ZTE continues to expand its sales scale, but profits are under pressure. In Q1 2025, revenue increased by 7.82% year-on-year, but net profit attributable to shareholders and net profit excluding non-recurring items decreased by 10.5% and 26.14% year-on-year, respectively.
On the 22nd, ZTE released its Q1 2025 report:
<blockquote>
<ul>
<li>Revenue: Q1 revenue was 32.97 billion yuan, a year-on-year increase of 7.8%;</li>
<li>Net Profit: Q1 net profit attributable to shareholders was 2.45 billion yuan, a year-on-year decline of 10.5%;</li>
<li>Net Profit Excluding Non-recurring Items: Q1 net profit excluding non-recurring items was 1.96 billion yuan, a year-on-year decline of 26.1%;</li>
<li>Basic Earnings Per Share: Q1 was 0.51 yuan/share, a year-on-year decline of 10.53%;</li>
<li>Cash Flow: Q1 net cash flow from operating activities was 1.85 billion yuan, a year-on-year decrease of 38%.</li>
</ul>
</blockquote>
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/4bd9e197-64ef-44bd-9dc2-a9de0776807a.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/4bd9e197-64ef-44bd-9dc2-a9de0776807a.png"/>
<h2>Steady Revenue Growth but Significant Profit Decline</h2>
ZTE continues to expand its sales scale, but profits are under pressure. In Q1 2025, revenue increased by 7.82% year-on-year to 32.97 billion yuan, but net profit attributable to shareholders decreased by 10.5% year-on-year, and net profit excluding non-recurring items fell by 26.14% year-on-year.
The company's financial expenses decreased significantly by 432.98% year-on-year, mainly due to increased net interest income and foreign exchange gains from currency fluctuations.
In terms of the balance sheet, the company's non-current liabilities due within one year reached 11.47 billion yuan, a year-on-year increase of 105.07%, mainly due to an increase in long-term borrowings due within one year. The company also issued new medium-term notes, resulting in a year-on-year increase of 100.27% in the balance of bonds payable, reaching 2.01 billion yuan.
ZTE has always regarded technological innovation as its core competitiveness. In Q1 2025, the company's R&amp;D expenses were 5.95 billion yuan, a decrease of 6.7% compared to 6.38 billion yuan in the same period last year, but the proportion of R&amp;D investment to revenue remained at a relatively high level of around 18%.
The net cash flow from operating activities was 1.85 billion yuan, a year-on-year decrease of 37.93%, mainly due to an increase in cash paid for purchasing goods and receiving services. In contrast, the net cash flow from investing activities was -1.38 billion yuan, a significant improvement of 90.81% compared to -15.06 billion yuan in the same period last year, mainly due to a reduction in net outflow from investments

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ZTE's Q1 revenue increased by 7.82% year-on-year, but profits were under pressure, with net profit attributable to shareholders and net profit excluding non-recurring items decreasing by 10.5% and 26.14% year-on-year, respectively. R&D expenses decreased by 6.7% year-on-year

- ZTE Corporation reported a 7.82% year-on-year revenue increase in Q1 2025, reaching 32.97 billion yuan.  
- However, net profit attributable to shareholders fell by 10.5%, and non-recurring net profit decreased by 26.14%.  
- The company continues to focus on technological innovation, with R&D expenses at 5.95 billion yuan, representing about 18% of revenue, despite a decline from the previous year.

ZTE's Q1 revenue increased by 7.82% year-on-year, while its net profit excluding non-recurring items decreased by 26.14% | Financial Report Insights