

Summary of Xiaomi Group's Q2 2025 Earnings Call Company Overview - Company: Xiaomi Group - Date: Q2 2025 Earnings Call Key Points Financial Performance - Adjusted net profit reached CNY 10.8 billion, a 75% year-on-year increase, marking a record high for three consecutive quarters [2][3] - Total revenue for Q2 2025 was CNY 116 billion, up 30.5% year-on-year, achieving a historical high for five consecutive quarters [3] - Gross margin improved to 22.5%, an increase of 1.8 percentage points year-on-year [3] Smartphone Business - Global smartphone market share reached 14.7%, ranking third globally, with the highest activation volume in mainland China [2][4] - High-end strategy showed significant results, with market share in the CNY 4,000-6,000 price range increasing by 4.5 and 6.5 percentage points, respectively [6] - Smartphone sales in mainland China ranked first, with high-end smartphone sales accounting for 27.6% of total sales, up 5.5 percentage points year-on-year [11] AIoT Business - AIoT revenue reached CNY 38.7 billion, a 44.7% year-on-year increase, with a gross margin of 22.5% [2][11] - Smart home appliances revenue grew by 66.2%, with air conditioner shipments exceeding 5.4 million units, a growth of over 60% [2][8] Automotive Business - Delivered 81,302 vehicles in Q2, with over 30,000 units delivered in July alone [9][14] - The first SUV U7 series saw over 240,000 orders within 18 hours of launch [9] - Automotive gross margin stood at 26.4% [14] User Engagement and Internet Services - Global monthly active users reached 730 million, a 8.2% year-on-year increase, with 185 million in mainland China, up 12.4% [2][14] - Internet services revenue was CNY 9 billion, a 10.1% increase year-on-year, with a gross margin of 75.4% [14] Research and Development - R&D expenditure reached CNY 7.8 billion, a 41.2% year-on-year increase, with 22,641 R&D personnel, accounting for 46.2% of total employees [14][20] - Focus areas include chips, AI, operating systems, and technology across product lines [20] Market Strategy and Future Outlook - Xiaomi aims to continue its high-end strategy and expand its global market presence, particularly in Europe by 2027 [10][28] - The company plans to maintain a focus on product structure optimization and average selling price (ASP) enhancement rather than just volume growth [27] - The overall smartphone market is expected to remain stable, with Xiaomi confident in achieving its annual shipment target of 175-180 million units [24][26] ESG Initiatives - Xiaomi has increased its use of green electricity and solar power, significantly reducing carbon emissions [15][16] Challenges and Risks - The smartphone business faced margin pressure due to rising costs of memory and battery materials, but long-term strategies are expected to stabilize margins [12][13][17] Conclusion - Xiaomi's strong performance in Q2 2025 reflects its successful high-end strategy, robust growth in AIoT and automotive sectors, and a commitment to R&D and sustainability initiatives. The company is well-positioned for future growth despite challenges in the smartphone market.