ECOVACS Q3 net profit surged 72 times, operating cash flow increased by 1780.60% | Financial report insights
ECOVACS Q3 net profit surged by 7160.87%, with revenue increasing by nearly 30% year-on-year, and the profit growth rate far exceeding the revenue growth rate. The company attributes the explosive growth in profit to its home service robot business, which saw an increase in revenue year-on-year along with an improvement in gross margin, coupled with a decrease in operating expense ratio
ECOVACS delivered an impressive Q3 financial report. The data shows that the profit for Q3 surged by 7160.87% year-on-year. The core driver of this profit explosion comes from the "ECOVACS brand home service robot business." During the reporting period, revenue increased, gross margin improved year-on-year, and the expense ratio decreased, collectively driving the enhancement of profitability.
On October 24th, ECOVACS announced its Q3 financial report, with the core financial data as follows:
- Q3 single-quarter revenue of 4.201 billion yuan, a year-on-year increase of 29.26%; net profit of 438 million yuan, a year-on-year surge of 7160.87%
- Revenue for the first three quarters reached 12.877 billion yuan, a year-on-year increase of 25.93%; net profit of 1.418 billion yuan, a year-on-year increase of 130.55%
- Net profit excluding non-recurring items was 1.284 billion yuan, a year-on-year increase of 141.99%, indicating improved profit quality
- Net operating cash flow reached 1.963 billion yuan, a year-on-year surge of 1780.60%, indicating improved cash flow conditions
Significant Profit Improvement and Cash Flow Surge
ECOVACS' net profit attributable to the parent company in Q3 increased 72 times year-on-year, with the report attributing the profit explosion to the "ECOVACS brand home service robot business." During the reporting period, not only did revenue grow, but gross margin also improved year-on-year, while the expense ratio decreased, collectively enhancing profitability.
The high profit growth is partially attributed to a low base effect, as the net profit in Q3 2024 was only 6.4 million yuan. Overall, the net profit for the first three quarters reached 1.418 billion yuan, compared to 615 million yuan in the same period last year, representing a year-on-year increase of 130.55%, with significant profit improvement. In Q3, the company achieved both "profit increase and revenue increase," with profit growth far exceeding revenue growth, enhancing the company's profitability.
The financial report also highlights the operating cash flow data. The net operating cash flow for the first three quarters reached 1.963 billion yuan, a year-on-year surge of 1780.60%, compared to only 104 million yuan in the same period last year. This change is attributed to a substantial increase in cash received from sales—cash received from sales of goods was 14.463 billion yuan, a year-on-year increase of 29.46%, indicating progress in the company's channel management and accounts receivable control.
It is noteworthy that accounts receivable decreased from 2.924 billion yuan at the beginning of the year to 2.181 billion yuan, a decrease of 25.43%, indicating that while the company expanded sales, its bargaining power and collection management capabilities with downstream channels have also improved.
The financial report shows that the company's selling expenses for the first three quarters reached 3.910 billion yuan, a year-on-year increase of 32.1%, with the proportion of operating revenue rising from 29.0% in the same period last year to 30.4%. This reflects that ECOVACS is continuously increasing market investment to strengthen brand recognition and compete for market share
