Faraday Future Intelligent Electric Inc. (FFAI) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for joining today's conference call with management of Faraday Future and AIXC. [Operator Instructions] Please note that today's conference is being recorded. I will now pass the call over to John Schilling, Global Director of Public Relations, Communications and Government Affairs at Faraday Future. Please go ahead.

Good morning, everyone. My name is John Schilling, Global Director of Public Relations, Communications and Government Affairs at Faraday Future. Thank you for joining our conference call to discuss the proposed transaction with FF EAI Robotics and AIXC and introduce the soon-to-be Faraday Future FF EAI Robotics Ecosystem Inc., which will officially begin trading under the new entity and ticker FFR, starting September 30, 2026. Before we begin, please note that today's discussion will include forward-looking statements based on current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. We encourage you to review our SEC filings for a detailed discussion of these risks. We undertake no obligation to update forward-looking statements, except as required by law. Following prepared remarks, we will address a selection of stockholder questions submitted in advance. With that, I'll turn the call over to YT Jia, our Founder and Global CEO.

Thank you, John. Good morning, everyone, and thank you for joining us today. First and foremost, I'm very happy to share a major milestone with you. FF's robotics business has taken a big step toward its independent public listing. Yesterday, September 28, NASDAQ-listed AIXC, soon to be FFR, announced a proposed combination with FF EAI Robotics to start a major strategic restructuring. This could make it the #1 publicly traded pure-play 4-Core Full-Stack AI robotics ecosystem company. It could put us in a stronger position to lead the global Embodied AI robotics industry. It would also put us on a faster path to maximize the strategic and capital market value of FFR's robotics ecosystem. At the same time, FFAI announced a major strategic upgrade. We plan to become a robotaxi and EAI cabin shared mobility operations company as well as a Physical AI investment holding company. Our goal is to help drive the next wave of change in the auto industry and Physical AI once again. These initiatives represent a significant step forward in our journey to become a leading Physical AI ecosystem company. First, we are taking a major step to accelerate the development and value realization of our robotics business. FFAI and AIXC have signed a nonbinding term sheet under which AIXC proposes to acquire and consolidate our robotics assets and business at an approximately $200 million market-based valuation and FFAI would receive AIXC shares in exchange where FFAI is expected to become AIXC's single largest controlling stockholder. Following AIXC's previously announced name change to FF EAI Robotics Ecosystem Inc., new ticker symbol FFR beginning tomorrow, we believe this transaction has the potential to create one of the most unique public robotics platforms in the market. Our aim is to become the first NASDAQ-listed pure-play robotics ecosystem company built on a 4-Core Full-Stack AI ecosystem in the U.S. Most importantly, upon completion of the proposed transaction, FFAI is expected to become the largest controlling stockholder of FFR and continue participating in the future value creation of the robotics business. Following completion of the proposed transaction, FFAI is expected to consolidate FFR's financial results into its own financial statements subject to FFAI's resulting ownership interest and applicable accounting standards and to the definitive agreements. This is not a divestiture in the traditional sense. Instead, it is a strategic restructuring designed to provide the robotics business with an independent platform for growth, financing, valuation recognition and execution while allowing FFAI shareholders to continue benefiting from its long-term upside. Subject to closing of the proposed deal, FFR will provide a stand-alone platform to highlight and unlock the value of the robotics business, which may gradually reduce reliance on substantially dilutive financing and is expected to significantly reduce FFAI's potential equity dilution. Following the strategic upgrade of its automotive business, a lighter operating model is expected to help substantially reduce costs. Together, these initiatives are intended to help FFAI's intrinsic value be better recognized and accelerate the maximization of value for stockholders. We believe robotics and Physical AI represent one of the largest opportunities of the next decade. Our vision is built around what we call the 4-Core Full-Stack AI ecosystem, EAI Brain and Developer Platform, EAI Devices, Industry Productivity Solutions and EAI Data Factory. Together, these components create a powerful closed-loop ecosystem where deployments generate data, data improves intelligence, intelligence enhances products and stronger products drive broader adoption. In less than one year, we have already made substantial progress. We completed Phase 1 of our Built in USA acceleration program. We launched 24 FCC-certified products across 3 robot forms. We have started customer deliveries and achieved cumulative sales and shipments of 552 EAI devices by the end of August. Under preliminary projections prepared by FFAI management for the FF EAI robotics business on a stand-alone basis, the business is projected to reach positive operating cash flow in the third quarter of 2028 