GoerTek's Q1 revenue increased by 14% year-on-year; net profit rose by 7%, dragged down by exchange losses | Earnings Report News
```
On April 23, GoerTek Inc. released its Q1 2026 report. During the reporting period, the company achieved operating revenue of 18.659 billion yuan, a year-on-year increase of 14.44%; net profit attributable to shareholders was 503 million yuan, up 7.28% year-on-year. Net profit excluding non-recurring gains and losses was 349 million yuan, an increase of 19.57% year-on-year, indicating improved core business profitability.
Earnings growth was significantly lower than revenue growth, mainly due to exchange losses drag. Affected by exchange rate fluctuations, financial expenses surged more than 50 times year-on-year, becoming the main pressure point on profits. In addition, net operating cash flow turned from a net inflow of over 1.5 billion yuan in the same period last year to a net outflow of about 585 million yuan, a noteworthy change in cash position.
Regarding shareholder returns, the company's share buyback plan of 1 billion to 1.5 billion yuan was completed on April 9, with approximately 44.2 million shares repurchased for about 1.2 billion yuan. R&D investment continues to increase, with first-quarter R&D expenses at 1.141 billion yuan, a year-on-year increase of about 4.2%. Development expenses rose sharply quarter-on-quarter.
Steady revenue growth, exchange losses drag on profit
In the first quarter, GoerTek achieved revenue of 18.659 billion yuan, up 14.44% year-on-year. The main growth drivers were acoustic precision components, smart hardware OEM, and core businesses like VR/AR.
From a profit perspective, net profit attributable to shareholders was 503 million yuan, up 7.28% year-on-year; net profit excluding non-recurring items was 349 million yuan, up 19.57% year-on-year, significantly higher than overall net profit growth. Non-recurring gains and losses totaled about 154 million yuan, mainly fair value changes of forex derivatives and investment income of about 164 million yuan, and government subsidies of about 52 million yuan, offset by about 37 million yuan in fixed asset scrapping losses. The improvement in core profitability outpaces overall net profit, showing continued optimization in operational quality.
Financial expenses fluctuated significantly. In Q1, financial expenses were 344 million yuan, compared to a net gain of 6.89 million yuan in the same period last year (net income), a year-on-year change of over 5000%, mainly due to increased exchange losses from exchange rate fluctuations. Meanwhile, investment income reached 322 million yuan, up 123.45% year-on-year, mainly from forex derivative gains. Hedging strategies provided some offset, but actual exchange losses still exceeded hedging gains, putting pressure on the consolidated report. For GoerTek, which operates in multiple currency regions, exchange rate fluctuations remain a key concern.
Operating cash flow turns negative, short-term loans expand nearly 50%
In Q1, net operating cash flow was -585 million yuan, compared to a net inflow of 1.536 billion yuan in the same period last year. The company explains this mainly due to reduced sales collections. Data shows Q1 sales receipts were about 19.5 billion yuan, down roughly 1.5 billion yuan year-on-year, while procurement and payroll expenses increased.
On the balance sheet side, short-term loans increased from 13.411 billion yuan at the start of the year to 20.075 billion yuan, a 49.7% increase. The company states this is due to operational and financial management needs. On the asset side, monetary funds rose from 18.886 billion yuan to 22.404 billion yuan, with short-term loan expansion and funds increasing simultaneously, possibly linked to interest rate arbitrage or liquidity reserves.
R&D ramp-up, capacity building advances steadily
Net cash outflow from investing activities was 4.408 billion yuan, up about 38% year-on-year. Of this, fixed asset acquisitions totaled about 2.3 billion yuan, and expenditures on time deposits and other financial assets also rose sharply, with total investment spending surpassing 16.3 billion yuan, reflecting the company's dual focus on expanding production and financial asset allocation.
In Q1, GoerTek's R&D expenses were 1.141 billion yuan, up 4.2% year-on-year; capitalized development expenses stood at 356 million yuan, up 58.96% from the beginning of the year, indicating the company is at a concentrated stage of tackling several key technology projects.
On the cost side, administrative expenses were 566 million yuan, up 10.5% year-on-year; selling expenses were 203 million yuan, up 16.5% year-on-year, roughly in line with revenue growth, within a reasonable range. On the asset side, construction in progress increased from 2.062 billion yuan at the start of the year to 2.572 billion yuan, up 24.7%; fixed assets remained at 22.652 billion yuan. Capacity building is proceeding in an orderly manner, laying the foundation for fulfilling major client orders in the future.
Risk warnings and disclaimerThe market carries risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account any individual user’s specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their particular circumstances. Investment decisions based on this are at your own risk. ```