Prepared remarks
Ladies and gentlemen, thank you for standing by, and welcome to Pony AI Inc. First Quarter 2026 Earnings Conference Call. As a reminder, today's conference call is being recorded, and a webcast replay will be available on the company's Investor Relations website at ir.pony.ai. I would now turn the call over to your host, George Shao, Head of Capital Markets and Investor Relations at Pony AI. Please go ahead, George.
Thank you, operator. Hello, everyone. We appreciate you joining us today for Pony AI's First Quarter 2026 Earnings Call. Earlier today, we issued a press release with our financial and operating results, which is available on our Investor Relations website, and an earnings presentation, which we will refer to during the conference call, can also be accessed and downloaded on our Investor Relations website. Joining me on the call are Dr. James Peng, Chairman of the Board and CEO; Dr. Tiancheng Lou, CTO; and Dr. Leo Wang, CFO of the company. They will provide prepared remarks followed by a Q&A session. Before we begin, please refer to the safe harbor statement in our earnings release, which applies to this call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP in our earnings release available on our Investor Relations website and filings with the SEC and Hong Kong Stock Exchange. I will now hand it over to our Chairman and CEO, Dr. James Peng. Please go ahead.
Thank you, George. Hello, everyone. Thank you for joining our earnings call. We kicked off 2026 with an amazing first quarter. This strong start defines our growth momentum for the whole year. Let me start with the highlights. I'm proud to report that in Q1 2026, our total revenue grew by 145% year-over-year, and we also achieved record high quarterly robotaxi revenue. Specifically, our robotaxi revenues grew nearly 400%, powered by more than 50% surge in fare charging revenues. Our operational momentum is accelerating across the board. We have scaled our robotaxi fleet to exceed 1,700 vehicles and amplified this expansion to a massive surge in user adoption. Now our registered users grew more than 200% year-over-year in China. In fact, our weekly average paid orders so far in May grew more than 100% compared to the beginning of the year. Lastly, we continue to expand our operating area, currently broadening our service footprint into overseas markets. Globally, we have been advancing our operations in the capital of Croatia, Zagreb, totaling Europe's first commercial robotaxi service. Looking at our overall Q1 results, I'm thrilled that our strategic and execution model translated directly into our exponential growth in robotaxi and fare charging revenues by scaling our fleet, user base and paid order volume. We have achieved consistent month-over-month growth this year. This is a remarkable achievement as spring typically is a low season for ride hailing. Our dual-engine strategy that is focusing on both China and the global market and the joint deployment model started unlocking new and diversified revenue streams. China market remains our primary growth engine, where we have secured a dominant lead. We are steadily ramping up our domestic suite while simultaneously broadening our operational footprint. We expanded our operations in Guangzhou from outer districts into Tianhe District, which is the heart of Guangzhou that covers high-demand areas like Canton Tower, the central business district and the Canton complex. In Shenzhen, we have been continuously increasing the size and the density of our fleet in Futian District, one of the city's core business areas. For key transportation hubs, we are now providing comprehensive airport transfer services across Beijing, Shenzhen and Guangzhou. Our international expansion is also gaining traction. We have now established a presence in 9 countries and started services to the public in 4 overseas markets including Croatia, Qatar, Singapore and South Korea. In the capital of Croatia, Zagreb, we realized the first robotaxi commercialization in Europe. In the Middle East, our footprint in Dubai and Qatar continues to expand, currently initiating driverless deployment in Dubai. These achievements serve as proof that our model can be applied smoothly across multiple regulatory and operational environments, ultimately creating solid revenue streams. As for the joint deployment model, we consistently make significant strides because of our technology leadership, our operational success and our commercial maturity; partners increasingly recognize us as their preferred collaborator. We have seen more partners from both domestic and international markets join forces with us, starting to contribute sizable revenue in Q1. Our robotaxi success is