In the first half of this year, iFlytek, a leading Chinese language technology company, reported a net loss of 2.39 billion yuan, with a further adjusted net loss after deductions of 3.64 billion yuan. This marks the second consecutive semi-annual period of losses for iFlytek since 2024.
According to iFlytek’s “2025 Semi-Annual Report,” the company achieved a revenue of 10.911 billion yuan in the first half of the year, a 17.01% year-on-year increase. However, the net loss reached 2.39 billion yuan, signifying a 40.37% increase compared to the same period last year. The adjusted net loss of 3.64 billion yuan also saw a worrying 24.62% growth, putting the company in a challenging situation of increased revenue without accompanying profits.
Analysis from Beijing Xuelang Technology Co., Ltd.’s “Radar Finance9” on September 1st attributed iFlytek’s revenue challenges to a decline in the gross profit margin of its open platform business. From 2022 to the first half of 2025, the gross profit margins for the company’s “iFlytek Open Platform” business were recorded at 29.15%, 25.55%, 16.51%, and 16.58%, showing a concerning downward trend.
Moreover, the company’s actual profits are being eroded by high sales and research & development expenses. The financial report disclosed that in the first half of this year, iFlytek’s sales expenses reached 2.086 billion yuan, a 28.28% increase year-on-year, while research and development expenses were 2.068 billion yuan, marking a 6.99% increase. Together, these expenses accounted for a significant 38.07% share of the company’s total revenue.
Additionally, difficulties in recovering accounts receivable and high financial expenses are eating into profits. The 2025 semi-annual report revealed that iFlytek’s accounts receivable amounted to 15.746 billion yuan, a 7.36% increase compared to the same period last year, further escalating to 36.68% of total assets. In the first half of this year, iFlytek recorded bad debt to the tune of 3.772 billion yuan.
Furthermore, iFlytek is facing an expanding funding gap. Data from Wind Information Co. shows that from 2021 to the first half of 2025, iFlytek’s net cash flow from operating activities was 893 million yuan, 631 million yuan, 350 million yuan, 2.495 billion yuan, and -772 million yuan, totaling 3.597 billion yuan. Meanwhile, the net cash flow from investing activities amounted to -2.579 billion yuan, -1.704 billion yuan, -3.979 billion yuan, -3.305 billion yuan, and -1.416 billion yuan, accumulating to -12.983 billion yuan. Over a period of four and a half years, the funding gap has reached 9.386 billion yuan. Simultaneously, iFlytek’s cash reserves are depleting with cash and cash equivalents standing at 3.173 billion yuan as of the end of June this year, down by 2.697 billion yuan from the end of 2021.
Established in 1999, iFlytek is a publicly-traded company known for its intelligent voice and artificial intelligence technologies and has been dubbed the “Number One AI Stock in China.” However, due to its involvement in aiding human rights violations by the Chinese Communist Party, iFlytek has faced international sanctions. In 2019, the U.S. Department of Commerce added iFlytek along with other technology companies such as SenseTime, Hikvision, and several CCP official entities to the U.S. Entity List.
Subsequently, iFlytek has witnessed a decline in its performance year by year. According to its annual report, iFlytek’s net profit in 2024 dropped by 14.78% to 560 million yuan compared to the previous year.