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Huawei net profit drops 32% in the first half of 2025 despite revenue growth
Huawei reported a 32% decline in net profit to RMB 37.195 billion in H1 2025, despite a 3.95% revenue increase to RMB 427.04 billion. Rising costs from advanced chips and increased R&D spending of 9.04% strained earnings. Consumer business improved with over 12 million HarmonyOS 5 devices sold. However, higher operating costs and fair value losses added pressure on profitability.
Key points
- Net profit fell by 32% year-on-year to RMB 37.195 billion ($5.1 billion).
- Total revenue increased by 3.95% to RMB 427.04 billion ($58.5 billion).
- R&D expenditure grew by 9.04% to RMB 96.95 billion ($13.3 billion), constituting 22.7% of revenue.
- Investments focused on AI computing, foldable devices, and smart vehicles.
- Consumer business recovery indicated by 12 million HarmonyOS 5 devices sold and smart vehicle deliveries nearing 900,000.
- Operating costs rose 9.33%, with fair value losses amounting to RMB 5.84 billion ($0.8 billion).
- Increased costs for advanced chips further diminished profitability.
Why it matters
- This report reflects broader trends in the tech industry, where companies face profit compression despite revenue growth due to rising costs.
- Investment in AI technologies aligns with the 2025 IT trend focusing on AI adoption across various sectors.
- Huawei’s challenges mirror the global semiconductor shortage issues that began in 2020, continuing to affect tech firms.
- Recovery in consumer businesses is a key trend, as digital transformation and smart device adoption continue to reshape industry expectations.
Despite challenges like rising costs and significant R&D investments, Huawei's modest revenue growth and signs of recovery in its consumer business indicate resilience in a competitive market.