Beijing Roborock Technology – 1Q26 result: improving operating margin with expanding new categories
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Beijing Roborock Technology delivered better-than-expected 1Q26 results, with revenue and net profit reaching RMB 4.23 billion and RMB 323 million, representing year-over-year growth of 23% and 21%, respectively. The operating margin improved sequentially to 9.2%, expanding 2.4 percentage points year-over-year. This improvement was primarily driven by better-than-expected robot vacuum margins in overseas markets excluding the US, alongside narrower losses in the washing machine segment.
The domestic and overseas revenue split held at roughly 30% and 70% during 4Q25 and 1Q26. The wet-dry vacuum cleaner segment doubled its revenue to nearly RMB 900 million, achieving positive profitability overseas and reaching breakeven domestically. Robot lawn mowers generated over RMB 100 million in revenue with gross margins exceeding 40%.
North American operations faced headwinds, with margins in the low single digits for 4Q25 and only reaching breakeven in 1Q26. However, anticipated IEEPA tariff refunds related to fentanyl and reciprocal tariffs could provide a meaningful uplift.
Gross margin declined 2.2 percentage points to 43.3% due to rising memory chip and plastic costs. Nonetheless, SG&A reductions helped expand the operating margin. FX losses exceeding RMB 50 million created a gap between net and operating margins.
UBS maintains a Buy rating with a target price of RMB 195, implying 26x 2026 P/E. Risks include slower smart vacuum adoption and intensifying competition.