360 Security Technology Co., Ltd. (referred to as “360”) announced on July 11th that it expects to incur a net loss of 240 million to 320 million yuan in the first half of 2025.
The main reason for the anticipated loss, as explained by 360, is a significant increase in sales expenses. In order to strengthen product promotion and expand market influence, the company has invested a huge amount of funds in marketing and promotion. After deducting non-recurring gains and losses, the net profit is expected to fall between -340 million to -250 million yuan.
This current situation sharply contrasts with the public statements made by the company’s founder, Zhou Hongyi, in the past. Zhou had once declared his intention to “eliminate” the entire marketing department to save tens of millions of yuan in costs annually for the company. However, judging from the current profit warning, not only has sales expenses not been reduced, but they have shown a significant increase, raising doubts about the effectiveness of their strategic adjustments.
360’s losses are not just a temporary phenomenon but rather a continuation of long-term difficulties. According to the company’s annual report data, the financial losses are alarming: from 2022 to 2024, the accumulated losses have exceeded 3.7 billion yuan.
In 2024 alone, the company incurred a staggering loss of 1.094 billion yuan, with a fourth-quarter loss of 515 million yuan, indicating an even larger loss. The further loss in the first quarter of 2025 amounted to 273 million yuan, with a year-on-year increase of 149.16%, demonstrating an accelerated deterioration in losses.
What is more concerning is that 360’s revenue has been declining for six consecutive years since 2019, plummeting from 12.841 billion yuan in 2019 to 7.948 billion yuan in 2024, a year-on-year decrease of 12.23%. All business segments under the company have not been spared and have shown a general downward trend: internet advertising and service business decreased by 7.9%; smart hardware business declined by 35.4%; and security business decreased by 27%.
The continuous shrinking revenue coupled with substantial losses have put significant pressure on the company’s cash flow, painting a bleak picture of its financial situation. The net cash flow generated from operating activities in 2024 was 326 million yuan, a significant decrease of 64.71% compared to the same period last year, indicating a huge cash flow pressure from the company’s daily operations.
360 Security Technology Co., Ltd. is a well-known Chinese provider of internet and mobile security products and services, with familiar products like 360 Security Guards, 360 Mobile Guards, and 360 Security Browsers under its umbrella. The company completed a privatization transaction in July 2016, delisted from the New York Stock Exchange, and relisted on the Shanghai Stock Exchange in February 2018, once garnering market attention. However, in recent years, its performance failed to meet market expectations.