Lotus Technology Inc.

Good day and thank you for standing by. Welcome to Lotus Technology Inc third quarter 2025 earnings conference call. At this time, all participants are in 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 one and one 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. Please be advised that today's conference is being recorded. And I'd like to hand the conference over to your first speaker today, Ms. Michelle Ma, Head of Investor Relations. Please go ahead.

Thank you, Amber. Welcome to Lotus Tech's third quarter 2025 earnings call. My name is Michelle Ma, the Head of Investor Relations here at Lotus Tech. With me today are CEO Mr. Ching Fung Fung and CFO Dr. Daxue Wang. Our conference call materials were issued today and are available on our investor relations website. We are also broadcasting this call via webcast. Before we continue, please be reminded that today's discussion will contain forward-looking statements to the Safe Harbor provisions. of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in relevant filings of Lotus Tech with the US Securities and Exchange Commission. The company undertakes no obligation to update any forward-looking statements except as required and applicable law. Please also note that our earnings press release and this conference call will include disclosure of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. You can also find a reconciliation of these figures in the press release available on our investor relations website at ir.group-notice.com. With that, I'm delighted to turn the call over to our CFO, Dr. Wang, please.

Good morning, good afternoon, and good evening, honored shareholders, analysts, and friends from the media. Thank you for joining us for Lotus' Q3 2025 earnings release. I'm Daxi Wang, Chief Financial Officer for Lotus, and it is my privilege once again to present the company's audited financial results. In the third quarter, the company delivered nearly 1,800 vehicles to distributors. This represents a 35% decrease year-on-year, but a 28% increase quarter-on-quarter. As a result, total delivery of the first nine months of the year reached 4,612 units, about 40% compared to the same period last year. These figures reflect a transitional period characterized by the impact of tariffs graduate stocking activities under the first commencement of the graduate upgraded module deliveries. Revenue for the third quarter was $137 million, down 46% year-on-year, but up 10% sequentially. Revenue for the first nine months totaled $356 million, down 45% year-on-year. Growth margin improved to 8% in the third quarter. up three percentage points from the previous quarter, and five percentage points from the same period last year. This improvement was driven by a favorable shift in our sales mix towards upgraded models, reflecting healthy inventory dynamics and our continuing recovery in our underlying profitability. The gross margin for the first nine months remained stable compared to the same period in 2024, safely in a positive territory. Now, allow me to break down our sales by category and regions. By category, lifestyle vehicles accounted for 77% of the total deliveries in Q3, down from 83% in Q2. Consequently, they contributed 72% of the total deliveries for the first nine months of the year. And in terms of regions, deliveries in the US sports car market began a gradual recovery in the third quarter. This improvement came after the initial US-UK tariff disruptions were resolved, with UK vehicles ultimately securing a favorable tariff rate of 10%. Overall, deliveries in the first nine months of 2025 were primarily driven by China and Europe. It's worth noting that our delivery growth in China for the first nine months outpaced the broader premium auto segment in the country. This underscores the competitive strength of our product portfolio in an increasingly challenging environment. Now, let me turn to the key financial. As I have already covered, deliveries, revenue, and gross margin are perceived to other financial metrics. The cost of revenue decreased by 35% year-on-year to $126 million in Q3, and a total of $327 million for the first nine months of 2075. This resulted in a gross profit of $11 million for the quarter and $29 million for the first nine months. We reported operating loss of $95 million in the third quarter, a 41% improvement year-on-year. The net loss for the quarter was $65 million, a 68% improvement year-on-year. For the first nine months, The operating loss was $357 million, narrowing by 40% year-on-year, while the net loss narrowed to $378 million, down 43% year-on-year. And for your reference, on a net gap adjusted basis, the net loss for the first nine months was $2 million lower, primarily due to the impact of the share-based compensation. and adjusted EBITDA under the non-GAAP for the same period narrowed by 48% year-on-year to $294 million. Beyond these numbers, I would like to reiterate that we have now reduced operating expenses for eight consecutive quarters through value-added measures. This underscores our strong commitment to enhancing operational efficiency. Our efforts in cost discipline and inventory optimization are reflected in the significantly narrowed loss for both quarter and the year to date. We remain focused on prudent resource allocation and margin enhancement, while also preparing for a more dynamic operating environment in the quarters ahead. During the third quarter, we achieved several key milestones amid challenges posed by the fierce market competition. We will be awaiting our new PHEV model in the coming months to further expand our electrification product roadmap and address consumer demand in diversified powertrain segments. Our CEO, Ms. Feng, will elaborate further on these developments. With that, I will now turn the floor over to Ms. Feng.