Kandi Technologies Group (NASDAQ:KNDI) released quarterly financial results and hosted an earnings call on Monday. Read the complete transcript below.

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Summary

Kandi Technologies Group Inc. reported a 57.4% year-over-year increase in revenue for the first half of 2026, totaling $57.1 million, driven by strong sales in the off-road electric vehicle market and contributions from the recently acquired ROAR brand.

The company achieved a significant 452.2% increase in net income to $9.4 million, supported by higher revenues and stable operating expenses, marking a return to operating profitability.

Kandi's strategic initiatives include advancing its battery swapping business which secured initial orders, expanding its AI data center energy solutions through Hsinchu New Energy, and enhancing its North American off-road electric vehicle sales network.

The company plans to launch a new Kandi product lineup in the fourth quarter and continue integrating ROAR's brand and product offerings to strengthen its market position.

Management remains confident in the outlook for 2027, anticipating stronger growth from new product launches and diversified revenue streams, while maintaining disciplined capital allocation.

Full Transcript

OPERATOR

Greetings and welcome to Kandi Technologies Group Inc. First Half 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kiwa Liu, Investor Relations. Thank you. Please go ahead.

Kiwa Liu, Investor Relations

Thank you. Hello everyone, and welcome to Kandi Technologies Group Inc.'s first half 2026 earnings conference call. As a reminder, today's call is being recorded. The Company's financial and operational highlights were issued in a press release earlier today and are available online. You can access the earnings press release and subscribe to the Company's email alerts by visiting the Investor Relations section of our website at ir.candygroup.com.

Joining us today are Mr. Fong Chen, Chief Executive Officer, and Ms. Alan Lin, Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements made under 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 under applicable laws. Unless otherwise noted, all financial figures discussed today are in U.S. dollars. I will now turn the call over to our CEO, Mr. Fong Chen, who will deliver his remarks in Chinese followed immediately by English translation.

Mr. Chen, please go ahead.

Fong Chen, Chief Executive Officer

Good day, investors and analysts. Welcome to Kandi Technologies Group's earnings conference call for the first half of 2026. Thank you for your continued interest and support. The first half of 2026 marked a new phase in Kandi's strategic transformation as our new business initiatives began to deliver tangible results. Our battery swapping business in particular is gaining commercial traction, showing that our earlier investment and development efforts are paying off.

It is now poised to become an important growth driver. Growth momentum in our core business also strengthened significantly, driving robust gains in both our top and bottom lines. Meanwhile, we continue to build out our off-road vehicle dealer network, refine our retail partnership model, and refresh and upgrade our product lineup. This financial and operational progress demonstrates that our strategy is driving improvements in operating performance and business fundamentals, reinforcing our confidence in our next phase of growth.

Our first half revenue grew 57.4% year over year to $57.1 million. Revenue from our core off-road electric vehicle business increased 59.4% to $54.2 million, including $6.1 million from ROAR, the electric off-road motorcycle brand we acquired in February 2026. Higher revenue and gross profit, combined with relatively stable operating expenses, drove a return to operating profitability and a significant improvement in earnings. Net income rose 452.2% year over year to $9.4 million.

As of June 30, our cash and cash equivalents, restricted cash, and certificates of deposit totaled $285.7 million, providing a solid financial foundation to support future growth. On our full-year 2025 earnings call, I outlined Kandi's dual-engine strategy: strengthening our core North American off-road electric vehicle businesses while cultivating new growth drivers in energy and intelligent equipment. On the new driver side, we are advancing our battery swapping equipment and intelligent robotics business, and we broadened our energy solutions for AI data centers by acquiring a controlling stake in Hsinchu New Energy.

Going forward, we will continue to improve product competitiveness and sales channel efficiency in our core business while tailoring our commercialization efforts for new businesses to each one's stage of development. Over time, this will diversify our revenue base and growth drivers. Next, I would like to share more details on our first half progress and recent developments across each business, as well as our priorities going forward. Let me begin with our new business initiatives.

We have made tangible progress in commercializing our battery swapping equipment and are now in volume production. In July, our subsidiary China Battery Exchange secured its first batch order from CATL's TGIN Energy subsidiary for heavy-duty truck battery swapping station equipment. Just two months later, it received another batch order. These orders demonstrate that our investments in technology and strategic partnerships are beginning to pay off, while also providing visibility for planning production and deliveries.

We expect this business to begin generating meaningful revenue in the second half of this year, emerging as a new growth driver for Kandi. Our entry into the battery swapping equipment business marks an important step in extending Kandi's technology and manufacturing expertise to new energy infrastructure. Looking ahead, our priorities are to fulfill customer orders, improve product quality and delivery efficiency, and strengthen our after-sales service capabilities.

We aim to deepen customer relationships and secure follow-up orders by constantly meeting our project commitments. As we accumulate project delivery experience and scale manufacturing capacity, we will be better positioned to drive sustained growth in this business. In intelligent robotics, we continue to invest in autonomous core drove robots, focusing on security patrols, inspections, and applications in logistics parks. This business remains in an early R&D stage.

Our work is currently centered on aligning development with customer needs, tailoring products to specific use cases, and validating their performance in real-world settings. Progress in these areas will guide our decisions on further investment. Additionally, Xinchu New Energy, in which we acquired a controlling stake in the third quarter of this year, is expanding its AI data center backup power and energy storage business. In July, Tingqiu became an authorized solutions reseller of Schneider Electric.

By combining Schneider Electric's established UPS and data center infrastructure products with Hsinchu's expertise in energy storage, batteries, and battery management systems, we can offer data center customers integrated backup power and energy storage solutions. Tsingzhu is rolling out new products and technical services and has already begun winning orders overseas. We expect the business to make meaningful revenue contribution this year as AI computing infrastructure continues to expand globally.

