Xiaomi (3CP) Q2 2026 Earnings Report

The call highlights a company maintaining solid scale and strategic progress across smartphones, IoT, EVs, AI and robotics: strong revenue (RMB 108.9B), positive adjusted profit (RMB 6.2B), category rankings, rapid MiMo adoption, EV delivery growth and notable robotics/foundational-model milestones. At the same time management flagged significant near-term headwinds — historically high memory costs, smartphone shipment declines, larger raw-material inventory, EV/AI segment operating losses (RMB 2.6B) and elevated R&D/CapEx intensity. On balance the call presents multiple execution wins and advancing strategic initiatives that outweigh current operational and cost pressures, while acknowledging short-term margin and demand challenges.

Management guided that near-term operations will face sustained pressure from high memory/storage costs, slow consumer demand recovery and fierce competition, noting memory costs are roughly 5x year‑ago levels and raw material inventory rose to ~RMB40bn (from ~RMB30bn); they expect the pace of memory cost increases to slow in Q3–Q4 and described the smartphone business as “controllable” after Q2 results (Q2 group revenue RMB108.9bn; adjusted net profit RMB6.2bn; smartphone revenue RMB42.1bn, shipments 31.2m, record‑high ASP, smartphone gross margin 8.5%). Management reiterated a long‑term focus on heavy investment in next‑generation tech—R&D H1 RMB18.2bn (up 25.6% YoY), Q2 R&D RMB9.2bn (up 18.9%), AI‑related spend ~30% of R&D and a previously disclosed AI budget of RMB16bn for the year—while Q2 CapEx was RMB3.6bn (65.8% to EV/AI) and share buybacks reached ~HKD11.7bn YTD; they plan to accelerate AI monetization (MiMo API/token revenue beginning to contribute, MiMo call volume surged), expand IoT/overseas retail (IoT revenue RMB31.3bn, IoT GM 20.1%, 640+ new overseas stores), grow Internet services (MAUs 770m, June ARPU gains; Internet revenue RMB9bn, GM 76.8%) and scale EVs (Q2 deliveries 104,199; smart EV & AI revenue RMB24.9bn, segment GM 19.2%; SU7 cumulative >500k as of Aug 17), with product launches (SkyNomad in Sept) and overseas EV roll‑out planned.