continuously driven by our innovation and execution, which helps us to achieve a large-scale fleet, excellent technology and operation, and a superior user experience. Moving forward, we will focus on reinforcing these areas to expand market share and cement our industry leadership. Operating a scaled fleet with consistent stability is a powerful testament to our technology and operational maturity. As we scale, we are supercharging our growth engine. We continue to build competitive barriers and trust from policymakers and fortify our brand position at the forefront of user mind share. Currently, we are accelerating the rollout of Gen 7 vehicles across Toyota, Beijing Auto and Guangzhou Auto, exceeding 1,700 robotaxi vehicles. At the Beijing Auto Show last month, we debuted our 2027 version of the robotaxi for the domestic market. This upgraded version will achieve further BOM cost optimization to less than RMB 230,000. This competitive pricing facilitates rapid scaling of the robotaxi fleet for the years to follow. Safety has always been the foundation of our company, which is ensured by our technological and operational advantages. Our industry-leading L4 technology, vehicle-level intelligence and resilient fleet management help us to maintain unpremised safety. This proven mastery of highly complex scenarios enables our robotaxis to navigate peak-hour dense urban areas and bad weather conditions, satisfying stronger user demand. We have moved beyond a novelty experience into a go-to daily transportation choice. The results speak for themselves: our robotaxi fares maintain a premium over entry-level ride-hailing services. Despite this premium service pricing, demand remains exceptionally robust, particularly during peak hours. Notably, our weekly average paid orders so far in May increased by more than 100% compared to the beginning of the year, significantly outpacing industry-wide growth. Beyond that, we are continuously optimizing ground operations from charging efficiency to dispatching algorithms. This, in turn, boosts our fleet utilization and reduces operational costs. Now let me move to our Robotruck business. Our Gen 4 Robotruck is slated for mass production in the second half of the year with preproduction vehicles currently rolling off the production line. I'm also pleased to share that in Q1, Robotruck revenues were up 31% year-over-year. This was driven by scaling up long-haul operations. We also strive to expand our addressable market across multiple fronts, particularly into city urban logistics. To this end, we launched our L4 autonomous light truck in April, leveraging our fully automotive-grade and fully redundant Level 4 robotaxi architecture. In terms of Intelligent Solutions, our business we recently renamed from Licensing and Applications to better reflect our expanding business in this segment. In Q1, the ADC, essentially the autonomous domain controller shipments in this segment surged by over 500% year-over-year. This was mainly driven by domain controller deployment in low-speed delivery applications. 2026 is off to a strong start for Pony. We have achieved supercharged revenue growth in all three business lines without any compromise in safety. Since the first day of our founding, we have been committed to provide safe and reliable autonomous driving services. It is our deepest moat, as it's now the perfect stage for Pony to demonstrate what a decade of rigorous engineering looks like. Our fourfold global taxi revenue growth was fueled by accelerated user adoption in domestic Tier 1 cities and revenue contributions from our joint deployment model, both domestically and globally. Reflecting this powerful commercial momentum, I am now raising our 2026 annual targets that we forecasted earlier this year. First, upgraded fleet target: we are now on a clear path to surpass a fleet size of 3,500 vehicles, which is an upward revision from our initial 3,000 target. Second, accelerated revenue growth: we are now lifting our robotaxi revenue target higher to more than 3.5x from our previous target of triple. Third, scaling our domestic and overseas presence: as we continue to accelerate scaling up in our existing markets, we are firmly confident to expand our footprint to over 20 cities, both domestically and globally. As an industry leader, our mission goes beyond our own growth. We are here to lead the development of autonomous driving that has sustainable societal benefit by providing a driverless technology that is safe and profitable at scale. We are building the future of mobility that the world can trust. With that, I'll hand it over to our CTO, Dr. Tiancheng Lou, to go over the technology that's powering our leadership. Tiancheng, please go ahead.
