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On the evening of October 16, Hangzhou Hikvision Digital Technology Co., Ltd. (002415.SZ) released its 2026 third-quarter report. The company's revenue for the first three quarters grew by 12.60%, with net profit growth significantly outpacing revenue growth. On October 17, Hikvision held a performance briefing to analyze the profit changes brought about by operating leverage.
Both Revenue and Profit Rise, Full-Year Performance Expected to Hit New Highs
The financial report shows that Hikvision achieved operating revenue of 74.044 billion yuan in the first three quarters, a year-on-year increase of 12.60%; net profit attributable to shareholders of the parent company was 12.911 billion yuan, up 38.55% year-on-year; net profit excluding non-recurring gains and losses attributable to shareholders of the parent company was 12.696 billion yuan, up 41.52% year-on-year, with basic earnings per share of 1.409 yuan. The growth rate of net profit excluding non-recurring items was higher than that of net profit attributable to parent company shareholders.
On a quarterly basis, third-quarter revenue alone was 27.222 billion yuan, a year-on-year increase of 13.71%; net profit attributable to shareholders of the parent company was 5.016 billion yuan, up 36.97% year-on-year; net profit excluding non-recurring gains and losses attributable to shareholders of the parent company was 4.984 billion yuan, up 43.13% year-on-year. Both revenue and non-recurring profit growth rates hit new highs since 2025.
The comprehensive gross margin for the first three quarters was 49.05%, return on equity was 14.99%, and the operating expense ratio was 28.00%, which Hikvision stated was lower than the same period over the past three years. Based on current operating conditions, Hikvision indicated that full-year net profit for 2026 is expected to exceed the 2021 level.
Operating Leverage Unleashes Benefits, Multiple Business Segments Provide Revenue Support
The financial report shows that gross profit increased by 6.916 billion yuan year-on-year in the first three quarters, while the three operating expenses increased by only 916 million yuan, a rise of 4.62%. Total profit increased by 5.217 billion yuan year-on-year, up 44.74%. Hikvision stated that the expansion of gross profit scale and the low growth rate of expenses formed operating leverage. The effects of earlier quality improvement and efficiency enhancement adjustments are reflected in metrics such as human efficiency and expense efficiency, which is the main reason why profit growth outpaced revenue growth.
Affected by the appreciation of the renminbi against the euro and the US dollar, Hikvision incurred exchange losses in the third quarter, with the scale not exceeding 200 million yuan. On the business side, machine vision, infrared thermal imaging, smart storage, AGV, and innovative businesses are the main sources of revenue growth. Facing rising storage prices, Hikvision's encoding products maintained growth during the year. Hikvision introduced that revenue from Guanlan-related products in the first half of the year already exceeded the full year of last year, and multiple products have been put into actual production scenarios. Specific quantitative data is not yet disclosed externally due to non-standardized statistical criteria. Hikvision judges that future growth will revolve around scenario digitalization, promoting the cross-industry application of IoT perception technology.
Raw Material Cost Pressure Exists, Domestic and Overseas Markets Show Structural Divergence
On the supply chain side, industry price increases have gradually spread from storage components to power supplies and passive components, with increased volatility in upstream prices. Hikvision stated that thanks to long-term cooperation with upstream suppliers, Hikvision has resilience in the continuity of key material stocking, thereby hedging the operational pressure brought by raw material price fluctuations, while dynamically balancing price fluctuations and internal operational efficiency.
Overseas business has officially withdrawn from the US market, with no further sales activities conducted. Excluding the Americas, revenue growth in the three major regions of Asia-Pacific, the Middle East and Africa, and Pan-Europe outperformed the Americas. Hikvision's business covers more than 180 countries globally, with incremental growth in the European market mainly concentrated in major economies such as the UK, France, Spain, and Italy. The domestic market shows a K-shaped divergence. Hikvision's domestic business achieved positive growth, but the recovery momentum is relatively weak. Hikvision judges that the downward demand in the security industry that began in 2022 has basically bottomed out. Some equipment is beyond its service life, and there is objective demand for stock renewal. However, rising storage prices have suppressed overall shipment volumes, and market demand is driven by both equipment renewal and technological upgrading. Hikvision will focus on its core main business, relying on technological iteration and refined internal management, emphasizing the development of business segments with good returns, and pursuing growth with quality and efficiency.
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