360 Security Technology Co., Ltd. (360) released its annual report for 2024, showing that the company continued to incur losses in 2024, with a total loss exceeding 3.7 billion yuan. At the same time, sales expenses continued to increase, surpassing 2 billion yuan in 2024.
On April 26, 360 disclosed in its “2024 Annual Report” that the company suffered a full-year loss of 1.094 billion yuan in 2024. The losses in the first three quarters of 2024 were 110 million yuan, 232 million yuan, and 238 million yuan respectively, while in the fourth quarter, the loss was 515 million yuan, almost equaling the cumulative losses of the first three quarters. In 2024, the net profit attributable to shareholders of the listed company was -1.094 billion yuan, representing a 122.10% increase in losses compared to the previous year.
The “New Yellow River,” a publication under the Jinan Daily Newspaper Group, reported on April 27 that 360 had accumulated losses exceeding 3.7 billion yuan from 2022 to 2024. Additionally, in the first quarter of 2025, the company recorded a loss of 273 million yuan, a 149.16% increase in losses compared to the same period last year.
Since 2019, 360 has seen a continuous decline in revenue for six consecutive years, dropping from 12.841 billion yuan in 2019 to 7.948 billion yuan in 2024, a year-on-year decrease of 12.23%. Broken down by business segments, internet advertising and services, smart hardware, and security businesses declined by 7.9%, 35.4%, and 27%, respectively. Only the internet value-added services, with a lower base, saw a 26% growth, but it was insufficient to reverse the overall downward trend.
Despite the ongoing losses, in 2024, sales expenses exceeded 2 billion yuan. In the first quarter of 2025, sales expenses increased by over 72% to 804 million yuan compared to the previous year, far outpacing revenue growth. The company’s operating income was 1.864 billion yuan in the first quarter of 2025. Overall, the combined sales and management expenses accounted for 43.45% of the total operating costs in the first quarter of 2025, representing a 54% increase year-on-year, with sales expenses surging more than 70%.
The report raised questions from many investors: “With first-quarter operating income of 1.8 billion, including nearly 900 million in R&D expenses and 800 million in sales expenses, totaling 1.7 billion, does anyone know why sales expenses are so high?”
However, 360 did not provide an explanation in the financial report, attributing the year-on-year decline in first-quarter net profit solely to “increased sales expenses.”
Currently, 360 is facing financial pressure, with poor cash flow, especially in operational activities encountering significant strain. The net cash flow generated from operating activities in 2024 decreased by 64.71% compared to the same period last year, amounting to 326 million yuan.
As of the close of trading on the A-share market at 3:00:00 PM on April 25, 360’s stock price was 10 yuan per share, with a total market value of 69.996 billion yuan.
Investors are perplexed by the fact that despite years of massive losses, 360’s latest market value has reached nearly 70 billion yuan, questioning how this valuation is justified.
Founded on June 20, 1992, 360 Security Technology Co., Ltd. is a provider of internet and mobile security products and services in China. The company, headquartered in Chaoyang District, Beijing, offers products such as 360 Security Guard, 360 Mobile Guard, and 360 Secure Browser. In July 2016, 360 announced the completion of its privatization transaction and delisting from the New York Stock Exchange. In February 2018, the company was listed on the Shanghai Stock Exchange.