Xiaomi Group announced its financial results for the second quarter of 2023, showing strong growth in adjusted net income and advertising revenues, despite a decline in smartphone shipments and total revenue.
Xiaomi Group beats expectations with net profit growing by 147% and record advertising revenues in Q2 2023
According to the financial report, the Group's turnover Xiaomi in the second quarter, it was 67,35 billion Yuan, down 4,0% year on year. However, adjusted net profit rose to 5,14 billion Yuan, an increase of 147,0% year on year. The Xiaomi Group attributed this improvement to its “smartphone x AIoT” strategy, which has led to greater diversification of products and services.
In the first half of the year, the Xiaomi Group's total revenue was 126,83 billion Yuan, down 11,6% year on year. However, adjusted net profit increased by 69,5% year on year to 8,37 billion Yuan. The Xiaomi Group stressed that its advertising revenues reached a new high of 5,1 billion Yuan in the second quarter, an increase of 13,0% year on year. This is due to the deepening of refined advertising operations and the growth of high-end smartphone users.
Xiaomi Group's smartphone segment recorded a 13,4% year-on-year decrease in revenue to 36,6 billion Yuan in the second quarter. This was mainly caused by a decrease in smartphone shipments due to global chip shortages and heightened competition in the market. However, the Xiaomi Group has increased the average selling price of smartphones thanks to the launch of new premium models such as the Mi 11 Ultra and the Mi Mix Fold.
The Xiaomi Group also maintained its leadership in the smart TV and laptop market in mainland China. Revenue from these products was 4,7 billion Yuan in the second quarter, a decrease of 10,1% year on year. This was mainly due to declining revenues in overseas markets due to the pandemic and logistical challenges. However, the Xiaomi Group has increased shipments of smart TVs in mainland China due to its strong demand and wide range of products.
The Xiaomi Group also showed strong growth in the smart home appliances segment, with revenues rising more than 70% year-on-year to Yuan 9 billion in the second quarter. This was mainly driven by a significant increase in shipments of smart air conditioners in mainland China, which hit a record high in just one quarter. The Xiaomi Group has also expanded its product offering in this segment with the launch of new models such as the Mi Air Purifier Pro H and the Mi Smart Projector 2 Pro.
Xiaomi Group also strengthened its position in the global AIoT platform, with the number of MIUI monthly active users reaching 606 million in June 2023, an increase of 10,8% year on year. At the same time, the number of connected IoT devices (excluding smartphones, tablets and laptops) on Xiaomi's AIoT platform increased to 654,5 million as of June 30, 2023, an increase of 24,2% year on year.
Finally, the Xiaomi Group has continued to invest in research and development to support its technological innovation. Xiaomi Group's R&D expenditure reached 4,6 billion Yuan in the second quarter, an increase of 21,0% year on year. The Xiaomi Group plans to invest more than 100 billion Yuan in research and development over the five years (2022-2026). As of June 30, 2023, the Xiaomi Group's R&D personnel reached 16.834, accounting for nearly 52% of the total number of employees.
In conclusion, the Xiaomi Group has demonstrated strong resilience and adaptability in the face of market and environmental challenges. The Xiaomi Group has maintained its vision of making technology accessible to all and has continued to offer high-quality products and services to its users around the world. The Xiaomi Group expects to maintain sustainable and profitable growth in the future.