.4 million for the year ended December 31, 2024 to US$686.6 million for the year ended December 31, 2025. The increase was primarily driven by an increase in sales volume of automotive computing platform products and higher design and development contract cost, partially offset by a decrease in the cost of SoC core modules.
Gross profit and gross margin
For the Year Ended December 31,
2024 2025 Change
US$ US$ US$ %
(In thousands, except percentages)
Gross profit 160,099 161,262 1,163 0.7
Gross margin (%) 20.8 19.0 — (1.8)
Our gross profit increased from US$160.1 million for the year ended December 31, 2024 to US$161.3 million for the year ended December 31, 2025, mainly driven by the sales volume increase of automotive computing platform products. On the other hand, our gross margin decreased from 20.8% for the year ended December 31, 2024 to 19.0% for the year ended December 31, 2025, primarily attributed to the decrease of intellectual property license revenue which carries a higher margin.
Operating expenses
For the Year Ended December 31,
2024 2025 Change
US$ US$ US$ %
(In thousands, except percentages)
Operating expenses
Research and development expenses 174,864 123,337 (51,527) (29.5)
Selling, general and administrative expenses 108,195 93,841 (14,354) (13.3)
Others, net (64) (1,143) (1,079) 1,685.9
Total 282,995 216,035 (66,960) (23.7)
Research and development expenses. Our research and development expenses decreased by US$51.6 million from US$174.9 million for the year ended December 31, 2024 to US$123.3 million for the year ended December 31, 2025, reflecting continued strategic resource prioritization and R&D integration efforts.
Selling, general and administrative expenses. Our selling, general and administrative expenses decreased by US$14.4 million from US$108.2 million for the year ended December 31, 2024 to US$93.8 million for the year ended December 31, 2025, primarily driven by improved operating efficiencies, reduction in staff cost including share-based compensation expense, and lower outsourced consulting, and lease expenses.
Loss from operations
We had a loss from operations of US$54.8 million for the year ended December 31, 2025, narrowed by 55% in comparison with a loss from operations of US$122.9 million for the year ended December 31, 2024. The decrease was primarily attributable to the reduction in operating expenses.
Interest income
Our interest income increased by US$0.6 million from US$3.1 million for the year ended December 31, 2024 to US$3.7 million for the year ended December 31, 2025, primarily due to the increase in loans to related parties made during 2025.
Interest expense
Our interest expense increased by US$5.2 million from US$18.6 million for the year ended December 31, 2024 to US$23.8 million for the year ended December 31, 2025, primarily due to an increase in short-term and long-term borrowings in 2025 compared to 2024.
(Loss) gain from equity method investments
We recorded a gain from equity method investments in the amount of US$5.6 million for the year ended December 31, 2024 and US$1.2 million for the year ended December 31, 2025. The change was primarily due to a one-off gain of US$17.9 million in 2024 from the partial sale of equity interest in SiEngine in 2024, partially offset by losses from other equity method investments. During 2025, we recorded small gains from the sale of our investment in the joint venture we had with smart, equity pick up in U Chance and dividend income from ACO Tech in excess of the carrying value of investment.
Other non-operating (expenses) income, net
Change in fair value of equity investments
We recorded a fair value loss of our investments in equity securities of US$6.1 million and US$0.2 million for the years ended December 31, 2024 and 2025, respectively, which was mainly affected by the market prices of these listed securities.
Change in fair value of warrant liabilities
We recorded a loss in fair value of warrant liabilities of US$0.5 million for the year ended December 31, 2024, compared to a gain of US$0.1 million for the year ended December 31, 2025. The change in fair value was affected by the market price changes in our warrants between the two reporting dates.
Government grants
For the years ended December 31, 2024 and 2025, we recorded income from government grants totaling US$2.8 million and US$5.9 million, respectively, as a result of support and incentives from local governments, which primarily consisted of subsidies for research and development activities.
