This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk09: Good day and thank you for standing by. Welcome to the eCarX Q1 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Alternatively, you may submit your question via the webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Adam Kay, Head of Investor Relations.
spk06: Please go ahead.
spk13: Good morning, everyone, and welcome to our first quarter 2023 earnings conference call. With me today are eCorX Chairman, CEO and Co-Founder Xu Shen, Chief Operating Officer Peter Serino, and Chief Financial Officer Ramesh Narasimhan. As a quick reminder, this call is being recorded. Before we begin the prepared remarks, which will be followed by Q&A, please note that we may refer to both GAAP and non-GAAP measures. Today's discussion also contains forward-looking statements based on the environment as we currently see it, and as such, does include risks and uncertainties. Please refer to our filings with the SEC for more information on the specific risk factors that could cause actual results to differ materially. With that, I'd like to hand the call over to Ziu.
spk16: Thank you, Adam. Hello, everyone, and welcome. Thank you for joining our quarter one earning call. Before I dive into the financial results for the first quarter, I'd first like to recap a few elements of our global strategy and progress. eCoreX is ideally positioned to capture share in a large and rapidly evolving market, with an estimated TAM of $470 billion by 2030, supported by our differentiated full-stack technology that simplifies and expedites OEM product development timelines, we see a clear path for accelerating growth over the next five years as we expand our reach beyond our current base of 12 OEMs and 21 vehicle brands. We have a solid strategy in place to achieve double digital revenue growth. adjusted EBITDA, profitability, and strong free cash flow generation while remaining independent in our capital allocation. Our focus remains on expanding revenue streams by partnering with global OEMs to meet their involving needs. Increasing average revenue per car through innovation continuing to invest in R&D and accelerating collaborations with cutting-edge partners across the globe. With that, I'd like to give you the highlights of our financial performance during the first quarter, which Ramesh will go into in great detail later. We saw revenue of over $111 million for quarter one, up 16% compared to the year period in a challenging development. This growth was largely driven by an increase in new digital copy sales volume and the favorable sales mix with higher revenues per unit. Our focus on EVs is continuing to pay off, and we have great visibility into our revenue pipeline through the remainder of the year, as we started to roll out products into vehicle brands, including Lotus, Smart, Volvo, and Mazda. We achieved growth profit of $31 million, which was up more than 50% compared to the prior year period. Driven by increased content per car, new product launches and continued focus on sourcing efficiencies. Following our strong performance in 2022, we again saw significantly improved adjusted EBITDA in Q1 as we reduced our losses by 48% compared to the prior year period. Importantly, we remain on track to reach adjusted EBITDA profitability by the end of 2024. As we continue to grow, it is important to remember how we got here and what our purpose is. eCarX is a global mobility tech provider working with OEMs to create new vehicle platforms from the ground up. We are one of the only companies within the industry offering a unique vertical, vertically integrated four-step solution that's including digital copy system, chip-style solutions, SCORC operating system, and integrated software stack. These solutions and technologies, which are purely focused for the automotive industry, aim to combine multiple ECUs into a single computing platform, enabling OEMs to develop new applications, services, and revenue streams. We have a clear roadmap and are focused on further developing a fully integrated solution for software-enabled vehicles of the future. And with our joint venture with ARM, We were the first to launch a 7 nanometer automotive grid SOC in China. As of April, our solutions have been integrated into around 5 million cars worldwide. We can leverage our strong foundations to further expand internationally, seeing mass production and traction with mainstream OEMs like Robocop, Mercedes, Mazda, and Polestar. Next, I would like to review some of the progress we made over the first three months of the year, which puts us in strong position for the remainder of the year and emphasizes the power of the e-commerce strategy and the playbook. In addition to making strong progress building out our team in London, we opened an R&D center on the west coast of the US and a sales and engineering center in Germany. We continue to focus on developing our international capabilities to capture growth opportunities in the rapidly growing EV market in North America and Europe. Having showcased our cutting edge technology and exclusive collaborations with partners such as AMD at the start of the year, we also unified our exciting new product line-up, which is already scheduled to be in production in the second half year with Volvo, and the linking code. From our product perspective, we continue our automotive forecast testing program with SuperBrain to ready this all-in-one full-stack solution, integrating the digital copy, driving, and vehicle controls. Peter will elaborate our product line up in a few minutes. We are excited by the opportunities in the large and growing automotive tech industry. And I see broad trends that we will further support joint growth for years and decades to come. We