Thank you, James. Hello, everyone. This is Tiancheng. Our strong start in 2026 fully proves our solid technology foundation. Looking at our scale, our robotaxi fleet now surpasses 1,700 vehicles and the Q1 robotaxi revenues skyrocketed by nearly 400% year-over-year, hitting an all-time high. Building on this robust growth momentum, we are raising our full year target to over 3,500 vehicles and revenue growth to 3.5x from the level of last year. This scaling up is driven by our proven capability to expand rapidly in high-value markets, for example downtown core of Guangzhou and launching Europe's first commercial robotaxi service. We demonstrated our true technology leadership. Only a tech leader can deploy fleet so quickly into these high-value ultra-complex urban areas. Because our technology navigates this environment safely, more users choose to call our robotaxi and more partners want to collaborate with us. This demonstrates the capabilities that give us the confidence to upsize our scale. Another clear testament was our performance during a series of concerts held in Guangzhou earlier this month. These events attracted tens of thousands of attendees around the stadium. I'm very proud that Pony's robotaxi officially became a government-recommended transportation choice for the post-concert crowd. We highlight this because we can master this level of extreme localized demand seamlessly; being integrated into official local traffic plans proves that the authorities highly trust our systems and operational capability. Ultimately, mastering this high-traffic environment demand scales engineering by orders of magnitude. It comes down to three core technical pillars: an exceptional training paradigm, robust operational redundancy as well as safe and efficient fleet management. Many years ago, we realized a critical truth: the public demand a much higher safety standard for L4 driverless robotaxis than for human drivers. This means when human drivers make mistakes, the public can accept it as a normal part of daily life. But if an AI driver makes a mistake, the public trust will be negatively impacted. This understanding shaped our approach years ago: we could not achieve true L4 by simply learning from human driving data. More importantly, we knew we could not sell L4 through a simple scaling law like in some large language models, meaning just increasing parameter size and data alone. Turning from human driving data and scaling up parameters can give you a decent L2 driving system, but that level of AI is only good enough for L2 assistant driving when a human acts as the backup. It can never work for large-scale L4 robotaxis because they cannot significantly beat human safety level. Driving is very different from AI coding. In coding, the AI does not need to make decisions with low latency and the first output does not need to be perfect. The AI can try, fail and stitch errors multiple times during an agent framework in simulation and test environment. Humans expect to see a final result; they do not want to see trial and error on the streets. But for an L4 driver, the model output must be instant and correct on the first attempt. Therefore, we started using reinforcement learning and world models years ago. Today, this approach allows our robotaxi to drive much safer than humans, especially in complex areas. This early work gives us a massive first-mover advantage allowing us to rapidly deploy our robotaxi in high-value markets globally. However, for a true L4 vehicle, achieving safety just at the algorithmic level is not enough. If a system downgrades and stops on a high-speed road to wait for rescue, the public will not accept it. That is why every single Pony robotaxi features a full-stack multilayer redundancy architecture for both software and hardware. This gives us through operational capability: if any component fails during a trip, the system stays fully functional, the car will continue to drive safely to a secure spot while avoiding traffic congestion and rare crashes. Furthermore, our cars can drive normally even when there is no network or GPS signal, both of which can drop in urban environments. We also do not rely on high-definition maps. For example, even when road layout or markings change significantly or even if we need to drive in the opposite lane, our system adapts and navigates safely based on real-time local perception. We also detect any impact through cars encrypted with impact sensors so the system notes immediately if a collision occurs or stops the vehicle right away. We detect hardware or software failures and network instability instantly to ensure driving safety. We even have specialized waterproofing sensors to make sure our cars do not enter parts that could cause damage. At the operational level, keeping the entire fleet running becomes just as critical as a single vehicle. To achieve this, we scale intelligence into citywide operations, protecting our larger operations through three strong lines of defense. The first line is prevention. We have a dedicated safety team to systematically eliminate risk from the very beginning; we design systems to stop safety issues before they happen, including risks from human errors or cyber attacks. For example, our remote assistance only provides high-level guidance; it does not control the car. The onboard module on the vehicle is responsible for any conditional accident avoidance. This ensures our remote assistants cannot cause an accident through wrong input or network delay. The second line is detection. If demand surges and our vehicles end up heading in the same direction, our smart dispatching system ensures they don't arrive on the same section of road at the same time, but rather operate one after another. If a low-level block is detected, our system will also detect it instantly and notify the whole fleet to avoid making traffic worse. The third line is response. We established dedicated ground support teams. If a vehicle encounters any issue on the road, our ground personnel will arrive within minutes to handle the situation immediately. In short, our technology makes our operations safe and this last layer of operations builds our ultimate moat because we chose the right foundation from day one and we now have a unique capability and a first-mover advantage to rapidly expand in high-value markets. By the end of this year, we target to expand our fleet to over 3,500 vehicles across more than 20 cities. This massive scale will allow us to unlock even greater commercial value while continuing to deliver the most trusted, highest-rated service both domestically and globally. This concludes my prepared remarks. I will now pass the call to our CFO, Dr. Leo Wang. Leo, please go ahead.
