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

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Summary

EHang Holdings reported Q2 2026 revenues of 77.9 million RMB, a significant sequential increase from Q1 2026 but down year-over-year due to lower EH216 series sales.

The company is transitioning from certification to operational readiness and global expansion, with strategic emphasis on building an end-to-end operational capability and replicable solutions.

Regulatory delays have impacted the timeline for domestic passenger-carrying commercial operations, leading to the withdrawal of 2026 annual revenue guidance.

EHang is focusing on global expansion, with operations in 23 countries and plans to secure commercial operation certificates in Thailand by year-end.

The company is diversifying revenue streams by developing non-passenger businesses such as logistics and firefighting, with aerial media revenue surging over 270% year-over-year.

Operational efficiency improvements are underway, including streamlining the organization and cutting non-essential capex, with outcomes expected in the second half.

Despite regulatory challenges, EHang remains focused on long-term growth and maintains a positive outlook on the future commercialization of pilotless urban air mobility.

Full Transcript

OPERATOR

Ladies and gentlemen, thank you for standing by and welcome to the EHang Holdings second quarter 2026 earnings conference call. Please note that management's prepared remarks and the subsequent Q&A session will be primarily conducted in Chinese, and the corresponding simultaneous or consecutive interpretation can be accessed on the English line. As a reminder, all translations are for convenience purposes only. In case of any discrepancy, the management statement in the original language will prevail.

To listen to the original remarks by 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 EHang's Senior Director of Investor Relations, Ms. Anne. Please proceed. Hello everyone. Thank you all for joining us on today's conference call to discuss the Company's financial results for the second quarter of 2026. The earnings release is available on the Company's IR website. Please note the 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 Zhi, our founder, chairman, and CEO; Mr. Peng Shuai, CTO; Mr. Wang Zhao, COO; and Connor Yang, CFO.

Before we continue, please note that today's discussion may contain forward-looking statements made pursuant to the safe harbor provisions of the U.S. Private Securities 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 these and other risks and uncertainties is included in the Company's public filings with the SEC.

The Company does not assume any obligation to update any forward-looking statements except as required by law. Also, please note that all numbers are presented in RMB for the second quarter of 2026 unless stated otherwise. With that, I'll turn the call to our CEO, Mr. Huazhi. Please go ahead.

Huazhi Hu, CEO

Good day everyone. Thank you for joining our Q2 earnings call. Since Q2, EHang has entered a strategic transition, moving beyond certification toward operational readiness, scenario validation, capability development, and global expansion. Certification is just the entry ticket to commercial operations. What really determines whether a company can sustain flights and scale commercial operations is not just about having an aircraft or a certificate.

It's about having an end-to-end operational capability, replicable solutions, a solid product pipeline, and the ability to deliver standardized solutions to global markets. We have been investing in these areas and have made meaningful progress. Of course, all of these rely on a sound regulatory environment. That's the foundation that enables qualified, capable companies to grow. In late June, a serious accident involving a piloted light sport aircraft in China has led regulators to adopt a more cautious approach to safety oversight.

While unrelated to EHang's pilotless eVTOLs, this has affected our human-carrying commercial-operations approval process, and the timeline remains uncertain. To be clear, this is a temporary industry-wide timing issue and reflects no change in EHang's products, nor does it indicate any issue with our technology or safety record. Recent accidents highlight that safety, regulation, and traceability are baselines for low-altitude commercialization. EHang operates with a pilotless aircraft, pre-certified routes, intelligent fleet dispatching, and centralized monitoring.

Our goal is to make urban air mobility safer, more transparent, and easier to regulate. Pilotless passenger-carrying aviation fundamentally changes how we travel. We fully understand the regulator's caution and we respect that it is a responsible commitment to public safety. However, technology innovation and regulation must evolve together. More than a century ago, when automobiles first appeared, people had similar concerns about this new form of transportation.

The UK passed the Red Flag Act, which required a person to walk in front of a motor vehicle carrying a red flag to warn pedestrians and limiting vehicle speed. The law was essentially old rules over-regulating new technology. History shows that safety validation, operational rules, and regulatory frameworks for disruptive transportation technologies all take time to mature. History shows technology and regulation eventually align. New forms of transport don't mature overnight.

