---
title: "ECARX Q2 2026 Earnings: Gross Margin Rises to 19.8% as Product Mix Improves"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/295527500.md"
description: "ECARX reported Q2 2026 revenue of $225.2 million, up 45% year-over-year, driven by a shift to higher-value products and pricing adjustments rather than volume growth. Gross margin expanded to 19.8%, and adjusted EBITDA turned positive at $0.5 million for the fourth consecutive quarter. While GAAP losses narrowed significantly, management warned that rising memory costs may pressure future profitability. The company also announced a $266 million acquisition of Flyme software."
datetime: "2026-08-11T11:14:41.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/295527500.md)
  - [en](https://longbridge.com/en/news/295527500.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/295527500.md)
generator: "portal-rs"
---

# ECARX Q2 2026 Earnings: Gross Margin Rises to 19.8% as Product Mix Improves

ECARX (Nasdaq: ECX) reported Q2 2026 revenue of US$225.2 million, up 45% from US$155.6 million a year earlier, while diluted loss per share narrowed to US$0.03 from US$0.13. Gross margin expanded to 19.8%, and adjusted EBITDA remained positive as a higher-value product mix, pricing adjustments and lower operating expenses offset broadly flat shipment volume.

## Core Earnings Data

For the quarter ended June 30, revenue grew faster than cost of revenue, which increased 30% to US$180.7 million. Gross profit consequently rose 165%, while reductions in R&D and selling, general and administrative expenses helped narrow the GAAP operating and net losses.

Adjusted EBITDA reached US$0.5 million, marking ECARX’s fourth consecutive positive quarter on this non-GAAP measure. The company nevertheless remained loss-making under GAAP.

| Metric                   | Q2 2026             | Q2 2025              | Year-over-year change       |
| ------------------------ | ------------------- | -------------------- | --------------------------- |
| Revenue                  | US$225.2 million    | US$155.6 million     | Up 45%                      |
| Gross profit             | US$44.5 million     | US$16.8 million      | Up 165%                     |
| Gross margin             | 19.8%               | 10.8%                | Up 9.0 percentage points    |
| Total operating expenses | US$50.7 million     | US$57.2 million      | Down about 11%              |
| Operating loss           | US$6.2 million      | US$40.4 million      | Narrowed by US$34.2 million |
| Net loss                 | US$12.0 million     | US$45.4 million      | Narrowed by US$33.4 million |
| Diluted loss per share   | US$0.03             | US$0.13              | Narrowed by US$0.10         |
| Adjusted EBITDA          | US$0.5 million gain | US$29.8 million loss | Improved by US$30.3 million |

Adjusted EBITDA excludes interest, taxes, depreciation, amortization and share-based compensation.

## Revenue Mix and Product Momentum

Sales of goods remained the main growth driver, increasing 50% to US$196.4 million. ECARX attributed the increase to demand outside China, a greater share of higher-priced automotive computing platforms and pricing adjustments intended to offset elevated memory costs.

Service revenue rose 21% to US$28.1 million, supported by more design and development contract deliveries associated with new vehicle launches, particularly in China. Software license revenue fell 42% to US$0.7 million because of lower license sales volume.

ECARX shipped more than 550,000 units during the quarter. Antora and Pikes products represented 42% of shipments, compared with 20% a year earlier; Antora shipments increased 52%, while Pikes shipments rose by more than 2,000%. The company also began mass production for nine new vehicle models across four brands and recorded 33 vehicle design wins.

## Higher-Value Products Lifted Revenue Despite Flat Shipments

Management characterized overall shipment volume as broadly flat against a challenging automotive backdrop. The 45% revenue increase therefore depended less on unit growth and more on product mix and pricing, with higher-value Antora and Pikes solutions taking a much larger share of shipments.

This shift also supported profitability. Pricing adjustments helped balance higher memory costs with customers, while a more favorable service cost structure contributed to the increase in gross margin from 10.8% to 19.8%. The durability of that improvement is not assured, however, because management expects memory cost dynamics to negatively affect gross margin and operating profitability in coming quarters.

## Profitability, Liquidity and the Balance Sheet

R&D expense declined 14% to US$29.1 million as ECARX prioritized resources, integrated development work and deployed AI tools to reduce structural costs. Selling, general and administrative expenses and other items declined 8% to US$21.6 million, reflecting operating efficiencies and lower share-based compensation.

These reductions helped narrow the operating loss to US$6.2 million. Interest expense increased to US$8.3 million from US$5.5 million, leaving the GAAP net loss wider than the operating loss despite the substantial year-over-year improvement.

ECARX reported US$165.5 million of total cash at June 30, including US$117.8 million reserved for consideration related to the planned Flyme acquisition. The company also held US$46.7 million of short-term investments. The definitive agreement values the Flyme software portfolio at approximately US$266 million and is intended to give ECARX control over the software layer used in its products.

Balance-sheet obligations also increased between December 31, 2025, and June 30, 2026. Current liabilities rose to US$968.5 million, exceeding current assets of US$697.1 million, while short-term borrowings increased from US$310.7 million to US$444.8 million. Inventory more than doubled from US$62.3 million to US$126.2 million, and total shareholders’ deficit remained US$265.9 million.

## 2026 Guidance

ECARX reiterated its full-year revenue range based on its backlog and commercial pipeline. Management did not provide a quantified profit or margin target, but warned that memory costs and the timing of strategic investments could pressure profitability over the coming quarters.

| Metric                 | Latest guidance               | Previous guidance             | Change     |
| ---------------------- | ----------------------------- | ----------------------------- | ---------- |
| Full-year 2026 revenue | US$1.0 billion–US$1.1 billion | US$1.0 billion–US$1.1 billion | Reiterated |

## Risks Investors Should Watch

-   **Memory cost pressure:** Q2 pricing adjustments helped offset higher memory costs, but management expects these costs to weigh on gross margin and operating profitability in coming quarters.
-   **Dependence on mix and pricing:** Revenue rose sharply even though overall shipments were broadly flat. Slower adoption of higher-value platforms or reduced ability to pass through component costs could weaken growth and margins.
-   **Liquidity and financing demands:** Most of reported total cash was reserved for the Flyme transaction, while current liabilities exceeded current assets and short-term borrowings increased substantially during the first half of 2026.
-   **Strategic investment execution:** The approximately US$266 million Flyme acquisition and continued platform investments are central to ECARX’s full-stack strategy, but their timing and costs may affect near-term profitability.

## Summary

ECARX’s Q2 2026 results showed meaningful operating improvement: higher-value products, pricing adjustments and better service economics lifted revenue and gross margin, while lower expenses produced another positive adjusted EBITDA quarter. The company still reported a GAAP loss, and investors will need to monitor memory costs, underlying shipment growth, acquisition-related funding requirements and whether the improved product mix can support margins through the rest of 2026.

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**