Foreign currency exchange gains, net
We recorded foreign currency exchange losses of US$1.2 million for the year ended December 31, 2025, compared to losses of US$1.0 million for the year ended December 31, 2024. The increase in foreign currency exchange losses was primarily attributable to the impact on non-functional currency transactions and account balances of the fluctuations in the foreign currency exchange rates.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Revenues
For the Year Ended December 31,
2023 2024 Change
US$ US$ US$ %
(in thousands, except percentages)
Sales of Goods Revenues 467,403 611,245 143,842 30.8
Automotive computing platform 385,886 536,582 150,696 39.1
SoC core modules 70,140 73,944 3,804 5.4
Merchandise and other products 11,377 719 (10,658) (93.7)
Software License Revenues 62,796 42,455 (20,341) (32.4)
Service Revenues 132,027 117,830 (14,197) (10.8)
Automotive computing platform–design and development service 94,641 78,470 (16,171) (17.1)
Connectivity service 31,142 34,112 2,970 9.5
Other services 6,244 5,248 (996) (16.0)
Total Revenues 662,226 771,530 109,304 16.5
Our revenues increased by US$109.3 million from US$662.2 million for the year ended December 31, 2023 to US$771.5 million for the year ended December 31, 2024, primarily due to an increase in sales volume of automotive computing platform products with Geely Auto and Geely ecosystem brand-penetration, partially offset by a decline in software license revenue and services revenue.
Sales of Goods Revenues. Sales of goods revenues increased by US$143.8 million from US$467.4 million for the year ended December 31, 2023 to US$611.2 million for the year ended December 31, 2024, primarily due to a US$188 million increase attributable to the increase in the sales volume of automotive computing platform products, driven by an increase in the sales volume of digital cockpits with Geely Auto and Geely ecosystem brand-penetration, and the ramping up of autonomous driving control unit (ADCU) sales volume, which was partially offset by a US$31 million decrease resulting from changes in the per unit price. Additionally, a US$18 million increase from SoC core modules unit price changes, offset by a US$13 million and US$10 million decline from lower sales volume of SoC modules and automotive merchandise and other products, respectively, contributed to the change between the two reporting periods.
Software License Revenues. Software license service revenues decreased by US$20.3 million from US$62.8 million for the year ended December 31, 2023 to US$42.5 million for the year ended December 31, 2024, primarily driven by a decrease in the sales volume of navigation and operating software and decrease in intellectual property license revenue.
Service Revenues. Service revenues decreased by US$14.2 million from US$132.0 million for the year ended December 31, 2023 to US$117.8 million for the year ended December 31, 2024, principally as a result of a decrease in the total value of design and development contracts for automotive computing platforms completed during the year.
Cost of revenues
For the Year Ended December 31,
2023 2024 Change
US$ US$ US$ %
(in thousands, except percentages)
Cost of revenues
Cost of goods sold 385,929 537,620 151,691 39.3
Cost of software licenses 16,978 17,783 805 4.7
Cost of services 80,701 56,028 (24,673) (30.6)
Total 483,608 611,431 127,823 26.4
Our cost of revenues increased by US$127.8 million from US$483.6 million for the year ended December 31, 2023 to US$611.4 million for the year ended December 31, 2024. The increase was primarily driven by an increase in sales volume of automotive computing platform products. The increased sales volume contributed to the increase in the cost of goods sold. The decrease in cost of services was mainly linked to the decrease in service revenue.
Gross profit and gross margin
For the Year Ended December 31,
2023 2024 Change
US$ US$ US$ %
(In thousands, except percentages)
Gross profit 178,618 160,099 (18,519) (10.4)
Gross margin (%) 27.0 20.8 — (6.2)
Our gross profits decreased from US$178.6 million for the year ended December 31, 2023 to US$160.1 million for the year ended December 31, 2024. The decrease in gross margin was attributable to the aggressive competition in the automotive sector, the pricing strategy implemented to stimulate automotive computing platform revenue growth, and a shift in the overall revenue mix in 2024 compared to the prior year. As a result, our gross margins decreased from 27.0% for the year ended December 31, 2023 to 20.8% for the year ended December 31, 2024, a decrease in gross margin of 6.2% percentage points.
Operating expenses
For the Year Ended December 31,
2023 2024 Change
US$ US$ US$ %
(In thousands, except percentages)
Operating expenses
Research and development expenses 177,679 174,864 (2,815) (1.6)
Selling, general and administrative expenses 131,717 108,195 (23,522) (17.9)
Other income (1,009) — 1,009 (100.0)
Others, net 247 (64) (311) —
Total 308,634 282,995 (25,639) (8.3)
Research and development expenses. Our research and development expenses decreased by US$2.8 million from US$177.7 million for the year ended December 31, 2023 to US$174.9 million for the year ended December 31, 2024.
