Xiaomi Corporation

Q2 2026 total revenue was RMB 108.9 billion. Adjusted net profit was RMB 6.2 billion. Group gross margin was 19.8%; smartphone gross margin was 8.5%; IoT gross margin was 20.1%; Internet services gross margin was 76.8%; and smart EVs, AI and other new initiatives gross margin was 19.2%. Mobile times AIoT segment revenue was RMB 84 billion; smartphone revenue was RMB 42.1 billion; IoT revenue was RMB 31.3 billion; Internet services revenue was RMB 9 billion; and smart EV, AI and other new initiatives revenue was RMB 24.9 billion, up 17.1% year on year. Smartphone shipments were 31.2 million units and EV deliveries were 104,199 units. For the first half, smartphone gross margin was 9.3%; R&D expense was RMB 18.2 billion, up 25.6% year on year; and AI-related investments accounted for nearly 30%. CapEx was RMB 3.6 billion in Q2, with 65.8% allocated to innovative businesses such as Smart EVs and AI. The company also said it had bought back about HKD 11.7 billion of shares since the start of 2026. Management did not provide formal next-quarter or full-year revenue/profit guidance, but said Q3 will still face high storage costs, slow consumer demand recovery, and fierce competition.

Weibing Lu framed the quarter as one of operating through a difficult environment, with high memory costs, slow demand recovery, and tougher competition. He emphasized that Xiaomi is balancing scale and profit through product mix upgrades, software optimization, and operational improvements, and said the smartphone business is now in an “appropriate and controllable situation.” He was also upbeat on Xiaomi’s broader strategy, highlighting AI, embodied robots, and the company’s “Human × Car × Home” ecosystem as the basis for the next growth cycle.

Alain Lam focused on the financial impact of cost inflation and the mix shift across businesses. He cited Q2 revenue of RMB 108.9 billion, gross margin of 19.8%, adjusted net profit of RMB 6.2 billion, and smartphone revenue of RMB 42.1 billion with 8.5% gross margin despite sharply higher memory costs. He also noted IoT revenue of RMB 31.3 billion at 20.1% gross margin, Internet services revenue of RMB 9 billion at 76.8% gross margin, and smart EV/AI/new initiatives revenue of RMB 24.9 billion at 19.2% gross margin, while that segment posted an operating loss of RMB 2.6 billion due to higher investment. He said R&D spending rose to RMB 9.2 billion in Q2 and RMB 18.2 billion in H1, with AI-related investment near 30%, and CapEx reached RMB 3.6 billion, mostly for innovative businesses. He also said share buybacks totaled about HKD 11.7 billion since the start of 2026.

Analysts pressed Xiaomi on whether it can keep smartphone pricing, shipment control, and margins balanced as memory costs stay high. Management said it cannot simply pass through all cost increases, so it is adjusting product lines, sales strategy, and launch timing; Lu added that current conditions are manageable and that pricing/mix actions are already supporting results. Questions on AI monetization drew a cautious answer: Lam said MiMo is gaining usage and API/token revenue has started, but Xiaomi is still in a large-scale investment phase and is not prioritizing monetization yet. On EV gross margin and SkyNomad, management said margins moved around because of mix differences, lower Ultra contribution, and early AI revenue drag, while SkyNomad margin will depend on final pricing after launch in September.