WeRide Inc. Earnings Call: Growth Amid Financial Challenges

WeRide Inc. Sponsored ADR ((WRD)) has held its Q4 earnings call. Read on for the main highlights of the call.

WeRide Inc. recently held its earnings call, revealing a mixed sentiment characterized by significant achievements in global market expansion and technological innovation, alongside financial challenges. The company reported record-breaking revenue, yet faced declining service revenue and increased expenses. While the advancements in technology and international partnerships suggest strong growth potential, financial hurdles remain a concern.

Global Expansion and Partnerships

WeRide has made remarkable strides in its global expansion, extending its Robotaxi services to multiple international markets. The company has forged partnerships with Uber in Abu Dhabi and collaborated with Zurich Airport in Switzerland. Impressively, WeRide has deployed Level 4 (L4) autonomous vehicles in over 30 cities across 10 countries, showcasing its commitment to international growth.

Technological Advancements

The launch of the GXR, a new purpose-built Robotaxi, marks a significant technological advancement for WeRide. The GXR boasts an industry-leading L4 architecture and incorporates WeRide’s proprietary sensor suite. Additionally, the company has deployed end-to-end models for both Advanced Driver Assistance Systems (ADAS) and L4 systems, underscoring its innovation in autonomous vehicle technology.

Record-Breaking Revenue

WeRide achieved record-breaking revenue in its Robotaxi segment, marking the highest international revenue since its inception. The company reported a 46% increase in product revenue for the fourth quarter of 2024 and a 62% increase for the full year, driven by strong sales of its autonomous vehicle products.

Safety and Operational Milestones

WeRide’s commitment to safety is evident in its Robotaxi fleet, which has completed over 1,900 days of commercial operation on public roads without any regulatory issues due to system failures. The company has also received permits to operate in various challenging environments, further solidifying its operational credibility.

Decline in Service Revenue

Despite the positive revenue figures, WeRide experienced a 3% decline in total revenue for the fourth quarter, primarily due to a decrease in service revenue, which fell to 89 million RMB. This decline highlights a potential area of concern for the company’s financial health.

Increased Operating Expenses

WeRide’s operating expenses surged by 82% in the fourth quarter and 32% for the full year, largely driven by higher personnel costs and increased share-based compensation. This rise in expenses poses a challenge to the company’s profitability.

Net Loss Increase

The company reported a 66% increase in net loss for the fourth quarter, amounting to 592 million RMB, and a 29% increase for the full year, totaling 2.5 billion RMB. These figures reflect the financial challenges WeRide faces despite its revenue growth.

Forward-Looking Guidance

WeRide’s forward-looking guidance emphasizes its strategic focus on both domestic and international expansion. The company aims to deploy its autonomous vehicles in more cities worldwide and enhance its revenue streams through product innovation. Despite a 3% decline in total revenue for the fourth quarter, WeRide’s strong cash position of 4.9 billion RMB as of December 31, 2024, provides a solid foundation for future growth.

In summary, WeRide Inc.’s earnings call highlighted a blend of significant achievements and financial challenges. The company’s advancements in global expansion and technology underscore its growth potential, while the decline in service revenue and increased expenses indicate areas that require attention. Investors and stakeholders will be keenly watching how WeRide navigates these challenges to capitalize on its promising opportunities.