Xiaomi Group announced its financial results for the fourth quarter and full year of 2025 on the evening of March 24. While the company achieved record-high annual performance, the fourth quarter saw revenue growth without a corresponding increase in profit.

According to the financial report, Xiaomi's total revenue for 2025 reached 457.29 billion yuan, a 25% year-on-year increase, while net profit was 41.57 billion yuan, up 76.3% compared to the previous year.

The smart electric vehicle business emerged as the primary growth driver, with revenue surging 221.8% year-on-year to 103.3 billion yuan.

However, impacted by rising storage costs and intensified industry competition, Xiaomi's overall revenue for the fourth quarter grew 7.3% year-on-year to 116.92 billion yuan, while net profit declined 27.3% to 6.54 billion yuan.

Within this period, the company's Phone x AIoT business experienced a significant decline, with quarterly revenue falling 13.7% year-on-year to 79.7 billion yuan.

During Xiaomi's 2025 earnings conference, President Lu Weibing acknowledged the pressure from storage costs, stating that product price increases are inevitable for the company. He noted that while Xiaomi would try to absorb the costs for consumers as long as possible, price hikes would be implemented if necessary.

Xiaomi Group was listed on the Hong Kong Stock Exchange in 2018. As of the market close on March 26, its share price stood at HK$32.44, with a total market capitalization of HK$841.3 billion, nearly halving from its peak last year.

The proportion of revenue from the Phone x AIoT business within Xiaomi's total revenue is declining rapidly, while the share from smart electric vehicles and innovative businesses like AI is growing significantly.

For the full year of 2025, the Phone x AIoT business contributed 351.22 billion yuan in revenue, a 5.4% year-on-year increase, accounting for 76.8% of total revenue—a decrease of 14.2 percentage points from 2024.

During the same period, revenue from the smart electric vehicle and AI innovation segment surged 223.8% from 32.75 billion yuan in 2024 to 106.07 billion yuan, representing 23.2% of total revenue, an increase of 14.2 percentage points year-on-year.

Xiaomi's Phone x AIoT business comprises smartphones, IoT and lifestyle products, internet services, and other related operations.

Notably, the smartphone business, which serves as Xiaomi's core segment, reported negative growth in revenue last year. In 2025, revenue from this segment decreased 2.8% year-on-year to 186.44 billion yuan, accounting for 40.8% of total revenue, down 11.6 percentage points from the previous year.

Xiaomi attributed this decline primarily to a reduction in smartphone shipments and a decrease in the average selling price (ASP).

Although Xiaomi's smartphone shipments in the Chinese market increased 4.1% last year, global shipments fell 2% year-on-year to 165 million units. This was mainly due to lower shipments in India, partially offset by growth in mainland China and other international markets such as Latin America and Africa.

Meanwhile, the ASP of Xiaomi smartphones decreased slightly by 0.8%, from 1,138.2 yuan per unit in 2024 to 1,128.7 yuan per unit in 2025, primarily due to higher shipments in emerging markets with lower ASPs, partially offset by an increased proportion of shipments in mainland China where ASPs are higher.

For the full year of 2025, Xiaomi's revenue from other global regions amounted to 151.06 billion yuan, a decrease of approximately 1.5% year-on-year.

It is worth noting that the gross profit margin for the Phone x AIoT segment reached 21.7% in 2025, a year-on-year increase of 0.5 percentage points, setting a new historical high.

However, the gross margin for the smartphone business within this segment declined significantly, from 12.6% in 2024 to 10.9% last year, mainly due to the phase-out of government subsidies in mainland China and rising prices of core components in the second half of the year, coupled with intensified global market competition.

Focusing on the fourth quarter performance, Xiaomi's smartphone and IoT and lifestyle products businesses showed signs of weakness.

In the fourth quarter of last year, revenue from the smartphone business decreased 13.6% year-on-year to 44.34 billion yuan, primarily due to an 11.6% year-on-year decline in shipments to 38 million units and a lower ASP.

Similarly, revenue from IoT and lifestyle products fell 20.3% year-on-year to 24.6 billion yuan in the fourth quarter, mainly due to reduced revenue from certain lifestyle products, major smart home appliances, and smart TVs in mainland China, resulting from the subsidy phase-out and heightened competition.

In contrast to the sluggish growth in traditional businesses like smartphones, Xiaomi's automotive business demonstrated strong growth momentum.

In 2025, revenue from smart electric vehicles surged 221.8% year-on-year to 103.3 billion yuan, accounting for over 97% of the revenue from the smart electric vehicle and AI innovation segment. This growth was driven by increased vehicle deliveries and a higher ASP.

Xiaomi delivered approximately 411,000 vehicles in 2025, a 200.4% year-on-year increase in deliveries.

During the same period, the ASP for smart electric vehicles rose 7.1% from 234,000 yuan per vehicle in 2024 to 251,000 yuan per vehicle, primarily due to deliveries of higher-ASP models such as the Xiaomi SU7 Ultra and Xiaomi YU7 series.

