Huawei Technologies Co. reported its first quarterly net loss in years, despite a 9.5% increase in revenue to approximately 276 billion yuan ($38.1 billion) in the December quarter, according to Bloomberg calculations.
The loss comes as the company aggressively invests in research and development across various sectors, including electric vehicles (EVs) and semiconductors.
The revenue growth, fueled by the increasing popularity of Huawei’s Mate devices at the expense of Apple Inc., follows a period of double-digit gains.
In 2024, Huawei made significant strides in chipmaking and smartphones, debuting its own in-house operating system and competing with Nvidia Corp. domestically in the AI server chip market. Heavily impacted by US sanctions, Huawei has prioritized research and development, particularly in new ventures such as EV software, allocating 179.7 billion yuan to R&D last year – a 9.1% increase from 2023, representing approximately one-fifth of its overall revenue.
This heavy investment contributed to a net loss of about 300 million yuan for the quarter, compared to a net profit of 13.9 billion yuan a year earlier, which was boosted by gains from previous asset sales. Huawei divested Honor Device Co. in 2020 and parts of its server arm in 2021.
Despite the quarterly loss, Huawei experienced strong growth in several key areas. The smart driving solutions business for carmakers became profitable for the first time in 2024, benefiting from the rapid adoption of electric vehicles in China, with revenue increasing more than fivefold.
The consumer business group, encompassing handsets, wearables, and laptops, grew by 38% in 2024. Huawei devices recorded 20%-plus growth in the Chinese smartphone market during the past quarter, while Apple saw a decline, according to industry consultancy IDC.
Huawei’s cloud computing arm grew by 8.5% in 2024, driven by demand for AI-powered growth across China post-DeepSeek. The company has also benefited from US sanctions preventing Chinese buyers from accessing advanced Nvidia GPUs. The Jack Ma-backed Ant Group Co. reportedly utilized Chinese-made semiconductors, including those from Huawei, to train its models.
The core telecom business, Huawei’s oldest division and the foundation of its global expansion, grew by 5% last year. The US continues to exert pressure on European carriers to cease business dealings with Huawei.
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