VTech Announces FY2025 Annual Results

PR Newswire

HONG KONG, May 14, 2025

Higher revenue on growth in Europe and Other Regions

   -- Group revenue rose 1.5% to US$2,177.2 million as Gigaset sales 
      consolidated 
 
   -- Gross profit margin of 31.5%, up from 29.6% in FY2024 
 
   -- Profit attributable to shareholders of the Company decreased 5.9% to 
      US$156.8 million 
 
   -- Final dividend of US44.0 cents per ordinary share, resulting in a 
      full-year dividend of US61.0 cents per ordinary share, a decrease of 6.2% 
      from the previous financial year 
 
   -- Successful integration of Gigaset 
 
   -- Vertical integration and global manufacturing footprint enable VTech to 
      remain resilient in evolving tariff situation 
 
   -- Strong financial position 

HONG KONG, May 14, 2025 /PRNewswire/ -- VTech Holdings Limited (HKSE: 303) today announced its results for the year ended 31 March 2025.

"VTech reported an increase in revenue in the financial year 2025 despite an increasingly challenging business environment. Sales in Europe rose following the integration of Gigaset Technologies GmbH (Gigaset), augmented by growth in Other Regions. This offset lower sales in North America and Asia Pacific. Profit declined owing to lower operating profit, as total operating expenses rose. The Group has continued to diversify its production globally, mitigating the effects of the recently announced tariffs on imports to the US," said Mr. Allan Wong, Chairman and Group CEO of VTech Holdings Limited.

Results and Dividend

Group revenue for the year ended 31 March 2025 increased by 1.5% to US$2,177.2 million, from US$2,145.7 million in the previous financial year. Higher sales in Europe and Other Regions offset lower sales in North America and Asia Pacific. The higher revenue in Europe was due to the consolidation of Gigaset sales following the acquisition of the assets of GST Communications GmbH on 5 April 2024.

Profit attributable to shareholders of the Company decreased by 5.9% to US$156.8 million. The decline in profit was mainly due to lower operating profit, as total operating expenses rose. This was primarily due to the integration of the Gigaset operations, which resulted in correspondingly higher selling and distribution costs, administrative and other operating expenses, as well as research and development (R&D) expenses.

Basic earnings per share decreased by 6.1% to US62.0 cents, compared to US66.0 cents in the financial year 2024.

The Board of Directors has proposed a final dividend of US44.0 cents per ordinary share, providing a full-year dividend of US61.0 cents per ordinary share, a 6.2% decrease from the US65.0 cents declared in the previous financial year. This represents a dividend payout ratio of 98.5%.

Costs

The Group's gross profit margin in the financial year 2025 rose to 31.5%, as compared with 29.6% in the financial year 2024. This was due to three factors. Cost of materials was lower as material prices declined. There was a positive change in the product mix and there was a gross profit contribution from Gigaset. These factors offset several negative developments. Direct labour costs and manufacturing overheads rose owing to the expansion of the factory workforce following the integration of workers at the Gigaset factory in Germany. The Group also ramped up production and increased inventory levels to optimise capacity utilisation at its production facilities, further increasing direct labour costs and manufacturing overheads. Cost increases were exacerbated by higher freight rates and tariff costs as compared with the previous financial year. These impacts offset the effect of a depreciation of the Renminbi and further improvements in productivity.

Impact of US Tariffs

Beginning in 2018, the US introduced a series of tariffs for goods made in mainland China. In response, VTech has been diversifying its manufacturing footprint, starting in the same year with its first facility outside mainland China in Muar, Malaysia. This expansion has continued, with the acquisition of an additional facility in Penang, Malaysia in 2020 and in Tecate, Mexico, in 2021. The acquisition of Gigaset in 2024 extended the Group's manufacturing operations to Bocholt, Germany.

In 2025, US tariffs have been expanded to cover imports from nearly all countries, alongside additional tariffs targeting Chinese goods. Faced with these uncertainties, VTech is accelerating the relocation of its production of US bound products away from mainland China. This migration started with contract manufacturing services $(CMS)$ in 2018, followed by telecommunication $(TEL)$ products in 2020. Transfer of electronic learning products (ELPs) production is now in progress. The Group is aiming to complete the transfer of its production of US bound products away from mainland China within 2026.

