Xiaomi Reports 52.9% YoY Decrease of Adjusted Net Profit in Q1

Beijing-based tech giant Xiaomi released on Thursday its unaudited consolidated results for the three months ended March 31, 2022.

Xiaomi‘s revenue decreased by 4.6% to 73.4 billion yuan ($10.87 billion) in the first quarter of 2022 on a year-on-year basis, including 37.5 billion yuan from overseas markets. Specifically, advertising revenue reached 4.5 billion yuan, up 16.2% year on year, while the company’s game business revenue reached 1.1 billion yuan, up 3.0% year on year.

Xiaomi‘s adjusted net profit reached 2.9 billion yuan in the same period, a year-on-year decrease of 52.9%, which included 425 million yuan of expenses related to smart EVs and other new initiatives. The report also showed a loss of 0.5 billion yuan in the first quarter of 2022, compared with a profit of 7.8 billion yuan in the first quarter of 2021.

In this quarter, Xiaomi‘s smartphone revenue reached 45.8 billion yuan while global smartphone shipments amounted to 38.5 million units. The short supply of core components, COVID-19 outbreaks and the global macroeconomic environment were the main factors of the decrease in the company’s smartphone revenue and shipments compared with those of Q4 last year. According to Canalys, in the first quarter of 2022, Xiaomi still maintained its No. 3 ranking in terms of global smartphone shipments with market share of 12.6%.

In the first quarter of 2022, revenue from IoT and lifestyle products reached 19.5 billion yuan, an increase of 6.8% year-over-year, while gross profit margins of those products reached 15.6%, a quarterly high.

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Xiaomi‘s research and development expenses reached 3.5 billion yuan in Q1, an increase of 16.0% year-over-year. As of March 31, 2022, Xiaomi had 33,793 full-time employees, 31,165 of whom were based in mainland China, primarily at their headquarters in Beijing, while the rest primarily were based in India and Indonesia. As part of the company’s human resources strategy, the company offers employees competitive compensation packages. As of March 31, 2022, 18,861 employees held share-based awards.