with cumulative funding requirements of approximately $150 million before then. In 2026, total revenue across the 4-Core Full-Stack AI ecosystem is projected to reach $7.1 million with a positive gross margin of 9.9%. For 2027, we project $45.7 million in revenue and a gross margin of 30.5%, marking our entry into a high gross margin phase. Over 5 years, cumulative revenue is projected to reach $1.98 billion with gross margin rising gradually to 54% in 2030. We also plan to invest an estimated total of $300 million in R&D over 5 years, so we can stay ahead in both products and technology. Our EAI device sales targets are 2,001 units in 2026 and 7,400 in 2027. Over 5 years, the target is more than 130,000 units. Beyond devices, the ecosystem is rapidly taking shape. Our proprietary EAI brain has entered engineering testing and delivery. Developer Platform 1.0 is live. Our EAI data factory has established its first commercial closed loop and RoboShare has already secured multiple paid orders. These achievements give us confidence that our robotics strategy is transitioning from concept to execution and from execution towards scale. Based on this 5-year plan, once the transaction is completed, our goal is for FFR to remain among the top 3 EAI robotics ecosystem companies over the next 5 years. The second major strategic upgrade involves our automotive business. When I first proposed the 4 future trends of electrification, AI, Internet and sharing many years ago, I believe the automobile industry would eventually evolve beyond vehicle ownership into intelligent connected shared mobility systems. Today, we believe that the transition is accelerating. As a result, FFAI plans to evolve from being primarily an intelligent EV manufacturer into a robotaxi and EAI cabin technology operator. This transformation includes 3 key initiatives. First, we plan to enter robotaxi operations and explore connectivity with autonomous mobility networks, including potential integration opportunities with the Cybercab ecosystem. Second, we intend to extend our EAI cabin technologies beyond FF vehicles and into other intelligent vehicle platforms. Third, we plan to enable FF vehicles themselves to participate in future robotaxi networks. Through collaboration with RoboShare, we also plan to pursue opportunities in vehicle onboarding operations, fleet management, mobility services and user support. This represents a lighter asset operating model that aligns with where we see the industry heading. Rather than relying solely on manufacturing scale, we can leverage technology, software, operations, data and ecosystem partnerships to create additional revenue streams and improve capital efficiency. Beyond these business transformations, we are also evolving our corporate structure. FFAI plans to strengthen its role as a Physical AI investment incubation and holding company. Our long-term vision is inspired by proven structures such as Berkshire Hathaway and Alphabet, where a central platform incubates, supports and grows multiple businesses while allowing them to operate independently and maximize their individual value. The proposed robotics transaction represents the first important step in that strategy. Over time, our goal is to establish a model that combines industrial operations, capital investment, business incubation and ecosystem collaboration to create multiple engines of growth. This structure is designed to help reduce the valuation discount that often occurs when multiple businesses are bundled together under a single corporate framework. It also creates the potential for mature businesses to pursue their own financing, strategic partnerships and growth opportunities while remaining connected to the broader FF ecosystem. We believe these initiatives can unlock value across 4 key dimensions: First, strategic value. FFAI will maintain meaningful ownership in a publicly traded robotics company while advancing its broader Physical AI strategy. Second, business value. The combination of robotics, robotaxi operations, mobility services, data platforms and AI technologies creates significant ecosystem synergies and multiple growth opportunities. Third, financial value. Independent reporting structures can provide greater transparency into business performance, capital requirements, profitability and growth trajectories. Fourth, capital market value. A dedicated public platform for robotics may enable investors to better recognize the value of that business independently while potentially reducing financing pressure and dilution at the FFAI parent level. We are still in the early stages of executing this vision. The proposed transaction remains subject to definitive agreements, Board approvals, regulatory approvals, financing arrangements and other customary closing conditions; however, what excites us most is the opportunity ahead. We believe Physical AI will become one of the defining technology platforms of the coming decade. Through our robotics ecosystem, our automotive transformation, our shared mobility strategy and our investment holding company model, we are positioning FF to participate meaningfully in that future. Our goal is simple: create sustainable long-term growth, improve capital efficiency, unlock intrinsic value and maximize value for our stockholders. Thank you for your continued support, your confidence and your belief in our mission. We look forward to sharing additional details as we continue advancing these initiatives and executing on the next chapter of Faraday Future's evolution. Now let me turn it back to Jimmy for the Q&A session.

