Welcome to the Noble Capital Markets October 26th Virtual Equity Conference. My name is Richard Magnusen. I am a Senior Research Analyst at Noble. Today we have Jerry Wang, Executive Chairman of Faraday Future and CEO of FF Robotics, to present. Faraday Future Intelligent Electric trades on Nasdaq Capital Market under the ticker FFAI. We will have time for some questions at the end, so if you have any questions, please submit them. With that, I turn it over to Mr. Wang.
Thank you very much, Richard. Greetings, everyone. Good afternoon. My name is Jerry Wang. I am the Executive Chair of Faraday Future, as well as CEO of Faraday Robotics. We have two public companies. The parent is FFAI, but the robotic trading specifically under the ticker of FFR. This is our product portfolio. As you can see, we have almost 20 different type of the robotics we are building and selling in the United States. So far, the demand as well as the financial has been growing very well. I will turn into a company introduction slide. As you can see, so far we have delivered more than 550 robots during this year of 2026, ranking number one regarding unit of shipments in the United States market. We are not only delivering that, we are generating revenue, but also with positive gross margin.
This is a great business to have. We believe that in 10 years, there will be more robotic devices compared to human beings. We are talking about something around 10 billion device opportunity in the next 10 years. Even for one company capture 1% of this market opportunity, the return and the value generating will be very significant. We started with the electric vehicle business under FFAI. During the past 12 years, we invested approximately $4 billion building our product and technology, brand, sales, after sales capabilities. Earlier this year, similar to all the successful vehicle automotive companies like Tesla or XPeng, they launched their robotic products. We launched our robotic products as well, and we start delivery in March this year. We reached a record high regarding unit of delivery each and every single month.
The growing has been great. For the past half a year, we already become number 1 regarding unit of delivery in the United States. I would like to highlight our philosophy. As you can see, we have many different products. Why Tesla only has one? We are thinking that there should be one brain as a centralized controlling unit, but it should be multiple forms, multi-forms, and different forms should carry multi capabilities. Basically, different forms should be utilized as of different tasks. For example, we have three different product portfolios. One is humanoid, one is quadruped, and one is wheel-based. For humanoid, it is perfect for the hospitality or for stage performance, entertainment, or for university studies. For the quadruped, it is perfect for educational activities as well as safety and surveillance inspection, all this related work.
For wheel-based, it is perfect for the industrial solutions. Different forms should be having different tasks, fit for the different tasks, but under control of a single source of brain, which we are developing by ourselves. We are a full stack AI ecosystem consisting with four parts: the brain, the device, the data, as well developer platform, as well as industrial solutions. This create a positive flywheel effect, which I will cover later. We initiate Built in USA program. We develop all the software capability, data training in the United States, and hardware, we are gradually moving in the manufacturing or built in the U.S., and we already kick it off. Regarding five-year target, we hope that we will reach top three regarding unit of delivery, both unit of delivery as well as revenue generation in the United States.
Here are some numbers to highlight. $4 billion investment so far, 550 unit, number one in the United States. This year target is 2,000 unit and $7.1 million revenue generating, and next year will be $45 million with more than 7,000 unit delivered. We target having a 2028 Q3 cash flow, operating cash flow breakeven. Here are some investment highlights. We touch most of them. We are very unique in the North America, only four-core ecosystem robotic company. Built in USA initiative, one brain, multiple forms, multiple capabilities. We already complete the first stage of robotic board, covering three different types, 20 different products. The sales has been growing really, really, really well. Using half a year, we already generate substantial sales. We are number one in the United States on the education industrial solution. We are partnered with public schools, with private education institutions, mostly in L.A.
We are in the process of loading into the public school purchase catalog, as well as generating courses for the education system and for the robotic studies for the K-12 education. We have a profitable closed loop data factory business. We already generate almost $500,000 revenue on the data factory, and this revenue has been growing really, really well. We see a huge demand on the high quality, diversified robotic data, which I will cover later. We also have a robotic leasing business similar to Uber. They rent cars, we rent robot. It is called RoboShare, roboshare.com. It is number one in the United States. We are operating in Los Angeles as well as Bay Area and in New York. We start commercialization in New York.
