Top Highlights
- ZTE’s revenue reached 134 billion yuan in 2025, growing 10.4%, with its computing segment soaring 150%, now comprising 24.6% of total sales.
- Despite revenue growth, net profit declined sharply by 33.3%, attributed to industry shifts and strategic business adjustments.
- The company’s gross margin fell to 30.25%, reflecting industry cycle changes and reduced spending on traditional telecom equipment.
- ZTE emphasizes expanding its AI and data-center solutions, with revenues in servers and storage increasing significantly by 200% and 50%, respectively.
Record Growth in Computing Revenue Highlights Industry Shifts
Recently, ZTE reported a significant increase in its computing business, soaring 150% compared to last year. This surge contributed to a 10.4% rise in overall revenue, reaching 134 billion yuan. The company’s focus on building its computing infrastructure, including servers, storage, and data centers, appears to be aligned with the global AI boom. As demand for advanced computing solutions grows, ZTE’s efforts to develop full-stack AI capabilities strengthen its competitive edge. This strategic move may position the company as a key player in the evolving tech landscape, potentially fostering broader adoption of AI technologies across various sectors. However, despite this impressive growth, the company faces challenges in maintaining profitability, especially given the current industry cycle.
Profits Decline Amid Revenue Growth and Industry Challenges
While ZTE’s revenue experiences remarkable growth, its profits take a hit. Net profit attributable to shareholders drops by 33.3%, settling at 5.62 billion yuan. Moreover, profit excluding non-recurring items declines even more sharply by 45.5%. The gross margin also shrinks, falling over 7 percentage points to 30.25%. According to the management, this decline results from shifts in the industry cycle and internal restructuring. Spending on traditional telecom network equipment by operators has slowed down, impacting overall profitability. Despite the robust growth in computing segments, the company’s profitability challenges reveal the complexities of balancing expansion with financial health. This situation underscores a broader industry trend: rapid growth in specific areas does not always translate immediately into higher profits, especially amidst fluctuating market demands.
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