We will build out our integrated solutions to meet demand for highly reliable backup power and energy storage, cultivate customer relationships, and drive order conversion, further developing this new revenue stream. Turning to our core business, the North American off-road electric vehicle market, with a portfolio spanning UTVs, golf carts, and other electric off-road products. In the first half, average monthly sales through our U.S. dealer network doubled year over year, reflecting strong sales momentum.

This growth was driven by greater contributions from existing dealers and the addition of new partners. Looking ahead, we will deepen collaboration with existing dealers, add high-quality new partners, and align these efforts with upcoming product launches to broaden our reach and improve sales performance. On the product side, we continued to clear inventory of slow-selling models and old models in the first half. We expect to complete the transition to an all-new Kandi product lineup in the fourth quarter.

We are closely coordinating inventory optimization, new product launches, and sales channel upgrades to provide our dealers and retail partners with a more competitive product mix, and help drive core business growth in 2027. ROAR is already contributing to our revenue, and we continue to deepen its post-acquisition integration with the group amid intense price competition in the electric off-road motorcycle market. We are preserving ROAR's premier brand positioning, focusing on product performance, rider experience, and brand equity to differentiate the business and support sustainable growth.

We are integrating Kandi Group's R&D, manufacturing, and supply chain capabilities with ROAR's brand assets and distribution network to develop products and respond to U.S. market demand more efficiently. We are also broadening ROAR's product offering and strengthening channel coordination to drive sales growth across its existing network of more than 300 dealer partners. In the first half, ROAR continued to expand its team and refine its operating system while building brand equity through professional racing events, trade shows, and social media campaigns.

ROAR is also advancing development of an all-new product lineup with launches planned for 2027. This year we are concentrating on managing the inventory transition, preparing for new launches, and optimizing our sales channels. As the benefits of integration materialize, we are confident we can convert these product and channel strengths into revenue increases and make ROAR a stronger growth driver for our North American business. In short, we have four priorities for the second half of this year.

First, scale battery swapping equipment deliveries and support Hsinchu New Energy in winning additional overseas orders. Second, sustain sales momentum in our North American off-road electric vehicle business while refining our sales channels and refreshing the Kandi product lineup. Third, strengthen ROAR's team, supply chain, and distribution network in preparation for its new product launches in 2027. Fourth, continue developing intelligent robotic solutions tailored to real-world applications.

We remain confident about our outlook for 2027. We expect a significant upgrade to Kandi's product portfolio, new product launches, and revenue contributions from our emerging businesses to drive stronger growth. At the same time, we will maintain a disciplined approach to capital allocation, evaluating investments in new businesses, acquisitions, and capacity expansion based on commercial progress, expected payback period, and associated risks and returns, and aligning the pace of investment with business needs to optimize capital efficiency.

The management team and I are fully committed to strategic execution, converting the momentum in our core business and opportunities across our new businesses into sustainable growth and long-term value for our shareholders. Now let me turn the call over to our CFO, Alan Lin, who will provide details on our first half 2026 financial performance. Thank you.

Alan Lin, Chief Financial Officer

Thank you, Mr. Chen and Kiwa. I'm Alan Lin, CFO of Kandi Technologies, and thanks everyone for joining us today. I will go over the financial results for the first half of 2026. Regarding the income statement, net revenues were $57.1 million for the current period, up 57.4% from $36.3 million for the same period in 2025, mainly due to an increase of sales of off-road vehicles compared to the prior-year period, as well as the additional revenue contributed by our newly acquired entity, ROAR, a subsidiary the company acquired in February 2026.

The cost of goods sold was $32.3 million in the current period, up 62.3% from $19.9 million for the same period of 2025. The increase was primarily due to the corresponding increase in sales. Gross profit was $28.8 million in the current period compared with $16.4 million for the same period of 2025. Gross margin was 43%, comparable to 45.2% for the same period of 2025. Total operating expenses were $19.3 million, up 5.3% from $18.3 million for the same period of 2025.

As a breakdown of different expenses, R&D expenses were $2.4 million, a decrease of 3.5% from $2.5 million for the same period of 2025. Sales expenses were $5.0 million, up 10% from $4.5 million for the same period of 2025; the increase reflected the higher sales activities. G&A expenses were $11.9 million, up 5.4% from $11.3 million for the same period of 2025. Income from operations was $5.5 million in the current period, compared with a loss from operations of $1.9 million for the same period of 2025.

Net income increased 452.2% to $9.4 million from $1.7 million for the same period of 2025. The increase was primarily driven by the higher net revenues and gross profit, while operating expenses remained relatively stable and controllable. Basic and diluted net income attributable to the Company's shareholders per share were $0.10, compared with $0.02 for the same period of 2025. Turning to our balance sheet, our financial position remains strong.

As of June 30, 2026, the Company had cash and cash equivalents, restricted cash, and certificates of deposit totaling $285.7 million, compared with $211.9 million as of December 30, 2025. Working capital was $189.5 million as of June 30, 2026. That concludes my remarks. I will now hand the call back to Kiwa for any final comments. Thank you everyone.

Kiwa Liu, Investor Relations

Thank you once again for joining us today. If you have any further questions, please reach out using the contact information provided on our website. We appreciate your time and interest in Kandi Technologies. This concludes today's conference call. You may now disconnect.

OPERATOR

Ladies and gentlemen, thank you for your participation. You may now disconnect your lines or log off the webcast and enjoy the rest of your day.

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.