On August 18, Pony AI (NASDAQ:PONY) held its second-quarter earnings call, and the headline number was hard to miss. Robotaxi revenue jumped 691% year over year to $12.1 million, part of a total revenue haul of $36.2 million that grew 68.8% from a year earlier. The company is still losing money, but the losses are shrinking even as the fleet, the city count, and the international partner list all get bigger at the same time.
A Fare Engine Finally Revving
The clearest story in the quarter is how fast robotaxi fares are accelerating. Fare-charging revenue grew 849.3% year over year, up from 395% growth in the first quarter, meaning the business is speeding up rather than plateauing. Behind that number sits a fleet of 1,975 robotaxis as of June 30, 2026, with management targeting more than 3,500 vehicles by year-end. The company is leaning on a joint deployment model where outside partners fund the vehicles, which Chairman James Peng said enables “faster scaling, lower unit costs and superior capital efficiency.” That model has already produced more than 4,000 international vehicle commitments, including over 2,000 robotaxis across five European cities tied to Uber.
Meanwhile, management said unit economics turned positive in Guangzhou and Shenzhen during the quarter, and the company credited its PonyWorld 2.0 simulation system with letting a handful of engineers adapt the driving software to new cities, like Zagreb, instead of the dozens it used to take. The robotruck side chipped in too, growing 40% to $13.3 million as Pony AI launched driverless truck operations at Shenzhen’s Mawan Port.
The Bills Are Getting Bigger, Too
Growth this fast is not free. Quarterly capital expenditures jumped to $32.2 million from $9.6 million a year earlier, and free cash flow swung to negative $76.2 million from negative $35.0 million, as the company built up inventory and prepayments ahead of its second-half push. Net cash used in operations nearly doubled to $44 million. On top of that, Chief Financial Officer Leo Wang disclosed a one-off $25.0 million impairment on prepayments for long-term investments that were “determined to be unrecoverable,” a reminder that not every capital bet pans out.
Growth also isn’t even across the business. Intelligent Solutions revenue rose just 4% year over year in the quarter, a sharp slowdown from the 76.8% growth the segment posted over the first half, because domain controller deliveries can swing quarter to quarter. And Chief Technology Officer Tiancheng Lou cautioned that safety, not ambition, sets the pace of expansion, noting that “you cannot just shortcut by dumping thousands of cars on the street overnight.” Pony AI is still deeply unprofitable, with an operating loss of $65.7 million for the quarter, even as that loss margin narrowed from negative 285.6% to negative 181.5% year over year.
Wall Street Is Still Split
The number of hedge funds holding Pony AI slipped from 23 to 20 quarter over quarter, which points to some institutional money stepping back even as the growth numbers improved. Short interest sits at 6.20% of the float, high enough to suggest a real bear camp has formed around the stock rather than just scattered skepticism. That combination suggests investors are still working out how much of the growth is durable.
Two Numbers Tell Different Stories
Pony AI’s quarter captures a company scaling two ways at once, growing overseas through capital-light partnerships while burning noticeably more cash to do it domestically. For the bulls, the case rests on fare revenue accelerating and unit economics turning positive in two major cities. For the bears, a widening cash burn and an unrecoverable prepayment write-down complicate the path to profitability.
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