Thank you, Tiancheng. Hello, everyone. This is Leo. I will focus on year-over-year comparisons for the first quarter of 2026, unless otherwise noted. For detailed financials, please refer to our earnings release. 2026 is the year where our commercialization strategy translates into remarkable financial performance. This quarter total revenues reached a record of USD 34.3 million, representing a 145% increase from USD 14.0 million in the same quarter last year. The triple-digit top-line growth was driven by robotaxi revenue growth of 395% and intelligent solutions growth of 246%. We are also capturing compounding benefits as we extend our autonomous driving technology from robotaxi into robotruck and other partners along the value chain. Diving deeper into robotaxis, this segment continues to serve as our core growth engine. This quarter, we reached a record high robotaxi revenue of USD 8.6 million, up nearly 400% compared with USD 1.7 million in the first quarter of 2025. As James mentioned, three key elements have helped Pony achieve leadership in robotaxi operation. These are a scaled fleet, excellent technology and operations, as well as superior user experience. Pony's robotaxi has become a popular service that has captured user mind share, and this is now reflected in our financial numbers. Specifically, our fare charging revenues delivered an exceptional growth of 46%. This impressive increase was driven by several compounding factors. We continue to add more vehicles and expand into more regions, especially core downtown areas with higher economic value. Operating metrics reflect our growing capacity and strong user demand. For example, our weekly average paid orders so far in May grew more than 100% compared to January, registered users increased more than 200% year-over-year, and our daily order growth rate continued to outpace the industry average. What makes this strong growth trajectory even more remarkable is our pricing power. Even after this growth, our effective sale rate per kilometer remains above entry-level pricing on wide-hailing platforms and is on par with the standard premium services. Our demand remains robust and is growing at a very fast pace. We believe this is a clear reflection of the superior ride experience and the robust technology we deliver, especially during peak hours and in downtown areas. On the cost side, we continue to make good progress on both operating costs and the BOM cost front. Pony's combined depreciation and operating costs per vehicle are already among the most competitive globally, and this is achieved while operating in central downtown areas during the morning and evening peak hours under the most demanding traffic conditions. By leveraging operational efficiency, we continue to drive operating costs even lower, and are also on track to bring robotaxi BOM costs below RMB 230,000 by mid-2027 in the domestic market. Together, these two levers—declining operating costs and lowering BOM costs—will further enhance our robotaxi margins as we scale the fleet. Aside from fare charging revenues, our joint deployment model has started to contribute meaningful revenues with both domestic and overseas partners. Such a model will enable more efficient use of capital in fleet deployment, specifically as a global technology enabler. We successfully launched the first commercial robotaxi service in the city center of Zagreb with our local partners. Combined with our expanding operations in China, this is a strong testament to the execution of our dual-engine strategy. Turning to robotruck, robotruck services revenue grew 31% to USD 10.2 million this quarter, up from USD 7.8 million in the first quarter of 2025. This growth was driven by the addition of more trucks and the expansion of our diversified client base, reflecting increasing demand from downstream logistics clients in the long-haul business. We continue to see our industry-leading autonomous driving technology expanding into wider use cases, for example, long-haul trucking and intracity logistics. Looking ahead, with the launch of Level 4 autonomous light trucks and ongoing development for robotruck, we are firmly on track to deliver even better autonomous driving trucks with lower cost, superior driving performance and wider use cases, expanding into a broader addressable market. Our Intelligent Solutions segment, formerly the Licensing and Applications segment, delivered a remarkable growth of 246% and reached USD 15.5 million in the first quarter of 2026, up from USD 4.5 million in the first quarter last year. This exceptional performance was mainly fueled by strong sales of ATOM domain controllers. Such strong growth is yet another testament to the opportunities of our autonomous driving technology as we empower other customers along the value chain. Moving to cost and margin: total cost of revenue was USD 28.7 million, translating to a gross margin of 16.2%. Total operating expenses were USD 63.9 million, an increase of 9.5%. On a non-GAAP basis, operating expenses were USD 59.3 million, representing a 20.2% increase. Such commitments, especially in R&D, have helped us to maintain our technology leadership and will effectively drive down our BOM costs. Loss from operations was USD 58.3 million, remaining relatively flat compared to USD 56.0 million in the first quarter last year. Net loss was USD 53.5 million compared to USD 37.4 million in the first quarter last year. The increase was mainly attributable to the