Xiaomi reported record 2025 revenue on March 24 as its electric-vehicle business expanded fast enough to reshape the group’s growth profile, but the results also exposed a harder truth about the Chinese tech company’s transition: weak smartphone demand still hit fourth-quarter profitability. According to Xiaomi’s annual results materials, full-year revenue rose 25.0 percent to about 457.3 billion yuan and adjusted net profit increased 43.8 percent to roughly 39.2 billion yuan. Yet Reuters said adjusted Q4 profit fell 23.7 percent year over year, showing that EV momentum has become meaningful without fully insulating Xiaomi from handset pressure.
The annual numbers show that EV is no longer a side story
The clearest change in Xiaomi’s 2025 results is that its EV business now looks large enough to alter the company’s financial narrative, not just its brand image. Xiaomi said revenue from its Smart EV, AI and Other New Initiatives segment reached 106.1 billion yuan in 2025, up 223.8 percent from a year earlier. Within that total, smart EV revenue came in at about 103.3 billion yuan. The company’s results materials also said it delivered 411,082 vehicles in 2025.
Those figures matter because they move Xiaomi’s EV push out of the speculative phase. For much of the past two years, the market could still treat Xiaomi’s automotive expansion as a promising but early business layered on top of its existing handset and consumer-electronics base. After this set of results, that framing is harder to defend. EV is now large enough to lift group revenue in a visible way and to give investors a real operating line to track quarter by quarter.
That is why the most useful reading of Xiaomi’s 2025 results is not simply that the company had a strong year. It is that Xiaomi’s transition from a handset-led Chinese electronics group toward a broader consumer-tech-and-EV platform is now measurable in the income statement. Record annual revenue did not come from a small experimental division. It came in part because EV has become a serious commercial business.
But the quarter also showed how much the phone business still matters
The full-year record should not be confused with a clean quarter. Reuters focused on the weakest part of the release: adjusted fourth-quarter profit fell 23.7 percent from a year earlier. Bloomberg’s framing was similarly blunt, describing Xiaomi’s sales growth as the slowest in years as poor phone demand weighed on performance. That combination is what makes the results more interesting than a straightforward growth story.
The pressure point was the legacy business that still defines Xiaomi for many investors. Media coverage cited fourth-quarter smartphone revenue of about 44.3 billion yuan, down 13.6 percent year over year. In other words, Xiaomi’s newer business lines were strong enough to help produce a record year, but not strong enough to fully neutralize a weak quarter in phones. That distinction is important. The market is not being asked to choose between “Xiaomi EV is working” and “Xiaomi’s core business is weakening.” The results suggest both statements can be true at the same time.
That is also why the quarter deserves more attention than the annual headline alone. A company can post record yearly revenue while still revealing a fragile operating mix underneath. Xiaomi’s results did exactly that. The EV business is scaling rapidly, but the smartphone operation remains large enough that a softer demand cycle can still drag down the quarter’s profit reading and shape market reaction.
Investors now have a cleaner picture of an uneven transition
The real value of this earnings release is that it makes Xiaomi’s business transition easier to see. For an English-language business audience, the story is not “Xiaomi wins because EV is booming,” nor is it “Xiaomi disappoints because Q4 profit fell.” The more accurate interpretation is that Xiaomi is moving into a new stage where its automotive expansion is clearly real, but the handoff away from a phone-led earnings profile is still incomplete.
That is a more durable angle because it captures the tension inside the numbers. Xiaomi is not a pure EV maker, and it is no longer just a smartphone company either. The annual results show how much EV can expand the top line. The quarter shows how quickly weakness in the legacy handset business can still affect the bottom line. For investors, that is the point: Xiaomi’s newer growth engine is already powerful, but the old engine still determines too much of the ride quality.
This is also why the story fits a broader China business frame. Xiaomi sits at the intersection of two large markets where China has scale: consumer electronics and electric vehicles. When both sides move in different directions at the same time, the company becomes a useful case study in how Chinese tech groups are trying to reinvent themselves without fully escaping the cycles of their original businesses.
