Transcript: EHang Holdings Q1 2026 Earnings Conference Call

On Tuesday, EHang Holdings (NASDAQ:EH) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

EHang Holdings reported Q1 2026 revenues of 25.7 million RMB, with a notable decline from the previous quarter due to seasonal factors and delivery schedules, but maintained its annual revenue target of 600 million RMB.

The company is making significant progress in regulatory approvals and commercial operations, focusing on launching the world's first pilotless human-carrying eVTOL service, with ongoing efforts in Thailand and China.

EHang Holdings is diversifying its revenue streams beyond passenger eVTOL sales, with non-human carrying businesses contributing 40% of Q1 revenue, and continuing to expand globally with a focus on obtaining overseas type certifications.

The company maintains a strong gross margin of 63%, supported by manufacturing efficiencies and effective cost management, despite increased R&D and operational expenses.

Management highlighted the importance of regulatory developments and partnerships with state-owned enterprises and local governments in supporting the growth of the low altitude economy and EHang's strategic initiatives.

Full Transcript

OPERATOR

Good day, ladies and gentlemen. Thank you for standing by and welcome to the EHUNG first quarter 2026 earnings conference call. Please note that the Management's prepared remarks and the subsequent Q and A session will primarily be conducted in Chinese and the corresponding simultaneous or consecutive interpretation can be accessed on the English line. As a reminder, all translations are for convenient purposes only. In case of any discrepancy, the Management's statement in the original language will prevail.

To listen to the original remarks by the management, please join the Chinese line. Additionally, both the Chinese and English lines are open for questions and today's call is being recorded. Now I will turn the call over to Ann G. EHang Holdings, Senior Director of Investor Relations. Ms. Ann, please proceed.

Ann G. EHang

Hello everyone. Thank you all for joining us on today's conference call to discuss the company's financial results for the first quarter of 2026. The earnings release is available on the company's IR website. Please note that a conference call is being recorded and the audio replay will be posted on the company's IR website. On the call today we have Mr. Hua Zhihu, our founder, chairman and chief executive officer Mr. Shuai Feng, chief technology officer Mr. Zhao Wang, chief operating officer Ms. Xiao Nali, China general manager and Mr. Connor Yang, chief Financial Officer. Before we continue, please note that today's discussion will contain forward looking statements made pursuant to the safe harbor provisions of the U.S. private Security Litigation Reform act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today.

Further information regarding this and other risks and uncertainties is included in a company's public filings with SEC. The company does not assume any obligation to update any forward looking statement except as required under applicable law. Also please note that all numbers presented are in RMB and are for the first quarter of 2026 unless stated otherwise. With that, let me now turn the call over to our CEO, Mr. Hua Zhi Hu. Please go ahead. Mr. Hu. Thank you.

Hua Zhihu (Founder, Chairman, and Chief Executive Officer)

Hello everyone and thank you for joining our earnings call in the first quarter of 2026. Ehang is navigating a critical transition from from certification to commercial operation. We are fully committed to launching the world's first pilotless human carrying eVTOL into commercial service. Today I would like to share updates from two the fundamental shift in regulatory environment and progress on our four core strategies. First, policy and industry developments.

The biggest change in Q1 was institutional. The low altitude economy now has a solid legal foundation and policy anchor were moving from a policy concept stage to one truly governed by law. On the legal front, the newly revised Civil Aviation Law was passed in January and will take effect on July 1, formally recognizing the low altitude economy for the first time. On the regulatory front, the CAAC has established a new Low Altitude Safety Bureau while the NDRC and CAAC have formed a two tier governance model with the NDRC providing top level coordination and the CAC handling industry specific implementation.

Separately, China's State Administration for Market Regulation together with 10 government departments in China have jointly issued the Low Altitude Economy Standard System Development Guide, aiming to establish a basic standard system by 2027. Some worry that more regulations may slow the industry down. I believe the opposite. This is a positive development. A clear regulatory and standard framework helps everyone in industry move faster and more properly.

As a pioneer, EHang is turning our certification and talent development know how into building blocks for industry standards. These first mover advantages not only contribute to industry development but also strengthen our long term competitive mode. Meanwhile, state owned enterprises and local governments are accelerating their deployment. The Low Altitude Economy has been featured in the Government Work Report for three consecutive years and is now designated as one of the six emerging strategic pillar industries under China's 15th Five Year Plan.