Segment Results

North America

Group revenue in North America decreased by 3.2% to US$893.1 million in the financial year 2025, as higher sales of ELPs were offset by declines in TEL products and CMS. North America became VTech's second largest market, accounting for 41.0% of Group revenue.

ELPs revenue in North America increased by 7.0% to US$444.9 million. Sales rose in both the US and Canada as the toy markets stabilised in the calendar year 2024. VTech was able to take full advantage of this improvement as the new leadership team in the US successfully implemented a revitalised sales and marketing strategy, boosting growth. Both standalone and platform products registered higher sales and VTech strengthened its leadership in electronic learning toys from infancy through toddler to preschool in the US in the calendar year 2024([1]) . In Canada, sales also grew as VTech branded products achieved higher sales and VTech regained its number one position in the infant, toddler and preschool toys category in the calendar year 2024([2]) .

There were higher sales of standalone products for both the VTech and LeapFrog brands. For VTech, growth in preschool products, the Kidi$(R)$ line and KidiZoom(R) cameras offset lower sales of infant and toddler products, the Go! Go! Smart family of products, Switch & Go(R) Dinos and Marble Rush(R) . LeapFrog saw higher sales of infant, toddler and preschool products, eco-friendly toys and the Magic Adventures(R) series, with the successful roll-out of Magic Adventures Binoculars contributing additional revenue. This offset lower sales of LeapLand Adventures$(TM)$ .

In platform products, both the LeapFrog and VTech brands registered higher sales. LeapFrog sales were pushed higher by children's educational tablets, interactive reading systems and Magic Adventures Globe. Subscriptions to LeapFrog Academy(TM) , however, posted a decline. At VTech, sales of Touch & Learn Activity Desk(TM) increased and a new generation of smartwatch, KidiZoom Smartwatch DX4, boosted sales of this popular product line. These increases offset a decline for KidiBuzz(TM) .

In March 2025, the Group launched an exciting line-up of new VTech and LeapFrog products at Toy Fair 2025, expanding its popular baby, infant, toddler and preschool categories. VTech reinforced its commitment to fostering developmental milestones through play with six new products. These included Explore & Write Deluxe Activity Desk(TM) , an interactive learning desk that combines touch-sensitive technology with engaging content to help children learn letters, numbers, shapes and more. LeapFrog's four new items included those blending physical activity with engaging educational experiences, while others incorporated scientifically-based approaches to phonics, vocabulary and comprehension instruction to develop reading skills. Touch & Learn eReader(TM), for example, features ten built-in stories that can be read aloud, encouraging early learners to follow along with the words on screen.

In total, the Group earned over 60 industry awards and from trusted parenting websites, toy industry experts, toy advisory boards and major retailers during the financial year 2025. In the US, VTech's Sort & Discover Activity Wagon(TM) was named to Walmart's "2024 Top Toys List" and KidiZoom Smartwatch DX4 made Target's "2024 Bullseye's Top Toys" list. Sort & Discover Activity Wagon was named a "Parents Best Toys Award Winner", alongside three more of the Group's ELPs. VTech's Go! Go! Smart Wheels(R) Checkered Flag Motorised Track Set(TM) and LeapFrog's Magic Adventures Binoculars were made Toy of the Year (TOTY) Finalists by the Toy Association. In Canada, Sort & Discover Activity Wagon and the Go! Go! Smart Wheels Checkered Flag Motorised Track Set were named to Walmart and Toys"R"Us "2024 Top Toys" lists respectively.

TEL products revenue in North America fell by 11.0% to US$178.8 million in the financial year 2025, as sales in all three product categories declined.

Sales of residential phones were lower, as the US residential phones market saw further contraction. Despite this, VTech remained the number one US cordless phone brand([3]) and launched a new range of AT&T phones in the financial year 2025. The Group also achieved success in expanding sales through online channels.

Commercial phones and smartphones experienced a decline in sales, despite growth in hotel phones and headsets. Orders for SIP (Session Initiation Protocol) phones fell as a customer lost market share in the face of strong competition. This offset the good performance of hotel phones, where VTech gained market share. Sales in this category were boosted by a new series of competitively priced models with sleek styling that was launched during the financial year 2025, as well as increasing sales of thermostats for the hotel channel. Headsets also reported modest growth, as a customer increased orders.