Basically, we want you as a robot owner not only utilize our device, but also you can put into our leasing platform, and then we will generate revenue and we are going to have a revenue split with you. If it is too expensive for you to spend a couple thousand, tens of thousand to buy a robot, no problem. Spend $100, $300, lease one to experience for a day, and then if you like it, hopefully then you can submit an order. Regarding capital markets advantage, this is a very rare pure play, physical AI robotic ecosystem company. We are the only one on Nasdaq as a publicly traded company right now. The proposed merger valuation is really, really low. We are combining this with one of our public companies, really, really clean. It is called FFR.
We already executed a term sheet as well as announced it, publicly announced it, and the proposed valuation is only $200 million. Really not so expensive, giving significant upside opportunity to investors. This is the team. The team has been working together for more than 10 years or so. This is really robust and driving great development and growth opportunities. This is the flywheel that I just described, similar to Tesla flywheel. More device they sell, more data they can gather, and better they train their FSD autonomous driving system, and better, more device, more cars that they can sell. Very similar, more robotic device we can sell, generating more data, and better train our brain and developer platform, and better establish our industrial solutions and more device we are able to sell.
This positive flywheel has already come into effect as of now, since we have mostly growing delivery units. Also the revenue coming from data factory, brain, as well as industrial solutions are growing really well as well. Regarding some business progress. On the brain front, 100% deployment is already done. We have more than 100 skills and 200 developers on our platform, already number one in United States. On the device level, we deliver more than 500 units so far, and the growth trajectory has been really well. On the industrial productivity solutions, we already have solutions around education, industrial application, security, and commercial services. For example, hospitality or entertainment. This brings robot into the real world activities and provide real world value, and we are definitely number one on that front as well.
On the data factory, we are generating 2,000 hours per month, high quality robotic data in the August 2026. The goal is to generate no less than 20,000 hours per month by year-end 2026. So far, the revenue already exists, $400,000 and grow gross. The demand is really strong from the major players in the market. This is the architecture of the brain. I will not go into too much detail, but we are utilizing the lead frontier models and we are integrating it together, but we build our specific training and specific use case skills. For example, this 3D scanning and perception, as well as motion capture, integrated security and inspection solutions, and whole body control. We develop those capabilities mostly by ourself. It is all built on the NVIDIA ecosystem, both software and hardware. Let us demonstrate our developer platform.
Basically, we are an open source, open ecosystem you can join as a developer. We will provide you open source SDK and API. We can develop skills, applications on our platform. If you develop something cool, unique, people are willing to pay for it. Basically, we are giving you a very nice revenue split. This is our product portfolio. As you can see, lots of device in here. The humanoid, we have larger one, your medium size, smaller one starting from $9,999, not so expensive.
For the quadruped, we have five to six different products starting with Navi. Let us sell less than $2,000, but this is perfect for education. Kids love it, and we have summer camp. We have different robotic courses developed together with top education institutions. On the AGIs, we have different type of AGIs. This is perfect for the security inspection, surveillance, so on and so forth. If you think like one security position for your building or for your factory or for your office, right? If you want 24/7, you need at least three shifts.
We are talking about all the insurance, all the salary, all the overtime fee, all these tax and the expenses, so on and so forth. We are talking about something around $200,000, right? We sell the most expensive one. It has lots of capability. It has LIDAR, it has a camera, it has a temperature detection as well as. All this putting together, it can jump really, really high, run very fast. All this together only sell $130,000. See, it is not that cheap, but compared to human labor, it is extremely cheap. This is good for like at least four to five years. Basically you are purchasing like one tenth of the cost.
There is also service subscription that we are putting together, bundling together with the hardware. Basically, we are charging you $1,000 or something like that for the service we offer to you. It is still very, very cheap compared to human labor cost, but for us, this is very high margin software, recurring revenue, on top of the hardware revenue that we are generating. On the mobile manipulator or wheel-based solutions, wheel-based hardware, this is perfect for industrial solutions, right? For example, in the warehouse, they pick up tools or pick up merchants from the shelf and deliver to the transportation vehicles and ship it to everywhere in the U.S. We have lots of warehouse, needs lots of labor, and this is perfect solution. Some companies using standard, let us say that, humanoid robot to do those deliveries or to do these industrial applications, but this is not most efficient.
