On August 19, at the 2026 World Robot Conference, Xiaomi's new-generation humanoid robot, which had just completed a four-month training session at its automobile factory, made its official public debut. Just one day earlier, however, Xiaomi Group had released a quarterly earnings report that was far from impressive.
In the second quarter of this year, the company recorded revenue of 108.9 billion yuan, a year-on-year decrease of 6.1%, and an adjusted net profit of 6.2 billion yuan, down approximately 4.6 billion yuan from the same period last year, representing a slump of over 40%.
Breaking down the figures, Xiaomi Group's smartphone × AIoT segment generated 84 billion yuan in revenue in the second quarter, down 11.3% year-on-year, with a gross margin of 20%, a 1.6 percentage point decline. Smartphone shipments during the quarter reached 31.2 million units, a year-on-year drop of 26.5%, contributing 42.1 billion yuan in revenue, down 7.5%. Meanwhile, the smart electric vehicle and AI innovation business saw revenue grow 17.1% year-on-year to 24.9 billion yuan, yet it recorded an operating loss of 2.6 billion yuan for the quarter, with losses expanding more than sevenfold year-on-year.
In the first half of this year, Xiaomi Group delivered a total of 185,100 vehicles, a year-on-year increase of 17.74%. Against the full-year sales target of 550,000 vehicles for 2026, Xiaomi Auto's completion rate for the first half stood at less than 35%.
Additionally, the financial report disclosed progress on the commercialization of Xiaomi's AI business. In the second quarter, revenue from other related businesses within the smart EV and AI innovation segment reached 1 billion yuan, up 56.5% year-on-year. Xiaomi Group attributed this growth primarily to increased after-sales service revenue from the smart EV business and higher AI business revenue linked to the Xiaomi MiMo large model series.
During the earnings call, Xiaomi Group CFO Lin Shiwei noted that the MiMo large model Token Plan has already started contributing revenue with rapid growth. However, Xiaomi's AI business remains in a phase of substantial investment, and monetization is not the current priority. The company will continue to push forward with AI-driven restructuring of its human-vehicle-home full ecosystem.
Sluggish Smartphone × AIoT Segment Weighs on Overall Revenue Performance
On August 18, Xiaomi Group released its second-quarter earnings announcement. Total revenue for the quarter came in at 108.9 billion yuan, down 6.1% from 116 billion yuan in the same period last year.
By segment, the smartphone × AIoT division generated 84 billion yuan in revenue, down 11.3% year-on-year, while the smart EV and AI innovation segment saw revenue rise 17.1% to 24.9 billion yuan from 21.3 billion yuan a year earlier. Clearly, the weak performance of the smartphone × AIoT segment was a key drag on Xiaomi's overall revenue in the second quarter.
Specifically, Xiaomi's smartphone business contributed 42.1 billion yuan in revenue during the quarter, down 7.5% year-on-year, primarily due to lower shipment volumes, partially offset by a rise in average selling price (ASP). Smartphone shipments totaled 31.2 million units, a 26.5% year-on-year decline, mainly attributed to product portfolio optimization, reduced shipments of low-to-mid-end devices, and weak global demand caused by sustained increases in core component prices.
However, thanks to the optimized product mix, a higher share of shipments in mainland China, and a higher overseas ASP driven by the launch of the Xiaomi 17T series, Xiaomi's smartphone ASP climbed 25.9% year-on-year from 1,037.2 yuan per unit to a record-high 1,351 yuan.
It is worth noting that, due to rising memory chip prices, Xiaomi raised prices on several flagship phone models again in early August. The REDMI Turbo 5 saw its starting price increase from 2,299 yuan to 2,599 yuan, while the Xiaomi 17 Pro Max went up by 500 yuan, with a new starting price of 6,499 yuan. According to reports, this marked Xiaomi's third price adjustment for its phones within the year. The first round of price hikes took place on April 11, covering models such as the REDMI K90 Pro Max and Turbo 5, followed by a mid-year adjustment, and by August, the increases had expanded to include the flagship Xiaomi 17 series.
Lu Weibing, partner and president of Xiaomi Group, said on the earnings call that the storage industry is expected to enter a phase of "moderate increases" in the second half of the year, though prices will remain at elevated levels. To adapt to higher storage costs, Xiaomi will continue adjusting its product structure in the coming months. Nevertheless, Lu stated that the most difficult period for the industry has passed, and the storage sector has entered a relatively visible and controllable stage.
As for IoT and lifestyle products, they contributed 31.3 billion yuan in revenue in the second quarter, down 19.2% year-on-year. Internet services generated 9 billion yuan in revenue, a slight decrease of 0.6%. Other related business revenue grew 16.3% from 1.4 billion yuan a year earlier to 1.6 billion yuan.
Net Profit Down Over 40% as EV and AI Innovation Losses Widen
According to Tianyancha, Xiaomi Group listed on the Hong Kong stock market in 2018. As revenue faced headwinds, the company's profit indicators also flashed warning signs. The financial report shows that Xiaomi Group recorded an adjusted net profit of 6.2 billion yuan in the second quarter, down 42.6% year-on-year.
The decline in gross profit and gross margin further underscored the deterioration in Xiaomi's profitability. Gross profit for the quarter was 21.6 billion yuan, down 17.2% year-on-year, while the gross margin fell from 22.5% in the second quarter of last year to 19.8%, a year-on-year decline of 2.7 percentage points. The smartphone × AIoT segment's gross margin stood at 20%, down 1.6 percentage points, while the smart EV and AI innovation segment saw a sharper drop, falling from 26.4% to 19.2%.
