FFAI - NASDAQ

Greetings, and welcome to the Faraday Future Intelligent Electric Inc. Second Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to John Schilling, Director of PR and Communications. Please go ahead, sir.

Welcome, everyone, to Faraday Future's Second Quarter 2025 Earnings Call. This is John Schilling, Director of PR and Communications at FF. Today, I'm joined by a few members of our leadership team, including our Global Co-CEO, Matthias Aydt; Global President, Jerry Wang; and our CFO, Koti Meka. Today, we will be sharing details from our second quarter 2025 results. The press release as well as today's presentation will be available in the Investor Relations section of our website at investors.ff.com. A replay of this call will also be posted there later today. Please note that on the call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today, should not be relied upon as representative of views as of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC. In today's call, we will be covering the following topics: the second quarter overview and financial highlights, our development progress, together with our third quarter and full year outlook. The management team will also address questions from our shareholders submitted electronically in advance of this call. With that, I will now turn over the call to Matthias.

Thank you, John. Hi, everyone. This is Matthias, the Global Co-CEO of Faraday Future. I'm pleased to share our key developments for the second quarter of 2025 through today, structured around our 7 Tier 1 strategic goals and pillars from S1 to S7, highlighting meaningful progress in operations, improvements in our business and financial fundamentals and continued strategic execution across our AI-driven mobility road map. The FX Super One launch campaign has demonstrated tangible commercial impact, underscoring the effectiveness of our influencer- led marketing strategy. In Q2, we received over 4,000 FX Super One nonbinding nonrefundable preorders from both B2B and B2C channels. By July 31, 2025, we received total nonbinding nonrefundable preorders exceeding 10,000 units. The campaign's reach was amplified through coordinated digital content and endorsement from high-profile co-creation participants, resulting in broad social media visibility and accelerated customer engagement across both institutional and consumer segments. FX continues to build strong momentum with its innovative B2B and B2C sales model. We have confidence that we will further strengthen our preorder pipeline. By far, FX B2B strategy has covered multiple key FF partners. We are confident that our innovative B2B, B2C co-creation model will further strengthen our preorder pipeline. On July 17, 2025, we hosted the global initial launch of the FX Super One MPV in Los Angeles, where we unveiled 2 groundbreaking global-first products, the FX Super One EAI EV MPV and the FF Super EAI F.A.C.E. System, alongside the FF EAI Embodied AI Agent 6x4 Architecture. The launch event was live-streamed to a global audience and attended by hundreds of guests. It was a tremendous success generating a sensational impact in both the United States and China and powerfully promoting the FX brand and the FX Super One product. One more significant achievement of our delivery in the second quarter is that Mariah Carey, award-winning best-selling female artist of all time and global top music legend, features prominently the FF 91 2.0 Futurist Alliance in her new music video Type Dangerous, alongside the FF

Thank you, Matthias. Hello, everyone. I'll walk you through several key metrics that highlight both our operational execution and improving financial position in Q2 2025. For the quarter, our net loss from operations was $48.1 million compared to $50.6 million in the same period in 2024. Excluding depreciation, amortization and stock-based compensation, the adjusted operating loss stood at approximately $27.4 million, made up of $7.3 million in cost of revenue, $4.8 million in R&D, $1.9 million in sales and marketing and $13.4 million in G&A. The monthly operating loss is approximately $9 million during this quarter. These numbers reflect our disciplined cost management even as we continue to invest in FX-related engineering, talent expansion and strategic ramp-up initiatives. For the 6 months ended June 30, 2025, operating cash outflow totaled $43.6 million, a 50% increase from $29.1 million for the same period in 2024. This increase was primarily driven by timing of the payments and the operational ramp-up of the FX platform. The increase in operating cash usage reflects our ongoing investments in product development, strategic execution and cost discipline as we position the company for growth. Our financing activities generated $55.1 million in net cash inflows during the 6 months ended June 30, 2025, a 106% increase from $26.7 million in the same period of the prior year. As of August 12, subsequent to Q2's end, we received an additional $45.7 million in financing. Our financing efforts have meaningfully bolstered our liquidity with quarter end cash position reaching an 18- month high. This improvement reflects our ability to secure capital despite the constrained macroeconomic environment. While total liabilities grew by approximately $29.4 million over the 6-month period, much was due to mark-to-market adjustments rather than new financing, highlighting the balance sheet sensitivity to equity-linked valuation changes under fair value accounting. In summary, our Q2 performance reflects meaningful progress across both capital liquidity and operational fronts. We remain focused on executing strategic investments aligned with our core road map while optimizing capital deployment and driving toward long-term sustainable growth. I will now invite Jerry Wang, Global President of FF, to provide some comments.

