CENN — Q2 2026 Financial Report Analysis

Overview: deliveries recovered, losses did not, and the share count is being rebuilt

Cenntro sells small electric commercial vehicles (delivery vans, light trucks and utility vehicles, built mainly at its Changxing factory in China) through distributors in Europe, North America, Asia and Africa. In the second quarter of 2026 (April–June) it sold 506 vehicles, up from 430 a year earlier, but revenue still slipped 2.9% to $6.2 million. The mix moved toward lower-priced models and toward spare parts and iChassis (bare rolling chassis that partners build bodies onto), and Europe, its biggest market, roughly halved. Net loss attributable to shareholders was $10.6 million, slightly wider than the $9.9 million a year ago. About $4.8 million of that came from one-off charges: a $2.9 million write-down of supplier prepayments and a $1.9 million loss from losing control of its insolvent German subsidiaries. The bigger story came after the quarter ended. In September Cenntro sold 15.12 million new shares in a private placement for about $57 million, which multiplied the share count roughly seven times and handed the new investors control of the company.

At a glance

• Gross margin of 6.6%, up from -0.3%. Cenntro now makes a small profit on each vehicle before overhead (8.1% on vehicle sales for the half-year, versus 1.3%). It is still nowhere near enough to cover $4–5 million a quarter of running costs.
• Cash of $4.3 million at June 30, against $5.5 million of cash burned by operations in six months. Before the September raise the company had well under a year of cash at its current burn rate.
• 17.6 million shares outstanding on September 24, versus 2.47 million on June 30. That is after a 1-for-60 reverse split in April. Shares issued in the September placement make up about 86% of the total.

Q2 2026 results

n/d = not disclosed for the prior-year quarter. Share and per-share figures are restated for the April 2026 1-for-60 reverse split. Operating margin is operating loss divided by revenue: here, how many cents the company lost running the business for every dollar of sales.

For the first half, revenue fell 13.1% to $7.4 million and the net loss attributable to shareholders narrowed to $14.5 million from $15.5 million. The first quarter was very weak: only 57 vehicles and about $1.2 million of revenue. So almost all of the half-year's volume landed in Q2.

What moved and why

Revenue mix. The 10-Q says vehicle revenue fell about $1.4 million in the quarter, "offset by the increase in spare-part sales by approximately $1.2 million due to the increase in sales of iChassis." Unit volume rose while vehicle revenue fell 22.6%, so the average revenue per vehicle fell from roughly $14,100 to roughly $9,300 (our calculation from the filing's figures). The model list explains it. Q2 2026 was dominated by the Avantier (224 units) and the Logistar 210 (134) and Logistar 100 (122). A year earlier it included 69 of the larger Logistar 450 and 16 Seres 5 units; this year there were just 11 Logistar 450s and no Seres.

Geography. Europe's revenue fell to about $2.6 million from $4.9 million, and its share of the total dropped to 41% from 77%. That follows Cenntro's decision to stop selling through its own European subsidiaries and use independent distributors instead. North America rose to about $1.8 million from $0.7 million (28% of revenue, up from 11%). Asia's share rose to 26% from 12%.

Gross margin. Vehicle gross margin turned positive (6.8% in the quarter versus -1.5%). Cost of vehicle sales fell faster than vehicle revenue, and inventory write-downs charged to cost of goods were smaller ($0.72 million versus $0.95 million). Spare parts were close to break-even: $1.44 million of revenue against $1.36 million of cost.

Overhead. General and administrative expense fell 25.9% to $3.8 million. Management attributes this mainly to lower leasing costs (about $0.6 million) and lower share-based pay (about $0.6 million). R&D fell 28.3% to $0.5 million, mostly from lower salaries. Selling and marketing roughly tripled to $0.7 million, which the filing attributes to about $0.4 million of extra freight "resulting from higher customer shipment volumes."

