Huawei's 2022 Revenue: Did It Weather the "Storm"?
Huawei's 2022 annual report is out, and its chairman called 2022 a "storm" for the Chinese telecom. Here's the data—and how it compares to Huawei's past years.
Chinese telecommunications firm Huawei has released its 2022 annual report. Here’s the data on how Huawei performed, including across different business segments and regions of the world — and how it compares to past years. Brought to you by Global Cyber Strategies, a Washington, DC-based research and advisory firm.
The One-Liner
While Huawei executives talked about weathering a “storm” in 2022, the company generated the least amount of revenue it has since 2017 and the least amount of profits it has in at least eight years — as it continues pushing to expand into some key global markets and business verticals.
Huawei’s 2022 Revenue and Profits
Huawei’s global revenue in 2022 was approximately $92.379 billion, and its profits were approximately $5.114 billion.
In 2022, Huawei generated its lowest amount of annual revenue since 2017, when the company brought in approximately $89.44 billion in revenue. This also represents a revenue decline from 2021, when the company brought in approximately $94.57 billion in revenue (about a 2.3% decrease from 2021 to 2022). Huawei’s 2022 profits, meanwhile, were the lowest for the company since at least 2015. While revenue may be stagnating for now — if that conclusion can even be drawn — Huawei’s profits have taken a serious hit in the last year.
Huawei’s global net profit as a percentage of its revenue also declined greatly in 2022 to approximately 5.54%. This is a shift from the year prior. In 2021, executives had touted the company’s ability to make a profit despite market uncertainty — Huawei’s profit as percentage of revenue in 2021 was approximately 17.86%, a notable feat given its declining revenue — but that appears to have been short-lived. Huawei’s net profit as percentage of revenue last year was its lowest in at least eight years.
Huawei’s Core Business Segments
In 2022, Huawei earned the most revenue from its Carrier Business segment (approximately $41.33 billion), which also generated the most revenue in 2021.
This was followed in 2022 by revenue from its Consumer Business segment (approximately $31.21 billion), Enterprise Business segment (approximately $19.38 billion), and “Other” (approximately $1.56 billion). Interestingly, Huawei’s Consumer Business segment declined: revenue went from approximately $36.07 billion in 2021 to approximately $31.21 billion in 2022 (about a 13.5% decrease). On the flip side, its Enterprise Business segment grew: revenue went from approximately $15.17 billion in 2021 to approximately $19.38 billion in 2022 (about a 27.4% increase).
Huawei’s most revenue-generating business segment has fluctuated over the years — but this reflects changes in company priorities, such as Huawei’s 2021 shift away from consumer electronics and towards wireless base stations and other technology, and its 2020 sale of its Honor smartphone business.
Huawei’s Core Market Regions
In 2022, Huawei earned approximately $58.79 billion in revenue in China, the most from any region. Compared to 2021, its 2022 revenue from Europe, the Middle East, and Africa grew, and its revenue from China and the Asia-Pacific declined.
China was followed in revenue in 2022 by approximately $21.71 billion from Europe, the Middle East, and Africa (EMEA); approximately $6.99 billion from the Asia-Pacific; approximately $4.64 billion from the Americas; and approximately $1.34 billion from “Other.” Huawei’s revenue-by-region ranking has been the same since at least 2018. Notably, though, its 2022 revenue from China declined from approximately $61.24 billion in 2021 (about a 4% decrease), and its 2022 revenue from EMEA grew from approximately $19.49 billion in 2021 (about an 11.4% increase).
Much of this data, to Western observers, may seem counterintuitive. After all, many European countries have restricted Huawei 5G equipment, yet revenue in EMEA is up; Huawei is a Chinese telecom, yet revenue in China and the Asia-Pacific is down. Yet, that doesn’t capture the entire geopolitical picture. In EMEA, for example, many countries outside of the European continent are increasingly using Huawei telecom equipment, including the United Arab Emirates, Saudi Arabia, Kuwait, Oman, and Bahrain. This is clearly upholding Huawei’s presence in the region. Across the Asian continent, to give another example, the company’s move away from consumer tech has certainly impacted its revenue (e.g., Huawei no longer has Honor, a major smartphone brand in China); and Asia-Pacific companies with direct and indirect ties to Huawei have many reasons to restrict or cut ties, due to sanctions compliance.
Clearly, restrictions on Huawei technology, including sanctions and other measures, have taken a chunk out of the company’s revenue and profits. It nonetheless has managed, through investments and positioning in other markets, to keep its business somewhat expanding in certain regions of the world.
Huawei’s Tone: Optimism, with Subtext
Upon the release of its 2022 annual report, Huawei’s rotating chairman Eric Xu said:
A challenging external environment and non-market factors continue to take a toll on Huawei’s operations. In the midst of this storm, we have kept racing ahead, doing everything in our power to maintain business continuity and serve our customers. We have also gone to great lengths to grow the harvest — generating a steady stream of revenue to sustain our survival and lay the groundwork for future development.
Huawei’s explicit message is that it’s doing well given the global circumstances, but the tone is clear: there are indeed global circumstances that have hurt Huawei’s profits and hindered its growth. These unmentioned factors include the US government’s years-long campaign to restrict the use of Huawei 5G equipment in the US and worldwide — based on espionage concerns — and shifts in Europe, India, and elsewhere away from using Huawei 5G equipment and towards non-Chinese suppliers.
Meng Wanzhou, Huawei’s CFO, struck a similar tone at the release event, saying that:
Despite substantial pressure in 2022, our overall business results were in line with forecast. … Our financial position remains solid, with strong resilience and flexibility. … In times of pressure, we press on — with confidence.
This is not dissimilar from 2021, when she said that Huawei had suffered a “revenue decline” in 2021 but had become “more capable of dealing with uncertainty.” (Meng Wanzhou, who also goes by Sabrina Meng, is the daughter of Huawei’s founder and CEO Ren Zhengfei and serves as one of the company’s three rotating chairpeople.)
What Lies Ahead for Huawei
Huawei’s revenue and profits in 2022 were not the company’s best over at least the last eight years. Looking forward, Huawei’s expansion in some markets and regions must be considered alongside the fact that its ability to turn a profit hugely fell in 2022. Such a steep drop suggests that Huawei’s high profit to revenue percentage in 2021 was perhaps more of an anomaly than an indicator of a groundbreaking strategy.
In any case, Huawei is not past the “storm” yet. The US House of Representatives’ Foreign Affairs Committee, for instance, is set to vote on H.R. 686, the Keep Huawei on the Entity List Act. If passed, it would prohibit the Commerce Department from removing Huawei, its subsidiaries, and its affiliates from the entity list — which tracks restrictions on trade exports, reexports, and transfers to certain people or organizations — unless the Commerce Department could certify that Huawei:
Has not engaged in actions contrary to US national security and is unlikely to do so in the future; and
Is not “owned, controlled, or influenced by the Communist Party of China.”
The Keep Huawei on the Entity List Act would also require the US Commerce Department to add Honor (the smartphone brand Huawei sold) to the entity list and to submit a monthly report to Congress on all company applications to trade with Huawei or Honor. Germany, meanwhile, is conducting a new security review of equipment made by Huawei, ZTE, and some other companies. Authorities in Berlin are reportedly planning to ban certain Huawei 5G equipment (and ZTE equipment) from German networks entirely.
In the coming months, Huawei’s ability to expand in the Middle East, Africa, and the Asia-Pacific and its ability to bolster its cloud computing and other business services could greatly shape its 2023 outcomes.
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