EHang's role isn't to sit and wait, but to proactively provide regulators with real safety data, proven operations, and reliable technology. The EH216-S and its operating system have obtained all key certificates under China's civil aviation regulatory framework: TC, PC, airworthiness certificate, and an air operator certificate. Our end-to-end systems in Guangzhou and Hefei are fully operational within our internal trial operations. Both sites have been operating continuously and safely for around 1.5 years.

With a 4.94 out of 5 passenger satisfaction score, the EH216 series has accumulated nearly 100,000 safe flights. With the demanded product-certification safety records in place, we only wait regulatory approval for public ticket sales. Despite this critical transition point, we are confident that the commercialization window will eventually open. Amidst uncertainty, EHang isn't sitting still. We're tackling challenges head on and finding new opportunities.

Since Q2, we've been pushing hard on three things. First, expanding globally on multiple fronts, strengthening domestic readiness while accelerating overseas deployment. In China, we continue to strengthen our end-to-end operations, develop standardized, replicable operating models and solutions. We have completed preparations across the full operating cycle, including personnel training, maintenance, insurance services, airspace coordination, and emergency response in Guangzhou and Hefei.

Accumulating practical operating experience, we initiated a point-to-point trial operation to build experience in advance. Once the regulatory window opens, we will rapidly deploy and help customers operate to standard overseas. Our footprint expanded to 23 countries, adding Mexico and Switzerland. Since Q2, Thailand is running validating flights via sandbox, and the Civil Aviation Authority of Thailand has established a clear path forward. We're targeting a commercial approval in 2026.

We were also selected for Hong Kong's Low Altitude Economy Regulatory Sandbox X trial project, with validation underway and a public demo coming soon. Furthermore, we advanced our Global Fast Track program. Many countries want to bring in pilotless eVTOLs but lack the regulatory framework on how to build a complete path from safety validation to operational standards to commercial deployment. Drawing on a decade of experience, as well as our engagement with the civil aviation authorities in multiple countries, EHang is turning this experience into a standardized market-entry framework.

This is the basis of our Global Fast Track program. It's not simply about selling an aircraft. EHang is providing a standardized methodology from validation to operational preparation to commercial deployment, helping local regulators and partners move more efficiently. Sri Lanka has become the first country to join our Fast Track program, and we are also engaging with multiple other countries regarding the framework. This shifts our global strategy from merely selling products to exporting experience, standards, and capabilities.

Second, revenue diversification, keeping passenger transportation as our strategic focus while developing non–passenger-carrying business and a broader product portfolio. Passenger aerial mobility remains our strategic focus. While domestic passenger commercialization is still pending regulatory approval, we're actively developing logistics, firefighting, and aerial media to build additional revenue streams. We're developing and validating logistics and firefighting aircraft based on our passenger-grade safety technology.

These products address real needs such as forest firefighting, port logistics, and emergency response. They are moving through testing, certification, and customer validation, with the potential for faster market deployment. Alongside steady progress on the EH216 platform and the VT-35 certification and flight test, EHang is building a multi-scenario product matrix rather than relying on a single aircraft. Meanwhile, aerial media revenue surged over 270% year over year in Q2 and is now expanding to Europe, Japan, Thailand, and other countries.

We're expanding one-off event performances to regular on-site shows for sustainable revenue and replicable business models. Third, improving cost efficiency and focusing resources on long-term competitiveness. Since Q2, we streamlined the organization, refreshing talent structure, cutting non-essential capex, and improving efficiency. The outcomes will be visible in the second half. We are focusing resources on things that matter most: core product development, certification capability, operating system, overseas commercialization, and business data that can generate revenue, deliveries, and cash flow.

Over the past decade, EHang's core strength has been getting aircraft flying and operations running. Now we're turning that into standardized, scalable capabilities. Customers value our ability to guide them from zero to commercial operations, not just the aircraft itself. We are validating our capabilities in China and scaling them overseas. Two tracks reinforcing each other. The demand is real and the path is proving out. Now we're focused on execution, converting operational capability into orders, deliveries, and cash.

Finally, EHang is building a long-term business. We are breaking technology barriers and helping shape industry rules. While navigating evolving regulatory frameworks requires careful management, our long-term vision remains unchanged. The end game for low-altitude mobility remains pilotless flight. But regulation and ecosystems take time to mature. Short-term friction won't alter our direction. When the window opens, EHang will be the first to run through with the credentials, capabilities, and readiness, and the moat we're building through standardized operations will only get deeper.

