Lei Jun reports on Xiaomi's Q2 performance, the high-end strategy of its mobile phone business has delivered tangible results, while the automobile and AI sectors are still in the "cash-burning" phase.
Reported by Zhidx on August 18, today, Xiaomi released its financial report for the second quarter (Q2) of 2026, with revenue and net profit rebounding slightly. Lei Jun posted on Weibo to share the performance data with netizens. Lu Weibing, Partner and President of Xiaomi Group, revealed at the earnings call that the Xuanjie O1 chip launched by Xiaomi last year has achieved cumulative shipments of over 1 million units across three end products, and the brand-new generation of Xiaomi Xuanjie chip is also about to be released.
Lei Jun posted on Weibo to report the company's performance (Source: Weibo)
The financial report shows that Xiaomi's revenue in Q2 was approximately 108.9 billion yuan, down 6.1% year on year; the adjusted net profit was approximately 6.2 billion yuan, down 42.6% year on year.
Revenue and Net Profit of Xiaomi Group (Data range: Q2 2025 - Q2 2026, chart produced by Zhidx)
In Q2, Xiaomi's capital expenditure was approximately 3.6 billion yuan, of which the capital expenditure for the innovative business segments including smart electric vehicles and AI was 2.4 billion yuan, accounting for about 67% of the total capital expenditure; the R&D expenditure was approximately 9.2 billion yuan, up nearly 19% year on year, and the cumulative R&D investment in the first half of the year reached 18.2 billion yuan.
According to the financial report, in Q2, the revenue of Xiaomi's "Smartphone × AIoT" business reached 84 billion yuan, with gross margin stably maintained at 20%.
Lu Weibing disclosed at the earnings call that the memory price increase exceeded Xiaomi's expectations. From the sales perspective, the rising memory price has the most obvious impact on low-end and entry-level models. Lu Weibing predicted that the upward trend of memory prices is expected to slow down in the middle of the third quarter, maintain a slow rising trend in the fourth quarter, and gradually become controllable as a whole.
In terms of innovative businesses, the overall revenue of sectors including smart electric vehicles and AI increased 17.1% year on year to 24.9 billion yuan. Among them, smart electric vehicles contributed revenue of 23.9 billion yuan, and the revenue from emerging businesses such as AI was approximately 1 billion yuan, including revenue from the commercial implementation of the Xiaomi MiMo large model.
However, the innovative businesses are still in the strategic investment period. In this quarter, the operating loss of this segment was 2.6 billion yuan.
Regarding this loss, Steven Shiwei LIN, CFO of Xiaomi Group, explained that Xiaomi's AI is still in the large-scale investment period at present, and the company will continue to promote the reconstruction of businesses by AI. The previously launched Token Plan has brought certain revenue, but monetization is not the primary goal.
Proportion of Revenue of Xiaomi's Business Segments (chart produced by Zhidx)
01. Releasing Multiple "Technical Bombs" Consecutively, HyperOS 4 and Super Xiaoai 2.0 Make Their Debut
Since Xiaomi recruited Fuqi Luo, a former DeepSeek researcher known as a "genius girl" in the industry, every move of Xiaomi's AI business has been pushed to the spotlight.
On June 9, Xiaomi MiMo team and the inference system team TileRT jointly announced that the UltraSpeed mode of Xiaomi MiMo-V2.5-Pro, the flagship large model released in April, has achieved a breakthrough of 1000 tokens/s in the output speed of the 1-trillion-parameter (1T) flagship model for the first time.
In the same month, Xiaomi MiMo team released and open-sourced AI programming assistant MiMoCode V0.1.0. This product is secondary developed based on the open-source project OpenCode, with its core capability of solving the problems of traditional Coding Agent such as forgetfulness, deviation and excessive rework through "model-Agent collaboration + engineering memory".
Xiaomi MiMo Claw official version was also launched in June, positioned as a cloud-hosted, no-local-deployment required, out-of-the-box personal Agent, which is built on the MiMo-V2.5-Pro large model at the bottom, and connected to the Kingsoft Office ecosystem at the same time.
On June 18, Xiaomi also released and open-sourced the Xiaomi Miloco 2.0, the open-source smart home AI solution, which is currently the first in the industry to realize a smart home solution with active AI services and family memory.
Xiaomi Miloco 2.0 GitHub Homepage (Source: GitHub)
In August, Xiaomi officially released the new-generation operating system Xiaomi HyperOS 4 Beta version, introducing load precision calculation and memory preloading technologies for the self-developed Xiaomi HyperCore kernel, and building the HyperOS application running environment.
In addition, Xiaomi also released "Super Xiaoai 2.0". Through the improvement of AI architecture and the access to the Xiaomi MiMo large model, it has better task orchestration capability and content generation capability, and has made special optimizations for cross-application and cross-device scenarios.