More cities are actively planning airspace building vertiports and rolling out subsidy programs. The low altitude industry ecosystem is accelerating toward maturity. Now let me turn to progress on our four core strategies for this year. Routine commercial operations, global expansion, VT35 certification and industrial chain integration. First, routine and scaled commercial operations remain our top priority. We have cleared the certification hurdle and are now fully focused on the commercial operation hurdle.

We have obtained PC, PC and AC and our two operators hold ocs. Over the past year we have continued to refine the entire operational chain ticketing, insurance, aerospace approval, maintenance, charging, infrastructure, crew training and command and control systems to launch the world's first commercial pilotless human carrying veto service. We are now working closely with the regulator to fine tune our operational capabilities and to make the final push from internal trial operations to public ticketed service.

That day will not be far away. The market demand is real. Take our 299 RMB experience ticket as an example. We continue to receive a large volume of inquiries asking when can I buy a ticket and take a flight? This reflects a strong public enthusiasm for evito commercial flights. Importantly, our operational capabilities extend beyond passenger vehicles. Our formation drone fleet has years of proven experience. In February, our new GD 4.0 drones completed 22,580 units of formation flights, setting a Guinness world record in Q1, the proportion of revenue from the aerial media solution increased noticeably.

The experience, processes and teams we have built through these large scale highly reliable unmanned aircraft operations will directly benefit EH216s commercialization. As the saying goes, the last leg of the journey marks the halfway point. Obtaining the four certificates was only the first half. The real second half is a commercial operation. In the global EVO industry, EHang remains the only company with tc, PC, AC and the license for commercial operations.

The first mover advantage here is not a short sprint nor a manufacturing race. It is an operational race who can run a safe sustainable commercial model. Second, deepening our global footprint. We are making steady progress overseas. The Thailand AAM sandbox program continues with routine validation flights to address hot weather conditions. We completed battery cooling vehicle testing in Thailand and Gwangju this month adding independent cooling systems that secure significantly improve charging efficiency and passenger comfort.

We are also actively working with Civil Aviation Authority of Thailand to issue EH216s first overseas operating license. Our experience in Thailand sandbox has become an important reference for our global expansion. Third, accelerating VT35 certification and commercialization certification for VT35 our new longer range pilotless human carrying veto is progressing steadily. In Q1 we completed multiple system functions and flight performance tests and held in depth discussions with the CAAC on a certification basis.

Our VT35 will support future intercity and regional air mobility, enriching our product portfolio. At the same time, we are developing non human carrying models including firefighting and logistics for more application scenarios to further expand our addressable market. Fourth, strengthening industrial chain integration, we are turning our first mover certification and ecosystem experience into industry consensus. EHang is not only China's leader in pilotless human carrying in vehicle certification, but also the earliest practitioner and contributor to national and industry standards for unmanned aircraft in China.

As the world's first mover about to enter routine commercial operation, we are taking steady steps to strengthen our operational capabilities and build a compliance mode. At the same time, we are integrating R and D manufacturing supply chain and quality systems to improve end to end efficiency and scaled delivered capabilities. In closing, I want to reiterate the low altitude economy is a long term strategic arena with deep potential. EHang will never lose sight of safety compliance and operational quality.

We are committed to being long term players who shape EVO industry standards with craftsmanship so that China developed and China operated pilotless evitos will continue to lead the global low altitude mobility market. I will now turn the call over to our CTO Shifeeng. Thank you thank you, Mr. Hu. Hello everyone, I am Shuai Feng. In Q1 2026, our work focused on three priorities Product R and D and upgrades, certification progress and commercial operations support.

On one hand, we accelerated VT35 development and certification. On the other, we continue to optimize the EH216s performance, operational efficiency and passenger experience to support upcoming operations, strengthening the foundation for scale deployment. 1. VT35 progress VT35RD and certification progressed steadily in Q1. The program has now entered the certification basis definition stage where we are working closely with the CAAC to establish the safety evaluation framework.

