VeriSilicon Microelectronics (Shanghai) (688521) Q2 2025 earnings summary

Executive summary

• Achieved revenue of RMB 974 million in H1 2025, up 4.49% year-over-year, with net loss attributable to shareholders of RMB -320 million and adjusted net loss of RMB -358 million.

• Gross margin for H1 2025 was 43.32%, down 1.08 percentage points year-over-year, mainly due to changes in revenue structure.

• R&D investment reached RMB 640 million, accounting for 65.71% of revenue, reflecting continued high investment in technology and talent.

• Second quarter revenue grew 49.90% sequentially, driven by strong IP licensing and mass production business.

• Orders on hand hit a record RMB 3.025 billion at Q2-end, up 23.17% from Q1, with 81% expected to convert within a year.

Financial highlights

• H1 2025 revenue: RMB 973.8 million (+4.49% YoY); net loss: RMB -319.8 million; adjusted net loss: RMB -358.0 million.

• Gross profit: RMB 422 million (+1.93% YoY); gross margin: 43.32%.

• Operating cash flow: RMB -365.2 million; total assets: RMB 6.32 billion; net assets: RMB 3.60 billion.

• Basic and diluted EPS: RMB -0.64; adjusted EPS: RMB -0.71.

• R&D expenses: RMB 640 million (+7.60% YoY), 65.71% of revenue.

Outlook and guidance

• Orders on hand at record high, with strong pipeline in chip design and mass production, supporting future revenue growth.

• Company expects to continue investing in AIGC, automotive, wearable, data center, and IoT platforms.

• R&D investment ratio expected to normalize as more resources shift to customer projects.