Rockchip's Q3 Net Profit Grows 90%, New Edge AI Products Enter Mass Production

On the evening of October 26, Rockchip disclosed its 2026 third-quarter report. In the third quarter, the company achieved operating revenue of 1.573 billion yuan, up 43.57% year on year; net profit attributable to shareholders of the parent company was 473 million yuan, up 90.49% year on year; and net profit after deducting non-recurring gains and losses was 461 million yuan, up 92.10% year on year.

In the first three quarters, the company's revenue was 4.449 billion yuan, up 41.64% year on year; net profit attributable to shareholders of the parent company was 1.332 billion yuan, up 70.90% year on year; and net profit after deducting non-recurring gains and losses was 1.301 billion yuan, up 72.09% year on year. Profit growth further accelerated in the third quarter.

Profit grew faster than revenue, supported both by the contribution of expanding sales scale and by higher gross margins. In the first three quarters, the company's comprehensive gross margin was 46.37%, up about 4.59 percentage points from the same period last year based on calculations from the financial statements. Calculated on the basis of net profit attributable to shareholders of the parent company, the net margin in the third quarter was about 30.09%, compared with about 22.68% in the same period last year.

R&D investment is also increasing. In the first three quarters, R&D expenses were about 600 million yuan, up 33.23% year on year, but because revenue grew faster, the R&D expense ratio fell from about 14.34% to 13.49%. Higher gross margins and expanding revenue allowed the company to retain more profit while increasing R&D spending.

Business changes are concentrated in edge AI chips and their applications. The company disclosed that product lines such as robotics, automotive electronics, machine vision, and industrial applications maintained rapid growth. Its product layout is being built around main control chips and AI coprocessors: the main control handles device operation and system processing, while the coprocessor provides the additional computing power needed to run AI models, with the two combined for different terminals.

The uses of these chips have already been implemented in specific products. According to the semi-annual report, commercial cleaning robots equipped with the relevant solutions can identify stains and plan paths locally; in-vehicle AI devices combine voice, vision, and sensor information to complete offline interaction. For terminal manufacturers, this means they can add AI functions to existing devices and reduce some functions' dependence on cloud services.

At the earnings briefing on September 11, Rockchip further disclosed that RK182X has been introduced into dozens of industries and hundreds of customer projects, applications such as AI TVs, commercial cleaning robots, and companion robots have entered mass production, and the in-vehicle AI Box has also won several project design wins. Customers moving from R&D and validation to production is an important step in converting chip demand into actual shipments.

The third-quarter report updated the progress of new products: products such as RK3572 have already entered mass production in the third quarter, and RK182X-related projects continue to advance. The company expects RK182X to ramp up in the fourth quarter, with RK3572 achieving large-scale shipments in the same period, becoming new sources of revenue.

However, terminal production is still constrained by the supply chain. The company said that in the third quarter, shortages of PCB raw materials and lengthened delivery cycles affected customers' terminal product production, causing some chip orders to be delayed and postponed, and it expects recovery in the fourth quarter. Price increases for components such as memory are also being passed through to terminals. The company itself has a relatively small proportion of products with built-in storage, but customers' overall device costs and production schedules will still be affected.

Inventory buildup is also expanding. As of the end of the third quarter, Rockchip's inventory was 1.884 billion yuan, an increase of about half from the beginning of the year; in the first three quarters, net cash flow from operating activities was 882 million yuan, up 4.13% year on year. The company previously said in institutional research that it is expanding supply chain channels and carrying out strategic inventory buildup for mid-to-high-end products and new products. As new chips and customer terminals gradually enter mass production, higher requirements are being placed on supply capacity. Risk disclosure and disclaimer

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