believe our cutting edge solutions and the strategic relationship will enable us to continue to capture new market share across geographies. These growth drivers include, first, the shift toward always connected, automated EVs Second, the rise of software-defined vehicles. And lastly, moving to a new platform dynamic that supports faster product development. Research conducted by McKinsey showed that the TAM of this market is expected to reach almost half a trillion dollars by 2030. and we plan to win more than our fair share this month. The rise of the software-defined vehicle is why Eric Li and I found eCarX. As cars continue to evolve to become more complex digital devices with greater vehicle autonomy and as drivers' expectations of their in-car experience increase, the demand for high-powered seamlessly connected automotive focus compute platform expands significantly. As it's painting the clear directions the market was handling, EcoX turns its focus to EV model series goals and is well positioned to take advantage of the growth vertical. With our unique product capabilities, we are best positioned to help OEMs move from a distributed EE architecture to a more centralized one with increased computing power, offering a better driver experience. And additional benefits to OEMs, such as reduced wiring needs, increased development speed, low BOM costs, all leading to requiring fewer suppliers before handling call over to peter i want to thank all of our employees for the hard worker and dedications to ecar x things our listing in december we are excited by our results in the first three months of 2003, and I believe we are well positioned to deliver on our guidance for the remainder of the year given the industry transforming the automotive industry and our own well-defined growth strategy. With that, let me pass the call over to Peter Cirino, our Chief Operating Officer
spk10: Thank you, Ziu, and good morning, everyone. One of the key drivers of growth for eCARx has been our focus on innovation. We continue to invest in research and development and to introduce cutting-edge technologies and features in our products, which allows us to stay ahead of the market. We have a significant TAM opportunity ahead of us, and our clearly differentiated product line is designed to capture all segments of that growth opportunity. Our Antora series is designed to fulfill the need of powerful SOCs in high-volume vehicles in the growing EV market. Makalu, one of the most powerful intelligent cockpits available today, designed to push the boundaries of the driver experience with amazing 3D graphics, is powered by AMD and Unreal Engine. And then, to power the evolution of autonomy in software-defined vehicles and the future of electronic architecture, we have our all-in-one central compute platform, SuperBrain. All of these products are supported by CloudPeak, our multi-pillared software system, which is featured in the new Volvo EX30. Now let's switch gears to our product mix. All of our products are designed to be automotive grade, which in our view is one of the key differentiators of eCorex compared to other industry players. Our Antora 1000 and 1000 Pro are designed to meet the growing demand for system on a chip in the EV and intelligent vehicle markets. They have a physical safety layer or island, which runs independently and needs no virtualization. The Antora 1000 Pro uses SE-Link to provide seamless connection for two Antora 1000 SOCs, effectively doubling the computing power. And also this will provide redundancy for more functions and features In addition, this additional computing power increases the lifecycle of the vehicle. Makalu delivers high-speed gaming performance and supports the latest graphics processing interfaces of PC platforms, ideal for gaming, real-time 3D environment rendering, and spatial surrounding audio effects. It offers a very sophisticated in-vehicle experience. We are seeing real interest from OEMs for this product and mass production rollout is expected to begin in early 2024. Following eCARX Maclo is the SuperBrain Central Compute Platform, which combines our SC1000 SoC with an advanced AD chipset. This product brings AI performance to its full potential. This is our all-in-one solution that we view as a super computing controller that integrates the cockpit, driving, and vehicle control with our full-stack hardware and software technologies. The SuperBrain will lead to improvements in the performance and efficiency of the electronic architecture and drive the evolution from EVs to intelligent mobile devices. SuperBrain will also enable OEMs to reduce the wiring harnesses in the vehicle by 5%, cut vehicle engineering costs by 15%, and bring a 20% material savings when compared to distributed controllers. Finally, eCARX's Cloud Peak architecture is built to fully meet the functional safety and information security requirements of the vehicle. It supports multiple operating systems and the global mobility ecosystem. It meets national and international standards, and it's compliant with the EAL4 certification. We work with many OEMs, directly serving 21 brands across Asia Pacific and Europe, and we are continuously looking to diversify our customer base and our geographic footprint, as we have done recently with FAW and Mazda. For FAW, we'll be supplying our Antora 1000 powered digital cockpit, which is planned for mass production by the end of the year. Lincoln Co. will be utilizing our Antora 1000 Pro with FlyMeAuto for its new 08 model launching in Q3. We recently announced the mass production of a customized intelligent cockpit product for Chang'an's Mazda CX-50 model based on our E02 platform. This E02 platform has already been deployed in around 800,000 vehicles across 26 separate