WeRide Inc.

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to WeWrite's first quarter 2025 earnings conference call. At this time, all participants are in the listen-only mode. The company will be hosting a question and answer session after management's prepared remarks. Please note that today's event is being recorded. The company's unaudited financial and operating results were released by the Newswire earlier today and are currently available online. Joining us today are WeWrite's founder, chairman and CEO, Dr. Tony Han, and CFO, Ms. Jennifer Lee. Before we continue, I'd like to refer you to the Safe Harbor Statement in the company's earnings press release, which also applies to this call, as today's call will include four looking statements, including WeWrite strategies and future plans. These forelooking statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forelooking statements involve inherent risks and uncertainties. The company's actual results could differ materially from those stated or implied by these forelooking statements as a result of various important factors, and please refer to the risk factors section of the company's Form 20F filed with the SEC for full disclosure of these risk factors. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please note that all numbers stated in management's prepared remarks are in RMB terms, and we will discuss non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in the company's earnings release and filings with the SEC. With that, I'll now turn the call over to the company's founder, chairman and CEO, Dr. Tony Han. Please go ahead, sir.

Hello, everyone. Thank you for joining us today. I'm excited to give you an update on our last quarter. We have reached a number of new milestones as we continue our global expansion and also cemented deeper collaboration with key partners such as Uber, Specifically with Uber, we have committed to providing robot taxi service in 15 additional cities internationally and accepted a commitment for an additional $100 million equity investment on the heels of their initial investment at our IPO. Other notable milestones included launching the first driverless robot taxi testing in Abu Dhabi, the first of its kind in Middle East. In China, we roll out the country's first autonomous mobility service in the central area of Guangzhou, the number three city in China. While some of this will be reflected in our near-term financial results, others lay the foundation for the robust growth in the quarters to come. First, let's quickly discuss our latest Uber announcement. This expanded partnership and the incremental $100 million investment is a testament to our shared commitment to autonomous mobility and the confidence in our operational and technological excellence. We began our partnership with Uber in the Mid-East and continue to scale our operations there. As a reminder, we first launched UpDavi in December of last year and have recently announced plans to expand in Dubai. There have also been mentions of expansion to a third city recently in the press, so look out for more information there. We are excited by our program in the region and the opportunities that it presents. In addition to the Mid-East, we expect to scale and expand our RoboTaxi presence to other geographies, such as Europe, with a particular focus on markets, where we have already deployed some of our other autonomous mobility products such as our autonomous buses. We believe having multiple autonomous mobility products widens our time and also makes dialogues with stakeholders such as regulators more substantial. We continue to expand our autonomous mobility operations in China and abroad. As alluded to earlier, we launched full driverless robo-taxi testing in AptRB. This means that we will be the first company to have robo-taxi running without safety drivers. At the same time, we also expanded our operational service to include new destinations such as El Maria Island and El Rim Island, covering a range of vibrant areas in the city. Through this, you can see in action our phased approach to operational expansion. This phased approach allows us to ensure a high quality of service while ensuring that we meet all regulatory and safety standards. To date, we have a leading safety track record in the commercial delivery of our services. In China, we expanded our robo taxi service in Beijing and Guangzhou In Beijing, we added routes between the sub-center of the city, Beijing Yizhong, and the Beijing railway station, spanning over 600 square kilometers. In Guangzhou, we launched China's first 24-7 autonomous ride-hailing network and added eight routes in the city center, connecting landmarks and the transport hubs, such as airport, Guangzhou South Railway Station, Canton Tower, and the Canton Fair complex. These roads cover more than 250 kilometers of public roads in a densely populated urban area with very busy traffic. Going forward, our robo-taxi service in China will be integrated into Tencent Smart Transportation mini program on WeChat to serve a wider use base in China. We also continue to expand our other autonomous mobility business. Our RoboBus has entered downtown Guangzhou, one of the most complex urban environments. The development follows our launch of the first robust BRT road in city last year. RoboBus has now become an integral part of the day life of Guangzhou citizens who can easily hop on the driverless shuttle in the main district by simply tapping their city pass. It stands a paradigm of the future mobility that we envision, where autonomous vehicles are fully integrated with the local transportation system, enabling safe and a seamless movement for the communities. We are also making headway in the international market, bringing our product to Switzerland, Spain, and France. In March, our RoboBus was granted an operation permit by France, making WeRide the first and to date the only autonomous driving company whose products have received operational approvals in five countries, including China, the UAE, Singapore, France, and the US. Technology and safety are the cornerstones of our success. Our autonomous mobility product all operates atop what we call WeRide One, an autonomous driving technology platform. designed to handle a broad spectrum of operational environments, from complex urban settings to full-day functionality and varying weather conditions. Its proven adaptability in a range of real-world applications provides a fundamental tech advantage over our peers. The high level of universality of WeWrite1 has recently demonstrated once again through our RoboWan W5, which secured Guangzhou's first group of driverless testing permits for logistic equipment in less than three months after the product launch. The powerful adaptability of WeWrite1 is further demonstrated by our real-world operations across abroad a broad geographic area. The initial deployment of our AV fleets in a new city can be completed in just a couple of weeks, enabling rapid adoption for our partners. We believe safety is the best test of autonomous driving technology. In over 2,000 days of operation, our safety records remain industry-leading. While we have iterated multiple times we have not had any accident attributed to the failure of our autonomous driving systems. Our commitment to safety and transparency is key to earning the confidence of both regulators and partners. We also leverage our core autonomous mobility know-how in our ADAS business. In April this year, we announced a partnership with QNNX, a division of BlackBerry. to work together to enhance the safety and the reliability of our ADA solution. By integrating QNAP OS for safety into our ADA system repilot, we will be helping OEMs and tier one companies fast track the future of intelligent vehicles. I will now hand over the call to our CFO, Jennifer Li, to discuss our financial results in more detail. Jennifer, please go ahead.