Selling, general and administrative expenses. Our selling, general and administrative expenses decreased by US$23.5 million from US$131.7 million for the year ended December 31, 2023 to US$108.2 million for the year ended December 31, 2024, primarily driven by improved operating efficiencies, a reduction in staff cost including share-based compensation expense, and lower outsourced consulting, and IT expenses.
Other income. Our other income represents recharges of certain management expenses to a related party. There were no recharges in 2024 due to the discontinuance of the contractual arrangement with the related party.
Loss from operations
We had a loss from operations of US$122.9 million for the year ended December 31, 2024, narrowed by 5% in comparison with a loss from operations of US$130.0 million for the year ended December 31, 2023. The decrease primarily attributable to the reduction in operating expenses, partially offset by a decline in gross margin due to competitive industry dynamics and the pricing strategy implemented to expand market share and revenue growth for automotive computing platform, as well as a shift in the overall revenue mix in 2024 compared to the prior year.
Interest income
Our interest income decreased by US$1.2 million from US$4.3 million for the year ended December 31, 2023 to US$3.1 million for the year ended December 31, 2024, primarily due to the decrease in loans to related parties made during 2024.
Interest expense
Our interest expense increased by US$7.4 million from US$11.2 million for the year ended December 31, 2023 to US$18.6 million for the year ended December 31, 2024, primarily due to additional interests accrued on convertible notes and increased short-term borrowings in 2024 compared to 2023.
(Loss) gain from equity method investments
We recorded a loss from equity method investments in the amount of US$6.1 million for the year ended December 31, 2023 and a gain from equity method investments in the amount of US$5.6 million for the year ended December 31, 2024. The change was primarily due to a gain of US$17.9 million from the partial sale of equity interest in SiEngine in 2024.
Other non-operating (expenses) income, net
Change in fair value of an equity security
We recorded a fair value loss of an equity security of US$3.2 million and US$6.1 million for the years ended December 31, 2023 and 2024, respectively, which was mainly affected by the market prices of this listed equity security.
Change in fair value of warrant liabilities
We recorded a gain in fair value of warrant liabilities of US$1.7 million for the year ended December 31, 2023, compared to a loss of US$0.5 million for the year ended December 31, 2024. The change in fair value is affected by the market price changes in warrants between two reporting dates.
Government grants
For the years ended December 31, 2023 and 2024, we recorded income from government grants totaling US$1.7 million and US$2.8 million, respectively, as a result of support and incentives from local governments, which primarily consisted of subsidies for research and development activities.
Foreign currency exchange gains, net
We recorded foreign currency exchange losses of US$1.0 million for the year ended December 31, 2024, compared to losses of US$1.5 million for the year ended December 31, 2023. The decrease in foreign currency exchange losses was primarily attributable to the impact on non-functional currency transactions and account balances of the fluctuations in the foreign currency exchange rates.
B.Liquidity and Capital Resources
Cash flows and working capital
The following table sets forth a summary of our cash flows for the periods indicated.
For the Year Ended December 31,
2023 2024 2025
US$ US$ US$
(in thousands)
Summary Consolidated Cash Flow Data
Net cash used in operating activities (172,440) (59,980) (94,391)
Net cash (used in) provided by investing activities 87,265 (8,121) (70,482)
Net cash provided by financing activities 40,619 36,355 203,863
Effect of foreign currency exchange rate changes on cash and restricted cash (2,030) (2,183) 4,102
Net (decrease) increase in cash and restricted cash (46,586) (33,929) 43,092
Cash and restricted cash at the beginning of the year 130,679 84,093 50,164
Cash and restricted cash at the end of the year 84,093 50,164 93,256
To date, we have funded our operating and investing activities primarily through cash generated from financing activities (including credit facilities).
Related party borrowings
For the years ended December 31, 2023, 2024 and 2025, we borrowed unsecured loans with aggregated principal amounts of US$44.5 million, US$41.8 million and US$111.3 million, respectively, from Geely Holding and its subsidiaries, bearing weighted-average interest rates of 4.1%, 3.9% and 3.9% per annum, respectively. During the same periods, we repaid loans totaling US$44.5 million, US$41.8 million and US$84.1 million, respectively. Of the 2025 repayments, US$29.4 million was settled through debt assignments and offset arrangements.