vehicles from various OEMs and remains a powerful intelligent cockpit computing platform. Finally, CloudPig, our digital cockpit software stack, will be integrated into the new all-electric Volvo EX30 SUV in their state-of-the-art infotainment system. We have a flexible business model. In addition to our OEM customers, we also supply eight Tier 1 automotive suppliers, including Visteon, Noisoft, Baidu, and Desai. Our focus on developing an automotive tech platform is informed by our deep-rooted automotive knowledge and strategic collaborations. We recognized early on that the best way to deliver great computing power and fantastic experience is to collaborate at the R&D development stage. As many of you know, we have agreements and strong relationships with cutting-edge companies like AMD, ARM, Epic Games, Volvo, and SciEngine, all to define the next generation of in-vehicle connectivity and take the digital customer experience to the next level. We remain excited about our wide industry partners and continue to seek collaborations with similarly innovative businesses to improve the cockpit experience and create meaningful differentiation of our product offering. Looking ahead, we continue to build eCorex into a market leader in the large and growing and rapidly transforming EV market. We continue to invest in our people and in R&D to create the innovative in products and services that meet the evolving needs of our customers. Now I'll return the presentation over to Ramesh to review our financial results.
spk15: Thank you, Peter, and good morning to all of you. eCorrect's first quarter financial results came in strong with our focus on growth and commercial success driving the numbers. We continue to see strong growth throughout the quarter with the revenues up 16% to $111.1 million compared to the prior year period in a challenging macro environment where vehicle production in China fell 10% year over year in Q1, a testament to the continued strong demand for our products and our focus on the EV market. Our growth was driven by new digital cockpit sales volumes and the portfolio shift from IHU to DHUs. Our business remains robust and we are confident of achieving our full year revenue guidance of $700 to $720 million. The results for Q1 also reflect the seasonality of our industry and was in line with our expectations and is factored into the guidance for the year. Compared to the prior year period, sale of goods revenue increased by 19% and while software license revenue was up 140%. Service revenue was around $7 million lower both driven by contract completions in the period. Gross profit was 30.7 million, up 52% compared to the prior year period. This was mostly a result of an increase in content per car, favorable product mix, and a continued focus on sourcing and manufacturing efficiency, along with an increase in margin for software licensing. Adjusted EBITDA was negative 17.4 million, a 48% improvement compared to the prior year period, benefiting from higher margins and lower fixed costs, while maintaining investment in core product development. SG&A was 23% of revenue, up from 21% in the prior year, as we continue our international expansion while keeping a tight control on costs. We finished the quarter with a cash of $148 million, up 31% compared to the prior quarter, which gives us a solid financial foundation and further strengthens our position in the market. This empowers us to continue to drive innovation, explore new markets, and seize strategic partnerships. Although I've presented this slide on previous occasions, it is crucial to emphasize the inherent seasonality within our business. This reminder is especially relevant as we anticipate a similar pattern this year considering the planned launches of new products scheduled for third and fourth quarters. As you heard earlier from Ziu, we have had a pretty full agenda so far this year. And looking forward, we have a number of key milestones to deliver through the balance of the year, including a number of key product launches, seeing Antora 1000 and 1000 Pro on the road in a mass rollout for the first time, while we continue to expand our international footprint and enhance our engineering capabilities. We're also focused on diversifying the business in terms of our customer base and geography. Our first quarter progress on all these metrics gives us confidence in meeting our projections for 2023, and we are reiterating our guidance for revenue to be in the range of 700 to 720 million, a 38% year-over-year increase at the midpoint. For adjusted EBITDA, we maintain our guidance of achieving breakeven by the end of 2024. To summarize, we continue to see strong revenue growth and our new product introductions, including the Antora series, Macaulay, SuperBrain central computing platform, and CloudFig software have generated excitement among both our existing customers and potential prospects. These innovative offerings have positioned us as a leading player in the leading market. Both these factors signify our ability to stay ahead of industry trends and meet the growing demand for electric vehicles, which are expected to continue and serve as a strong tailwind for the years to come. We continue to strengthen the business by adding engineering capacity and by executing our commitment to diversify our customer base and revenues. Lastly, our financial performance continues to create a clear pathway to achieving adjusted EBITDA profitability by the end of 2024. In conclusion, we continue to make significant strides in driving the business forward while benefiting from the secular adoption of electric vehicles and strong demand for our automotive grade products. With a clear path to profitability, we are well positioned for continued success.