In terms of embodied intelligence, on July 15, Xiaomi launched Xiaomi-Robotics-U0, which is an autoregressive world foundation model with 38B parameters, and is also the first unified embodied generation model that combines the image generation foundation model with the embodied world modeling.
Multi-view Prediction of Robot Interactive Video Generation (Source: Xiaomi Technology)
On July 14, Xiaomi also disclosed the latest progress of its robot business. Earlier this year, the Xiaomi robot performed tasks at the self-tapping nut loading station in the Xiaomi car factory, and its operation success rate on both sides of the self-tapping nut loading station has been increased to 98%. At the same time, the robot has also reached a success rate of 90% in the work of sorting the central control side cover and folding and recycling material boxes.
When asked about the positioning of the robot business within Xiaomi, Lu Weibing replied that humanoid robots still have a long cycle before large-scale commercialization. Xiaomi will first get its existing businesses running smoothly, and implement scenarios such as smart factories and smart homes. In the future, many of Xiaomi's core capabilities will form synergy with robots, and the technological development of robots can also feed back existing businesses.
02. Smartphone ASP Hits Record High, Number of Connected AIoT Devices Exceeds 1.16 Billion
The financial report shows that in Q2, Xiaomi's smartphone revenue was 42.1 billion yuan, down 7.5% year on year, which was mainly due to the decrease in smartphone shipments, partially offset by the increase in the average selling price (ASP) of smartphones.
According to Omdia data, in the second quarter of 2026, affected by storage prices, global smartphone shipments declined 6% year on year. In the same period, Xiaomi's global smartphone shipments were 31.2 million units, the smartphone business revenue was 42.1 billion yuan, and the gross margin was 8.5%.
Facing the rising storage prices, Xiaomi's smartphone division adopted a high-end strategy to raise product prices, and continued to optimize the product structure. In the second quarter of 2026, the average selling price (ASP) of Xiaomi's smartphones increased 25.9% year on year, reaching 1351 yuan.
According to third-party data, in the second quarter of 2026, in mainland China, the sales volume of smartphones with a retail price of 3000 yuan and above accounted for 32.1% of the total smartphone sales volume, hitting a record high, up 4.5% year on year. Among them, Xiaomi's market share of smartphone sales in the 3000-4000 yuan price range in mainland China reached 16.2%, up 3.3% year on year.
According to Omdia data, in the second quarter of 2026, Xiaomi's global smartphone shipments ranked third, having been among the top three worldwide for 24 consecutive quarters.
Global Smartphone Shipments and Market Share (Source: Omdia)
Meanwhile, Xiaomi's smartphone shipments rank among the top three in 53 countries and regions around the world, and rank among the top five in 67 countries and regions around the world.
Among them, Xiaomi's smartphone shipments rank second in Southeast Asia, Latin America and the Middle East, with market share of 19.3%, 16.2% and 13.5% respectively; rank third in Europe and Africa, with market share of 16.5% and 10.9% respectively.
For other products, according to Omdia data, in the second quarter of 2026, Xiaomi's global tablet shipments rose to fourth, and mainland China shipments ranked fourth; global TWS earphone shipments ranked second, and mainland China shipments ranked second; global shipments of wearable wrist devices ranked second, and mainland China shipments ranked second.
In terms of Xiaomi's ecosystem, the financial report shows that as of June 30, 2026, the number of connected IoT devices (excluding smartphones and tablets) on Xiaomi's AIoT platform has reached 1.16 billion, up 17.4% year on year; the number of users with five or more devices connected to Xiaomi's AIoT platform (excluding smartphones and tablets) has reached 24.6 million, up 20.2% year on year.
In June 2026, the monthly active users of the Mi Home app increased 9.7% year on year to 124 million, and the monthly active users of Xiaoai Assistant increased 14.2% year on year to 175 million.
In the second quarter of 2026, the overall revenue of sectors including smart electric vehicles and AI increased 17.1% year on year to 24.9 billion yuan. Among them, smart electric vehicles contributed revenue of 23.9 billion yuan.
The financial report shows that in Q2, Xiaomi delivered a total of 104199 new cars, up 28.2% year on year. In the first half of 2026, among all pure electric sedans with a sales price of over 200,000 yuan in mainland China, the Xiaomi SU7 series ranked first in sales volume. As of August 17, 2026, the cumulative delivery volume of the Xiaomi SU7 series has exceeded 500,000 units.
03. Conclusion: Revenue and Profit Under Pressure, Xiaomi Is in the Transition Pain Period
Looking at this Q2 financial report, Xiaomi is in a period where new businesses are still growing and old businesses continue to face pressure.
On one hand, Xiaomi's fundamental smartphone business has maintained its market share against the industry downturn, the high-end strategy is indeed taking effect, and the ASP and the proportion of high-end models have achieved solid growth; on the other hand, its new businesses including automobiles and AI are still burning a lot of capital, with a loss of 2.6 billion yuan and capital expenditure of 2.4 billion yuan, making it difficult to see the profit inflection point in the short term.
In terms of AI progress,