What the headline numbers hide

• The per-share loss improvement comes almost entirely from more shares, not smaller losses. The weighted average share count rose from about 607,000 to 1.77 million (split-adjusted). The dollar loss attributable to shareholders actually grew by $0.68 million. With 17.6 million shares outstanding after September, future per-share losses will look far smaller still, even if the dollar losses don't change.
• Underlying operations did improve, but the one-offs swamp it. The quarter's operating loss includes a $2.9 million impairment of prepayments and other current assets (the bulk of that balance is advances to suppliers). The filing records the charge but does not explain it. The prior-year quarter carried a $2.0 million credit-loss provision instead. Strip both out and the operating loss shrinks to about $4.6 million, from about $6.1 million a year ago. That improvement comes from the cost cuts and the better gross margin.
• Below the operating line, the swings partly cancel out. Q2 2026 had a $1.9 million loss on deconsolidating Antric, a subsidiary held through the German entities that went insolvent. It also had a $2.9 million loss from discontinued operations, mainly a $2.8 million year-to-date loss on disposing of those subsidiaries. Against that sit a $1.1 million non-cash gain from revaluing the convertible note and warrant liability, and about $0.8 million of income from ending or modifying leases. Q2 2025 had its own one-offs: a $1.8 million loss on amending its convertible note and a $1.2 million gain from selling its stake in Cenntro Electric CICS.
• Cash burn is lower but still large relative to the business. Operating cash outflow was $5.5 million for the half, down from $9.4 million. Part of that improvement came from running inventory down by about $2.8 million and from customer deposits rising (contract liabilities climbed to $5.7 million from $3.0 million). Neither of those repeats indefinitely. Financing in the half came mostly from $4.4 million of loans from third parties and $2.3 million of new bank loans, not equity.
• The May share sale's cash wasn't in the bank at quarter-end. Cenntro sold 1 million shares for $3.93 million (closed June 2). Instead of appearing in cash, $3.93 million sits in prepayments as a "deposit in a third-party regulated collection account." That is why the cash flow statement shows no equity proceeds for the half.
• Inventory is large and has needed repeated write-downs. Net inventory was $18.4 million at June 30, after a $6.8 million valuation allowance. That compares with $6.8 million of cost of goods sold in the whole first half. Q2 included another $0.72 million write-down.
• No going-concern warning in this 10-Q. Management says cash "will be sufficient for us to continue to execute our business strategy over the twelve months" after filing. That was a stretch with $4.3 million of cash at June 30. It is much easier to believe after the September raise.
• Adjusted EBITDA got worse. The company's own non-GAAP measure was -$9.2 million versus -$6.6 million. It adds back the deconsolidation loss and the note revaluation gain. It does not add back the $2.9 million impairment or the discontinued-operations loss, which is why it looks worse than the operating trend.

Takeaway: Cenntro is still losing more than a dollar for every dollar of revenue at the operating level. What changed in 2026 is ownership and funding, not the economics of the business. A 1-for-60 reverse split in April, a $3.9 million share sale in June and a $57 million share sale in September (at $3.773 a share) have given a new group of non-US investors about 86% of the company and more than ten times the cash it held at June 30. Shareholders from before 2026 have been diluted down to a small minority, and the dollar losses have not yet started shrinking.

The September financing and what it means

The 8-K filed September 16 says the placement was enlarged from 12.8 million to 15.12 million shares and closed on September 15 for gross proceeds of about $57.0 million, earmarked for "working capital and general corporate purposes." It was sold under Regulation S, meaning to investors outside the US. A September 24 information statement shows that holders of 16.5 million of the 17.6 million shares then outstanding signed a written consent. No shareholder vote was held. The consent widened the board's authority for a further reverse split to as much as 1-for-2,000, to be done within a year. A July charter amendment had already raised authorized common shares from about 16.7 million to 3 billion. Taken together, the new controlling holders have given the board room to issue many more shares and to consolidate them again. A remaining $2.6 million convertible note (8% interest, due January 19, 2027, convertible at $6.00 a share) is small next to the new cash.

Outlook

Management gave no revenue or volume guidance. Its stated plan for the next 12 months is to keep rolling out new vehicle models in North America and Europe, set up local assembly in the US and the EU, and add equipment at the Changxing factory. It also expects G&A to keep falling over the next two years. Our read: the Q2 jump in volume and the higher customer deposits suggest Q3 revenue can stay well above the very weak Q1. But at a 6–8% gross margin, Cenntro would need several times today's revenue to cover even its reduced overhead. The $57 million gives it years of runway at the first-half burn rate. That buys time, but it doesn't make the business profitable. Things to watch in the Q3 10-Q (due around mid-November):

• whether the $3.93 million collection-account deposit and the $57 million placement show up as actual cash;
• whether the operating loss excluding one-offs keeps shrinking from about $4.6 million;
• what the new controlling shareholders do with the board and the newly expanded authority to issue shares and split them again.