Breakthrough in the "Hundred Glasses Battle": XREAL files for Hong Kong listing, AR glasses face their "profit litmus test"
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Author | Huang Yu
After a long period of exploration of underlying technologies and market enthusiasm, the smart glasses sector has finally ushered in a “touchstone” to test its commercial value.
On April 1, leading AR glasses manufacturer XREAL (XREAL Ltd.) officially submitted its listing application to the Main Board of the Hong Kong Stock Exchange, with CICC and Citigroup acting as joint sponsors.
This is not only a report card delivered by a leading enterprise in the AR glasses field, but also marks the iconic moment when the entire smart glasses sector shifts from “concept hype” to “commercial closed loop.”
If successfully listed, XREAL may become “the world’s first smart glasses stock.”
XREAL’s founder and CEO, Xu Chi, posted in his WeChat Moments that the tenth year of XREAL marks a new beginning.
Founded in 2017, XREAL’s product lines can be categorized into three main series: the Air series, the One series, and the Light-Ultra-Aura product line, covering different price ranges, user needs, and product functions, ranging from entry-level spatial display products to next-generation spatial computing products.
The core concern of the capital market lies in the scale of product sales and its ability to generate self-sustaining cash flow.
According to data disclosed in the XREAL prospectus, XREAL demonstrated a relatively stable growth trajectory over the past three years.
In 2023, 2024, and 2025, XREAL’s total revenue was 390 million yuan, 394 million yuan, and 516 million yuan, respectively, with the year-on-year growth rate in 2025 reaching 30.8%.
From a market structure perspective, in 2025, 71% of XREAL’s revenue comes from overseas, with the US and Japan being the core revenue sources, contributing 36.9% and 14.6% of total revenue, respectively. Currently, its sales network covers 40 countries and regions worldwide.
In terms of shipments, XREAL has also achieved continuous growth.
According to the prospectus, from 2023 to 2025, XREAL’s smart glasses sales amounted to about 400,000 units in total.
According to IResearch data, XREAL's global AR glasses revenue market share in 2025 is 27.0%, and its sales volume market share is 24.8%, both ranking first. Other IDC data shows XREAL has topped the global AR glasses market sales volume for four consecutive years.
In its prospectus, XREAL highlights its “full-stack” technical layout, including its self-developed X-Prism optical engine, an end-side co-processor (X1 chip) designed specifically for AR glasses, and the NebulaOS operating system. This vertical integration capability from underlying chips and optical modules to system software is XREAL’s main strategy to build technical barriers amid fierce hardware competition.
In the consumer electronics hardware sector, gross margin is a key indicator of a company’s supply chain management ability and product premium capability.
According to data, XREAL’s gross margin rose slightly from 18.8% in 2023 to 22.1% in 2024, and significantly to 35.2% in 2025.
The improvement of this data reflects that in the past year, with the increase in shipment volume, scale effects have begun to appear on the manufacturing cost side. Meanwhile, the launch of high value-added products and the ramp-up of capacity at its own production base have also supported the optimization of gross margins.
However, in terms of absolute profit, XREAL is still in a net loss position.
From 2023 to 2025, XREAL’s net losses were 882 million yuan, 709 million yuan, and 456 million yuan, respectively.
Although the loss amount is narrowing year by year and the operating expense ratio dropped from 137.6% in 2023 to 82.7% in 2025, objectively, as a hardware company driven by underlying technology, XREAL still bears high R&D expenditure and market expansion costs.
How to further optimize the financial structure and cross the breakeven point as soon as possible, while maintaining the pace of technological iterations, will be a long-term issue for management post-listing.
It is worth mentioning that, in this prospectus, Google appears as an important technical ally of XREAL in the evolution of its next-generation products.
It is reported that XREAL is conducting in-depth cooperation with Google on the Android XR platform, jointly developing its next-generation flagship AR product—codenamed “Project Aura.” This product is planned as the highest tier within XREAL’s future product matrix (Light-Ultra-Aura product line), and is expected to launch in 2026.
Reportedly, Project Aura will integrate lightweight design, ultra-wide field of view, cinema-level immersive experience, and Gemini AI, and is poised to usher the AR industry into the “Android moment.”
Xu Chi has high expectations for Project Aura after its release.
With the help of Project Aura, Xu Chi revealed to Wallstreetcn last year that XREAL expects to achieve breakeven in 2026.
Driven by the wave of large AI models, the smart glasses sector stands on the eve of explosion.
By choosing to list in Hong Kong at this time, XREAL is not only conducting a comprehensive self-test of its business model, but also providing a concrete financial and operational sample for the outside world to observe the commercialization process of the entire spatial computing sector.
Broadening the view to the entire consumer electronics industry, the logic of personal computing platforms has always revolved around improving interaction efficiency.
From keyboard and mouse interaction in the PC era to multi-touch in the smartphone era, the market generally expects the next-generation computing platform to be based on multimodal AI and spatial computing.
Within this trend, AR glasses with portability and environmental awareness are regarded as a crucial hardware gateway for the next generation of human-computer interaction.
In recent years, from Meta driving rapid sales growth of Ray-Ban Meta to the sudden surge of “Hundred Glasses Battle” in China, from startups to Internet giants and smartphone manufacturers, almost everyone is talking about AI/AR glasses. The rapid influx of capital has quickly brought this once quiet industry into the limelight.
However, behind the “Hundred Glasses Battle,” there are few products that can achieve sustained shipments and user retention.
Against this backdrop, shipment volume, channel capability, and technological accumulation are becoming the dividing line, as capital and resources concentrate toward a handful of leading companies.
Li Hongwei, founder and CEO of Thunderbird Innovation, told Wallstreetcn that the smart glasses industry is still in the first stage—the iPhone moment has not yet arrived. The core logic at this stage is who has the determination to create the next iPhone and sufficient resources, including money and people; whoever moves fast enough can make it. Thunderbird Innovation also has IPO plans, but there is currently no public timeline.
Therefore, for XREAL, this Hong Kong IPO undoubtedly holds clear strategic defensive and expansion significance.
The smart glasses sector is essentially a capital-intensive industry with very high trial-and-error costs. As the industry matures, the threshold for competition is rising sharply. The global tech giants and even domestic major players coveting the smart sector mean that the endgame of this war is far from over.
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