Thank you, Koti. This is Jerry Wang, the Global President of Faraday Future. I will now share our progress with capital financing in the second quarter. In Q2, FFAI was officially added to the Russell 3000 Index, a key milestone that enhances our visibility and credibility among institutional investors, analysts and the broader market. Externally, top-tier international fund managers, including Vanguard and BlackRock, continued to increase their holdings in FFAI. Vanguard currently holds 5.24 million shares and has increased by 500% compared to Q4 2024. BlackRock has increased its holdings in FFAI for 4 consecutive quarters, boosting its position nearly sevenfold from the previous quarter. As of June 30, 2025, BlackRock reported that it holds approximately 5.39 million shares, up from just 780,000. Capital markets are recognizing and gaining confidence in FF's authentic value and long-term growth potential. Internally, we launched our 10b5-1 executive stock purchase plans, which reflect FF executives' personal commitment to the company's future and aim to align their interests with those of the stockholders. Our Founder and Co-CEO, YT Jia; Global President, Jerry Wang, myself; FX CEO, Max Ma; FF CFO, Koti Meka; and several other executives have been officially approved and processed for these 10b5 purchase plans. On the capital markets front, we actively participated in several investor conferences, forums and non-deal road shows to strengthen our engagement with the broader capital markets. I had the honor of delivering remarks at Keppel Bank's conference, and I just presented at JPMorgan 2025 Auto Conference in New York last week. Stakeholder engagement remained a key focus in the second quarter. We hosted our first Annual Stockholders' Day where we provided in-depth FX product updates and deepen alignment with our retail investor community. We strategically collaborated with HabitTrade, a global multi-market brokerage and digital asset infrastructure platform, marking Faraday Future's first step into the Web3 financial ecosystem. We have also engaged a leading financial adviser to help advance global AI and AI EV M&A strategy. Additionally, we recently announced $105 million in financing in July to fund our aggressive growth strategy. This fund will significantly strengthen the company's ability to launch FX Super One, scale up the production readiness as well as advance our position to be a leader in the AI EV market. Now let's welcome back Matthias to discuss the outlook.