In March 2024, we entered into an accounts receivable factoring agreement with a finance company of Geely Holding with a minimum interest rate of 6.0% per annum. In October 2024, the interest rate was reduced to 4.8% per annum and the factoring limits were increased from US$20 million to US$35 million. In March 2025, we paid US$21 million and concurrently received US$21 million. In July 2025 and August 2025, we received a further US$3 million and US$4 million, respectively. In September US$21 million was repaid and renewed. In November 2025, we repaid US$28 million and concurrently received US$28 million. In November 2025, the interest rate increased to 5.0% per annum and the factoring limit remained unchanged.
Bank borrowings
For the years ended December 31, 2023, 2024 and 2025, we borrowed loans with aggregated principal amounts of US$208.8 million, US$222.4 million and US$334.0 million, respectively, from banks in mainland China, bearing weighted-average interest rates of 3.9% ,3.9% and 3.7% per annum, respectively. During the same periods, we repaid loans with principal amount of US$163.2 million, US$201.6 million and US$216.6 million, respectively.
Debt financing
In October 2025, we entered into the 2025 ATW Convertible Note Purchase Agreement with ATW Mobility SPV LLC under which we agreed to issue and sell, in one or more registered direct offerings by us directly to the investor the 2025 ATW Convertible Notes for up to an aggregate principal amount of US$150,000,000 that will be convertible into Class A Ordinary Shares. We issued and sold to ATW Mobility SPV LLC a 2025 ATW Convertible Note in the original principal amount of US$50,000,000 on October 30, 2025.
In November 2025, we entered into the 2025 Convertible Note Purchase Agreement with an existing holder of the 2022 Notes. The 2025 Convertible Note Purchase Agreement contemplates the issuance and sale by us of up to US$100 million of the 2025 Convertible Notes on terms similar to the 2022 Notes in connection with the refinancing of the 2022
Notes. US$60 million of the 2025 Convertible Notes were issued and subscribed to in November 2025 and US$40 million in February 2026 pursuant to the 2025 Convertible Note Purchase Agreement and on terms similar to the 2022 Notes.
Equity financing
On March 28, 2025, we issued 25,000,000 Class A ordinary shares upon a follow-on public offering at a public offering price of US$1.80 per share. We received net proceeds of US$42.6 million.
In January 2026, we entered into a subscription agreement with Geely Investment Holding Ltd. Pursuant to the terms of the agreement, Geely Investment Holding Ltd. subscribed for and purchased from us, through a private placement, a total of 27,297,002 newly issued Class A Ordinary Shares at a price of US$1.67 per ordinary share, for a total purchase price of US$45.6 million. The Class A Ordinary Shares purchased by Geely Investment Holding Ltd. in this private placement are subject to a six-month lock-up period with certain customary exceptions.
We have incurred losses since inception. As of December 31, 2025, we had an accumulated deficit of US$1,190.5 million and its consolidated current liabilities exceeded current assets in the amount of US$339.8 million. In addition, we recorded net cash used in operating activities in the amount of US$94.4 million for the year ended December 31, 2025. We will require additional liquidity to continue our operations over the next 12 months.
Historically, we had relied principally on proceeds from the issuance of redeemable convertible preferred shares, convertible notes, and bank and related party borrowings to finance our operations and business expansion. We have evaluated plans to continue as a going concern which include, but are not limited to, (i) reducing discretionary capital and operating expenses; (ii) obtaining additional facilities from banks and renewal of existing bank borrowings; (iii) issuance of new equity and convertible debt securities; (iv) obtaining extended financial support from controlling shareholder and related parties; and (v) accelerating pace of collections of amounts due from related and third parties to optimize operational efficiency. Subsequent to December 31, 2025, the Company has secured a new issuance of Class A ordinary shares totaling US$45.6 million from Geely Investment Holding Ltd. and issued US$40 million of 2025 Convertible Notes pursuant to the 2025 Convertible Note Purchase Agreement. Notwithstanding this, feasibility of some of these plans is contingent upon factors outside of the control of us and as such we concluded that substantial doubt about its ability to continue as a going concern has not been alleviated as of the reporting date. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We had negative net cash flows from operations in the past and have not been profitable, which may continue in the future. A note regarding our ability to continue as a going concern has been included in our consolidated financial statements.”
