Xiaomi Quarterly Profit Falls Amid Rising Memory Costs

By Jiahui Huang

Chinese smartphone and electronics maker Xiaomi reported a slump in quarterly net profit, caught between soaring memory-chip prices and subdued consumption in one of the world's largest consumer markets.

The results underscore the headwinds the Chinese electronics giant has been contending with across its businesses, with shares under pressure over the past six months amid concerns about the challenging environment.

The global memory-supply shortage driven by the AI boom has led to higher component costs, weighing on Xiaomi's smartphone profit margins, while demand for its smart home products, such as air conditioners and vacuum cleaners, is flagging amid trade-in subsidy fatigue and stiff competition in the appliance sector.

Meanwhile, concerns about the company's electric-vehicle production capacity abound, and continued heavy spending in the fast-growing segment alongside competitive pricing have raised worries about a profitability squeeze in Xiaomi's newest segment.

The Beijing-based company said Tuesday that its net profit dropped 27% to 6.54 billion yuan, equivalent to $950.5 million, in the fourth quarter. Revenue was 116.92 billion yuan, up 7.3% from a year earlier. Analysts had expected 6.41 billion yuan of net profit on revenue of 118.45 billion yuan, according to a Visible Alpha consensus estimate.

Sales from its smartphone business, still the biggest revenue driver, fell 14% to 44.34 billion yuan on lower smartphone shipments and average selling prices, the company said.

Revenue from its Internet-of-Things and lifestyle products segment declined 20% to 24.60 billion yuan. The company said revenue from certain lifestyle products, large home appliances and televisions in China fell due to intensifying competition and lower national subsidies.

Meanwhile, quarterly revenue from its smart EVs more than doubled to 36.3 billion yuan, driven by higher vehicle deliveries and selling prices.

For the full year, Xiaomi's net profit increased 76% to 41.57 billion yuan. Revenue climbed 25% to a record 457.29 billion yuan, supported by growth across its smartphone, IOT and EV segments.

Annual revenue from the company's EV business was 106.1 billion yuan, with the segment's gross profit margin, includes AI and other new initiatives, reaching 24.3%.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

March 24, 2026 06:25 ET (10:25 GMT)