spk05: With that, We would like to open up for questions.
spk06: Thank you.
spk09: As a reminder, to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. If you wish to ask a question via the webcast, please type it in the box and click submit. Please stand by while we compile the Q&A roster.
spk08: We will take our first question.
spk09: And the question comes from the line of George Giannarekes from Canaccord Genuity. Please go ahead. Your line is open.
spk17: Hi. Good morning, and thanks for taking my question. My first one is just you've done an admirable job of navigating the headwinds in EV and auto demand globally. Can you just kind of give us a little bit more meet to the bone there and help us understand a little bit of what you're seeing in the marketplace and what gives you confidence in the second half ramp that you just articulated?
spk10: Yeah, George, thanks for joining the call today and thanks for the question. You certainly, you know, I think one of the strengths we have for e-car acts is just a fantastic market that we've participated in. You know, our segment of The automotive space continues to grow rapidly, and we see continuing strength in terms of demand for our products. About a number of years ago, ZU, our CEO, had us focus primarily on electric vehicles, and I think that's providing a good tailwind for what we were able to achieve in the first quarter and our continued visibility into balance of the year. We've got a number of exciting launches. We talked about the Mazda launch in our earnings call, additional launches with Lincoln Co. that we announced, and our cloud software we're launching on the Volvo EX30 later this year. So I think with the continued strength in electric vehicles and these launches, we are pretty confident in our continued progress through the balance of the year.
spk17: Thank you. And just as a follow-up, completely different topic, more long-term in nature. Just curious as to whether you can give us any update on SuperBrain and particularly the PsyEngine and the partnership there with ARM. Any update, any additional color you can share that would be very much appreciated? And also, whether or not you'd be open to other partnerships within the SuperBrain ecosystem outside of the PsyEngine? Thank you.
spk10: Yes, certainly. I mean, we definitely see you know, an advantage of eCarX is the technology ecosystem that we work with. So whether that's partnerships that we have with Arm and SciEngine, you know, Volvo cars with Helitech on our Cloud Peak software, you know, AMD and Unreal in our Macaloo product, you know, those partnerships continue to be, I think, a critical element of our strategy, enabling us to know develop products quickly you know with the best technology and in a cost-effective way and bring them to market um as we you know continue to work with cyanogen i think one of the significant advantages this year is the launch of the seven nanometer soc you know we'll have that on vehicle in a matter of weeks here and continuing to ramp up fairly aggressively as we go through 23 and 24. So we're excited to see that product roll out, and partnerships will continue to be core to our strategy on a go-forward basis, I think both in the cockpit space and in the central commute space.
spk05: Thanks a lot.
spk08: Thank you.
spk06: We will take our next question. And the next question comes from the line of Qi Kangding from HSBC. Please go ahead. Your line is open.
spk01: Thanks, team. I've got two questions. First, on the R&D side, we're reading the results that we stopped the R&D of the ADAS perception. So could you give us a bit more context on it and break down the key R&D areas for us? And second, could you also update, if any, all the wings especially from the other than these OEMs, any particular nationality or region we're focusing on, and how do we steer through the geopolitical tension that might get in the way in terms of we breaking into these international OEMs or sourcing system?
