Key Highlights

● Second-quarter revenue was US$225.2 million, up 45% from a year earlier.

● Gross margin rose to 19.8% from 10.8%, and the net loss narrowed to US$12.0 million.

● ECARX reiterated 2026 revenue guidance of US$1.0 billion to US$1.1 billion.

● It agreed to buy the Flyme software business for about US$266 million.

Latest verified development

ECARX Holdings Inc. (NASDAQ:ECX), a supplier of automotive computing platforms and software, reported second-quarter 2026 results on 11 August 2026. Revenue was US$225.2 million, up 45% from a year earlier. Gross profit rose 165% to US$44.5 million, lifting gross margin to 19.8% from 10.8%. The net loss narrowed to US$12.0 million from US$45.4 million, and adjusted EBITDA, a non-GAAP measure, was a gain of US$0.5 million against a loss of US$29.8 million a year earlier.

Market coverage of the results said revenue was 71% higher than in the first quarter, with shipments of about 550,000 units. Goods sales were US$196 million, services US$28 million and software US$0.7 million. Adjusted EBITDA was described as positive for a fourth consecutive quarter, though lower than roughly US$4 million in the first quarter, which included a one-time gain.

Guidance, acquisition and cost pressure

ECARX reiterated total revenue guidance for 2026 of US$1.0 billion to US$1.1 billion, citing its backlog and commercial pipeline. For context, the second-quarter figure alone is roughly a fifth of the lower end of that range.

The company also agreed to acquire the Flyme software business for about US$266 million. Of the US$165.5 million of cash held at 30 June 2026, US$117.8 million was reserved for the Flyme purchase consideration, which leaves a smaller unrestricted cushion than the headline balance suggests.

Management flagged a headwind. Cost of revenue rose 30% year on year, mainly because of higher memory prices, and the company said memory cost dynamics are expected to weigh on gross margin and operating profitability in the coming quarters. That puts the 19.8% gross margin, up from 10.8%, in the path of that pressure.

Business context

The company's reporting splits revenue into goods, services and software, and the mix reported for the quarter, dominated by goods sales, shows that hardware shipments drive revenue, which helps explain why component costs such as memory matter so much to margins. Software and services were a much smaller share, although the Flyme transaction, if completed, would add a software business.

No completion timing for the acquisition has been given, nor detail on how it will be funded beyond the reserved cash. Gross profit growth of 165% against revenue growth of 45% shows operating leverage from a low base; whether that continues depends on both memory pricing and volumes.

Memory costs, Flyme and the 2026 guidance

The guidance range of US$1.0 billion to US$1.1 billion for 2026 rests on a backlog and commercial pipeline that the company cites, and on a second quarter that delivered about a fifth of the lower end.

Alongside it sit two items that pull in different directions: the Flyme purchase, which has already absorbed US$117.8 million of reserved cash, and a memory-price headwind that management expects to weigh on a gross margin only just lifted to 19.8%.