Huawei’s 2024 profit falls despite record revenue
R&D and digital transformation kept Huawei growing in sales, but profitability took a hit amid margin pressure and investment in future bets
Huawei’s 2024 revenue hit ¥862.1 billion (US$118.8 bn), up 22.4% YoY, with China contributing over 71%.
Net profit fell 28% to ¥62.6 billion (US$8.63 bn), largely due to a sharp drop in “other income” and rising operational costs.
Investment in R&D reached ¥179.7 billion (US$24.76 bn), making up 20.8% of revenue, with continued bets on AI, cloud, EVs, and digital energy.
Huawei grows in every line of business—but not in profit
In its newly released 2024 annual report, Huawei posted its highest-ever revenue of ¥862.1 billion (approx. $118.8 billion), up 22.4% year-over-year.
While the company grew across all major business lines—including ICT infrastructure, consumer devices, cloud computing, digital energy, and smart vehicles—its net profit plunged 28% to ¥62.6 billion.
The profit decline marks a notable shift from Huawei’s strong rebound in 2023. The company cited lower “other net income,” which dropped from ¥62.7 billion in 2023 to just ¥8.3 billion in 2024, as a major reason for the earnings dip. Operating margins also slipped to 9.2%, down from 14.8% last year.
Smartphones stage a comeback
Huawei’s terminal (consumer devices) business saw a massive rebound, with revenue jumping 38.3% to ¥339 billion.
The resurgence is largely driven by strong domestic demand for Huawei’s flagship smartphones, particularly the Mate 60 series, which stirred patriotic support and circumvented US sanctions by using China’s advanced chipmaking capabilities.
Meanwhile, its ICT infrastructure business—Huawei’s bread and butter—grew modestly at 4.9% to ¥369.9 billion. Cloud revenue rose 8.5% to ¥38.5 billion, while the digital energy unit (e.g., solar and EV energy tech) expanded 24.4% to ¥68.7 billion.
One surprise standout: Huawei’s smart vehicle business surged 474.4%, reaching ¥26.4 billion in revenue. Though still a small contributor overall, this area is central to the company’s ambitions in the electric and intelligent vehicle space.
China remains Huawei’s anchor market
Domestically, Huawei pulled in ¥615.3 billion in 2024—71% of its total revenue.
This shows the company’s deep reliance on the Chinese market amid geopolitical tensions that limit its global reach. EMEA, Asia-Pacific, and the Americas grew modestly, reflecting continued hurdles in overseas expansion.
Heavy investments into AI, cloud, and foundational tech
Huawei’s R&D spend reached ¥179.7 billion in 2024, up 9.1%, accounting for over 20% of total revenue. That’s more than the company’s annual net income, a continuation of its decade-long strategy to reinvest heavily in innovation.
Among its forward-looking projects:
AI: Huawei released its own foundation models and established governance principles for responsible AI development.
HarmonyOS: Continued expansion of its in-house OS with more than 20,000 apps now available.
Cloud: Enhanced MetaERP system and digital platforms for partners and customers worldwide.
Smart mobility: Growing its footprint in autonomous driving and vehicle OS solutions.
Financial health remains strong
Despite the profit dip, Huawei maintains a robust balance sheet:
¥372.2 billion in cash and short-term investments
¥88.4 billion in operating cash flow (up 26.7% YoY)
Debt reduced by ¥43.5 billion year-over-year through restructuring.
Its ability to generate free cash flow and reduce debt amid global uncertainty highlights operational resilience.
The bigger picture: transformation, not just tech
Huawei’s 2024 narrative is more than just product lines and numbers. It's a story of long-term transformation: from a telecom gear giant into a broad-spectrum technology platform company, spanning AI, energy, smart devices, cloud, and more.
But this diversification comes at a cost. The sharp drop in non-operating income raises questions about sustainable profitability. Whether Huawei can convert these tech bets into future margin drivers is the key question going into 2025.