spk10: Yeah, sure. I'd be happy to address the question. We continue to invest very heavily in R&D. You know, we've got approximately 70% of our total headcount is engineering-focused. You know, as we looked at our internal investments, we felt that our partnership progress was, let's say, at a faster pace, and we chose to focus a lot of our ADAS activities on the partnership side. So with our GECA intelligent vehicle partnership as well as uh zenciac and luminar that we've got close relationships with we believe we have a very good offering to continue to grow in the 8s space so it was a simple matter of adjusting our approach and making sure we're really utilizing the best uh the best activities and we think that's core to the way that we approach the business um you know relative to volvo i mentioned the ex30 launch is an exciting launch for us it's a product that will have uh vehicle later this year. We integrate the Google automotive systems, automotive services into that product line. The global launch for eCarX, so as that vehicle ramps up, it will be in almost all the world's markets. So we continue to advance on a global stage, and we believe it's a great reference product that enables us to continue to make progress in the international marketplace.
spk15: And if I can just add on the R&D, We continue to invest very heavily to ensure that we stay ahead of the tech curve. And if you look at our spending, 60% to 70% of our OPEX is primarily focused on R&D, and we'll continue to invest in R&D going forward as well. In terms of your second question, in terms of diversifying our revenue, we are continuously focused on that. We have established our international offices. We also have established engineering centers in both U.S. and in Germany where we are establishing sales and engineering service centers, again, to be very close to potential customers where we are, you know, continuously having some very exciting opportunities. discussions about future opportunities. While we cannot mention any names today, it is something that, as a business, we are very, very closely following up and implementing.
spk06: Got it. Thanks, Dean.
spk04: Thank you.
spk06: Thank you. We will take our next question.
spk09: The next question comes from the line of Yingxi from CICC. Please go ahead, your line is open.
spk14: Hello, thanks for connecting and great congratulations to the results for quarter one. So actually I have four questions, so I'll just begin one by one. The first one is actually, we have noticed that the quarter one, the quarter one revenue actually took 14% of the forecast revenue for 2023. So could you help us do a breakdown on the quarterly revenue for this year's revenue forecast? Yeah, that's the first question.
spk15: Sorry, I didn't really understand the question. Do you want a breakdown of Q1 revenue?
spk14: Well, I actually want a breakdown on the quarterly revenue for this year. the second quarter, third quarter, fourth quarter, because we have noticed that the revenue actually took a larger percentage if we go under the road reaching the end of the year, usually like 40% from the last year. So could you give us a guidance on the percentage? Yeah, please.
spk15: Yeah, sure. I mean, I think it's one of the key things that we addressed in our full year earnings. in terms of the seasonality, we always find the Q1 to be the smallest in terms of the seasonality, and Q4 to be the strongest. And we're not seeing anything different this year. It's consistent with what we have said in the past. And we have said in the past that Q1 is approximately about 16% to 17%, Q2 in the range of about 20%, similar to that, and then Q4 about 40%. So that's what we are anticipating in 2023 as well, in that range compared to the overall full-year revenue. Of course, you've got to overlay the fact that, as we mentioned earlier, we have got Q3, Q4 new product launches that will accelerate on top of the seasonality, so you have to take that into consideration as well. but typically this is the seasonality that we see in the market.
spk14: Okay. Thank you. Thanks for the question. So my question is like, so for Antara 1000 Pro, as we have seen that it is launched in link and code 08 in quarter three. So my question is that, could you help us do a forecast on the revenue that can be generated from this product in quarter three this year?
spk10: Certainly, we anticipate that we're confident that product will launch. We're working very closely with Lincoln Co. to make sure that it launches successfully in vehicle and that our supply chain is lined up. We expect it to do the ramp this year. We've got additional launches in Antora 1000 and Antora 1000 Pro across multiple brands next year. We don't disclose specific revenue by product line. it really contributes to the latter half of the year.
spk14: Right. Okay. Thank you for the answer. Okay. That's fine. Um, so the third question I want to ask is that, um, how would you expect your service revenue and gross margin trends in maybe the coming year or the next two or three quarters?