For example, keeping a humanoid stand up will take 40% of your battery. So why use this energy? Why use this battery just for keeping it up? Why not build a very simple wheel-based solution with much, much cheaper cost, but able to do most of the work more efficiently compared to a humanoid? That is the action beyond, backed by our philosophy, one brain, multi-form, multi-tasks. Those are the application industrial solutions we have. I already covered that. I will not go into too much on the data factory, but the growth has been great and we have centralized, which we develop ourself.
These are centralized, which if you are a robotic owner, with your consent, we are going to collect non-privacy data from you, and we are going to share a nice revenue split on the data factory business. We are able to generate very good revenue, and growth is phenomenal. This is the Robot World that we already built. I covered most of this product. What is the difference with Tesla or with Figure, right? There is no right and wrong, but Tesla and Figure are aiming very, very high.
One product, one brain solve most of the use cases. It is amazing, it is great, right? We are a much smaller company compared to them. Instead of chasing the top here, we would like to do it step by step. We have one brain, but different forms, solving different applications, solving different solutions, and then we develop something specifically for this form, under this area, for example, education or civilians or safety or stage performance, and gradually go up from there.
Not only with us building that, it's a whole industry, a whole society can join on my platform and develop those skills application for us, and we grow this ecosystem together. They're more like an Apple capability. They're very, very strong, very capable. They do everything by themselves. But we're like Android, open ecosystem, no problem. I focus on building a solid platform, building a solid ecosystem with an open-end developer tool, and we welcome all the developer coming in to develop applications for us, and we have the best power, best solutions to fit the development needs. This is the sales channels. I won't go into too much detail, but we have established basically seven sales channels, and each sales channel's growth has been great based on the half year operating result. There's our four core use cases, education, security, application and commercial.
Right now, people are not spending $10,000 just buying a robot for buying a robot. People ask, "What can it do?" It can offer a real-world use case with real value. So we're fully FCC and SCTS compliance. Right now, FCC and SCTS are banning non-U.S. produced robots as well as non-U.S. produced software from coming in. SCTS, we believe, will soon are having that restriction, but we're fully compliant because we're manufacturing in the United States. We have a plan to build and manufacture in United States and all the software solutions data we are developing in the United States as a California company. This is our Built in USA three phase. So first phase, we're already complete. We have all the data software capability building in U.S. Second phase will start February next year. We have the final assembly start to build in the U.S.
Third phase in 2028, more than 65% of purchasing will be based in the U.S. suppliers, and definitely final assembly fully built in the United States will be fit into Built in USA category. That's our historical financial. There's not much, but we officially start delivery in March. It's growing, as you can see, each month's record high. We already delivered $1 million revenue for the first half 2026 with 31% gross margin. This year is to deliver 2,000 unit, $7 million revenue. We try to lower the gross margin in order to have a better growth trajectory, but still + 10%. Next year, back to 31% with 7,000 delivery, roughly $50 million in revenue. 2028 will break even, gross margin 44% with $250 million revenue generated on that year. The increase of gross margin is not because that I'm pricing my hardware more expensive.
It's because of the revenue stream of the software gradually grow and taking a higher percentage compared to hardware. Definitely software, we're targeting about 60%, 70%, even 80% higher recurring revenue margin. So that's why the overall margin has been growing steady. That's about it. As you can see, this is the percentage of hardware and software margin. This is EBITDA as well as cash flow all turning positive in Q3 2028. The cumulative funding need is less than $150 million. So basically, this is very efficient and very asset-light business model. It's not only because that we're trying to do things smart, but also we're already generating positive margin on all the revenue streams with all these growth opportunities, tremendous growth opportunities. This is really exciting.