The gross profit margin for the smart electric vehicle and AI innovation segment increased from 18.5% in 2024 to 24.3% in 2025.

More notably, this segment achieved positive operating profit for the first time in 2025, with an annual operating profit of 900 million yuan.

In the fourth quarter alone, the segment generated revenue of 37.2 billion yuan, a 123.4% year-on-year increase, with a gross margin of 22.7%, up 2.3 percentage points year-on-year. Revenue from smart electric vehicles amounted to 36.3 billion yuan, while other related businesses contributed nearly 1 billion yuan. The segment's operating profit for the quarter was 1.1 billion yuan.

However, on a quarter-on-quarter basis, although revenue for the smart electric vehicle and AI innovation segment grew 28.3% in the fourth quarter, the gross margin declined from 25.5% in the third quarter to 22.7%.

Xiaomi explained that this was mainly due to a lower proportion of Xiaomi SU7 Ultra deliveries and the sale of display and inventory vehicles in the fourth quarter of 2025.

The SU7 Ultra, a flagship model representing Xiaomi's entry into the luxury automotive market, was initially highly anticipated by CEO Lei Jun. However, by the end of last year, monthly sales of the SU7 Ultra had dropped from a peak of over 3,000 units at launch to double digits.

Additionally, in December last year, Xiaomi officially launched a "ready-to-purchase vehicle" channel, which included new inventory vehicles, official display models, and nearly-new vehicles.

Sources close to Xiaomi's automotive business suggested that this move was aimed at boosting annual sales targets as the year-end approached. Selling available vehicles could facilitate quicker transactions for customers who were hesitant or considering canceling orders due to long waiting times.

This strategy indeed stimulated sales to some extent. In December, Xiaomi's vehicle deliveries exceeded 50,000 units, setting a new monthly delivery record since the brand's inception.

After successfully establishing smart electric vehicles as a new growth driver, Xiaomi is now turning its attention to the booming field of artificial intelligence.

According to the financial report, Xiaomi's current AI business remains relatively small. Other related businesses within the smart electric vehicle and AI innovation segment generated revenue of 2.8 billion yuan last year.

Although this represents significant growth from 700 million yuan in 2024, it was primarily driven by increased revenue from after-sales services, accessory sales, and automotive financial services.

Nevertheless, Xiaomi dedicated substantial space in its report to outline its布局 in the AI field.

Compared to leading companies like ByteDance and Alibaba, Xiaomi's own large AI model started relatively late. It was not until April 30 last year that Xiaomi open-sourced its first large model designed for inference—Xiaomi MiMo.

Subsequently, in November, Luo Fuli, a talented AI researcher who previously studied at Peking University, published papers in top conferences and journals, worked at Alibaba's DAMO Academy, and later engaged in AI research at DeepSeek, announced her joining Xiaomi as the head of the Xiaomi MiMo large model.

In terms of foundation models, Xiaomi MiMo-V2-Flash was officially released and open-sourced in December last year. According to Xiaomi, this model, which offers extremely high cost-effectiveness, is a self-developed Mixture of Experts (MoE) model with 309 billion total parameters (15 billion activated parameters).

On March 19 this year, Xiaomi claimed the recently热议 mysterious large model "Hunter Alpha" and launched a series of models in one go: the flagship foundation model Xiaomi MiMoV2-Pro for the Agent era, the omnimodal foundation model Xiaomi MiMo-V2-Omni, and the speech synthesis model Xiaomi MiMo-V2-TTS.

At that time, Luo Fuli stated that this is the first full-stack model family truly built for the Agent era. She explicitly mentioned that to persuade the team to experience the "complex agent-based architecture," she required that "anyone in the MiMo team with fewer than 100 dialogues tomorrow can resign."

Xiaomi's intention to vigorously develop AI is to comprehensively empower the "Human x Car x Home" ecosystem with AI capabilities. In line with this, in March this year, Xiaomi began a small-scale closed testing of its mobile agent—Xiaomi miclaw.

This is an AI interaction test product built based on the Xiaomi MiMo foundation large model, focusing on verifying the large model's execution capabilities within Xiaomi's "Human x Car x Home" ecosystem and exploring the path for transitioning the model from "dialogue capability" to "system-level execution capability."

To support this grand vision, Lei Jun recently announced that Xiaomi is actively embracing the AI era and plans to invest over 60 billion yuan in the AI field over the next three years.

Notably, the financial report shows that Xiaomi's cumulative R&D expenditure over the past five years has reached 105.5 billion yuan. In 2025 alone, its R&D expenditure amounted to 33.1 billion yuan, a 37.8% year-on-year increase.

Furthermore, Xiaomi estimates that its cumulative R&D expenditure over the next five years, starting from 2026, will exceed 200 billion yuan.

Whether Xiaomi can maintain sustained business growth while successfully implementing its AI business in the future remains a key point of observation.