We are engaged in depth discussions on special conditions, safety objectives and performance requirements. On the engineering side, critical ground and flight tests are advancing as planned to validate system functionality, flight performance and safety redundancy. Meanwhile, the VT35 Avionics system has entered a detailed design stage, preparing for certification, prototype manufacturing and conformative verification. Building on the EH216S certification experience and our EVDO technical expertise, we are advancing VT35 efficiently, laying the groundwork for future intensity and original air mobility.

Two EH216s performance upgrades this quarter, we focus on hot weather operational efficiency and passenger experience through targeted upgrades to battery thermal management and cabin comfort systems. On operational efficiency to address battery thermal management challenges during high frequency takeoffs and landings, we developed a dedicated battery cooling vehicle. It has completed production testing and is undergoing further optimization. The cooling vehicle significantly shortens battery cool down time from high temperatures to safe operating levels, increasing daily charging cycles and flight volume.

In field tests, the cooling vehicle doubled EH216s utilization directly, supporting higher frequency commercial flights. The unit can be quickly deployed across operation sites, providing flexible and reliable thermal management for large scale high density operations. On passenger experience, we upgraded the cabin air conditioning system. The new independent cooling system is separate from flight control and Avinox circuits so it doesn't interfere with critical functions while improving comfort in tests, the system quickly reduces cabin temperature after prolonged sun exposure and maintains a comfortable level throughout the flight.

This upgrade directly addresses a key pain point in hot improving passenger experience, commercial reputation and market acceptance. 3. Digital Infrastructure for Low Altitude Operations Our Guangzhou Command and Control center is now fully operational, supporting passenger firefighting, logistics and formation drones. It provides integrated capabilities including aerospace management, flight planning, dispatch approval, real time monitoring, operation records and risk alerts.

In hefei, the command and control system has been deployed and is connected to the city's Low Altitude Sensing network and HUI aviations are operational data. Together, these platforms establish a solid foundation for regional scaled low altitude operations management. 4 New product development. We are also actively advancing the R and D and flight testing of new products including logistics and firefighting aircraft, further expanding our product portfolio and low altitude economy applications.

Under our CEO Mr. Hu's leadership, I will continue to lead our team in advancing product iterations with aviation grade standards, translating technological progress into commercial value efficiency and providing a strong foundation for EHA's long term growth. I will now turn the call over to our COO Jiao Wang for sales and operations updates. Thank you. Thank you Mr. Phone hello everyone, I am Jiao Wang. As Ehan enters a new phase of commercial operations, I want to introduce a new member of our management team.

Ms. Li Xiaona, formerly our Vice President and General Manager of East China, has been promoted to China General Manager. She will lead our sales, operations and marketing teams, overseeing business development and operations management in both China and overseas markets. Over the years, Xiaonao has led our East China team to build our presence in Hefei from the ground Ground up, she established HE Aviation, secured its operator certificate, built a highly effective operations system and team with strategic industrial layout covering R and D, manufacturing and commercial operations and delivered outstanding results.

I look forward to seeing the Hefei model scale further under her leadership. Now let me walk you through our Q1 business results and strategic plans. In Q1 2026, we achieved revenues of 25.7 million RMB. We delivered 4 units for the EH216s and 1000 units of the GD 4.0 formation drones and completed 22 drone formation performances. The year over year and sequential decline in EVO deliveries was mainly due to the seasonal impact of the Chinese New Year holiday and customer delivery timing.

Look at our revenue mix. Our Ariel Media business grew faster and contributed approximately 40% of the total revenue in Q1. The parallel development of our multiple business lines is driving revenue diversification reflecting continued demand growth across low altitude application scenarios. Looking ahead to the full year, we remain confident in our 2026 results. Revenue target of 600 million RMB. This will be supported by the progress we have made on three strategic initiatives.

First, diversified revenue streams beyond passenger EVITO sales and operations. Our non human carrying businesses including aerial media, firefighting solutions and command and control systems are expected to become new growth drivers. Second, continued overseas OPERA expansion. We expect to replicate our overseas model that combines regulatory sandbox program, local partners and our integrated operational capabilities to drive sales and operations in Thailand and other global markets.