In the event that additional financing is required from third party sources, we may not be able to raise it on acceptable terms or at all. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—Our business plans require a significant amount of capital. In addition, our future capital needs may require us to sell additional equity or debt securities that may dilute our shareholders or introduce covenants that may restrict our operations or our ability to pay dividends.” The issuance and sale of additional equity would also result in further dilution to our shareholders. The incurrence of indebtedness would result in increasing fixed obligations and could result in operating covenants that would restrict our operations.
We had cash and restricted cash of US$93.3 million as of December 31, 2025. As of December 31, 2025, US$80.7 million of our cash and cash equivalents were held in China and US$2.1 million were denominated in U.S. dollars. Substantially all of our revenues have been, and we expect them to continue to be, denominated in Renminbi in the short-term. Under existing foreign exchange regulations in mainland China, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our mainland China subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, approval from or registration with competent authorities is required where the Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. Economic uncertainty in China and around the world could also adversely affect our liquidity and capital resources in the future, and our cash requirements may fluctuate based on the timing and extent of many factors such as those discussed above.
Operating activities
Net cash used in operating activities increased by US$34.4 million from December 31, 2024 to 2025, primarily attributable to increases in inventories and amounts due from related parties, increases in accounts payable and amounts due to related parties offset by a lower level of non-cash items compared to 2024.
For the year ended December 31, 2025, net cash used in operating activities was US$94.4 million. The difference between our cash used in operating activities and our net loss of US$68.9 million for the same year from operations was attributable to certain non-cash items, primarily consisting of share-based compensation of US$13.3 million and depreciation and amortization of US$19.9 million, and certain changes in working capital accounts, primarily consisting of (i) increase in inventories of US$31.9 million, (ii) increase in amounts due from related parties of US$30.8 millions, (iii) increase in amounts due to related parties of US$20.4 million, and (iv) decrease in contract liabilities of US$19.0 million.
Net cash used in operating activities decreased by US$112.5 million from December 31, 2023 to 2024, primarily attributable to improvements in cash conversion cycle with accelerated accounts receivable collection, as well as narrowed net loss.
For the year ended December 31, 2024, net cash used in operating activities was US$60.0 million. The difference between our net cash used in operating activities and our net loss of US$137.8 million for the same period from continuing operations was attributable to certain non-cash items, primarily consisting of share-based compensation expense of US$19.1 million, depreciation and amortization of US$20.6 million, and certain changes in working capital accounts, primarily consisting of (i) decrease in accounts receivable of US$46.2 million, (ii) decrease in prepayments and other current assets and other non-current assets of US$22.4 million, (iii) decrease in contract liabilities of US$21.6 million, (iv) decrease in accrued expenses and other current liabilities and income taxes payable of US$17.2 million, (iv) decrease in accounts payable of US$12.3 million, and (v) increase in notes payable of US$17.9 million.
For the year ended December 31, 2023, net cash used in operating activities was US$172.4 million. The difference between our net cash used in operating activities and our net loss of US$143.9 million for the same period from continuing operations was attributable to certain non-cash items, primarily consisting of share-based compensation of US$24.9 million, depreciation and amortization of US$12.1 million, and loss from equity method investments of US$6.1 million, and certain changes in working capital accounts, primarily consisting of (i) increase in accounts receivable of US$80.4 million, (ii) increase in accounts payable of US$48.0 million, and (iii) decrease in contract liabilities of US$39.5 million.
Investing activities
Net cash used in investing activities was US$70.5 million for the year ended December 31, 2025 compared with net cash used in investing activities of US$8.1 million for the year ended December 31, 2024. The change mainly due to a higher level of short-term investments compared to 2024 and a new investment in convertible loan in 2025.
For the year ended December 31, 2025, net cash used in investing activities was US$70.5 million, which was mainly attributable to (i) cash paid for available-for-sale debt investment of US$43.0 million, (ii) cash paid for equity securities of US$17.0 million, (iii) net cash paid for short-term investments of US$12.4 million, and (iv) payments for purchase of property and equipment and intangible assets of US$12.2 million, partially offset by (v) cash received from partial sale of equity interest in SiEngine of US$17.9 million.