Other telecommunication products also posted a sales decrease. Sales of baby monitors contracted as competition rose, while those of CareLine(R) residential phones fell owing to weak demand. This offset modest growth in integrated access devices (IADs), as a customer increased orders. Nonetheless, VTech retained its position as the number one baby monitor brand in the US and Canada during the financial year 2025([4]) . VTech was named as the most trusted baby monitor brand in the "BrandSpark Most Trusted Awards 2025" in both the US and Canada. In the US, the Group's baby monitors won two "Baby Maternity Awards", including the "2024 Top Choice Award", and two "Motherhood Loves Community Awards". Two VTech brand baby monitors also gained the "Parent Tested Parent Approved Seal of Approval" in Canada.

CMS sales in North America decreased by 11.9% to US$269.4 million in the financial year 2025. There were lower sales of professional audio equipment, solid-state lighting and of IoT (Internet of Things) products, despite gaining a new customer. This offset higher sales of industrial products.

Professional audio equipment reported lower sales as a slow economy led to a drop in end-user demand, resulting in sales decreases for power amplifiers and audio mixers. Over-inventory at a key customer led to a reduction in orders for professional loudspeakers. Solid-state lighting experienced a decline as the number of projects fell because of the slowing economy. IoT products reported lower sales as a customer experienced a financial issue, offsetting gains from new orders for smart basketball hoop game consoles. In contrast, industrial products posted growth as a sales contribution from a new customer in smart water leakage detectors offset a decline in PCBA (printed circuit board assembly) for coin and note recognition machines. During the financial year 2025, the CMS facility in Tecate, Mexico became fully operational, offering full-turnkey EMS (electronic manufacturing services) capability to customers. VTech has been assisting customers affected by the new US tariff policy to transfer their production there.

In the financial year 2025, VTech CMS gained two US awards in recognition of its outstanding services, namely a "Pathfinder Award" from a professional audio equipment customer and a "Strategy Vendor 2024" award from the new IoT products customer.

Europe

Group revenue in Europe increased by 8.2% to US$960.7 million in the financial year 2025, as higher sales of TEL products offset declines for ELPs and CMS. Europe became VTech's largest market, accounting for 44.1% of Group revenue.

ELPs revenue in Europe fell by 2.7% to US$307.0 million, with declines in both standalone and platform products. Sales declined in France, Germany and the Benelux countries, affected by slow economic growth and a weak Euro. This offset rises in the UK, where there was a sales increase at a major e-tailer, and Spain, where the Group saw higher sales at its key customers. In Italy, sales continued to grow following the establishment of a sales office in the country in 2023. In the calendar year 2024, VTech remained the number one infant and toddler toys manufacturer in France, the UK, Germany, Spain, Belgium and the Netherlands([5]) .

In the standalone category, growth in the LeapFrog brand was offset by a decline for VTech. At LeapFrog, infant and toddler products saw higher sales, boosted by the successful launch of Magic Adventures Binoculars. By contrast, sales of eco-friendly toys were stable, while those of preschool products and LeapLand Adventures declined. VTech achieved higher sales of infant, toddler and preschool products, as well as the Kidi line. However, these gains were insufficient to compensate for lower sales of the Toot! Toot! family of products, KidiZoom cameras, Marble Rush, electronic learning aids and Switch & Go Dinos.

For platform products, growth in LeapFrog was offset by a decline for VTech. At LeapFrog, sales of Magic Adventures Globe were higher, while those of interactive reading systems remained stable. For VTech, sales of children's educational tablets, KidiZoom Smartwatch, the KidiCom(R) range and Touch & Learn Activity Desk were all lower.

The Group's ELPs won numerous awards across Europe during the financial year 2025, encompassing a wide array of products. In the UK, VTech's Kidi DJ Drums and Sort & Discover Activity Wagon, as well as LeapFrog's My 1st Phonics: Spin & Learn, each won a "Gold Award" in the "MadeForMums Toy Awards 2024". In France, V-Bot Explorer, Mon robot 5 en 1 (5-in-1 Make-a-Bot(TM)) and Genius XL -- Jumelles vidéo interactives (Magic Adventures Binoculars) were awarded "Grands Prix du Jouet 2024" by La Revue du Jouet magazine. VTech was also named the "Best Toy Brand 2025" (La marque de jouets pour enfants) in France by the organisation Marques et familles. VTech and LeapFrog products gained similar accolades in other European markets. There were "Toy of the Year 2024" awards for Kidi DJ Drums and Sew & Style Kitty Bag/Unicorn Bag from the Dutch and Belgian Toy Associations respectively. The Spanish Toy Association named both Magic Adventures Binoculars and Marble Rush Storage Box "Best Toy of the Year 2024" in different categories.

