Pony.ai, Inc. Q1 FY2025 earnings call

• Key milestones: Robotaxi revenue doubled YOY with fare charging up ~eightfold; launched Gen 7 autonomous driving system with 70% BOM cost reduction; secured production capability to grow fleet to 1,000 vehicles by year end; formed strategic partnerships with Tencent and Uber.
• Technological advancements: Gen 7 Robotaxi has 100% automotive-grade sensors/components, modular architecture for rapid deployment; PonyWorld AI-powered world foundation model generates over 10 billion km of test data weekly; Gen 7's domain controller uses auto grid chips, SoC adoption reduces size, weight, power, cost by 50%-80%; LiDAR costs reduced by 68% via software algorithms; remote assistant-to-vehicle ratio up to 20.
• Operational expansion: Commercialized operational domains span over 2,000 sq km in Beijing, Guangzhou, Shenzhen, Shanghai; secured China's first fully driverless commercial Robotaxi license in Shenzhen; registered users on Pony Pilot App up over 20% QoQ.
• Global progress: Partnered with Uber to launch Robotaxi service in Middle East market this year; started road testing in Seoul's Gangnam district; secured L4 Robotaxi testing permit in Luxembourg.

In the first quarter of 2025, Pony AI's revenues totaled $14 million, up 11.6% year-over-year. Robotaxi service revenue was $1.7 million, growing significantly at 200.3% year-over-year, with fare charging revenues increasing by approximately eightfold. Licensing and application revenues were flat at $4.5 million year-over-year. The total cost of revenue was $11.7 million, up 17.9% year-over-year. Gross profit reached $2.3 million, resulting in a gross margin of 16.6%, down from 21% in the same period last year due to a change in revenue mix from increased ADC sales for new robo-delivery clients.

• Gen 7 Robotaxis expected to enter mass production in Q2, with fleet size reaching 1,000 vehicles by year end.
• 2026 to see even more accelerated scale-up with more autonomous driving vehicles deployed in China and international markets.
• Focus on reinforcing foundations for robust fleet growth and scalable, sustainable expansion.

• Potential impact from U.S.-China tariff issues, though majority of supply chain is domestically sourced and supply chain resilience has been enhanced; however, any changes in trade environment could potentially affect operations if not managed properly.

Q: How should we understand Pony AI's progress throughout 2025 and pipeline for 2026?

A: Gen 7 to enter mass production in Q2, fleet to 1,000 by year end; working closely with OEM partners on mass production, agile component sourcing, and securing licenses; 2026 to see even more accelerated scale-up with more vehicles deployed in China and international markets.

Q: Elaborate on evolving global strategy and China market focus?

A: Prioritize China market due to mature regulations, but use established ecosystem to enter new markets; working with global partners like Uber and ComfortDelGro; made regulatory and testing progress globally.

Q: Factors driving Robotaxi revenue growth this quarter and sustainability?

A: Driven by fare charging and project-based engineering solution services; fare charging up ~800% due to expansion in Tier 1 cities and user group optimization; anticipate some volatility but confident in long-term growth.

Q: Impact of China's MIIT regulatory requirements on Pony AI?

A: Beneficial as it clarifies distinction between L2 and L4; L4 uses reinforcement learning and PonyWorld, differing fundamentally from L2's imitation learning in safety and capability.

Q: Potential impact of U.S.-China tariff issue on operations?

A: Minimal as majority of supply chain is domestically sourced; supply chain resilience enhanced, confident full-year fleet target remains on track