Thank you, YT. This is Jimmy Xia, Head of Investor Relations. We will now open the floor for investor questions. First question, why is the FF Robotics business worth $200 million?

Thank you for the first question, Jimmy. This is Jerry Wang. I'm the CEO of AIXC. We believe robotics represents one of the most compelling opportunities in the emerging Physical AI sector, driven by accelerating automation demand, AI adoption and long-term shareholder value creation potential. Unlike traditional manufacturing business, robotics has the potential to operate under a light asset model that combines software, AI services, data and ecosystem revenues with capital-efficient production and deployment strategies. We believe the value of Faraday Future's robotics business is not yet fully reflected in its current valuation, considering its accelerating commercialization, expanding Physical AI ecosystem and growth prospects relative to certain robotics industry peers. Such information can be found in the company presentation publicly filed with SEC. Under the company's 5-year business plan, revenue is projected to reach approximately $2 billion by 2030 with annual shipments of 60,000 units and gross margin of 54% compared with an estimated $7 million in revenue, 2,000 units shipped and 10% gross margin for full year 2026. As of the first half of 2026, the company has emerged as an industry leader in robot shipments, achieved positive gross margins and continued to strengthen customer adoption and commercial execution, providing a foundation for long-term shareholder value creation.

Question 2, why is the transaction necessary and why now?

Thank you. To understand why we're executing this transaction today, you have to look at both the macro evolution of the robotics industry and how public markets price emerging technology assets. The Embodied AI sector is moving rapidly from physical prototypes into software-defined commercial platforms. FFR strongly believes that the highest value within the next era of EAI robotics resides not in physical hardware assembly alone, but in combining AI software, real-world data and hardware capabilities. Over the past 12 years, the broader Faraday Future organization has built exceptional capabilities across these exact software and AI layers; however, when those cutting-edge software and data assets remain buried inside an electric vehicle parent company, public capital markets simply cannot evaluate or price them accurately. By executing this proposed carve-out of our robotics business into FFR and combining it with AIXC at an implied $200 million valuation benchmark, we're positioning FFR as a category-defining leader in Physical AI. Institutional investors today are actively seeking clean exposure to robotics without taking on legacy automotive manufacturing risk. FFR gives them exactly that, a stand-alone platform listed on NASDAQ, backed by real product shipments and positive gross margins. By establishing a standardized framework across strategy, finance, operations and value creation, FFR aims to set the benchmark by which the next generation of EAI robotics companies is evaluated. The timing aligns with important federal trade standards with regulations such as FCC EA26-786 and tightening ICTS standards, restricting foreign-made finished robotics. There is an immediate market window for compliant U.S. assembled platforms. Securing an independent public platform with a NASDAQ listing targeted for October to November 2026 gives FFR the dedicated capital and focus needed to capture market shares.

Question 3, how will each company benefit financially?