realization of investment income that occurred in Q1 2025, coupled with the modest increase in operating expenses; excluding the impact from this investment realization, the underlying loss amount remained broadly stable. It's worth noting that the loss from operation margin narrowed drastically, from negative 401% in the first quarter of 2025 to negative 170% this quarter. Similarly, our net loss margin narrowed from negative 267% to negative 156% year-over-year. The narrowing loss margin trends demonstrate our operating leverage driven by the rapid revenue growth and the gradual realization of commercial scale benefits. Turning to our balance sheet: cash and cash equivalents, short-term investments, restricted cash and long-term wealth management instruments stood at USD 1.4 billion as of March 31, 2026; this compares to USD 1.5 billion as of December 31, 2025. We continue to maintain an exceptionally robust financial position with ample dry powder to execute our strategy. Net cash used in operating activities was USD 74.2 million this quarter compared to USD 54.2 million in the first quarter of 2025; the increase was primarily due to an increase in accounts receivable resulting from substantial sales revenue increase of autonomous driving domain controllers, along with the increase of non-GAAP loss from operations. Capital expenditures were USD 12.5 million this quarter, compared to USD 4.9 million in the first quarter last year. The increase was primarily due to Gen 7 vehicle production for the quarter and the procurement of vehicle components for future manufacturing and investments in data centers and servers. We believe 2026 will prove to be a defining year for the industry, and we are confident in our ability to outperform the industry in operational and financial execution. With our solid robotaxi operational excellence, continued strong cost optimization, increasing partner interest and a strong cash reserve, we are highly confident in accelerating our path towards sustainable profitable growth for our shareholders. I will now turn the call over to the operator to begin our Q&A session. Thank you.
Questions and answers
The first question today comes from an analyst with Jefferies.
Congrats on the strong quarter. Just one from me. I'd like to ask about the regulatory environment. We've seen quite a bit of movement on the policy side for the robotaxi sector, both in China and overseas. So I was hoping you could share your perspective on how this evolving regulatory landscape is shaping up. And more importantly, how you see it impacting Pony AI's business or your competitive positioning going forward?
This is James, and I'll take this question. So as far as I know, most of the policy discussions, both domestically and globally, are actually centered on the safety operation of robotaxis. As you all know, safety is the cornerstone of the autonomous driving industry. Therefore, I would consider that discussions about standardized or even higher safety measures are beneficial for the long-term stable development of the industry. As Pony, we have many years of experience successfully operating a large fleet and have experience working with regulators to have a healthy, more transparent environment. Especially in China, we have built deep trust with regulatory authorities, and we consider that we will continue to work hand-in-hand with the regulators to safely bring autonomous driving to the public. Back to the safety scale: as Tiancheng mentioned, we have established a full life-cycle safety management for both the autonomous driving vehicle itself and the fleet operation. Every vehicle features a fully redundant architecture with fail-operational capability; our vehicles will continue to operate safely even during an extreme case of system failure. Additionally, our fleet management has the capability to detect and respond to any unforeseen issues on the road. The whole system actually serves as a city-wide control net to prevent traffic jams and handle real-time road changes. This is how we ensure safety and scale. This highly sophisticated and robust safety system and safety track record have given us confidence to scale our business quickly. The current policy discussions and policy updates do not have any direct negative impact on our business. In contrast, as you see in the prepared remarks, I have actually raised our business targets for the whole year of 2026. We are continuing to push forward with our Gen 7 deployment, and we are making smooth progress towards our targets in fleet size, revenue and operational area expansion. So as I mentioned, there's no immediate negative impact. And I believe that in the mid- to long-term, standardized regulatory environments will play directly to our advantage as we already are established as the industry leader. It highlights once again the complexity of operating robotaxis at scale in dense urban environments, which is exactly where we have proven our capability. I think ultimately, these high standards will consolidate the market, filter out unqualified players, increase the entry barrier for new players and, as a result, help the long-term growth of the industry. With this, I will hand over to the operator.
Next question comes from Ming-Hsun Lee with Bank of America.
Given you raised your robotaxi fleet size to 3,500 by the end of the year and also you raised revenue, could you elaborate more on the key drivers behind your upward revision for these two numbers?