If you look at our valuation with the peers, no matter you compare with China or U.S. companies where you have relatively lower end, four times forward-looking PS, 2027 forward-looking PS, there's no pure play embodied AI, robotic ecosystem company in the United States capital markets so far. If you compare us to Agility, they're doing great on the industrial solutions, but they only have one model humanoid doing the industrial solutions. FY 2025, they generate less than $2 million revenue. Gross margin is - 150%. They burn $100 million cash, and their valuation is $2.5 billion pre-money. They have not done a SPAC yet, but once they already file an S-4, once they announce, the stock price doubled immediately. Our valuation is only roughly $200 million, which is really reasonable. We want to give our shareholders a great upside return opportunity.
Regarding the FFR, the public company, previous ticker is AIxC, this is a very clean public company. It almost have no warrant, there's no convertible note and common stock and preferred stock. Preferred stock all convertible only to the common stock without any downside protection. So the cap table is really clean. Here is the Agility Robotics case study. Again, great company and capital markets really love it, but we're thinking that we're offering some unique value compared to them as well. That's about it. Again, thank you very much for your interest and please pay attention to our robotic company under the public trading under the ticker. We'll be public trading under the ticker of FFR at the closing of this proposed merger. The parent company is FFAI as the physical AI investment holding company. That's it. Back to you, Richard. Thank you.
Okay. Thank you. Let's see what questions we have coming in here. I'll start it. So you had quite a bit of news a few days ago with your restructuring and you've just shown us how FFR is now purely robotics.
Yeah.
Can you explain so people can get a better understanding why this restructuring is so preferable to keeping robotics inside of the FFAI as it was formerly? For example, what specifically can FFR accomplish as a separately traded public company operationally, financially, strategically? Also explain what they could accomplish that the robotics business could not accomplish or would have a tougher time accomplishing if it would've remained part of FFAI.
Yeah, that's a great question. Actually, we have some Q&A regarding this question since this is one of the most commonly asked questions. Basically, FFAI is great. They have been doing the electric vehicle business for 12 years. We raised $4 billion and spent mostly on our research and development technology. But on the other hand, FFAI is a little bit too complex with newborn, fast-growing robotic business, right? The cap table is relatively not as clean as AIxC. Right now, it's trading under FFR. It also has, because the automotive business has a lot of future cash needs as well. So it's relatively hard to calculate, right?
For example, how much cash is needed to grow all this business together, and also what's the dilution, and what's the cap table and the balance sheet will be looking like if you mix those automotive and the robotics business together under one public trading company. We understand the market is looking for some clean, pure play robotic, public trading robotic company. We already have one as a public trading company that has a much cleaner balance sheet and cap table as well. That's why we merge it together to have a, let's say that public robotic company and the market can really easy to do the analysis, to do the math around it and come up with an appropriate valuation, so on and so forth. So it's much cleaner to have a newly formed robotic companies moving forward and capture this fast-growing opportunity.
Okay, this is a very straightforward question. So your EAI device management target remains, I think, 2,001 units.
Yes.
You mentioned that I think as of through August, you had 552 that have been—
Yeah.
—committed to sold. You have a little under 1,500 left for the rest of the year. What gives you confidence in the expected acceleration during the remainder of the year, and what portion of the targeted shipments is supported by firm customer orders versus your sales expectations?
As you can see that we're reaching a monthly high every single month, so we feel pretty confident about getting this number down, and especially considering Q3 and Q4 are holiday seasons. We are expecting to launch new products very soon as well, so we feel that there will be a very good demand. Actually, there is very good demand coming from most of the sales channels. We have five, six different sales channels and all this process has been phenomenal. We're entering into the new market as well. We're primarily focusing in Los Angeles for the past half year, but also right now we're entering into the Bay Area, we're entering into Houston and Dallas, as well as New York. Basically there are more markets that we're entering into, and we're entering into Middle East, UAE, Dubai as well.
Basically there are five to six different new markets that we are entering into. I'll be very honest on the firm order or firm pre-order perspective. We're not focusing on getting the LOI, we're not focusing on getting the pre-order, right? Because why do we waste our time and focus on getting LOI as well that we can directly sell the product? If we're getting LOIs from big companies like Tesla or OpenAI or NVIDIA, that works a lot, but this will take a while. But if we get LOIs from distributors, we're getting LOIs from some small business. Don't get LOI, just buy our product. This is mostly from the management expectations. Like Tesla, they're not getting LOIs for selling Tesla Model 3 or Model Y. Just directly sell the product. We're already in the product selling and gross margin positive stage.