Net cash used in investing activities was US$8.1 million for the year ended December 31, 2024 compared with net cash provided by investing activities of US$87.3 million for the year ended December 31, 2023. The change mainly due to the collection of proceeds from the sale of Zenseact in 2023 of US$115.0 million.
For the year ended December 31, 2024, net cash used in investing activities was US$8.1 million, which was mainly attributable to (i) payments for purchase of property and equipment and intangible assets of US$15.9 million, (ii) cash paid for acquisition of equity method investments of US$7.5 million, and (iii) payments for acquisition of Suzhou Photon-Matrix, net of cash acquired of US$6.3 million, partially offset by (iv) proceeds from sale of HaleyTek AB of US$19.9 million, and (v) net cash proceeds from short-term investments of US$2.0 million.
For the year ended December 31, 2023, net cash provided by investing activities was US$87.3 million, which was mainly attributable to proceeds from sale of Zenseact of US$115.0 million received during the year, partially offset by payments for purchase of property and equipment and intangible assets of US$8.9 million and cash paid for acquisition of short-term investment of US$22.5 million.
Financing activities
Net cash provided by financing activities increased by US$167.5 million from US$36.4 million for the year ended December 31, 2024 to US$203.9 million for the year ended December 31, 2025, primarily due to an increase of US$96.5 million in net borrowings from banks and financial institutions in 2025 compared to 2024, a net increase in convertible notes of US$41.2 million in 2025 and issuance of new equity of US$43.2 millions in 2025.
For the year ended December 31, 2025, net cash provided by financing activities was US$203.9 million, which was mainly attributable to (i) net proceeds from bank borrowings and borrowings from related parties of US$151.9 million, (ii) net proceeds from issuance of ordinary shares upon follow-on public offering of US$42.6 million, and (iii) net proceeds from issuance of convertible notes of US$106.2 million, partially offset by (iii) repayment of convertible notes of US$65.0 million, and (v) cash paid for repurchase of ordinary shares of US$29.0 million.
Net cash provided by financing activities decreased by US$$4.2 million from US$40.6 million for the year ended December 31, 20233 to US$36.4 million for the year ended December 31, 2024, primarily due to net change in short-term borrowings from banks and related parties and financing for the acquisition of intangible assets.
For the year ended December 31, 2024, net cash provided by financing activities was US$36.4 million, which was mainly attributable to (i) net increase in borrowings from banks of US$20.9 million, (ii) from related parties of US$21.0 million; and (iii) receipt of government grants of US$7.0 million, partially offset by the financing for (i) the purchase of intangible assets of US$7.3 million and (ii) repurchase of ordinary shares of US$3.0 million.
For the year ended December 31, 2023, net cash provided by financing activities was US$40.6 million, primarily consisting of (i) net proceeds from short-term bank borrowings and borrowings from related parties of US$45.6 million, (ii) receipt of government grants of US$6.9 million, partially offset by (iii) cash paid for the costs of the merger of US$11.3 million.
Capital expenditures
Our capital expenditures are primarily incurred for the purchase of property, equipment, and intangible assets. Our total capital expenditures were US$8.9 million, US$15.9 million and US$12.2 million for the years ended December 31, 2023, 2024 and 2025, respectively. We will continue to make capital expenditures to meet the needs of our research and development activities.
Material Cash Requirements
Other than the ordinary cash requirements for our operations, research and development, and our capital expenditure, our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include interest and principal payments for our borrowings from banks and related parties, convertible notes, operating lease commitments, purchase commitments, and capital commitments.
Our operating lease commitment primarily consists of future minimum lease rentals payable under non-cancellable term of operating lease agreements for our offices and production facilities.
Our purchase commitment primarily consists of future minimum purchase commitment related to the purchase of research and development services.
Our capital commitment primarily consists of total capital expenditures contracted but not yet reflected in the consolidated financial statements.
In December 2025, we entered into a subscription agreement with Lotus Technology Inc. (Nasdaq: LOT), and strategically invested US$23 million through a private placement. Pursuant to the agreement, we subscribed for a total of 16,788,321 newly issued ordinary shares of Lotus Technology Inc. at a price of US$1.37 per ordinary share. The ordinary shares issued in this private placement are subject to a six-month lock-up period, with certain customary exceptions. Our investment commitment is towards the remaining tranche of this investment of US$6.0 million.