Thank you, Jerry. I will now walk you through our key updates with the primary focus on Q3, also structured across the S1 to S7 framework. For S1, first of all, we continue to make strong progress in building our user ecosystem. On the FS 91 side, we expect more elite celebrities and public figures to join as FF 91 owners and co-creation officers. Their participation not only validates our brand but also helps amplify our co-creation vision through influence, innovation and community building. On the FX side, momentum is accelerating. Our B2B and B2C sales channels have now expanded into the 8 U.S. states, and we have officially launched the FX Dream Partner Program, inviting leading players across various industries to join us in co-creating the next generation of mobility. We are also developing a comprehensive user engagement ecosystem that combines products, platforms and AI to deepen customer interaction. In the meantime, our FX Service Par Program continues to grow as we expand partnerships with major service and aftermarket providers to establish a strong nationwide aftersales support network. In the near future, we are ramping up physical presence and visibility through a series of high-impact off-line activities for the FX Super One. This includes our participation in the LA Auto Conference. Now shifting to S2 and S3 without -- or with product technology. We are doubling down on our AI product strategy. A core focus this year is building a robust internal R&D capability especially in software and AI. We are expanding the transfer of core technologies from our $300,000 flagship FF 91 into the FX product line. In the second half of the year, our voice interaction system built on large language models will be deployed across FX Super One and other models. These models will connect seamlessly with the full FF ecosystem of intelligent services, delivering a deeply interactive user ecosystem. From there, let's look at S4 where we will cover progress on supply chain, industrialization and delivery. We have launched the pilot production phase of the FX Super One, and equipment installation and commissioning are expected to be completed within the year to enable full vehicle manufacturing capability. In September 2024, the FF and FX dual-brand strategy was first announced. In 2025, we expect to complete the FX year-end off-line target. Shifting to S5. We are continuously optimizing our capital and financing structure, including bringing in top-tier investment banks and large institutional investors. As always, we continue to uphold the shareholders-first philosophy by putting all of our efforts towards building trust with investors and fully regain their confidence. Turning to S6, our efforts in the Middle East and China. The Middle East market has made positive progress in preparation, including financing, research and development and vehicle deliveries. It is expected that the preparatory work related to the delivery for the Middle East will be completed within Q3. Strong support from FF's partners and the smooth launch of the Middle East factory construction has greatly accelerated our ability to commence vehicle deliveries. We anticipate the first Super One will roll off the production line by the end of the year. Finally, let's close with S7, system development and strategic growth. FF will continue to advance its EAI EV dual-brand strategy. Our first brand, FF will remain focused on the ultra-spire segment, maintain FF 91 deliveries to celebrities and stars and complete the model change and upgrades to FF 92. Our second brand, FX will leverage the Super One to open the blue ocean MPV market in the U.S. while rapidly initiating deliveries of several additional models. We are continuing to improve operational efficiency through resource optimization, cost control and enhanced execution and tracking. Our strategic planning systems have undergone several rounds of iterative refinement, and we are beginning to see tangible results. In addition, we are integrating AI and IT tools across our operations. The ongoing improvement of our IT General Controls framework is helping us increase the efficiency of quarterly and annual reporting. We believe FF, propelled by the EAI + Crypto Dual-Flywheel Dual-Bridge Eco-Strategy, could continue to optimize operations in line with our corporate goal, Stockholder First. Thank you. Now let's turn it back to John for Q&A.

Thank you, Matthias, and thank you to everyone who presented today. As we wrap up, I'd like to briefly highlight the materials included in the appendix. In the appendix, you'll find our unaudited balance sheet and financial statements as of and for the 3 months ended June 30, 2025, providing additional detail on our financial position. These materials offer helpful context to support everything we've shared today. With that, we'd now like to open up the floor for some Q&A.

Here are some selected questions from e-mails sent to us. One, what is the status of your U.S. production time line? Are you still on target for initial production by the end of this year?

We remain on track for the first FX Super One rollout in the U.S. by year-end. Recently, we have announced the FX Super One has commenced its trial production based at our Hanford factory. This procurement and installation work are in progress, and the Middle East deliveries are planned to start this year.

Two, are you going to be presenting at any upcoming investor conferences? And will they be webcast?

We are scheduled to participate in several investor conferences this fall, including the Deutsche Bank Car Conference in Germany on September 8 to 9, 2025, and LA Auto Conference from November 21 to 30. We plan to participate in additional investor conferences in the fourth quarter, and we'll keep the investor community updated. Most of these conferences will be webcast or live stream, and we will publish the schedules and links on our Investor Relations website. Last week, I presented at the JPMorgan Auto Investor Conference in New York on August 12, 2025.

Three, what is your strategic plan in the Middle East market? Can you provide an update on the operations there?

The Middle East is the third major pillar, FF's global market strategy. Product and capital market of China and the U.S., we held a handover ceremony in Ras Al Khaimah, UAE for our regional factory and operations facility, a critical step forward. The plan for 2025 is to begin sales of the Super One model in the Middle East market, followed by sales in the U.S. market by the end of the year.