Xiaomi explained that the decline in the smart EV and AI innovation segment's gross margin was mainly due to a lower share of Xiaomi SU7 Ultra deliveries, rising core component prices, and increased costs related to the AI business.
In terms of deliveries, Xiaomi Auto handed over 104,200 new vehicles in the second quarter, a year-on-year increase of 28.2%, largely driven by higher deliveries of the Xiaomi YU7 series, partially offset by fewer SU7 Ultra deliveries. This shift in delivery mix also led to a decline in the ASP of Xiaomi's smart EVs, which fell 9.6% year-on-year from 253,700 yuan per vehicle to 229,300 yuan.
Xiaomi Group disclosed that the smart EV and AI innovation segment recorded an operating loss of 2.6 billion yuan in the second quarter, compared to a loss of 300 million yuan in the same period last year, representing a more than sevenfold year-on-year expansion in losses.
Notably, Xiaomi Auto previously announced a sales target of 550,000 vehicles for 2026. As of the end of the first half, Xiaomi Auto had delivered approximately 185,100 vehicles, achieving only 33.65% of its annual target, leaving considerable delivery pressure for the second half of the year.
However, at the end of July, Xiaomi Auto launched its first extended-range SUV models built on the Kunlun technology architecture — the SKYNOMAD Pengcheng series, including the Pengcheng N90 Max and Pengcheng N70 Max, with pre-sale prices of 299,900 yuan and 259,900 yuan respectively, expected to hit the market officially in September. Lu Weibing revealed on the earnings call that pre-orders for the Pengcheng series have far exceeded expectations. The company has completed multiple rounds of production capacity refinement and supply chain optimization for the new models, significantly improving delivery capability. The launch is expected to boost Xiaomi Group's overall performance.
On the cost side, Xiaomi Group's operating expenses in the second quarter reached 19.4 billion yuan, up 12.8% year-on-year. Operating expenses for the smart EV and AI innovation segment rose 25.7% to 7.4 billion yuan. Meanwhile, sales and distribution expenses increased 11.2% year-on-year to 8.6 billion yuan, driven mainly by higher costs related to the smart EV business and the expansion of new retail stores in overseas markets.
Research and development expenses climbed 18.9% year-on-year to 9.2 billion yuan in the quarter, influenced by increased R&D spending tied to the smart EV and AI innovation business, particularly higher AI infrastructure investment, as well as the progress of R&D projects related to the smartphone × AIoT segment. Additionally, administrative expenses declined 8.9% year-on-year to 1.5 billion yuan, primarily due to reduced compensation for administrative staff.
Can Xiaomi Open a New Chapter with Increased Investment in AI and Robotics?
In March this year, Xiaomi Group founder Lei Jun stated at the China Development Forum that Xiaomi had invested over 100 billion yuan in R&D over the past five years and planned to invest more than 200 billion yuan over the next five years. Of that, more than 60 billion yuan is earmarked for AI over the next three years, with AI-related R&D and capital expenditure exceeding 16 billion yuan in 2026.
With such heavy investment, the commercial contribution of Xiaomi's AI-related business is beginning to show. The financial report reveals that revenue from other related businesses within the smart EV and AI innovation segment reached 1 billion yuan in the second quarter, up 56.5% year-on-year. Xiaomi Group explicitly attributed this growth to increased after-sales service revenue from the smart EV business and higher AI business revenue related to the Xiaomi MiMo large model series.
In April, Xiaomi released its foundation model, Xiaomi MiMo-V2.5. From July 20 to July 26, Xiaomi MiMo-V2.5 ranked first in weekly call volume on the OpenRouter platform, reaching 10.5 trillion tokens. CFO Lin Shiwei revealed on the earnings call that Xiaomi MiMo will soon launch its first personal desktop application, designed to help users complete office and daily tasks in one place. Meanwhile, a new generation of the MiMo model is in training and is expected to be released soon.
Regarding commercialization, Lin stated that the MiMo large model Token Plan has already begun generating revenue with rapid growth. However, he also acknowledged that Xiaomi's AI business is still in a phase of significant investment and is not currently focused on monetization, as the company continues to drive AI-driven restructuring of the human-vehicle-home full ecosystem.
In the field of embodied intelligence, Xiaomi has also achieved notable results. In July, Xiaomi Group released and open-sourced two models: Xiaomi-Robotics-U0, a multimodal autoregressive embodied generative foundation model with 38 billion parameters, and Xiaomi-Robotics-1, an embodied foundation model for real-world mobile manipulation tasks. As of July 15, Xiaomi-Robotics-U0 ranked first in total score among 126 global models on the WorldArena benchmark, while Xiaomi-Robotics-1 also took the top spot in the RoboCasa365 simulation evaluation.
In the same month, Xiaomi demonstrated its robots' performance in its automobile factory — the success rate for dual-side operations at the self-tapping nut station improved from 90.2% to 98%. At a new station integrated into the final assembly workshop's logistics area, the success rates for sorting the center console side covers and recycling folded material boxes both reached 90%.
During the earnings call, Lu Weibing announced that Xiaomi's humanoid robot would make its first public appearance at the 2026 World Robot Conference, held from August 19 to 23. Lu emphasized that Xiaomi's approach to humanoid robots prioritizes practical, deployable capabilities, with the primary near-term application scenario being smart manufacturing production lines, aiming to replace some manual positions in factories.
As of the close of trading on August 20, Xiaomi Group's stock price stood at HK$27.76 per share, with a market capitalization of approximately HK$715.1 billion.
Comments