Faraday Future (NASDAQ:FFAI) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.

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Summary

Faraday Future reported a significant revenue increase for Q2 2026, reaching $836,000, which represents a 1,500% year-over-year growth, primarily driven by scaling product deliveries within the EAI Robotics segment.

The company has updated its annual shipment target to 2,000 units, driven by its EAI Robotics Allocation ecosystem and strategic initiatives such as the Built in USA program, and is advancing the development of U.S. domestic robotics manufacturing capabilities.

Faraday Future's financial performance improved with net loss narrowing by 69% year-over-year to $38.96 million for Q2 2026, due to cost optimization and increased revenue.

The company's four core full stack AI ecosystem, including the EAI Brain, Devices, Industry Productivity Solutions, and Developer Platform, is in active implementation, with positive momentum in commercial deliveries and strategic partnerships.

Faraday Future is actively addressing capital structure and debt reduction, aiming to reduce total liabilities to under $100 million, and has secured $70 million in new institutional funding commitments to support its growth strategy.

Full Transcript

OPERATOR

Quarter 2026 earnings call. At this time, all participants are in a listen-only mode. Should anyone require operator assistance during the conference, please press Star-0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to John Schilling, Director of Public Relations, Communications and Government Affairs. Thank you. You may begin.

John Schilling, Global Director of Public Relations, Communications and Government Affairs

Good evening, everyone, and thank you for joining Faraday Future's second quarter 2026 earnings call. My name is John Schilling, Global Director of Public Relations, Communications and Government Affairs at Faraday Future. Today I am joined by our Global CEO, YT Jia. 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. We would now like to open the floor for Q&A. 1. What strategic opportunities does the FCC's new policy present for Faraday Future? On July 28, 2026, the U.S. Federal Communications Commission (FCC) added advanced robotic equipment, including humanoid and quadruped robots manufactured outside the United States, to its Covered List. Foreign manufacturers and component suppliers will face substantially higher compliance costs, extended timelines, and increased legal risks, which in turn will incentivize them to seek deeper collaboration with U.S.-based companies.

Management believes that this regulatory shift is highly aligned with Faraday Future's Built-in USA strategy and presents a critical structural opportunity for the company. As the first U.S. company to achieve commercial deliveries of both humanoid and bio-inspired robots, Faraday Future has already established and continuously iterated its core R&D and operations for the EAI Brain, industry productivity solutions and developer platform, and Data Factory entirely within the United States.

Data collection and storage are strictly conducted in compliance with domestic requirements, giving Faraday Future inherent advantages in data security, cybersecurity, and model training. Leveraging its industry bridge strategy, Faraday Future effectively connects the U.S. market, global capital, cutting-edge technologies, and mature international supply chains. Capitalizing on this policy window, the company has formally launched the Built-in USA Acceleration program for its EAI robotics business to be executed in three phases.

Phase one: Preliminary deployment completed; the EAI Brain, industry productivity solutions and developer platform, and Data Factory are now operational, laying the technical groundwork for ongoing core development and proactively preparing for potential future ICTS-related regulations. Phase two: Accelerate U.S. local assembly of robot units and FCC-compliant components assembled in the USA, with the goal of achieving domestic production on a shorter timeline and greater efficiency.

This includes evaluating the conversion of our Hanford facility and exploring new site selections. Phase three: Ultimately achieve U.S. manufacturing (Made in USA) of complete robot units and certain components that fall under the FCC Covered List. 2. As the embodied AI industry rapidly evolves, how does Faraday Future plan to sustain its first-mover advantage? With the continued refinement of industry standards, declining costs, and expanding application scenarios, the robotics sector is expected to enter a phase of accelerated growth.

Faraday Future has built a closed-loop ecosystem centered on three core pillars: hardware, the Brain and open platform, and Data Factory. This ecosystem operates through a positive flywheel—deployment, real-world data collection, model evolution, skill enhancement, and incremental deployment—continuously elevating intelligence levels and driving toward large-scale commercialization. High-quality real-world data is essential for training embodied AI.

Our 2026 shipment target is 2,000 robots, encompassing both humanoid and bio-inspired models, distributed across multiple cities and diverse user scenarios to capture rich, authentic operational data. From our initial deliveries at the end of February through the end of July, we have cumulatively sold and shipped 394 units, and we remain in a steady ramp-up phase. Our data assets are growing consistently, and we are leveraging this early data advantage to continuously refine the technical architecture of both the robotic brain and cerebellum, building a replicable and scalable ecosystem tailored to the U.S. market. Furthermore, the recently announced FCC robotics policy has opened a critical market window that will help Faraday Future reinforce its first-mover position, accelerate market share expansion, and strengthen brand recognition and customer loyalty. 3. Before achieving positive operating cash flow, how does Faraday Future plan to balance financing needs and share dilution? The company intends to progressively reduce its reliance on expensive short-term debt and transition toward a funding structure anchored in operating cash flow, industrial partnerships, and long-term capital.

Specific measures include operational optimization: by executing our strategic plan, we aim to increase revenue scale while tightening cost and expense controls, thereby steadily improving operating cash flow and lessening dependence on external financing. We have established core financial targets covering gross margin, operating cash flow, and debt reduction. Financing mix adjustment, subject to negotiations with relevant counterparties: we will seek to replace convertible note financings with equity-based structures where feasible and explore standalone financing for our robotics business to further reduce dilution at the Faraday Future AI level. Any new capital raise will be primarily deployed to support robotics business development rather than to service historical liabilities. Setting a conversion floor: in compliance with applicable laws and contractual obligations, we plan to establish a minimum conversion price of no less than $5 per share for our outstanding convertible notes. This mechanism provides a clear ceiling on potential dilution from such instruments and helps stabilize market expectations.

Through these measures, the company aims to gradually shift from a financing-driven model to one powered by operating cash flow. 4. Why has the company set a debt reduction target at this stage? We, together with our investors who are bullish on Faraday Future's robotics business and our industry partners, do not wish to see this early-stage, high-growth robotics strategy constrained by the historical liabilities stemming from our post-IPO, legacy, and automotive operations since 2021.

We firmly believe that the true value and commercial potential of our EAI robotics business are significantly higher than what is currently reflected in Faraday Future's market capitalization. To unlock this value, our debt resolution program advances along two parallel tracks, combining operating debt reduction with capital structure liability optimization. Through rigorous financial reconciliations, legal settlements, commercial negotiations, and warrant cancellations, we are systematically clearing historical operating burdens while establishing long-term debt management and internal control mechanisms.

Building on the $20 million in debt resolution completed during the second quarter, these integrated efforts continuously improve our net equity position as we advance toward our roadmap target of reducing total liabilities to under $100 million over the next three to four quarters. Removing these legacy obligations across both operating and capital levels creates a cleaner, highly flexible balance sheet that enables our robotics business to move forward with a lighter legacy burden, accelerate commercial deployment, and unlock long-term value for our stakeholders.

OPERATOR

This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.

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.