Third, advancing domestic commercial operations preparation for EH216 as commercial operations has entered the final stage, we are working with the CAAC on the last mile of commercial operations will continue to prioritize both sales and operations, ensuring steady and compliant commercialization progress. I will now turn the call over to Xiaona for a detailed review of our Q1 execution. Thank you. Thank you, Mr. Wang. Hello everyone, I am Li Xiana.

I'm pleased to join the earnings call for the first time. Let me walk you through our Q1 results, operational strategy and Future Plans In February, we featured 16 EH216s aircraft and 22,580 GD 4.0 formation drones and the CMG 2026 Spring Festival Gala Hefei segment. We completed a flawless performance and set a new Guinness World Record. This appearance significantly enhanced our brand awareness and industry visibility, helped reduce the concept of low altitude mobility to a broad public audience, and demonstrated our leadership in fleet flight, remote dispatch and communication integration, strengthening our brand foundation for commercial partnerships and market expansion both at home and abroad. As of May 2026, the EH216 series has accumulated over 90,000 saved flights globally in 21 countries. This long term, stable, safe track record is our core competitive advantage in global market expansion. Overseas, we have achieved multiple milestones, completed the first humanitarian flight in Mexico, Latin America and trial flight permits in Thailand, Japan, South Korea and Middle east and Spain. On overseas strategy we made a strategic adjustment this year making VTC our top priority to fully open the commercial pathway in overseas markets.

Given how civil aviation regulations work, we plan to leverage China's existing bilateral airworthiness agreements with 32 countries for our certification applications. Thailand is our first flagship overseas market. Five vertiport locations have been identified and the first route survey has been completed. Completed we have adapted our hardware including batteries and onboard air conditioning for hot and humid tropical environment and are pushing hard on commercial operation.

Permitted Progress we have formed a dedicated overseas team integrating R and D commercial airworthiness and communications functions. Going forward, we will systematically map out our bilateral civil aviation policies globally and develop differentiated overseas deployment plans for human carrying and cargo aircraft targeting key markets one by one on domestic human carrying, air mobility network continues to expand. To date, our customers have built over 40 Evito operational sites across China, some of which are already in routine operation.

This year we are shifting our business focus to high demand tourism scenarios using light asset models such as equipment leasing, joint operations and direct sales to lower the barrier for partners while putting existing aircraft to fly, we are prioritizing locations with high foot traffic and natural commercial appeal such as Dali, Wangshan and Taishan, running small scale trials to accumulate safety data, then progressively helping customer supplies for operational certification to improve project execution efficiency, we have set up a dedicated sales support team that works alongside frontline teams to develop customized integrated operation plans based on local aerospace conditions, tourism resources and commercial landscape. On commercial operation preparation, the CAC has raised the requirements for the world's first pilotless human carrying veto commercial operation which with higher and more detailed standards. At this stage, our two OC certified operators in Hefei and Guangzhou continue to refine their operations systems, ground support, crew training and emergency procedures while running internal trial operations routinely and accumulating flight data and service experience.

Since obtaining their OCS in March 2025, both operators have maintained a perfect safe record, zero accidents and zero violations as domestic benchmarks, Ehon General Aviation and Huai Aviation have completed over 3,000 of EH216s flights. We have built a complete end to end service system covering ticket pricing, online and offline ticketing channels, customer service and complaint handling. Flight capacity is being expanded in phases. Going forward, we'll continue to refine our standardized sops for passenger services, ticketing management and vertiport operations and then exported these proven models.

Crew training progress is on track. We have completed internal instructor training for the EH216s model and submitted all required materials. The plan has been reviewed by the Central and Southern Regional Administration of the CAAC and once formally approved by the caac, all future training will begin. After internal instructor training wraps up in late June, we'll begin full scale crew training. Our non human carrying business is an important second growth driver.

We focus on two firefighting and inland waterway logistics. On firefighting side, based on real world operational scenarios, we have identified clear product iteration directions. R and D of the new firefighting aircraft is on schedule and will be formally launched to the market upon product validation together with supporting maintenance and training systems. In the second half of the year, we will showcase product performance through firefighting drills at various levels while actively working to get our products including fire equipment procurement catalogs, tapping into the emergency response market.