This is Leo. I'll take this one. So the upward revision is definitely showing that we are encouraged by our strong commercial momentum and especially the result of Q1. To be honest, this is actually moving faster than we expected, and it's reflecting many areas in our robotaxi business. For example, we are seeing our domestic operations are accelerating. We are seeing the pickup in revenue, in paid order volume and also in the user base in all Tier 1 cities in China. This is really a reflection that we are providing a qualified service nonstop in Shenzhen and in Guangzhou, and we are attracting more and more repeated users because we can provide a service even during peak hours with consistency even during complex scenarios and that eventually translates into more revenues. Another point is how we made the unit economics breakeven milestone in Guangzhou and Shenzhen. This also serves as a proven case for future possibility. And that's why we are seeing many potential partners now showing real interest domestically and internationally to really participate in our joint deployment business model. This could enable more efficient use of our capital, but it also means we could deploy more vehicles in different markets. So given all these facts and encouragements, that's why we have the confidence to push our robotaxi revenue growth target even higher to be 3.5x of 2025 and also our fleet target to be 3,500 vehicles by this year-end. And now I'll go back to the operator.
The next question comes from Wei Hong with Deutsche Bank.
So I have a question on the recently launched autonomous light truck platform at the auto show, and could you explain the strategic considerations for launching this platform in the commercialization for logistics?
This is James, and I'll take this question. As you consider, the company vision since our founding has always been autonomous mobility everywhere. To us, 'everywhere' actually has two implications: one, expanding our presence across both domestic and overseas markets; and two, scaling our technology across different vehicle platforms for both passenger and freight transportation. So the launch of our L4 autonomous light truck actually aligns perfectly with our vision and our ambition. In the logistics sector, the value chain spans long-haul trucking, urban logistics, and last-mile delivery. We already established a robotruck division that is working on long-haul logistics. For last-mile delivery, we are not directly working on every segment, but we have already become a leading ADC provider. So the recent launch of a Level 4 light truck serves the purpose of completing one key segment in our full logistics portfolio. The platform for the Level 4 light truck also shares a nearly identical software stack as our robotaxi. It can also fully utilize our existing operational infrastructure, such as remote assistance, ground support networks and even charging facilities. This unified architecture creates a powerful synergy: it can further flesh out our light truck operating cost by roughly half compared with human-driven light truck fleets. Also, we can lower the operational overhead of our robotaxi service because we can share a lot of the background support. In terms of the current status, we are developing the Level 4 light trucks and it's already well underway. For example, we co-developed this electric light truck with CATL, and we are establishing a solid pipeline with some of the leading logistics companies for future applications of those trucks. In addition, we have started discussions with regulators on licensing and fleet management. So we expect the autonomous light truck to begin scaled operation early next year. With this, I'll get back to the operator.
The next question comes from Ting Song with Goldman Sachs.
My question is on the technology part. Regarding the VLA visual-language-action model in autonomous driving, could you please share more on Pony's strategy and your future expansion technology path? Do you think the language part is still necessary as we recently noted some suppliers start to remove the language component from their models?
This is Tiancheng. I will take this one. Let me start from saying that the core of driving is understanding the intention of other road users and responding appropriately. By incorporating an intention layer into our onboard model training, we generate different intention combinations, and we evaluate the possibilities of all other traffic participants. This design ensures our onboard model always anticipates possible maneuvers and has a plan ready for any event, even for low-probability adjacencies. We believe language is not the essence of driving. Also, language models take too much compute power for a car. Instead, we believe 'intention' is the real core for driving. When humans drive, they think about the intention of other cars, not in natural language. Crucially, this intention data is hard to get from simple road testing; we generate it by simulation models. We believe large language models or language layers do not help on the core perception and planning side, where world models and generative data are essential for training. In fact, top driving and large language models are very different tasks. A large language model agent, like a coding tool, does not need to have very low latency; it does not need to be perfect on the first trial. It works in a low-risk environment where it can try, fail and fix mistakes inside a testing box. But driving has no room for mistakes: if you make a mistake, it is an accident. Therefore, our tolerance for error is effectively zero. To solve this, we build a virtual driving environment in our training regimen. This allows the system to try and fail during the training stage, not on real roads. During the real-world inference stage on the car, our model does not pick the single highest-probability path. Instead, it chooses actions that ensure safety under any reasonable scenario. With this, back to the operator.
The next question comes from Jeff Chen with Citi.
How should we think about the balance between sustaining this high-growth trajectory and your increasing strategic investments, especially when you are revising the full year target?