We intend to fund our existing and future material cash requirements with our existing cash balance, additional loan facilities from banks, financial support from controlling shareholder, future equity offerings, as well as renewing our existing bank loans when they fall due, as necessary, although such plans are contingent upon many factors out of our control. We will continue to make cash commitments, including capital expenditures, to support the growth of our business.
The following table sets forth our contractual obligations as of December 31, 2025.
Payment Due by Period
Total Less than one year 1–2 Years 2–3 Years 3–5 Years Over 5 Years
(US$ in thousands)
Operating lease commitment 25,572 5,413 5,350 4,352 6,716 3,741
Purchase commitment 45,351 45,351 — — — —
Capital commitment 2,601 2,601 — — — —
Investment commitment 6,000 6,000 — — — —
Borrowings from banks 316,246 310,659 5,587 — — —
Total 399,996 374,250 10,937 4,352 6,716 3,741
As of December 31, 2025, the outstanding balance of 2025 ATW Convertible Notes payable was US$38.8 million, which will be due in 2026.
As of December 31, 2025, the outstanding balance of 2025 Convertible Notes payable was US$60.3 million, which will be due in 2028.
Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2025.
Off-balance Sheets Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity, or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or product development services with us.
Holding Company Structure
ECARX Holdings Inc. is a holding company with no material operations of its own. We conduct our operations in China through our PRC subsidiaries and, prior to the Restructuring, also through our former VIE, Hubei ECARX. As a result, our ability to pay dividends depends significantly upon dividends paid by our mainland China subsidiaries. If our existing mainland China subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in mainland China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with the accounting standards and regulations in mainland China. Under the PRC law, each of our mainland China subsidiaries and, prior to the Restructuring, Hubei ECARX, is required to set aside at least 10% of its after-tax profits each year, if any, after making up previous years’ accumulated losses, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, each of our wholly foreign-owned subsidiaries in mainland China may allocate a portion of its after-tax profits based on the accounting standards in mainland China to enterprise expansion funds and staff bonus and welfare funds at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by SAFE. Our mainland China subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.
Inflation
To date, inflation in mainland China has not materially impacted our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent change in the consumer price index for December 2023, 2024 and 2025 were a decrease of 0.3%, an increase of 0.2% and 0.8%, respectively. Although we have not been
materially affected by inflation in the past, we can provide no assurance that we will not be affected by higher rates of inflation in China in the future.
Recently Issued Accounting Pronouncements
A list of recently issued accounting pronouncements that are relevant to us is included in Note 2(ee) of our consolidated financial statements included elsewhere in this annual report.
C.Research and Development, Patents and Licenses, etc.
See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” of this annual report.
D.Trend Information
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material and adverse effect on our total revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
E.Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP. In doing so, we have to make estimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate is made, and changes in them have had or are reasonably likely to have a material effect on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.
The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this annual report. When reviewing our financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgments and other uncertainties affecting the application of such policies, and (iii) the sensitivity of reported results to changes in conditions and assumptions.
Share-based compensation
We measure the cost of employee and non-employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the period the employee and non-employee is required to provide service in exchange for the award, which generally is the vesting period. For awards with performance conditions, compensation cost is recognized over the estimated vesting period if it is probable that the performance condition will be achieved.
The fair value of restricted stock units, or RSUs, and options is estimated using the binomial model and the Performance Share Unit, or PSUs is estimated using the Monte-Carlo simulation model with certain assumptions. The expected volatility for RSUs, options and PSUs was estimated based on the historical volatility of comparable peer public companies with a time horizon close to the expected term of our RSUs, option and PSUs. With respect to the RSUs and options issued in US$, the risk-free interest rate was separately estimated based on the yield to maturity of U.S. Treasury bonds for a term consistent with the expected term of our RSUs, options and PSUs in effect at the valuation date. Expected dividend yield is zero as we do not anticipate any dividend payments in the foreseeable future. Expected term is the contract life of the RSUs, options and PSUs.
Impairment of long-lived assets
We test long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If the carrying amount of an asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized in the amount of the excess of the asset group’s carrying value over its fair value. We determine the fair value of the asset group based on the forecasted discounted cash flows. Significant inputs used in the income approach primarily included revenue growth rates and discount rate. For the years ended December 31, 2023, 2024 and 2025, impairment losses of US$1.4 million, US$0.2 million and US$3.4 million were recognized, respectively.
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