On inland waterways logistics side, we have completed site selection for test routes at Guangzhou Port and the Pearl river main channel. The project will be rolled out in near term continued test flight and routine safety reviews, medium term routine delivery services on the Pearl river and expansion of our new application scenarios, long term replication of the proven model application for government funding and building a benchmark inland waterway low altitude logistics project in China.

On formation drone performances, the industry is seeing increasingly intense low price competition. We are avoiding price competition and have set a clear strategy to build benchmark projects replicate profitable models and expand both domestically and overseas. In overseas markets, we are simultaneously rolling out formation products, leveraging local tourism resources to create a routine performance vehicle venues that complement our human carrying business.

Going forward, I'll lead the sales, marketing and operations team to execute our strategic plan steadily with dedication, efficiency and compliance with safety as the first priority. I will now turn the call over to our cfo, Connor Young. Thank you. Hello everyone. Before I go into the details, please note that all numbers presented are in rmb. Unless otherwise, a detailed analysis is available in our earnings press release on the IR site. Now let me walk you through the key financial data.

In Q1 2026, revenues were $25.7 million on par with 26.1 million in Q1 2025, but down from $177.6 million in Q4 2025. The decline was mainly due to lower in vito deliveries, partly offset by growth from our non human carrying business. During the quarter, we delivered 40 units of the EH216 series compared to 11 units in Q1 2025 and 61 units of EH216 series plus 5 units of VT35 in Q4 2025. The lower deliveries were primarily due to seasonal factors at the beginning of the year and customer delivery schedules.

On a positive note, our revenue mix continues to diversify, benefiting from increased brand visibility and growing market demand. Our Ariel Media business grew faster and contributed approximately 40% of total revenue in Q1, highlighting the synergies across our diversified business lines. Gross margin in Q1 was 63% 2.5% stable compared to 62.4% in Q1 2025 and up slightly from 61.6% in Q4 2025. Our consistently strong margin profile reflects continued improvements in manufacturing efficiency and supply chain management.

Turning to operating expenses, adjusted operating expenses defined as total operating expenses excluding share based compensation were 101.1 million RMB in Q1, up 59% from 63.6 million RMB in Q1 2025 and up 7.9% from 93.7 million RMB in Q4 2025. The increase was driven by our continued commercialization efforts, R and D team expansion and increased technology investment. As our business scales. We have strengthened our operational R and D and global expansion teams while continuing to invest in EH216 series upgrades, VT35 development and future generation products and core technologies to enrich our product pipeline and reinforce our long term competitive advantage advantages. As we continue to invest for future growth, our near term profitability was impacted by lower revenue scale and higher R and D expenditure. Adjusted operating loss in Q1 was 77.1 million RMB compared to 42.6 million RMB in Q1. 2025 adjusted net loss was 75.6 million RMB compared to compared to 31.1 million RMB in Q1. 2025 as of March 31, 2026, our combined cash and cash equivalents, restricted short term deposits and short term and treasury investment totaled 1.03 billion RMB.

This healthy cash position provides a solid support for the continued execution of our commercialization strategy, global expansion plans and technology development programs. While near term financial performance was impacted by delivery timing and strategic investments, we remain committed to a long term growth strategy and maintain our 2026 annual revenue guidance of 600 million RMB. Our confidence is supported by our diversified revenue mix, continued global market progress including the commercial breakthrough in Thailand and the advancement of EH216s commercial operations in China.

Meanwhile, we remain focused on improving operational efficiency and capital allocation as we scale our business. We believe these efforts will strengthen our foundation for long term growth and create sustainable value for our shareholders. Based on our confidence in the company's future and healthy cash position, our Board of Directors has approved a share repurchase program. Over the next 12 months, the company may repurchase up to US$30 million worth of its ads.

Repurchases will be funded from existing cash reserves and management will execute them flexibly based on market conditions. This initiative reflects our commitment to returning value to shareholders and demonstrating our long term confidence. Thank you all.

OPERATOR

Thank you. If you wish to ask a question, please press Star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star two. If you're on a speakerphone, please pick up the handset to ask your question. We will now pause momentarily to allow questions to register. Once again, if you wish to ask a question, please press Star one on your telephone. Thank you. Your first question comes from Peggy Wang with Ms. Please go ahead.

