Huawei Technologies posted a sharp 28% drop in net profit for 2024 despite a surge in revenue, as the Chinese telecoms and consumer electronics giant boosted investment in strategic technologies to counter U.S. sanctions and rebuild its smartphone business. The Shenzhen-based firm reported net income of 62.6 billion yuan ($8.6 billion), down from 87 billion yuan in 2023, even as revenue climbed 22.4% to 862.1 billion yuan ($118.2 billion).
The results, released Monday, mark Huawei's second-highest revenue performance on record, just short of the 891.4 billion yuan posted in 2020. "In 2024, the entire team at Huawei banded together to tackle a wide range of external challenges," said rotating Chairwoman Meng Wanzhou in the company's annual report. "We will increase investment in strategic depth, particularly in building foundational technologies."
Huawei's consumer business, which includes smartphones and personal devices, drove much of the top-line growth, with revenue jumping 38.3% to 339 billion yuan. Smartphone shipments in China climbed 37% year-on-year, lifting Huawei's domestic market share to 16%, up from 12% in 2023, according to Canalys.
The rebound followed the launch of high-end models using domestically developed semiconductors, a workaround to U.S. sanctions that have blocked Huawei's access to advanced chips and Google's Android platform. In 2024, the company also released HarmonyOS 5, the first version of its mobile operating system reportedly free from any open-source Android code.
Huawei has invested heavily in research and development to reduce reliance on foreign technologies. R&D spending reached 179.7 billion yuan ($25 billion), accounting for 20.8% of total revenue. More than half of its workforce, or 113,000 employees, are now dedicated to R&D.
Its core ICT infrastructure division, including telecom equipment, rose 4.9% to 369.9 billion yuan, benefiting from global deployment of next-generation 5.5G networks. Huawei remains one of the world's largest telecom equipment makers, though it remains barred from supplying to U.S. networks and faces restrictions in several allied markets including the U.K., Canada, and Australia.
Automotive technology emerged as a breakout segment, with revenue in its Intelligent Automotive Solutions unit surging 474.4% to 26.4 billion yuan. Huawei is providing software and driver-assistance systems to third-party automakers, tapping into the electric and smart vehicle boom.
Meanwhile, Huawei's digital power division - focused on energy infrastructure for electric vehicles and renewables - generated 68.7 billion yuan in revenue, up 24.4% from a year earlier. Cloud computing, another strategic priority, brought in 38.5 billion yuan, a gain of 8.5%. When accounting for internal sales, cloud revenue totaled 68.8 billion yuan.
Huawei attributed the profit decline partly to its increased investment in future technologies and the absence of one-time gains from divestitures seen in prior years. The company is continuing its push to diversify across emerging sectors, though analysts remain cautious about its overseas smartphone prospects given the persistent lack of access to cutting-edge semiconductors and Google software.
Citing national security concerns, the U.S. and its allies have limited Huawei's role in telecom infrastructure and restricted chip sales. Huawei has repeatedly denied allegations that it poses a security threat.
