Xiaomi Corporation

In Q2 2026, Xiaomi reported total revenue of RMB 108.9 billion and adjusted net profit of RMB 6.2 billion. Group gross margin was 19.8%, Mobile times AIoT segment revenue was RMB 84 billion, and smartphone revenue was RMB 42.1 billion with 31.2 million units shipped. Smartphone gross margin was 8.5%, IoT gross margin was 20.1%, Internet services gross margin was 76.8%, and Smart EV, AI and other new initiatives revenue was RMB 24.9 billion with a 19.2% gross margin and a RMB 2.6 billion operating loss. For the first half, R&D expenses were RMB 18.2 billion, up 25.6% year on year, with AI-related investments accounting for nearly 30%. Management did not give formal next-quarter or full-year revenue/EPS guidance, but said Q3 will still face high storage costs, slow consumer demand recovery and fierce competition, while maintaining a commitment to heavy investment in AI chips, OS and embodied intelligence.

William Lu emphasized that Xiaomi is managing through a difficult environment marked by high memory costs, slower demand and stronger competition, but said the company has responded with product mix optimization, pricing actions and operational discipline. He framed the quarter as evidence that Xiaomi can balance scale and profit, citing record smartphone ASP, top-3 global rank for the 24th straight quarter, and growing momentum in EVs, AI models and embodied robots. His tone was confident but pragmatic, repeatedly stressing that short-term pressure does not change Xiaomi's long-term strategy in hard-core technologies.

Alain Lam walked through the financials by segment, highlighting RMB 108.9 billion of revenue, 19.8% group gross margin and RMB 6.2 billion adjusted net profit in Q2. He said smartphone revenue was RMB 42.1 billion with 31.2 million units shipped and 8.5% gross margin, while IoT revenue was RMB 31.3 billion with 20.1% gross margin and Internet services revenue was RMB 9 billion with 76.8% gross margin. He also said Smart EV, AI and other new initiatives brought in RMB 24.9 billion of revenue, had a 19.2% gross margin and a RMB 2.6 billion operating loss, and that CapEx was RMB 3.6 billion, with innovative businesses taking 65.8%; share buybacks since 2026 totaled about HKD 11.7 billion.

Analysts focused on whether Xiaomi can keep smartphone pricing, shipment volume and margins balanced amid rising memory costs; management said the cost spike has been worse than expected, but they are now in a more controllable situation after product and sales-mix adjustments. On EVs, questions centered on the new SkyNomad SUVs, with management saying the model targets a different customer base than SU7/U7, has received enthusiastic preorders, and will launch in September. On AI monetization and spending, management said MiMo usage is growing rapidly and API/token revenue has started, but Xiaomi remains in a heavy-investment phase and is not prioritizing monetization yet; they also said AI spending plans for the year were not being adjusted. Questions on overseas growth and EV international expansion drew a response that Xiaomi Home stores overseas are already in the 630-plus range, large appliances will expand overseas, and EV globalization is planned for the second half of 2027.