Peggy Wang

Hello, this is Peggy from Can you hear me? Yes, thank you for taking my questions. And so I have two questions for the first quarter results I think. First, I think most investors are curious about what is the expected revenue mix for remaining three quarters of 2026 because we have been exploring more revenue stream from products outside of eVTOL. So to the management team give more color on the revenue mix in the following quotas. So this is my first question and the second question is about the overseas business.

So how should we look at the contribution from the overseas market in the coming months? Thank you.

Connor Young

Thank you. All right. We actually need on time in the. Kishan. And since then. Hello, operator, can you hear me? Yes. Okay, now I'll provide the translation for Connor. So the key strategy for the company is to execute revenue diversification strategy. And the results have been shown in our Q1 results. And we have projects both at home and overseas for our human caring business as well as our GD4 aerial business. The projects are scattered across both China and overseas.

Some of them are. Some. The typical examples are projects in Changsha, Xiamen. And an overseas example would be Thailand. And we are going to increase the number of performances for these GD4 drone performances in the upcoming few quarters. We are also advancing the R and D for our logistics and firefighting models and they will be rolled out to the market later this year. In terms of the revenue mix breakdown for our human carrying business, roughly specifically speaking, that will be revenue contributed by the sales and deliveries OF and the VT35.

Together they will contribute 60% of our revenue. For non human caring businesses, they are going to contribute roughly 40% of our revenue. And now moving on to the second question. The proportion of overseas revenue will increase significantly. We have made obtaining overseas VTCs I.e. validation of type certificates our top priority this year. Relying on bilateral agreement channels and have established a dedicated team. Pioneer projects in Thailand and Mexico are progressing smoothly in the medium to long term, Overseas markets are expected to continuously contribute to revenue.

Thank you.

Shen Wei

The next question comes from Shen Wei with ubs. Please go ahead.

Connor Young

Thank you management for taking that question. My first question is on the gross profit margin. As we can see, it stayed elevated in Q1. I also noticed that 40% of revenue from Q1 was contributed by media business or non human carrying related services. I was wondering what's the gross profit margin for this segment? And what is the market and competition outlook is like for this segment? My second question is on your overseas business. As we have heard from management, the orders, potential orders from overseas markets was around 100 units.

I was wondering if there's any update to this number and if you can please also provide a timeline on that. Thank you. Sure. On the gross profit margin, the gross profit margin is. So that specifically means the gross profit margin of sales and performance of the flight performance of the GD 4.0 that is around 50%. And for our human carrying business, that's contributing higher and higher profit margin this year. Therefore, we are seeing the overall GP mix staying above 60% for the first quarter and we also keep that as our full year target.

So that's on the growth profit margin. Conference. And with your question on the overseas orders, we are expecting the revenue contribution to rise up to 10% of the overall revenue. However, this specific contribution is closely tied to our commercial developments in Thailand. We have been spending every effort in our communication with the CAAC. Our overall target is to launch the official commercial operation by the end of the year before the Advanced Air Mobility conference is going to be held in Bangkok.

By the end of this year, if that. If the commercial operation could be achieved earlier, we are going to see a higher contribution to the revenue from the overseas market. Thank you.

Alan Lau

Your next question comes from Alan Lau with Jefferies. Please go ahead.

Connor Young

Thanks for taking my question. Yes, Alan. So I'd like to follow up on the question regarding to the gross margins. So one of the major cost items for the non evito business because the margin is 50%, we'd like to know what are the key cost of goods sold in that business line. And the second question is is there any operation data that management can share to investors regarding the operations in Hefei? Thank you. And sorry, I would like to clarify.

My first question is regarding to the non evto part, the media, aerial media part. Like what are the cost of goods sold in that business? Thank you, Jiang. Like a piano. Should have.

Wang Zhao

Okay, now the sales and the performance of the drone flights, it's contributing 50% profit margin. And to break it down, majority of the costs for the sales of the drains is first of all the boom costs plus the battery. The costs used occurred in the assembly lines and when it comes to performing, the majority cost of that depends on the size as well as the units of the drones to be deployed for the performance. And given that these drones are possessed by the company as fixed assets.