Thank you, Tony. Hello, everyone. Before we get into the financials, please know that all amounts are in RMB and all comparisons are on year-over-year basis, unless otherwise stated. Now let's discuss our first quarter financial performance. Total revenue for the first quarter of 2025 increased 1.8% to 72.4 million, primarily driven by the growth in product revenue, which was partially offset by a slight decline in our service revenue. RoboTaxi has been one of the core drivers in our business, following our achieving record high RoboTaxi revenue for the financial year of 2024. We continue with the momentum in the first quarter of this year with RoboTaxi revenue of 16.1 million. RoboTaxi's contribution in group revenue reaches 22.3%, rising from 11.9% of the same period of 2024. Product revenue delivers strong growth increasing by 46.7% to 9.5 million for the first quarter. This encouraging growth was primarily driven by a substantial increase in the sales of RoboTaxi and RoboSafers, which were introduced into a new international market with extended operations. To 62.9 million, primarily due to a reduction of 33.5 million in revenue from ADAS, Research and Development Services. as the compromised R&D project for a certain client has been completed in 2024. This decline was partially offset by an increase of $29.8 million in revenue from intelligent data services and an increase of $1.9 million in revenue from operational and technical support services. As technical support engagement increased this quarter, along with the transition into the operation phase of certain projects, We recorded a group-level growth margin of 35.0%, representing a growth margin for a product of 49.9% and a growth margin for service of 32.8%, respectively. This reflects a sustaining improvement of our business structure in line with our Robotech's business expansion and globalized commercialization. We are building a sustainable business model by engaging trusted partners and localizing employees. localized deployment. It helps us sustain a healthy gross profit level. Now turning into our operating expenses, we recorded a rise of 14.2% for the first quarter, amounting to $463.5 million. The increase was driven by a 48.4% rise in personnel-related expense compared to the same period of 2024. we remain highly cost cautious and disciplined. The increase of operating expense is mainly driven by our incremental R&D effort. In this important phase of development, we prioritize strategic investment in talent acquisition and retention to drive our technological advancement. Combining with our expansion of selling and marketing activities, We aim to solidify our leading position by laying a sustainable foundation. To further break down, R&D expense represents 70.3% of operating expenses. This line item increased by 17.3% to 325.7 million compared to the same period of 2024. Excluding share-based compensation, R&D expenses increased by 54% to 278 million. Administrative expense increased by 5.2% to 123.9 million compared to the same period of 2024, excluding SBC. Administrative expense increased by 105.8% to 73.9 million. Selling expense increased by 32.4% to 13.9 million compared to the same period of 2024, excluding SBC, selling expense were up 66.7% in the first quarter. Our net loss increased by 17.7% to $385.1 million in the first quarter of 2025. On non-IFRS basis, the net loss increased by 108.2% to $294.6 million, which was mainly contributed to our continuous investment in R&D. As of March 31, 2025, we held a total capital reserve of $6.2 billion, including $4.4 billion in cash, cash equivalent, and time deposits, $14.7 million in restricted cash, and $1.7 billion in financial assets measured at fair value through profit and loss. We believe that our strong cash Capital position will continue to support our ongoing RMD initiative and facilitate expansion of our growing global business. On a separate note, our board has recently authorized a share repurchase program under which the company may repurchase up to $100 million of its Class A ordinary share over the next 12 months and indicate a vote of confidence in our business fundamentals, growth trajectory, and long-term outlook. In conclusion, we feel encouraged by our financial performance of the first quarter. As we continue to scale our operation with additional deployment underway in international markets, we are confident to build on this success and turn global opportunity into long-term value for our stakeholders. With that, operator, we are now ready to take on questions.