The strategic direction of the low-altitude economy will not be disrupted by short-term volatility. For 12 years, EHang has focused on making safe flights accessible. We will maintain a pioneering display and execute what needs to be done. Thank you. I would like to invite our CTO, Peng Shuai, to introduce our latest progress in technology and R&D.

Peng Shuai, CTO

Thank you, Mr. Hu, and hello everyone. In Q2, our R&D focused on three aspects. First, we continued to upgrade existing products and validate operations for current customers and scenarios. Second, we accelerated R&D for new products and new applications. Third, we deepened core underlying system capabilities. These three aspects together build a more complete technology foundation for scaled commercial operations. First, upgrading existing products and operational validation.

This quarter we completed a series of upgrades and validations for EH216-S route operations. We established our first point-to-point test route at our Guangzhou headquarters, continuously accumulating trial data. This marks a meaningful step moving EH216-S operations from a single-point takeoff and landing toward regular, route-based operations. On passenger experience, we completed several key updates. We validated the operational capability of our new battery cooling vehicle.

Under test conditions, it increases daily sorties per aircraft from about 6 to 12–15, a meaningful boost for daily capacity. With the same fleet infrastructure, each aircraft can handle significantly more flights per day, which matters a lot for operational efficiency and unit economics. Additionally, our new independent air conditioning system rapidly reduced cabin temperature by 10 to 15 degrees Celsius, enhancing passenger comfort. Second, new product development and scenario expansion.

For the VT-35, we completed wind-tunnel testing and lightning direct-effects and line production testing for key components, alongside multiple flight tests in China to support aerodynamic correlation and airworthiness validation. Meanwhile, we're extending our technology into new applications. For forest firefighting, we're testing an airborne delivery system with our existing product to enable early-stage ground fire response. Based on the certified EH216-S platform, we're also developing a cargo version.

Adapting this mature platform is expected to shorten development and certification timelines. Our prior work on the EH216L will also be integrated into this new configuration, ensuring logistics capability continuity. Third, deepening core systems. On the operational system front, we are building differentiated product capabilities for two key customer types: first, low-altitude operations control systems for operators and aircraft consumers; second, city-level low-altitude integrated supervision platforms for government agencies.

The latter covers aircraft use applications, plan filing and review, airspace designation, real-time monitoring, and information publication. This quarter we focused on two key areas: first, improving our platform situational awareness, tiered supervision, and emergency response efficiency; second, deepening system integration with the Hefei Government Flight Services Center. We've developed a set of framework documents covering airspace designation, operational standards, and service processes, helping the Hefei Flight Service Center build a city-level low-altitude supervision system.

Think of it as a software-plus-hardware foundation for future large-scale, high-density urban operations. We'll continue holding our product and system development to aviation-grade standards, translating technological breakthroughs into tested, validated, and deliverable commercial capability to sustain EHang's long-term leadership in the global low-altitude mobility market. Next, I'll turn the call over to our team for sales and operational updates.

Wang Zhao, COO

Thank you, Mr. Feng, and hello everyone. I'll discuss our Q2 operational progress and how we are approaching lean operations, product diversification, operations, markets, and safety systems. In Q2 we delivered 35 units of EH216-S and one VT-35. On the aerial media side, we completed 22 aerial media shows and delivered 520 units of TD4 drones. Beyond these numbers, we want to be transparent about our current environment. This year China's low-altitude economy entered a more cautious phase across safety oversight, airworthiness management, and operational regulation.

This has been reinforced by the new airworthiness frameworks and civil aviation laws. Recent industry safety incidents have heightened regulation and public attention on low-altitude flight safety, leading to intensified safety inspections of general aviation and low-altitude economy operators, aircraft, and operational projects. As a result, a slowed-down approach to deliveries, acceptance, and commercial operations for some projects, and passenger-carrying commercial operations for low-altitude aircraft has also been affected.

So we are being more cautious about our operational expectations and resource allocations. Our CFO will address our adjusted full-year revenue guidance shortly. However, we firmly believe that in passenger aviation, safety and compliance must always precede commercial speed. To be clear, only the local timeline for commercialization has shifted, not long-term market demand or EHang's competitiveness. Going forward, we will keep the market informed with clear operational progress updates.