So there is a cost of depreciation plus the cost of sending personnel and staff to operate and fly these drones at different places. So together these form the costs of the operation and the sales. And now moving on to the non human carrying business. Specifically we're talking about the firefighting models. It has a higher growth margin in terms of the cost. A third of it comes from the carbon fiber material used in building the model. Another 1/3 of the cost comes from the powertrain as well as the battery.

With the remaining 1/3 coming from the components that used to build the model. This is Wang Zhao. I'll take your second question. I know the market is keen, keenly watching the progress of the Operation site in Hefei I would say it is right now in the final stage of official commercial operations. At the moment, the Hefei and Guangzhou operation sites are currently still in preparation for commercial operations and given the unique nature of that site being the world's first pilotless human carrying veto commercial operation project, the CAAC has proposed a higher and stricter operational standards.

And since obtaining the OC in March 2025, we have been maintaining close communications with the CAAC. We are accumulating precious and valuable trial flight data making sure that there is no accidents or zero violations of the standards in place. Thank you, Thank you,. To supply some key data. Since obtaining the OC in March 2025, the two partner or two operation sites have maintained stable operations with a safe flight record of zero accidents and zero violations, completing over 3,000 flights.

As we have disclosed, the price, early bird price we set for the Hefei operations site is 299 RMB. Currently there are 4 units of EH216 at this site and they are scheduled to fly 14 flights per day. Related miniapps for ticket booking is now up and running. We are fully ready for commercial operations. Once we get to the approval from the caac, we will soon roll out the commercial operation. Thank you.

Laura Lee

Your next question comes from Laura Lee with Deutsche Bank. Please go ahead.

Connor Young

Thank you for taking my question. So my first question would be could you provide more color on the oil intake so far in 26? And are the new orders mainly from existing customers or that you're seeing demand from new clients as well? And my second question will be could you update the expected timeline for the operator training? Because once your program is approved, like how long it takes for the first group of the ground crew to complete the training.

Thank you. Jinjing. On the revenue question, we remain confident in our full year revenue target of 600 million RMB. Actually, this confidence is based on the diversified revenue structure achieved in Q1, the predictability of overseas market breakthroughs and domestic commercial operations Entering the final Sprint phase. Majority of the orders will be coming in in the second half of the year. We have many orders moving in parallel. Given that a majority of the orders coming from government related institutions or enterprises, the overall approval for the budget is primarily ready in the second half of the year.

We also have seen a lot of new customers expressing strong interest in purchasing our models. We expect that over 50% of the revenue for this upcoming year going to come from new customers. Sorry, Patient. So let me explain. The crew training usually is break down into three stages. In the very first stage, the CAIC has officially stipulated the large scale civil. Pilot training or crew training mechanism and we have deeply involved in this process.

We actually supplement all the related documents, teaching materials and everything. We also participate in making the related teaching materials and formulating the tests required to test all the training personnel. Actually in May this year the CAC has already published the formally published the requirements for the civil in vito training related standards and that actually provided a key compliant reference for the whole industry. And we actually EHAN has been deeply involved in that process and we have actually lent our experience to this process.

Informing the standards. Patient Lastly, the. Number jihan jin. And following the formulating the standards is the internal training of the instructors. This process has kicked off and is about to wrap up. We have submitted associated plans which has been reviewed by the caac. Right now this has been progressing quite steadily. We're expecting the training of the instructor program to wrap up by the end of the month. And the third stage is to kick off the official training of the crew ground crew and that will expect it to start in the following quarters.

Once all these stages have completed, EHAN will be in a good position and ready to launch batch trainings. With each training group we can train five to 10 personnel and with multiple classes training groups moving in parallel, by that time we will be ready to supply a sufficient number of qualified ground crew to the market. Thank you.

OPERATOR

Thank you all. Given the time is limited, let me turn the call back to Ms. Anne for closing remarks.

Ann G. EHang

Okay, thank you operator. And thank you all for participating on today's call. We understood that there are many analysts and investors still waiting on the line, but due to the time limit, if you have any further questions, please contact our IR team by email or participating in our following investor events through the calendar information provided on our IR site. We appreciate your interest and look forward to our next earnings call. Thank you.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.