China’s market backdrop helps explain both sides of the story
The wider market context strengthens that reading. Omdia said Mainland China’s smartphone market declined only slightly in 2025, but that still meant a relatively soft demand environment rather than a strong rebound. According to the figures cited in the upstream brief, Xiaomi shipped 43.7 million smartphones in China in 2025 and 10.0 million in the fourth quarter. That helps explain why a company of Xiaomi’s scale could still feel visible pressure in its phone segment even while other parts of the business were growing.
The EV backdrop looked very different. Xiaomi’s own 2025 results materials said it delivered 411,082 vehicles during the year, showing that the automotive business had already moved beyond an early launch phase and into a scale business with visible weight inside the group’s revenue mix. That does not prove the EV segment can offset every future handset slowdown. But it does support the idea that Xiaomi’s new business is not a one-quarter anomaly. It is already large enough to change how investors read the company’s overall trajectory.
Put together, those market signals make Xiaomi’s earnings split easier to understand. Smartphone demand in China was not strong enough to guarantee an easy quarter, while EV volume was rising fast enough to transform the company’s annual revenue structure. Xiaomi now sits between those realities. That is why this results cycle feels more strategically important than a normal earnings beat or miss.
What changed, and what could happen next
What changed this week is that Xiaomi gave investors the clearest post-EV read yet on how its business model is evolving. The company can now point to record annual revenue, sharply higher adjusted annual profit and an EV segment that has become commercially material. At the same time, the fourth-quarter numbers showed that weakness in the phone business still has the power to drag down profit and dominate the market conversation.
What happens next will depend on whether Xiaomi can narrow that gap. If EV keeps scaling while the smartphone business stabilizes, future earnings could make Xiaomi look more like a balanced multi-engine growth company. If smartphone demand remains soft, however, each strong EV milestone may continue to be matched by investor questions about margins, earnings quality and how fast the company can reduce its dependence on handsets. That is what this earnings cycle really changed: it made Xiaomi’s transition look real, but it also made clear that the transition is not finished.
Related coverage on 1M Reviews
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Sources
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Xiaomi — 2025 Q4 / FY2025 Results Announcement
– https://ir.mi.com/system/files-encrypted/nasdaq_kms/assets/2026/03/24/5-35-03/25Q4%20EN%20AC%20Xiaomi.pdf
– Key takeaway: Provides the official figures for full-year revenue, adjusted net profit, segment revenue and other core financial metrics. -
Xiaomi — 2025 Q4 Earnings Presentation
– https://ir.mi.com/system/files-encrypted/nasdaq_kms/assets/2026/03/24/6-20-53/Xiaomi%20Corp_25Q4_ER_ENG%20vF.pdf
– Key takeaway: Adds detail on the Smart EV, AI and Other New Initiatives segment, including smart EV revenue and vehicle-delivery scale. -
Reuters — international news framing
– https://www.reuters.com/world/asia-pacific/xiaomi-reports-237-drop-q4-profit-2026-03-24/
– Key takeaway: Highlights the quarter-level tension in the story by focusing on the 23.7 percent year-over-year decline in adjusted Q4 profit. -
Bloomberg — smartphone-demand framing
– https://www.bloomberg.com/news/articles/2026-03-24/xiaomi-sales-grows-slowest-in-years-in-sign-of-poor-phone-demand
– Key takeaway: Sharpens the market interpretation that softer smartphone demand remains a meaningful drag on Xiaomi’s quarterly performance. -
Omdia — Mainland China smartphone market data
– https://omdia.tech.informa.com/pr/2026/jan/mainland-chinas-smartphone-market-declined-1eprcent-in-2025-as-huawei-reclaimed-the-top-spot-after-five-years
– Key takeaway: Adds market-level context on China’s soft 2025 smartphone demand and Xiaomi’s shipment backdrop.
Editorial note: The quarter-level weakness should not be confused with a full-year decline. Xiaomi’s annual revenue and adjusted net profit both increased in 2025. The more precise conclusion is that EV growth lifted the full-year result, while smartphone softness still weighed on fourth-quarter profit.