Mr. Hu talked about our three strategic priorities: global expansion, revenue diversification, and cost efficiency. On the operational level, our approach covers the following areas. First, improving internal efficiency through lean management and AI integration. During the period of external adjustment, we haven't been waiting passively. We have been proactively streamlining our organization and focusing our resources on R&D. We're reconstituting our core talent and improving technology reuse across platforms.

On the digital side, we're integrating AI tools into R&D, knowledge management, and cross-functional workflows to shorten development cycles and boost productivity. Our rule is simple: cost reduction will never compromise safety, product quality, or core R&D. We won't sacrifice long-term competitiveness for short-term financials, but we're strictly scrutinizing expenses to strengthen cash reserves and ensure sustainable operations. Second, strengthening our operational foundation for passenger commercialization.

Our Guangzhou and Hefei sites continue to refine flight operations, ground support, emergency response, and regulatory data integration. Through internal trial operations, we're accumulating real operational data to ensure we're ready to start safe and stable commercial operations as soon as regulatory approved. We're also building point-to-point capabilities in advance, including route planning, vertical coordination, ground support, multi-aircraft dispatch, contingency handling, and passenger services.

These are full operational capabilities for future low-altitude transport. Take the Yarihe Lake Project. Ground trip across the lake takes an hour. Our plan would reduce the time to about 10 minutes. The Hainan Lingao Cross-Sea Low-Altitude Corridor project has also broken ground. This is the first project under our strategic partnership with the China State Construction Engineering Corporation 6th Bureau. The first key flight station at the Winghob South Sea is currently under construction.

Together, we're building a closed-loop low-altitude economy that combines infrastructure and operations. For local governments and partners, EHang delivers more than just an EH216-S. We provide a comprehensive solution including aircraft, command and control systems, scenario planning, route design, vertiport infrastructure planning and personnel training, maintenance, regulatory coordination, and safety assurance. Third, we are leveraging the mature safety architecture of the EH216-S to accelerate non-passenger products in specialized applications.

Passenger-carrying operations are our core direction, but they're not our only growth plan. We're leveraging the EH216's mature aviation-grade safety architecture, including its flight control, powertrain, redundancy design, and command and control for logistics, firefighting, and aerial media products, building a diversified portfolio less reliant on passenger commercialization approval. Aerial media remains a key revenue driver. In Q2, we completed 22 shows and delivered 520 units of TD4 drones.

The business is evolving from a one-time event to regular on-site services. Projects like Chongqing Media Group and Xingyi in Shanxi are helping us to build experience in continuous operations, content production, fleet management, and on-site support. Regular commercial shows improve equipment utilization, customer stickiness, and revenue predictability. Overseas, we also deployed TD4 drones across Japan, Thailand, and Europe, accelerating international expansion.

On firefighting and logistics, we are working with customers on product customization, advancing T30 firefighting drone prototypes and logistics aircraft, and trial flagship scenarios in forest firefighting and port logistics. Fourth, we're accelerating city-level regulatory sandbox to commercial center deployments to build a replicable international pathway. Overseas markets are a key part of EHang's long-term strategy and an important platform for validating adaptability, regulatory coordination, and business models.

In Hong Kong, we're selected as an early participant in the Regulatory Sandbox X trial project. We've chosen several sites as our first sandbox locations. Test flights started this month with a public demo coming soon. Additional flight validation and phased deployment will follow under regulatory oversight. In Thailand, we have established efficient communication and coordination with the CAAT, targeting a Commercial Operations Certificate in 2026.

This work will proceed according to CAAT's review process, with a final timeline subject to the regulator's schedule. Based on the sandbox experience, we launched the Global Fast Track program, a four-stage framework of regulatory alignment, sandbox build-out, validation flights, and commercial launch, designed to compress the timeline from market entry to commercial operations. Sri Lanka is the first country to formally adopt the program. Over the coming months, we will execute project deployment in Sri Lanka according to the Fast Track roadmap.