spk15: I mean, the service revenue is very seasonal. I mean, when I say seasonal, not based on calendarization, but it depends on contract completion. And we, you know, that will be in line with contracts that we have got in place. But as I said, overall, we are still, you know, very much focused on and confident on delivering the $720 million. And we've taken into account the contracts or the service revenue that will come into place this year within that. But it is very clearly driven by specific contracts that we've got in place.
spk14: Let me know what the relative size of the contract is. Is that clear currently?
spk15: Well, it varies. It depends on the level of customization that we do for different OEMs. We obviously don't go into details of what level of customization because that would be, you know, revealing some confidential information about what they expect in future products. But, yeah, the level of contracts is driven by what customer experience the OEM is wanting in its products and its product positions. okay right thank you for the answer and for the gross margin trends could you please elaborate on it yeah i mean you know we we got a gross margin of 28 this year overall we we are expecting that trend to continue um you know through this year. Of course, in the second half, we have new products coming through. But overall, I think for the year, we are expecting gross margin to be in that range.
spk14: Oh, sorry. I didn't get your last sentence. So it's around 25% for this year.
spk15: Yeah. Overall, we are expecting the gross margin to be in this range.
spk14: OK. Right. Thank you so much. And my last question is regarding the percentage of revenue generated from non-GD OEMs. So could you help us do a brief elaboration on the progress of e-CarX getting the contracts from non-GD OEMs, and what are the revenues generated from these contracts, please?
spk16: So yeah, so this is you speaking. Thank you for the question. So I think the important one, Yeah, in quarter one, we have already announced the FAW group partnership. That's a very significant milestone for us. We already got very confirmed confirmation from FAW group for Antora series product collaboration. And also two weeks ago, also we announced Chang'an Master SOP launch. That's also a very important milestone for us for EZ-02 platform. We already production long years. I think that is current, so we already disclosed the non-GD OEM partnership in this. Of course, the team is trying, working very hard and still, and we also have very strong confidence to distribute our technology to more and more Chinese domestic OEMs. and the global OEM together right now.
spk04: Hello? Hello? Can you hear me?
spk09: It seems the participants have muted themselves. One moment.
spk16: Can you hear me? Yeah, did you get my answer? Hello, could you hear me? Yeah, we can hear you.
spk14: Oh, great, thanks. So my previous question is like, could you have to do a rough estimation regarding the revenue, actually the portion of revenue that generates from non-GD OEMs maybe by the end of this year? Is it possible to do this kind of estimation by this time? Thank you.
spk15: Yeah, as you said in class, we will continue to drive the diversification of revenue by our customer base. But, you know, we certainly, you know, anticipate the diversification to improve, you know, as we launch new products in Volvo and, as you mentioned, with FAW early next year. I think we take a longer-term view in terms of diversifying our customer revenue rather than um you know taking a 12-month view because as you um you know very well know with automotive contracts in place it takes um you know about 24 months and sometimes even 36 months to to implement so what is really important is that we take a longer term view in terms of diversification objectives rather than looking at it year by year so i think it is something that uh you know when we make announcements on on new contracts you will get to see more and more of customer base that where we where we have opportunity to diversify yeah sure thank you for the answer totally understand yeah that's all my questions thank you so much for the answer thank you thank you thank you we will take our next question
spk09: Your next question comes from the line of Derek Soderberg from Cantor Fitzgerald. Please go ahead. Your line is open.
spk11: Yeah. Hey, guys. Thanks for taking my questions. Wanted to ask, and maybe this question's for Peter, if you could speak a bit more about the MacGlue platform. There's a lot of power in the solution. Curious if you can talk about what portion of the market is sort of ready for this level of computing power and you know, how you expect the McAloo ramp to play out. And then, you know, if you could just talk about the interest level and feedback around McAloo as well, that'd be great.
spk10: Hey, Jared. Good to hear from you. Thanks for the question. You know, we mentioned that we're working pretty aggressively on getting McAloo out in the market. We've already announced that that product will be launched late this year, early next year as it ramps up. You know, in that launch, we will also use a lot of 3D environments, and we think that will bring a great experience to the vehicle. Additionally, on top of that launch, we've also announced that Smart will be adopting that globally, adopting the Macklew product globally for their brand. I think we're quite excited around that. both solutions as being fantastic user experiences that those OEMs will be able to bring to customer base. We're continuing to work with a number of different OEMs to broaden the adoption of Mapaloo, and I think that we do get some excitement around that product, especially with the 3D capabilities. And I think we'll continue to talk about some exciting adoptions of that product as we go through next year.