Four, do you have a list of future events where we might be able to see the vehicles and production facilities?

Yes, and we are ramping up physical presence and visibility through a series of high-impact off-line activities for the FX Super One. We officially unveiled and kicked off the second chapter of our Bridge Strategy over the weekend at our Pebble Beach event. We will also attend LA Auto Conference from November 21 to 30.

Five, with top funds like BlackRock and Vanguard increasing holdings, what themes have come up in your conversations with them?

We are glad to see capital markets are recognizing and gaining confidence in FF's authentic value and long-term growth potential. We've had constructive conversations with institutional holders around scalability, governance and capital efficiency. The increased holdings reflect confidence in our long-term potential, and we continue to work closely with these stakeholders to ensure alignment on strategy and transparency.

Six, how do you plan to achieve the same level of the user experience in human-machine interaction, high-level intelligent connectivity and precise autonomous driving that some of your peers have already accomplished?

We have already built a solid foundation in the area of in-vehicle systems particularly with extensive team experience in Internet services, AI applications and human-machine interaction. For the final FX product, we will incorporate these advanced technologies and features that have already been tested and validated in the FF 91. On the software platform and intelligent hardware front, we will collaborate with partners and fully leverage supplier capabilities to ensure that resource-intensive areas such as intelligent hardware and algorithms meet industry-leading standards. As for autonomous driving, which involves significant investments in regulations, infrastructure and data, we will implement it in phases based on technology and end consumers' demand.

Seven, your company's stock price has made significant progress since the second quarter. Could you briefly introduce what your company's most core value is?

FF is one of the only 4 U.S.-listed new energy EV companies to pass crash testing alongside Tesla, Lucid and Rivian and among the few that have successfully gone from concept to commercialization. We've invested nearly $4 billion and built a full closed-loop system in the United States, encompassing R&D, safety testing, certification, manufacturing, sales and aftersales service. As a NASDAQ-listed company, FF benefits from strong liquidity, high visibility and a broad shareholder base. Our premium brand image is well established, and our FX series target the untapped blue ocean market in the United States. At our Hanford, California facility, we currently have an annual production capacity of 10,000 units, which can be scaled to 30,000 to 50,000 units for the production of FF and FX vehicles under certain conditions. As an American company with deep Chinese roots, FF keep close contracts with top China OEMs and Tier 1 suppliers. We're leveraging global supply chain advantages, including cost, speed and scale to deliver greater efficiency to the United States market. This strategy is now in active execution.

Eight, besides the FX Super One, you've also mentioned developing a second FX model. How do you plan to achieve it?

Currently, aside from software, most of FX work focuses on engineering management. Therefore, many resources and capabilities can be reused and shared within the FX Super One project. Meanwhile, the second model will be managed with staggered resource allocation to better utilize existing resources.

Nine, which flagship FF 91 technologies are being integrated into the FX product line? How are you managing cost and complexity in that transfer?

The company's resource are mainly divided into 2 categories, platform-based and model-based. The platform-based category primarily revolves around FF's core AI software and the application of Internet technologies, which also benefits FX. This area represents the company's core competitiveness and will be the primary focus of investment. Model-based category includes vehicle programs since FF's production has already reached a relatively mature stage. Apart from the software portion, most of our investment in this area will focus on FX mass production, development and complete vehicle testing.

10, what is your monthly burn rate?

As we mentioned before, for Q2, our adjusted operating loss stood at $27.4 million. That translates to an average monthly operating loss of approximately $9 million, which includes expenses across cost of revenue, research and development, sales and marketing and general and administrative functions.

Thank you for your time. This concludes our investor Q&A session. We appreciate all the questions submitted and apologize if we couldn't get to all of them today. We remain committed to maintaining open communication with our investors. That concludes today's conference call. Thank you for your participation.