Xiaomi Corporation · Q2 2026 call

In Q2 '26, our smartphone gross margin was 8.5%. Gross margin for the first half was 9.3%.

Ultimately, the value of technology lies in the breadth of its use.

Short-term pressure will not change our long-term strategy. We remain committed to our goal of becoming a global leader in next-generation hard-core technologies and continue to increase our investment in hardcore technologies such as AI chips, operating system and embodied intelligence to build strength for the next stage of growth.

in Q2 2026, our high-end or premium smartphone sales in Mainland China accounted for 32.1% of total smartphone sales in China, a record high.

In this quarter, our R&D expenses was RMB 9.2 billion, up 18.9% year-on-year. In first half 2026, our R&D expenses was RMB 18.2 billion, up 25.6% year-on-year with AI-related investments accounting for nearly 30%.

In Q2 2026, our CapEx reached RMB 3.6 billion, of which innovative businesses such as Smart EVs and AI accounted for 65.8%.

Since 2026, our share buyback amount has reached about HKD 11.7 billion, exceeding the total amount bought back for the entire past year or previous year.

There is no way for us to just pass on the whole cost increase to our consumers. We have to rationalize our product lines and adjust our product mix.

Our shipments declined on a year-on-year basis. However, we are still #3 globally. Our ASP was at record high. It rose by almost RMB 300

Final conclusion is that we are in a controllable condition for this business.

for AI, we are now in a large-scale investment phase. So we are not too anxious to pursue monetization. […] We do not treat monetization as our primary goal.

we delivered more new generation SU7. It was launched in March. […] that's why for SU7 delivery, when its share is bigger in our deliveries, gross margin came down on a quarter-on-quarter basis.

Last year or last quarter, it's almost RMB 30 billion in raw material inventory. Now in Q2, it is about RMB 40-odd billion of inventory.

now MiMo just started to be monetized and the revenue is not big. In the future, at appropriate times, we may disclose it separately. But at this stage, we will still put it within this RMB 1 billion.

ASP is a result to us. It's not a goal. ASP relatively speaking, is not related to GP margin.

Right now, it is 5x that of the Q2 last year level, but it's difficult to stay at this 5x level for a long time.

for final large-scale maturity and development, well, I think it will take a longer time. It's difficult to share some short-term goals.