Fast Track does not bypass local regulatory processes or lower safety or airworthiness standards. Instead, it reuses technical documentation, safety data, and our accumulated operational experience to reduce duplication and improve the efficiency of project collaboration, regulatory engagement, and local operational setup. Beyond Sri Lanka, we are also exploring this program in Central Asia. Through the program, we aim to transform individual overseas projects into a standardized, replicable capability, providing a clear, compliant, and efficient implementation pathway for more countries and regions to introduce pilotless eVTOLs.

Fifth, we are building operational standards and a safety foundation to convert our first-mover advantage into a sustainable competitive moat. Over the years we have accumulated nearly 100,000 safe flight records, and these flights span diverse geographies, weather conditions, terrain, application scenarios, and operating environments, providing a critical data foundation for continuous improvement in aircraft performance, operational procedures, and command-and-control systems.

We are working with airworthiness and operational experts to advance air operator certification standards. The goal is to turn our accumulated flight experience and internal operational capabilities into standardized, verifiable, replicable operational benchmarks that the industry can use. At the same time, we're building a comprehensive after-sales support network covering delivery, personnel training, spare parts, maintenance, data support, and emergency response.

We need to have the organization, systems, and service capability in place to support scaled operations before commercial scale-up actually begins. While this may not immediately reflect in short-term revenue, establishing these scalable service capabilities now ensures we can rapidly capture market demand once the commercial window opens. We'll continue translating investments into efficiency, building quality products, and closing the loop on operations.

By enforcing lean management, diversifying revenue, and establishing robust safety standards, we will build a sustainable competitive advantage and earn investor trust with verifiable results. Thank you. Next, I'll pass the floor to our CFO for financial updates.

Connor Yang, CFO

Hello everyone, I am Connor, CFO of EHang. Before I go into details, please note that all numbers presented are in RMB unless otherwise stated. A detailed analysis is available in our earnings press release on the IR website. Next, let me walk you through the key financial data for Q2. In Q2, revenues were 77.9 million, down from 113.3 million in Q2 2025, but up significantly by 200% from 25.7 million in Q1 2026. The sequential increase was mainly driven by higher sales volume of EH216 series, with additional contribution from VT-35 aircraft.

The year-over-year decline was due to lower sales volume of the EH216 series compared to the same period last year. Gross margin in Q2 was 61.2% compared with 61.5% in Q2 2025 and 62.4% in Q1 2026. Overall, gross margin remains stable. Our stable margin profile reflects the competitiveness of our products as well as our continued strength in manufacturing efficiency and supply chain management despite changes in quarterly revenue and product mix.

Turning to operating expenses, adjusted operating expenses, defined as the total operating expenses excluding share-based compensation, were 112.7 million in Q2, representing a 16.9% increase year over year and an 11.5% increase quarter over quarter. The increase in operating expenses primarily reflects the combined effect of our phased strategic business advancements and the transitioning costs associated with organizational optimization during the period.

We continue to make targeted investments in commercialization, global expansion, and R&D to reinforce our long-term competitiveness. It is worth noting that Q2 expenses haven't yet fully reflected the outcomes of our organizational optimization and capex control measures, as these initiatives were mostly rolled out during the quarter. We expect the outcomes to gradually show in the coming quarters. Going forward, while protecting our core R&D, airworthiness, operating, and global expansion capabilities, we'll continue to improve resource efficiency and reduce non-essential spending, and maintain strict cash discipline as we continue to invest in our future growth. Our Q2 profitability was affected by both revenue scale and operating expenses. Adjusted operating loss in Q2 was 62.0 million compared to 77.1 million in Q1 2026. Adjusted net loss was 58.5 million compared to 75.6 million in Q1 2026. As of June 30, 2026, our combined cash and cash equivalents, short-term, and treasury investments totaled 929.4 million RMB. This healthy cash position provides strong support for our continued commercialization efforts, core product development, global expansion, and day-to-day operations.

Turning to our full-year guidance. Given that the regulatory policies and supporting mechanisms for low-altitude human-carrying commercial operations are still evolving, there remains uncertainty around the timing of domestic commercial operations. Accordingly, the Company has decided to withdraw its previously issued 2026 annual revenue guidance of 600 million RMB. The Company will not provide a replacement full-year revenue guidance at this time.

