Annual revenue of 457.4 billion! Xiaomi's automotive surge in 2025, smartphone "slows down" | Financial report analysis

Is the Shrinking Mobile Business a Sign That Xiaomi’s Strategic Focus Has Shifted?

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Two battlefronts, a life-and-death struggle.

On March 24, 2025, Xiaomi Group disclosed its 2025 financial report, with a revenue of 457.3 billion and a net profit of 39.2 billion, marking the most impressive performance in its history.

A closer look at the data reveals the duality of Xiaomi: on one side, a mobile giant experiencing a “mid-life crisis,” and on the other, a promising newcomer in the automotive sector, as a dramatic power transition gradually escalates.

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First, let’s look at revenue.

As mentioned at the beginning, Xiaomi Group’s total revenue for 2025 was 457.287 billion, a year-on-year growth of 25.0%. Although the growth rate decreased compared to 35.04% in 2024, the absolute value reached an all-time high, breaking the 400 billion mark for the first time!

Xiaomi’s business is divided into two major segments: mobile × AIoT (core basic platform) and smart electric vehicles and AI innovation businesses (second growth curve), which showed a dichotomous state in 2025.

The mobile × AIoT segment generated a revenue of 351.217 billion in 2025, with a year-on-year growth of only 5.4%, falling 19.6 percentage points below the overall revenue growth, reducing its share of total revenue from 91.0% in 2024 to 76.8%.

Looking specifically at the numbers, Xiaomi’s smartphone revenue in 2025 was 186.440 billion, a year-on-year decline of 2.8%; global shipments totaled 165.2 million units, down 2.0% year-on-year; the average selling price (ASP) was 1,128.7 yuan, a slight decrease of 0.8%; gross margin dropped from 12.6% to 10.9%, reflecting simultaneous declines in volume, price, and profit.

Despite Xiaomi claiming breakthroughs in high-end products: the share of high-end devices priced above 3,000 yuan in mainland China reached 27.1%, an increase of 3.8 percentage points year-on-year, the market share in the 4,000-6,000 yuan price range was 17.3%, and 4.5% in the 6,000-10,000 yuan range, indicating that progress in high-end products is still relatively slow.

At the same time, in 2025, Xiaomi’s shipments in the Indian market significantly declined, becoming a core reason for the negative growth in its mobile business.

In the AIoT and lifestyle consumer products segment, revenue was 123.200 billion in 2025, a year-on-year increase of 18.3%, with a gross margin of 23.1%, up 2.8 percentage points year-on-year. Although supported by various national subsidies, the growth rate still lagged behind the average.

Additionally, for internet services, Xiaomi’s revenue in 2025 was 37.440 billion, representing a year-on-year growth of 9.7%, with a gross margin of 76.5%, which is an important source of profit for the group.

Next, we have the standout highlight of 2025: Xiaomi’s smart electric vehicles and AI innovation business.

The financial report shows that this segment’s revenue reached 106.070 billion in 2025, a massive increase of 223.8%, breaking the 100 billion mark for the first time and achieving an operating profit of 900 million for the first time.

In 2025, Xiaomi’s smart electric vehicle revenue was 103.3 billion, a year-on-year increase of 221.8%; total deliveries for the year reached 411,100 units, a growth of 200.4%, while the ASP rose from 234,500 yuan to 251,200 yuan. The core of this growth came from high-priced models like the SU7 Ultra and YU7.

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Now, let’s look at overall profit.

In 2025, Xiaomi’s annual profit was 41.57 billion, a year-on-year growth of approximately 76.3%, far exceeding the revenue growth rate of 25.0%. It appears that investment income contributed significantly to this increase.

In 2025, Xiaomi’s “fair value changes of financial instruments recognized in profit or loss” was 13.31 billion, accounting for 26.8% of pre-tax profit. This figure was only 1.05 billion in 2024, increasing more than tenfold in one year.

Xiaomi’s profit contribution from the mobile business is shrinking: from 24.254 billion in 2024 to 20.266 billion in 2025, a decrease of 16.4%.

Excluding investment income, Xiaomi’s operating profit for 2025 was 47.9 billion, a year-on-year increase of 95.5%, primarily benefiting from the automotive business turning from a loss to profit and the improvement in AIoT business gross margins.

Another noteworthy point is that in the fourth quarter of 2025, Xiaomi Group’s profit indicators saw a decline: operating profit was 6.229 billion, down 29.9% year-on-year, and down 58.8% quarter-on-quarter; adjusted net profit under non-International Financial Reporting Standards was 6.349 billion, down 23.7% year-on-year, and down 43.9% quarter-on-quarter, halving the profit level compared to the third quarter.

In the fourth quarter, Xiaomi’s mobile × AIoT business revenue fell over 13% year-on-year, combined with rising R&D, sales, and promotional expenses, led to a significant reduction in profits for that quarter.

In the fourth quarter of 2025, Xiaomi’s net cash from operating activities also shrank significantly, falling to only 614 million, a nearly 90% drop from 5.47 billion in the third quarter.

However, Xiaomi is not short on cash; by the end of 2025, its cash reserves (including cash and cash equivalents, restricted cash, time deposits, and investment products) were approximately 232.6 billion.

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In summary, in the eyes of the leverage game, 2025 is undoubtedly the most glorious year in Xiaomi’s history. It demonstrates its strategic foresight and strong execution in cross-industry vehicle manufacturing, showcasing its determination to transition from “marketing-driven” to “technology-driven.”

The story of the “whole ecosystem of people, vehicles, and homes” has transformed from a vision into a reality that is taking shape.

However, Xiaomi is also undergoing an extremely challenging “coming-of-age” process. It is bidding farewell to the “youth phase” of rapid growth driven by cost-effective smartphones and entering an “adult world” that requires balancing two core businesses, facing global competition, and bearing substantial R&D investments.

The financial report indicates that in 2026, Xiaomi aims to deliver 550,000 vehicles. Recently, the new generation of the SU7 series has also been launched. If the target of 550,000 is achieved, then the revenue contribution from Xiaomi’s automotive business is expected to surpass that of its mobile business, becoming the “primary engine.”

Of course, there remains considerable uncertainty. The competition in the new energy vehicle market in 2026 will be fiercer, and after experiencing various upheavals in 2025, it remains to be seen whether Xiaomi can remain resilient in 2026.

On the mobile side, it is even harder to find potential reversal opportunities; stabilizing would be considered a victory. This is evident from the issues in India. As Xiaomi delves deeper into global markets, particularly in the high-end sector and technology fields (such as chips and AI), the international regulatory and geopolitical risks it faces will increase day by day.

Therefore, these two years are crucial for Xiaomi, as they may determine whether Xiaomi can smooth its profit curve amidst a sluggish mobile business through the scale effects of its automotive operations and the value-added services of its AI ecosystem, ultimately achieving high-quality growth by “walking on two legs.”

All charts not marked with a source in this article are sourced from the company’s official website or announcements, hereby noted and thanked.

Ren Yaolong Law Firm

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