Insta360 Q1 Revenue Soars 83% but Net Profit Halved, Company 'Aggressively' Boosts R&D Investment

[Ebrun Original] Recently, Insta360 released its 2025 annual report and 2026 first-quarter results. For the full year 2025, the company's operating revenue was approximately 9.741 billion yuan, a year-on-year increase of 74.76%; net profit attributable to the parent company's shareholders was approximately 929 million yuan, a year-on-year decrease of 6.62%; gross margin was 45.74%, a decrease of 6.13 percentage points year-on-year. In Q1 2026, the company's revenue was 2.481 billion yuan, a year-on-year increase of 83.11%; net profit attributable to the parent company's shareholders was 84.62 million yuan, a year-on-year decrease of 52.02%. On the day following the earnings release, Insta360's stock price closed at 191.25 yuan, up slightly by 0.86%.

Addressing the financial situation of "increased revenue but decreased profits," Insta360 Chairman Liu Jingkang stated in a shareholder letter, "We see broad and far-from-satisfied customer demand," which led to the decision to "aggressively" increase R&D investment.

The financial report shows that Insta360's R&D expenses in 2025 were 1.53 billion yuan, a year-on-year increase of 96.95%, exceeding the total of the three years from 2022 to 2024. In 2025, R&D expenses accounted for 15.7% of operating revenue, an increase of 1.77 percentage points from the previous year. In Q1 2026, its R&D investment reached 460 million yuan, a year-on-year increase of 100.59%. The emphasis on R&D is also reflected in the workforce composition. As of the end of 2025, the company had 2,180 R&D personnel, accounting for 55.16% of its total headcount.

In the shareholder letter, Insta360 stated that in addition to its existing businesses (360-degree cameras, thumb-sized cameras, action cameras, etc.), it is strategically investing in the R&D of two drone models (including the Insta360 Sphere drone), a gimbal camera, wireless lavalier microphones, and three other new product categories, while also custom-developing three types of chips. It is reported that the three major new categories—gimbal camera, microphones, and drones—are expected to be launched within the next year, transitioning from "investment" to "revenue" and boosting profits.

In the shareholder letter, Liu Jingkang also proposed the concept of a "photography robot": "Just like the professional photographer you hire during travel or team-building events, it automatically moves in space, finds angles, and captures those wonderful moments, while you simply enjoy the present." He also mentioned that the company had this idea over six years ago and has been working towards this goal ever since.

Besides R&D expenses, Insta360's sales and marketing expenses also saw significant growth. In 2025, the company's sales and marketing expenses were 1.679 billion yuan, an increase of 103.31%. In Q1 2026, sales and marketing expenses were 449 million yuan, a year-on-year increase of 75.54%. However, the marketing cost per unit (market promotion expenses and sales platform fees divided by sales volume) in Q1 decreased by 10% year-on-year, indicating improved marketing efficiency alongside the expansion of sales expense scale.

From a product line perspective, consumer-grade smart imaging devices still contributed the majority of performance, accounting for 87.4% of total revenue. In 2025, revenue from this segment reached 8.516 billion yuan, a year-on-year increase of 77.83%. Revenue from accessories and other products was 1.131 billion yuan, a year-on-year increase of 57.47%, accounting for approximately 11.6% of total revenue. Professional-grade smart imaging devices, with a relatively smaller scale, generated revenue of about 24.8 million yuan, a year-on-year increase of 5.30%, accounting for about 0.3% of total revenue, but this was the only segment to see an increase in gross margin.

From a regional market perspective, overseas markets remain the main revenue driver for Insta360. In 2025, its overseas revenue reached 6.676 billion yuan, a year-on-year increase of 58.10%, accounting for approximately 69% of its main business revenue, with a gross margin of 47.87%. Domestic revenue was 2.995 billion yuan, accounting for approximately 31% of main business revenue, with a year-on-year increase of 129.07%, indicating rapid growth in the domestic market. However, the domestic gross margin was 42.10%, lower than that of overseas markets.

The financial report pointed out, "During the reporting period, over 69.03% of the company's main business revenue came from overseas sales, primarily from developed countries and regions with strong consumption power such as the United States, Japan, and Europe. Additionally, the company's product sales and market influence in the Asia-Pacific region are also growing rapidly."

From a sales channel perspective, offline channels have surpassed online channels in revenue contribution. It is reported that Insta360's offline specialty stores have grown from 36 at the beginning of last year to nearly 300 now, with average sales per store increasing by nearly 50% year-on-year during the same period. In 2025, offline revenue was approximately 5.274 billion yuan, a year-on-year increase of 83.21%, accounting for approximately 54.5% of main business revenue, with a gross margin of 42.21%. Online channel revenue was approximately 4.397 billion yuan, a year-on-year increase of 65.83%, accounting for approximately 45.5% of main business revenue, but with a gross margin of 50.72%, higher than that of offline channels.

Furthermore, in the shareholder letter, Liu Jingkang also mentioned the application of AI. He stated, "The 'company' will increasingly resemble a 'product.' The ability to deeply understand AI and organizational design, and to integrate the two effectively, will not only determine the ceiling of a tech company but also its survival."

It is reported that Insta360 has already introduced AI agents into various aspects including R&D, marketing, supply chain, and user engagement. In Q1 2026, 43% of the company's code was generated by AI. In 2025, AI handled over 50% of online customer service inquiries, saving the company over ten million yuan.

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