As the regulatory environment and business visibility become clearer, we'll provide an updated outlook to the market when appropriate. In the meantime, the Company will continue to provide transparent and timely updates on key operating milestones. These include preparation for and approval process of domestic commercial operations, progress in international markets, product development, orders and deliveries for non–passenger-carrying business such as logistics, firefighting, and aerial media, as well as continuing improvements in operating efficiency and our cash position.

Going forward, we'll stay focused on driving commercialization and core tech development. We'll continue to improve operating efficiency and resource allocation. We believe these efforts will strengthen our foundation for long-term growth and create sustainable value for our shareholders. 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. Your first question comes from Tim Hizial with Morgan Stanley. Please go ahead.

Tim Hizial, Analyst at Morgan Stanley

Hi, this is Tim from Morgan Stanley. Thanks for taking my questions. I have two questions about commercialization. The first question, as we just discussed, I think the company targets to get a commercial operation permit in Thailand this year. So just want to get more details. When do you think that would happen? Like in third quarter, in fourth quarter? And if it happens, how many units of 216 do you think you're going to ship this year based on the contract?

So that's my first question. My second question is about the commercialization in China. I think management just mentioned we are not going to provide updated guidance attributable to the uncertainty to the incident that took place in June. But as we remember, the incident was caused by human factors, and if there's any potential barrier, as we discussed with management, I think previously management believed that would favor EHang because EHang's 216 products are designed to follow the scheduled route and would fly autonomously and can be under system control.

So just wondering what really changed management's view on the impact and the OC schedule — just what happened over the past few months? Yeah, those are my two questions. Thank you.

Huazhi Hu, CEO

Let me take your first question. We are deploying both passenger-carrying and non-passenger-carrying operations in Thailand in parallel. On the passenger-carrying side, we have further clarified the approval pathway for flight qualifications with the Thailand Civil Aviation Authority, and we expect to obtain an experimental flight permit in Q3, and we also expect to secure a formal commercial operations certificate by the end of the year. By that milestone, it represents that our eVTOL will be officially registered within the Thailand Civil Aviation Authority, though we may not be able to directly sell tickets to the public.

But that is indeed a milestone that we are hoping to achieve within the year. So we are striving to secure the operational certificate in Thailand by the end of this year, and we are working with the local civil aviation regulator to plan 10 routes that will cover Bangkok, Phuket, Samui Island, and Pattaya. Official deliveries of our EH216 models will start sometime next year. According to the plans, each location will require at least 5 units of EH216s.

So we are going to see a significant increase in our eVTOL deliveries next year. On the non-passenger side, the company has shipped over 1,000 GT4 formation drones by sea to the Thai market, and we plan to launch regular drone light show operations in Bangkok and Pattaya. Regarding the impact of the June flight incident, the manned light sport aircraft accident in China at the end of June was indeed primarily caused by human factors. The subsequent regulatory tightening has been noticeable, particularly around manned aircraft and their pilots.

We continue to hold our original view. Our unmanned, pre-programmed, fixed-route, fleet-oriented, coordinated operating model has inherent safety advantages, and stricter safety regulation is a net positive for us in the long run. Regarding the change in our outlook on the operator certificate timeline, however, the regulatory response has been far more far-reaching than we initially anticipated. This incident has prompted regulators to adopt a more cautious stance toward the entire low-altitude industry.

Although it is not directly related to our unmanned eVTOLs, the overall cautious regulatory environment has indeed slowed the approval timeline for domestic passenger-carrying commercial operations. Specifically, the commercial operation approval process for the Hefei project has been delayed, and the timing of regulatory clearance remains uncertain. So our assessment is that the actual regulatory tightening at the enforcement level is not a rejection of our technology pathway, but rather a periodic, temporary impact on the approval cadence across the industry.

We respect and understand the regulators’ strong commitment to public safety. At the same time, we hope that the regulators would provide reasonable policies while ensuring safety. And for us, we’re going to focus on executing what can be done from our side. In the meantime, we are proactively pursuing our global overseas initiatives so that we can move the industry forward. Just a quick add, we are working with the local civil aviation authorities to clarify validation pathways and shorten the time from validation to market access through our overseas fast-track program.

Next question please.

OPERATOR

Your next question comes from Weibu with Jefferies. Please go ahead.

