SenseTime’s 2025 results showed that generative artificial intelligence remained the company’s main growth driver, while profitability improved in the second half, even as full-year earnings and operating cash flow stayed negative.

The company announced on March 25 that revenue rose 32.9% year-on-year to RMB 5 billion (USD 724.1 million). EBITDA turned positive in the second half, reaching RMB 376.4 million (USD 54.5 million), its first positive half since listing.

Still, the improvement was incomplete. For the full year, EBITDA was negative RMB 471.3 million (USD 68.3 million), adjusted EBITDA was negative RMB 645.4 million (USD 93.5 million), and net cash used in operating activities totaled RMB 301.1 million (USD 43.6 million). Gross margin also fell to 41% from 42.9%, reflecting higher costs associated with SenseTime’s infrastructure-heavy generative AI business.

Generative AI remained the main source of growth. Revenue from that segment rose 51% to RMB 3.6 billion (USD 521.3 million) and accounted for 72.4% of group revenue, up from 63.7% a year earlier. Computer vision revenue increased 3.4% to RMB 1.1 billion (USD 159.3 million). Revenue from its “X” businesses, including smart automotive and healthcare, fell 5.9% to RMB 302 million (USD 43.7 million). The company said the decline mainly reflected the deconsolidation of its autonomous driving business in August 2025.

The second half was stronger than the full-year figures alone indicate. Based on SenseTime’s interim and annual filings, H2 revenue was about RMB 2.7 billion (USD 391 million), up about 30.7% from a year earlier. Gross margin improved to about 43.2% from 38.5% in H1, while operating cash flow shifted to an implied inflow of about RMB 338.4 million (USD 49 million).

The improvement also extended beyond revenue. R&D expenses fell 8.6% in 2025, selling expenses declined 13.1%, administrative expenses dropped 16.2%, and impairment losses on financial and contract assets more than halved as collections improved. Together with stronger revenue, those changes helped narrow the net loss to RMB 1.8 billion (USD 260.7 million) from RMB 4.3 billion (USD 622.7 million).

Even so, the earnings picture came with caveats. Other gains rose to RMB 1.9 billion (USD 275.2 million) from RMB 538.8 million (USD 78 million) in 2024, and SenseTime’s H1 filing showed that period included RMB 937.6 million (USD 135.8 million) in gains on the disposal of subsidiaries. That suggests the reduction in losses was not driven by operating improvement alone.

Liquidity looked less strained at year’s end, with cash and cash equivalents at RMB 10.9 billion (USD 1.6 billion) and borrowings slightly lower at RMB 5.7 billion (USD 825.5 million). But the increase in cash was driven largely by RMB 5.6 billion (USD 811 million) in financing inflows, mainly from share placings and capital injections, while full-year operating cash flow remained negative.

SenseTime is now directing investor attention to a new foundation model based on its second-generation Neo multimodal architecture, which is expected in the second quarter, and to broader deployment of agentic AI applications. The next test will be whether the company can sustain its recent improvement without continued reliance on external capital, and whether generative AI can keep scaling without further pressure on gross margin.

Note: RMB figures are converted to USD at rates of RMB 6.91 = USD 1 based on estimates as of March 26, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.