spk11: Got it. That's helpful. Um, and then, uh, Ramesh, you know, you guys have a pretty clear product roadmap, uh, that you spoke about during, uh, your investor day and you guys are continuing to invest in R and D. Um, and you've, you know, you've got these product launches coming. Uh, can you talk about your cash position and, you know, how you feel about where that is for the year? Um, you know, just as it relates to funding for the growth. Thanks.
spk15: Uh, sure. Uh, hi, Derek. Good to talk to you again. Um, We started the year with $112 million in terms of cash. During the quarter, our cash balance actually improved, and we ended up at $148 million. I think we have a very strong cash balance right now, and we are comfortable that the business has got sufficient cash to support businesses continuing investment in R&D going forward. Of course, like any business, if there is a, you know, if we feel there's a need to raise funding, then at that time, we will evaluate what options we have, you know, and make the decision going forward. But currently, we are very, very confident with the cash balances that we've got.
spk11: Got it. Thanks, Seth. Thanks, sir.
spk06: Thank you. We will take the next question. Your next question comes from the line of Shelly Wang from Morgan Stanley. Please go ahead. Your line is open.
spk07: Thanks for taking my question. I have two questions from my side.
spk02: One is a follow-up on the customer expansion. So when we supply to the non-GD brands, may I know what's our competitive advantage comparing to our or like our peers?
spk10: Yeah, sure. I'll take a shot at that. You know, we think that eCorex brings a number of advantages to the market. If we look at our capabilities, you know, first we're, you know, between eCorex and the strong partnerships and joint ventures that we have, we've got the ability to deliver products from silicon to cloud services in a fully integrated stack. That enables us to understand the system and bring the best platforms into the market. Being a pure-play automotive company, we've got experience in launching many vehicles and ensuring that our product line is very focused on the automotive industry and delivering advantages to the automotive OEMs based on the system knowledge that we bring to play. With our relationship with the Geely brand, we very much are there helping to craft the vehicle roadmap on day one when vehicles are born. This enables us to bring our technology into vehicles very quickly. And if we talk to future customers, we're often talking about products that are on the road and successfully delivering great experiences to customers and to the OEMs. and that rather than talking about engineering prototypes and activities like that. And then lastly, we've got a very strong technology partnership ecosystem that we see ourselves as the center of and kind of the architect of that system. and bringing technologies like we've talked about here with AMD, our joint venture with Arm, our joint venture with Halitech, where we're bringing the Google Automotive software into the vehicle and the Google Automotive services. And we see, just to name a few, and we see this technology ecosystem is critical to the way that we're able to develop our systems and bring fantastic experience into vehicles.
spk15: And if I can just add a couple of points, you know, we see ourselves as leading in the leading market. And what that means is we are on top of the tech curve, driving a lot of innovation. So that's a critical competitive advantage that we've got. And, you know, and we've also said that we believe we are unique in terms of the vertical integration. What that means is that we are very, very cost competitive when it comes to delivering advanced products, which I also believe is a very critical cost advantage that we have in the market.
spk07: Got it very clear.
spk02: And my second question is about the dispatch concerns. So we are seeing the car makers in China aggressively cutting retail prices this year. So from our side, Do we see, like, will card makers pass the cost pressure to us, like asking for the price cap or use, like, a few intelligent corporate features? And what's our strategy if OEMs come to us for more price caps?
spk15: Yeah, I think, you know, it's very important to distinguish what eCarX offers versus traditional automotive components. You know, where we are seen as a value-add differentiator from an automaker perspective. So it's not a traditional pricing negotiation, it is what problem are we trying to solve for the OEM and what value add we bring to the table in terms of the digital customer experience. So I think it's more question of what we can deliver rather than more about a pricing pressure. So we're not the traditional OEM customer who makes a bracket and we want it cheaper by another 10 cents. That's not the kind of conversations we have. So, you know, it's really about enhancing the product value for the OEM and the customer experience ultimately.
spk07: Got it. Thank you very much.