Weibu, Analyst at Jefferies

Hi. Thanks. From Jefferies. Two questions, please. The first one being, given the full-year guidance on the revenue has been withdrawn, and I understand it could be difficult to quantify, but do you mind give us a little bit color on the kind of like the second half run rates versus the Q2 kind of numbers? It would be great if you kind of split out between eVTOL and the non-passenger segments. And my second question will be coming towards the accounting adjustment that we mentioned in the 1Q call.

So do you mind give us some sense on the numbers being delivered in this second Q and any more to be delivered down the line? Thank you. Can you repeat the second question? I didn't quite. Okay, got it. Yeah, yeah, got it. Perfect.

Connor Yang, CFO

Given the uncertainties, the Company has decided not to update its full-year 2026 revenue guidance at this time, nor will we provide any specific quantitative expectations on the revenue mix between passenger-carrying and non-passenger business. However, based on the actual operating data that has already been achieved, air mobility revenue accounted for around 92% of our Q2 revenue, while non-passenger business, primarily GT4 formation drone performance, accounted for approximately 8%.

Non-passenger revenue is expected to trend upward, both as a percentage share of total revenue as well as in absolute amount in the second half of the year, driven mainly by increased deliveries of formation drones as well as a small number of other model deliveries such as the firefighting series. Passenger business revenue will continue to dominate, largely depending on the pace of commercial operation launches on passenger routes in Guangzhou and Hefei, as well as overseas market expansion.

The Company will continue to advance both passenger commercial operations and non-passenger use case expansion in parallel, with the specific revenue mix evolving dynamically as each business line progresses. In the second quarter, the Company recognized revenue for a portion of the EH216 series aircraft that had been previously delivered, and going forward, we will recognize revenue as the contracts meet certain criteria, according to applicable accounting policies, and the Company will disclose them to the market in a timely fashion.

Weibu, Analyst at Jefferies

Thank you.

Connor Yang, CFO

Next question please.

OPERATOR

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

Laura Lee, Analyst at Deutsche Bank

Hey, thank you for taking my question. So two follow-ups on the topics that you mentioned before. So, firstly on the regulation side, I think you mentioned a certain level of cautiousness, but just trying to see, for this current regulatory sentiment, what kind of safety evidence or milestones will likely be needed for this approval pace to normalize? And my second question around the diversification about your revenue stream. So could you update us on the progress across the non-passenger businesses like the logistics or firefighting, like which area looks more promising in the near term, or any contract or program you are pursuing?

Yeah, that's all my questions. Thanks.

Huazhi Hu, CEO

Now let me take your questions. First, the review and approvals are conducted with a strong emphasis on ensuring safety, so there are still ongoing reviews. It doesn't mean that the review and approvals have completely come to a ground halt, because the low-altitude economy represents a worldwide trend. And with regard to operations, we are still advancing our operation capabilities, and the operational model will still need to be reviewed and approved.

For approval to become normalized, our operational model needs to pass regulatory review and enter routine operations. I think to see a full-scale back-to-normal review and approval condition, we need to see that the trial operations that we have in Hefei move into routine operations, and then we will establish this routine operation site as a role model for other operators, even an industry benchmark. So currently we are helping our customers put together related documents, etc. As regulatory clearance clears its way and the industry goes back to its normal cadence of review and approval, then our customers will be able to expedite their approval process and move into routine operations. There is clear and genuine demand across all of these areas, and EHang Holdings has a deep tech reserve, and we are reusing some of our technologies from the passenger-carrying products onto the non-passenger-carrying products. To give you some examples, there are some short-range emergency logistics and long-range logistics, etc., and those are some of the critical use cases where we can use our products.

Looking into the second half of the year, we are also going to ship firefighting products, and there are quite promising prospects for the orders of these products. And this is exactly where our strategy is this year. We're going to continue to focus on diversifying use cases, particularly in terms of the revenue mix. As you've already seen, non-passenger business has already reached 8% of the total revenue, and we expect this to further expand and the share to continue to grow as our business progresses.

Thank you.

OPERATOR

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

Anne, Investor Relations

Thank you once again for joining us today. If you have any further questions, you can reach out to us through the email on our IR website. Additionally, we are going to host some offline sessions where we are going to have more in-depth communications with you, and we look forward to seeing you in our next earnings call. Thank you once again. Bye.

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.