Okay. How will the transactions between FFAI and FFR work after the restructuring? FFR is expected to use FFAI's Hanford facility for domestic—
Yeah.
—level assembly, leverage the technology through the FFAI historical investments, which I believe are around $4 billion.
Yes, correct.
While FFAI, at the same time, expects to receive manufacturing facilities service revenue. How will the manufacturing, IP licensing, shared personnel facilities, and other intercompany arrangements be priced, and what governance mechanisms will protect the minority shareholders, both companies, now that they're separate?
Yeah, that's a great question. Everything will be fair market value based. Although FFR majority is and will be majority owned by FFAI, pre and post-closing, every transaction will be fair market value based. Most of the robotic, let's say the asset and technology as well as deal business and human resource will transferred to FFR. That's the price that FFR is paying in old stock to FFAI, $200 million worth of stock. But for example, manufacturing facility, if FFR decide to use Hanford facility, they're going to sublease it from FFAI, and we're going to make sure that's an arms' length fair value transaction approved, following our related party transaction policy.
Most of the related party, if it's a significant amount, needs to be approved either by the board or by the audit committee of the board, consists with majority independent directors. We're going to make sure that things are getting done in an appropriate manner. Most of the related party transaction, if it's reached a certain level, we're going to disclose it following the accounting and the disclosure requirement. We've been in public company for five, six years, and we do very good disclosure. We do very good accounting, and we work together really well with our board independent director as well as our auditors. We will just follow the book and make sure that everything's done in the right and efficient way.
Okay. Just, we got a couple minutes, so this might be our last question. What exactly does a transformation of FFAI from an EV manufacturer into more of a robotaxi or EAI, it's the embodied AI cabin share mobility operator mean in practice? Which businesses will FFAI operate directly, and what happens to your existing vehicle programs? How much capital will be required to execute this new automotive strategy?
Yeah, that's a great question, and I was hoping people will ask this question. It's actually quite interesting. One insight that I'm happy to share, and I think most of people will agree with my view, is that building car is not valuable anymore. Even Tesla stopped to build cars. I'm kind of exaggerating. Tesla is building cars, but they're not building cars for sales. They're building car for their robotaxi network, for like share fleet for the autonomous driving. Building car needs a lot of money, extremely capital intensive, and you're building car for what? Like selling 5% profit margin? That's ridiculous. Don't build cars. It's not a great business anymore. Don't spend $10 million and chasing for 5% profit margin, which will happen in 5-10 years. That's kind of ridiculous. What's the high ROI business on the automotive? Definitely shared mobility.
Like all the industry, the automotive industry is coming to a huge disruptive moment right now. Whoever will join the shared mobility, either a solution provider or operator, will be leading this industry from development. This is a trillion-dollar industry as well, but people really need to convert from building cars into operating and into maintaining and service to support a full self-driving network. This is where the huge value will create, and this is extremely asset-light. What is the point? Why spend $10 billion to build another giant facility and hope it will break even in 10 years and get your money back in 20 years? That is ridiculous. That is the direction FFAI is heading to instead of an asset-heavy investment, automotive manufacture business.
We want it to become an asset-light vehicle operator, a shared mobility operator business with our unique AI cabin capability on top of that to offer people unique experience. When car can drive themself automatically on the road, what do you do? Do you still see your phone inside of the car? Hopefully that we can offer you better solutions. With the existing FFAI portfolio, we want it to convert it to the autonomous driving capability as well, autonomous driving vehicle, and offer some premium autonomous driving vehicle, shared mobility experience similar to Uber Black, where we are going to make it higher premium. We will host some strategic updates shortly after we get this transaction done, both for FFR as well as for FFAI, and we are going to disclose more information there.
Well, thank you. With that, I believe we are out of time. Thank you very much for being here. Very interesting. We wish the best for your company. To all your viewers out there, look for this recorded presentation on channelchek.com. Thank you.
Awesome. Thank you very much. Take care.
Bye-bye.