iFlytek's non-recurring net loss in the first three quarters was 763 million yuan, with its book profit turned positive by subsidies and equity gains

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Event Search Project Recommendations I Want to Join City Partnerships Non-recurring loss of 760 million yuan, more than double year-on-year; iFlytek still has to wait to make money from AI ZAKER Finance · October 20, 2026 19:44 Where did the money go? iFlytek private placement Anhui 1999-12 Intelligent Speech Technology Provider 36Kr Report Enterprise Account Frontier Technology High-Tech Enterprise Enterprise Technology Center Technology Innovation Demonstration Enterprise WISE2024 Annual Enterprise List - Artificial Intelligence WISE2022 Annual Enterprise I Want to Connect

Revenue of 18.187 billion yuan, but the net profit that ultimately landed in the pockets of listed company shareholders was only 21.8872 million yuan.

This is the first three quarters report card iFlytek delivered on the evening of October 19. By that calculation, the profit margin is just over one-thousandth. The company said this was the first time in nearly three years that it turned a profit in the first three quarters; in the same period last year it was still losing 66.67 million yuan. But looking one layer deeper into the accounts, the quality of this "turn positive" deserves a question mark.

There is a key metric in the financial report called "net profit excluding non-recurring gains and losses," meaning all the money unrelated to the day-to-day business and unsustainable, such as government subsidies and appreciation of equity investments, is stripped out to see whether the core business is actually making money. Under this measure, iFlytek not only did not make money in the first three quarters, but instead lost 763 million yuan; in the same period last year it lost 338 million yuan, so this year the hole has more than doubled.

01

So where did the more than 20 million yuan of profit on the books come from? From three sums of money unrelated to the core business: 471 million yuan in government subsidies; the company's investments in Guoyi Quantum and Youdi, which went public this year, saw the shares it holds appreciate, bringing 370 million yuan in book gains; plus 84 million yuan in asset disposal income. The three together total about 785 million yuan, exactly the force that pulled reported net profit from a loss across the break-even line.

Looking only at the third quarter, the contrast is even more obvious. Quarterly revenue was 6.564 billion yuan, up nearly 8% year-on-year; reported net profit was 226 million yuan, up 31% year-on-year; but after excluding non-recurring gains and losses, it actually lost 126 million yuan, while in the same period last year this figure was a profit of 26.23 million yuan. Of the 352 million yuan in extra income that propped up the third-quarter reported figures, government subsidies were 165 million yuan and appreciation of equity in invested companies was 248 million yuan.

There is another detail worth highlighting. Including the shares of associate partners in the consolidated statements, the company's true net profit in the first three quarters was actually -22.8477 million yuan, that is, a net loss of 22.84 million yuan. The reason net profit attributable to parent was positive is that for the loss of one subsidiary, minority shareholders bore about 44.73 million yuan on behalf of the listed company. Simply put, the core business itself is still losing money.

02

Where did the money go? The bulk is R&D. In the third quarter alone, R&D investment exceeded 1.7 billion yuan, nearly 400 million more than the same period last year, accounting for more than a quarter of quarterly revenue; R&D expenses for the first three quarters totaled 3.850 billion yuan, equivalent to spending more than 21 yuan on R&D for every 100 yuan of revenue, 2.4 percentage points more than the same period last year. The company directly attributes the widening non-recurring loss to continued heavy investment in the self-controlled large model route.

Has the investment shown results? Some signs can be seen in operating data. Throughout the third quarter, there were 4,481 public domestic large model tender projects, with disclosed amounts of about 15.257 billion yuan, and iFlytek ranked first in both the number and amount of bids won, the same ranking as in the first half. In terms of business structure, the company proactively scaled back the smart city business, which involves heavy upfront funding and slow collections; third-quarter G-end revenue facing the government fell slightly by 2.39%, but smart education and smart healthcare both maintained growth of more than 20%. In the first half, open platform revenue reached 3.705 billion yuan, up 36% year-on-year, surpassing the traditional smart education business for the first time, of which large model API calls and MaaS service revenue rose about 70%. Two other somewhat leading indicators: inventory at the end of the third quarter was 4.791 billion yuan, up 58% from the beginning of the year, indicating stockpiling for subsequent delivery; advance receipts from customers of 2.579 billion yuan, up 55% from the beginning of the year, indicating that orders in hand are increasing. Cash flow also improved: sales collections in the first three quarters were 19.69 billion yuan, and net cash flow from operating activities was 264 million yuan, turning from negative to positive.

But the capital market has not yet paid for these advances. At the close on October 20, iFlytek's share price was 37.04 yuan, with a total market value of about 88.973 billion yuan, and a price-earnings ratio of about 95 times based on the past 12 months' profit. On January 16 this year it was still at a high of 67.40 yuan, and on October 16 it once fell to 35.48 yuan, nearly halved from the intra-year high; by calculation it has already fallen 26.94% this year.

The view from brokerages is uniformly optimistic. In an October 19 research report, CICC gave a target price of 59 yuan, believing there is about 60% upside from the current price; Shenwan Hongyuan pointed out directly that the better-than-expected book profit relied precisely on those 350 million yuan in non-recurring gains and losses, and that R&D investment was the reason non-recurring profit came under pressure; the Guotai Haitong team also summarized the third quarter as "net profit attributable to parent grew, while the main business swung from profit to loss." In summary, 40 institutions forecast full-year 2026 net profit of 1.031 billion yuan and revenue of 31.159 billion yuan, with an average target price of 56.84 yuan; the 26 analysts who issued ratings in the past three months all gave "Buy" or "Strong Recommend." Haitong previously forecast full-year revenue of 29.849 billion yuan and net profit of 1.027 billion yuan; based on the first three quarters' progress, about 60% of the full year would be completed, and most of iFlytek's education and government projects are concentrated in fourth-quarter acceptance, a pace that is also within expectations.

At the October 22 Developer Festival, the new-generation Spark X2.6 will officially debut. After that comes the fourth quarter, the season of the year when education and government projects are concentrated for acceptance and revenue is concentrated into the accounts. Whether the numbers in the current third-quarter report are the cost of phased investment or a sign that the main business itself has not yet started working will probably only become clear then.

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TA has not written a bio, but being reserved is also a form of expression Published 120 articles

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