R&D Spending Takes Priority
Huawei directed more than one-quarter of its first-half revenue toward research and development. The company prioritised long-term technological independence despite the immediate effect on earnings. R&D expenses reached 121.4 billion yuan, or US$18 billion, during the six months through June. This represented a 25% increase from the previous year and exceeded 25% of total revenue.
Profits and Cash Flow Weaken
Higher technology investment and rising component costs reduced Huawei’s first-half net profit by 36%. Earnings fell to 23.8 billion yuan from 37.2 billion yuan during the same period last year. This was the company’s second consecutive decline in first-half profits. Net operating cash flow also changed sharply, moving from a positive 31.2 billion yuan to negative 39.9 billion yuan.
Revenue Continues to Grow
Despite weaker profitability, Huawei’s revenue increased 9.55% to 467.8 billion yuan. A year earlier, the company had reported 427 billion yuan for the comparable period. Stronger smartphone shipments and accelerating demand for Huawei’s artificial-intelligence processors supported that growth. Because Huawei is privately held, it releases operating figures occasionally through bond-issuance disclosures filed with the Shanghai Clearing House.
References
Deng, I. (2026, August 31). Huawei, with an eye on self-reliance, ploughs 25% of revenue into R&D at expense of profits. South China Morning Post. https://www.scmp.com/tech/big-tech/article/3365852/huawei-eye-self-reliance-ploughs-25-revenue-rd-expense-profits