Revenue from TEL products in Europe increased by 173.8% to US$211.4 million in the financial year 2025. Residential phones, commercial phones and smartphones, as well as other telecommunication products all recorded sales increases.

Residential phones saw sales move higher. The growth was driven by the revenue contribution from Gigaset, following the acquisition of the assets of GST Communications GmbH on 5 April 2024, as well as increased sales of VTech branded phones in the UK. The Gigaset brand performed especially well in Germany, Austria, Switzerland and Belgium, allowing it to maintain its leadership position in the European residential DECT (Digital Enhanced Cordless Telecommunications) phone market([6]) . The solid sales performance was underpinned by the Gigaset Comfort 550 and A690 models, which offer elegant design, ease-of-use and attractive features such as long talk time and hearing aid compatibility. In the UK, VTech branded cordless phones continued to make good progress as the Group broadened its distribution channels and achieved higher sales via a major e-tailer.

The category of commercial phones and smartphones also recorded growth in the financial year 2025. This was mainly attributable to the consolidation of Gigaset revenue, comprising mainly sales of Gigaset's multicell DECT system, augmented by those of smartphones, a new category for VTech. Hotel phones also reported higher sales. These increases offset a decline for Snom branded SIP phones.

The Gigaset multicell DECT system supports Microsoft Teams, Asterisk, Broadsoft, 3CX and more. Its alarm, messaging and location feature is unique in the market and makes it particularly attractive to companies with employees working in environments such as warehouses, hospitals and factories. Gigaset's smartphones comprise powerful entry-level and mid-range models, together with accessories, as well as those tailored to specific user groups such as seniors and those working outdoors. Sales of hotel phones increased as the Group added new distribution channels and expanded into more European markets. Sales of Snom branded SIP phones declined, however, as they were affected by the slow market conditions.

Recognising market requirements, the final quarter of the financial year 2025 saw a new entry-level version of the popular Snom D8 series introduced to cater to different customers. In addition, three new SIP desksets were added to the Gigaset professional ranges, completing its product line-up. Ranging from a compact all-round device to a Wi-Fi connected premium model with a 5-inch LCD (liquid crystal display) colour display, the new models have been well-received by the market.

Other telecommunication products posted higher sales. Growth in baby monitors offset declines in CAT-iq handsets and CareLine residential phones, while sales of IADs were immaterial. Higher sales of baby monitors were driven by good performances in the UK and France. Sales of CAT-iq handsets and CareLine residential phones were affected by lower orders from ODM customers due to subdued end-user demand. During the financial year 2025, VTech retained its position as the number one baby monitor brand in the UK([7]) . VTech was named as the number one baby monitor brand in the "UK Newsweek/BrandSpark Most Trusted Awards"([8]) . In the UK, the Group's baby monitors won four "LovedbyParents" awards and a "Project Baby Award". There were also four "Dadsnet Awards 2024", including "Gold Winner (Best Technology Product)" for the RM7768HD Baby Monitor.

CMS revenue in Europe fell by 10.7% to US$442.3 million. Lower sales of professional audio equipment, hearables, communication products and smart energy storage systems offset higher sales of IoT products and automotive products. Sales of home appliances and medical and health products were stable.

In professional audio equipment, sales of home audio interface products were lower. This resulted from weak market demand and an unsuccessful new product launch by a customer. Hearables sales decreased as the customer lost market share. Sales of communication products were affected by lower orders for wireless routers as the customer over-stocked inventory prior to moving production to a new location. Smart energy storage systems were impacted by the removal of subsidies by the Swedish government and higher competition. On the positive side, IoT products grew on rising orders for internet connected thermostats and air-conditioning controls, as the customer successfully increased sales by selling directly to businesses. Sales of automotive products also increased, with orders for EV (electric vehicle) chargers rising as VTech gained market share.

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