Jeff, this is Leo. Yes, we have a very good Q1 result which proves that our robotaxi commercialization strategy and dual-engine strategy are translating into accelerated top-line growth. As you can see, our top-line growth is actually outpacing our expenditure, which resulted in our operating loss margin narrowing quite a lot this quarter. Given all this momentum, we are confident to raise our full-year business target so that we can achieve an even higher growth trajectory, which I think is really important for any growth company. In the meanwhile, we need to make strategic increased investments in certain areas to keep our advantages in the industry. One example is we are actually on track to decrease our total BOM cost to be less than RMB 230,000 in the domestic market by mid-2027 through our R&D efforts and deeper collaboration with our OEMs. We think this will be a payback for our future deployment and will attract more joint-deployment partners. So this is a balancing act regarding expenditure and investment versus the trajectory of our growth. We are definitely putting the growth trajectory as our highest priority, but we will always follow a value-driven and disciplined approach for these front-loaded expenditures. Thank you. I'll go back to the operator.
The next question comes from Purdy Ho with Huatai Securities.
Management, congratulations on the solid results. I'd like to focus on your international expansion strategy given the recent commercial traction we are seeing overseas. Could you provide more color on your roadmap for global fleet expansion? Specifically, as you are evaluating different markets such as the Middle East, Europe and Asia, what drives your prioritization across these regions?
This is James. Let me take this one. As I answered earlier, our company vision is autonomous mobility everywhere, and global expansion has always been part of our strategic efforts. Our dual-engine strategy is rapidly accelerating our global expansion. As more international countries introduce regulations supporting autonomous driving and as more partners want to work with us, we see tremendous growth opportunities abroad. In fact, several international markets have already started contributing sizable revenues to us in Q1. So we're capitalizing on this window because our technology and commercial operations in China's Tier 1 cities have already given us extensive experience in handling the most complex urban environments, and we have already achieved unit economics breakeven in Shenzhen and Guangzhou. This proven technical capability and cost advantage, along with overseas policy opening, are the underlying drivers for our accelerated global efforts. In terms of our international footprint, we are scaling quickly across all these key regions. We have now established our presence in 9 countries and started local taxi services to the public in 4 overseas markets, including Croatia, Qatar, Singapore and South Korea. In Europe, we partnered with local operators to launch the region's first commercial robotaxi in Zagreb. In the Middle East, we are advancing fare-charging services in Doha and initiating fully driverless operations in Dubai. In Asia, we have deployed public robotaxi services in Singapore and are currently conducting robust testing in South Korea. Moving forward, we'll continue to collaborate closely with local regulators and trusted partners to accelerate our commercialization. We'll double down on our investment and are fully committed to expand our footprint to over 20 cities worldwide by the end of this year. With this, get back to the operator.
The next question comes from Eugene Hsiao with Macquarie Capital.
In the earnings release, some of the CapEx in Q1 was for stock building of components. I'm wondering if you could please update us on if there's any material input cost impact from rising component costs. And I think you mentioned earlier that you're still on track for the BOM cost reduction to reach RMB 230,000. So what areas are you targeting to reach this target?
Yes, I'll take this question. This is Leo. Thank you for asking. In terms of BOM cost reduction, we have always been using a holistic approach, meaning we are looking into all aspects regarding the base vehicle and the autonomous-driving hardware to get the overall BOM costs down over time. Several factors will drive down our future BOM costs. First, we are deploying more vehicles. As our total fleet size increases with larger volumes, especially with more deployment partnerships, we can place larger orders to our suppliers, which helps us negotiate better pricing. Second, we already have our Gen 7 vehicle on the street accumulating millions of kilometers of data, giving us real information showing where we can refine, simplify and optimize the system. Based on this real data, our R&D work can further cut down BOM cost. Of course, the supply chain has uncertainties. However, Pony has been dealing with such uncertainties over the years. For example, when memory shortages occurred, we acted quickly last year to secure supply. This demonstrates our capability to handle shortages. That's why we are very confident to hit that BOM cost target by mid-2027. Thank you.
As there are no further questions, I'd like to turn the call back over to the host for closing remarks.
Thank you once again for joining us today. If you have any further questions, please feel free to contact our Investor Relations team. We look forward to speaking with you in the next quarter.
This concludes today's conference call. You may now disconnect your lines. Thank you.