spk04: Thank you. Thank you.
spk06: Thank you. We will take our next question. And your next question comes from the line of Zoe Lee from Jefferies. Please go ahead. Your line is open.
spk03: Hi. Good morning, and thanks for taking my question. I have two questions. My first question is on the industry front. How do you evaluate the impact on the value chain if Tesla rolls out FSD in China? And my second question is with regard to your next generation product, Antora, 1000 Pro as the integration of digital cockpit and ADAS functions on one chip seems becomes the new norm. I'm wondering, could you please compel your product with Qualicom's recently released Ride Flex SoC in terms of the functionality as well as the pricing? Thank you.
spk10: I'll take the first one. Relative to ADAS, we have got a tremendous amount of activity across all markets in the ADAS space. You know, eCarX, I think, is quite excited with the developments that we're bringing to market, specifically with our JICA joint venture. We're working, you know, very closely with that system, and we anticipate that we'll continue to make some great announcements in the future with how we bring that product forward. You know, additionally, we've got a number of partnerships that we continue to have in place, with Volvo and Zensiak and Luminar and we're quite, we feel quite confident in the way we're approaching the 8S market and developments that will take place there and the place that eCARX will play in that future. And then relative to the Qualcomm product line, I think when we look at the SOC roadmap for RecarX, especially when you look at the Antara 1000 product and its direct competitor, the Qualcomm 8155. a number of use cases where we see a significant advantage in the way that we've designed that system and brought CBR5 memory into the vehicle and optimized the interfaces. There are use cases where we see up to a 30% performance enhancement versus the direct Qualcomm product line. And I think we will continue to believe we've got a strong roadmap in working with Cyanogen to bring great SOCs that are both cost-competitive and future-competitive into the market.
spk03: Got it. That's very helpful.
spk06: Thank you. We will take our next question. Your next question comes from the line of Sui De Silva from Roth Capital.
spk09: Please go ahead. Your line is open.
spk12: Hi, Sui, Peter, Ramesh. Thanks for taking the question. So on the SuperBrain Central Compute Platform, I think you talked about some potential bomb savings, perhaps some wiring or so forth. Can you elaborate there and maybe how that compares to the competitors in terms of the advantage there?
spk10: Yeah, Suji, hey, great. Thanks for the question. Thanks for joining us today. I think central compute has got the potential to unlock a lot of potential in the vehicle around savings from a BOM perspective, vehicle infrastructure perspective, and we're quite excited about the Super Brain product. We still have that product in development, so not yet on vehicle, but we anticipate that will come in the near term here. We anticipate we will have an official launch date, I would say. in the next six to 12 months. So we're excited about the developments with that product and the potential that it can bring to the vehicle. I think we've quoted that we see significant savings from an electronic infrastructure perspective in the vehicle, both from consolidating additional ECUs together and creating savings from that perspective, as well as the wiring savings that we've quoted in vehicle that we would anticipate coming from that application as well.
spk12: Okay, great. Thanks, Peter. And then also, I was just curious on the, you know, in your attempt to diversify geographically, you placed your US office, I believe, in California. I'm just curious on the thinking behind that location. Is it closer to tech resources versus where the car companies are? Just curious on that thinking. Thanks.
spk10: Yeah, sure. I mean, we're continuing to expand our footprint to serve customers effectively. So we mentioned today our engineering and sales center that will be ramping up in Germany and was hiring well on the way there. Our activities in California tend to be focused today on SOC IP development, and we believe that's a fantastic place for for talent and driving effective capabilities in that space, but we also see it as an opportunity to build from as we continue to approach potential customers in North America and hope that it serves as a launching pad for those activities. Okay. Makes sense. Thanks, guys. Yes, thank you.
spk09: There seems to be no further questions, so I would like to hand back for closing remarks.
spk15: Yeah, if I can, thank you very much. I just wanted to thank everyone for joining the call today. As we've mentioned, as a management team, we are very excited about eCorrect's growth story, and we're very confident on delivering the key milestones that we went through today. And once again, thank you for very insightful questions and appreciate that. Thanks, everyone.
spk09: This concludes today's conference call. Thank you for participating. You may now disconnect.
Disclaimer