Xiaomi Returns to Profit Growth in Q3

Xiaomi returned to profit growth in the third quarter of 2023, with gains in its IoT, lifestyle, and internet divisions. The latter has offset the continued weakness in smartphones.

While the overall external environment showed few signs of improvement, Xiaomi registered year-on-year growth in quarterly revenue for the first time in six quarters, said chair and CEO Lei Jun. He added that the company invested CNY1.7 billion ($239.7 million) in its smart electric vehicle business and other new initiatives during the period.

Xiaomi booked a net profit of CNY4.9 billion compared with a CNY1.5 billion loss in 3Q22. Total revenue was flat at CNY70.9 billion. Despite a 4% increase in smartphone shipments to 40.2 million units, revenue declined 2% to CNY41.6 billion due to a 5.8% decline in average selling prices to CNY997. Total inventory dropped 30.5% to CNY36.8 billion, the lowest level in 11 quarters.

Revenue from IoT and lifestyle products increased 8.5% to CNY20.7 billion, and internet services sales 9.7% to RMB7.8 billion, fueled mainly by gains in advertising. R&D expenses increased 22% to CNY5 billion, with research staff accounting for more than 53% of the total workforce.