In its third quarter of 2023, Xiaomi Corp. reported a surge in adjusted net profit by 182.9% to RMB6 billion, attributing it to the effective execution of its core strategy.
With a focus on scalability and profitability, Xiaomi’s consolidated results for the period ending Sept. 30, 2023, reflect significant growth in revenue and profit, marking the first quarterly YoY revenue rise in six quarters and a two-year high in profit.
Xiaomi founder and CEO Lei Jun unveiled a vision for the company for 2020-2030, emphasizing sustained investments in core technologies. This commitment is evident in the increased R&D expenses, soaring by 22% YoY, with more than half of Xiaomi’s workforce dedicated to R&D. The introduction of Xiaomi HyperOS, a operating system integrating personal devices, smart home products, and smart mobility, reflects the company’s dedication to innovation.
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According to Xiaomi, the efficient execution of its “scale and profitability” strategy led to a record high gross profit margin of 22.7%, marking four consecutive quarters of increase. Maintaining lower inventory levels of RMB36.8 billion, down by 30.5% YoY, allows Xiaomi the flexibility to adapt swiftly to market demands. With a cash reserve hitting RMB127.6 billion by Sept. 30, 2023, the company is well-positioned for further innovation.
Smartphone business
Xiaomi’s smartphone business showed robust performance despite a global decrease in smartphone shipments, achieving 41.8 million units shipped, the highest in six quarters. The introduction of the Xiaomi 14 Series in China garnered exceptional sales, surpassing previous models and earning rave reviews.
The IoT and lifestyle products segment experienced a revenue increase of 8.5% YoY, with a record-high gross profit margin of 17.8%. Xiaomi’s ecosystem products emphasize interconnectivity, boasting 699 million connected IoT devices and over 13.7 million users with multiple connected devices.
Xiaomi’s AIOT ecosystem
The company’s internet services revenue hit a quarterly record high of RMB7.8 billion, with a gross profit margin of 74.4%, propelled by a growing user base. Xiaomi’s global expansion strategy showcased potential, with a substantial increase in revenue from overseas internet services and advertising.
Xiaomi’s strategic upgrade to “Human x Car x Home” is evidenced by its R&D investments, technological talent recruitment, and the unveiling of Xiaomi HyperOS. This operating system, designed for comprehensive device connectivity, emphasizes performance optimization, intelligent connectivity, proactive intelligence, end-to-end security, and an open platform approach.