Xiaomi Earnings: Profit Halved

Xiaomi Group released its financial report for the first quarter of 2026. The company recorded total revenue of 99.142 billion yuan, a year-on-year decrease of 10.9%. Net profit stood at 4.735 billion yuan, plummeting 56.5% year on year. Adjusted net profit reached 6.072 billion yuan, down 43.1% compared with the same period last year.

The dual decline in revenue and profits was mainly driven by intensifying industry competition, sharp hikes in prices of core components including memory chips and bulk commodities, as well as the phasing-out of domestic subsidies for IoT products.

Business Segments: Core Business Under Pressure, New Businesses Steadily Advancing

Smartphone × AIoT Segment: Core Business Contracted

This segment generated revenue of 79.3 billion yuan in Q1, a year-on-year drop of 14.5%, remaining Xiaomi’s primary revenue pillar.

• Smartphone Business: Revenue hit 44.3 billion yuan, down 12.5% year on year. The decline stemmed from lower shipment volume, partially offset by a rise in average selling price (ASP). Xiaomi shipped 33.8 million smartphones in the quarter, falling 19.2% year on year. While the smartphone ASP rose 8.2% year on year to 1,310 yuan, surging memory costs dragged the gross margin down from 12.4% in the same period last year to 10.1%.
• IoT & Lifestyle Products: Revenue was 24.7 billion yuan, a sharp year-on-year decline of 23.7%, largely due to the withdrawal of domestic home appliance subsidies and sluggish domestic demand. By contrast, overseas sales of smart TVs and tablets drove growth in overseas markets. The segment maintained a steady gross margin of 25.2%.
• Internet Services: Revenue totaled 9.5 billion yuan, up 4.3% year on year, mainly fueled by higher advertising revenue. Its gross margin remained high at 76.1%. The group’s global monthly active users (MAU) reached 746 million, reflecting continuous value creation across its ecosystem.

Smart EV, AI and Other Innovative Businesses: Mild Revenue Growth, Widening Phased Losses

Revenue of this segment amounted to 19.9 billion yuan, a year-on-year increase of 6.9%, among which revenue from smart electric vehicles was 19.0 billion yuan, up 5.1% year on year. A total of 80,856 vehicles were delivered in the quarter, representing a 6.6% year-on-year growth and a steady delivery pace. Affected by the phase-out of vehicle purchase tax subsidies and rising prices of core parts, the gross margin of this segment dropped to 20.1%, compared with 22.8% a year earlier.

Notably, the new-generation Xiaomi SU7 series was officially launched in March 2026. As of May 6, 2026, pre-orders for the new SU7 exceeded 80,000 units. Cumulative deliveries of the model surpassed 26,000 units as of April 23, 2026. Meanwhile, the Xiaomi YU7 series has achieved total deliveries of 232,000 units within 10 months since its launch.

Driven by increased R&D investment and production ramp-up, the operating loss of the smart EV, AI and innovative business segment reached 3.1 billion yuan in Q1, a sharp reversal from a profit of 1.1 billion yuan in Q4 2025. The business is currently in a period of strategic investment.

Announced a HK$20 billion share buyback plan

On the release of the financial results, Xiaomi announced a landmark share buyback plan worth HK$20 billion, a major highlight of the earnings report.

Approved by the Board of Directors, the programme will take effect on June 2, 2026. Over the next 12 months, the company may repurchase Class B ordinary shares worth no more than HK$20 billion until the conclusion of the 2027 Annual General Meeting.

Since the start of 2026, Xiaomi has spent over HK$8.4 billion on share repurchases, exceeding the full-year figure for 2025. Its buyback scale ranks second among all Hong Kong-listed companies, only after Tencent.

It is worth mentioning that in March 2025, Xiaomi completed a large-scale share placement via a top-up placement approach. It issued 800 million shares at HK$53.25 per share, raising approximately HK$42.5 billion in total, when its share price was near the historical peak of nearly HK$60.

The large-scale buyback at the current relatively low share price, together with the share placement executed at the market high, demonstrates the company’s sophisticated long-term capital management capabilities. By seizing opportunities to raise funds at market peaks, Xiaomi minimized equity dilution and protected the interests of existing shareholders.