Xiaomi released financial results that indicate a reduction in adjusted profit for the fourth quarter of 2025. The period ended December 31 marked the first quarterly decline in three years for the Chinese electronics and electric vehicle company. Adjusted net profit reached 6.3 billion yuan, equivalent to about US$914.5 million, down 23.7% from the same quarter last year. Total revenue amounted to 116.9 billion yuan, slightly higher than analysts’ average estimates.
This retraction occurs amid operating cost pressures and greater competition in the sector. The increase in component prices, especially memory, exceeded the company’s initial projections and impacted margins. Executivos from Xiaomi highlighted that the cycle of rising costs could be prolonged and affect several companies in the technology segment.
- Significant increase in memory expenses increased production costs
- Intensifying competition in the smartphone and electric vehicle market
- Moderate demand in some segments at the end of 2025
Cost pressure affects operating margins
The statement released by the company on March 24, 2026 details that sales costs grew more than revenue in the period. Despesas with research and development also rose, reflecting continued investments in innovation. Mesmo with the quarterly drop, the result surpassed the average forecast of analysts, who estimated adjusted profit at around 5.7 billion yuan.
Xiaomi maintains diversified operations that include smartphones, smart home appliances and electric vehicles. President Lu Weibing mentioned the possibility of adjustments in product prices if cost pressure persists. Ele assessed that some companies in the sector may face significant losses or even more serious situations in prolonged cycles of rising inputs.
The fourth quarter of 2025 marked the end of a year in which the company recorded general expansion. Annual revenue totaled 457.3 billion yuan, an increase of 25% over 2024. Annual adjusted profit reached 39.2 billion yuan, an increase of 43.8% year-on-year.
Annual performance contrasts with quarterly results
The company exceeded the target for deliveries of electric vehicles in 2025, which contributed to the advancement of the new mobility business. In the year to date, the intelligent vehicle segments and initiatives related to artificial intelligence showed strong expansion. Essa diversification helped offset variations in other product lines.
Despite the good annual performance, the final quarter highlighted specific challenges. The reduction in quarterly profit primarily reflects the impact of higher component costs and more subdued demand in certain markets. The company continues to closely monitor these variables to adjust operational strategies.
Business segments and future strategies
Xiaomi continues to invest in advanced technologies, including the development of electric vehicles and internet of things solutions. The focus on innovation allows the company to maintain a relevant presence in different consumer categories. Executivos indicated that rising memory costs may require partial price transfers in the near future.
The global technology market faces cycles of variation in input prices, which affect producers of electronic devices. In the case of Xiaomi, the 7.3% growth in quarterly revenue demonstrates resilience in generating sales even under cost pressure. The company seeks to balance volume expansion with expense control.
Context of the electronics and mobility sector
The release of the numbers occurred at a time of greater attention to the performance of Chinese manufacturers. Xiaomi operates in a competitive environment that includes global and regional players in smartphones and vehicles. The quarterly result serves as an indicator of current cost and demand dynamics in the sector.
The company reported that pre-tax profit fell 24.3% in the fourth quarter, while reported net profit fell 27.3%. Esses movements follow the adjustment in earnings from financial instruments and variations in other non-operating items. Xiaomi maintains robust cash flow, which supports continuous investments.
The company remains committed to developing products that combine performance and accessibility. The balance sheet reveals that the overall gross margin improved slightly in some segments throughout 2025, despite specific pressures in the final quarter. Essa trend indicates efforts to optimize the supply chain.
