J.P. Morgan: Unitree Robotics’ third-quarter revenue rises seventy percent, while expansion and R&D spending weigh on profit

Why did revenue growth not translate into matching profit growth?

In the third quarter of 2026, Unitree Robotics generated revenue of 665 million yuan, up 70% year over year; net profit attributable to the parent was 113 million yuan, down 17% year over year. Revenue for the first three quarters was 1.817 billion yuan, up 56% year over year.
Quarterly cost of sales rose 105% year over year, outpacing revenue growth. JPMorgan noted that higher bill-of-materials costs and price competition squeezed gross margin, while increased R&D and ecosystem investment also put pressure on profit.
Third-quarter R&D expenses were 127 million yuan, up 252% year over year, with spending covering product development, embodied intelligence research and development, and computing power. JPMorgan expects pressure on profit margins to persist in the near term as the company prioritizes building its ecosystem.

JPMorgan said sales growth broadened across bipedal and quadrupedal robots, both large and small. Cumulative shipments of the G1 humanoid robot reached approximately 10 thousand to 20 thousand units; small quadrupedal robots expanded in education and research, while larger models entered more industrial and public-service settings.
The bank emphasized that growth is increasingly backed by real-world deployments, rather than remaining confined to pilots. This broadens the range of real-world environments robots encounter and helps the company collect data and obtain product feedback.

A recent company ecosystem event attracted more than 3000 people and covered applications including urban management, emergency response, education, entertainment and industry; a global competition featured categories including sports, combat, dexterous manipulation and healthcare.
JPMorgan believes diverse scenarios and edge cases can accelerate feedback among simulation, real-world testing and model improvement, making it easier for the company to become a partner for model developers, universities and systems integrators in data collection, testing and deployment.
Turning this advantage into sustained returns also depends on whether pilots generate repeat enterprise orders and whether the company can convert its ecosystem leadership into revenue.

Operating cash flow for the first three quarters of 2026 was approximately 190 million yuan, down about 55% year over year. JPMorgan attributed the decline to working-capital requirements and investment in inventory, personnel and technology. Capital expenditure over the same period was approximately 100 million yuan, tripling year over year, but remained covered by operating cash flow for the period.
JPMorgan maintained its Overweight rating and a December 2027 price target of 995 yuan, valuing the company at 30 times forecast 2028 revenue. The bank believes advances in large-model planning capabilities are shifting the industry bottleneck toward real-world deployment, making the installed base more valuable; however, the pace of enterprise adoption, competition and margin sustainability will affect that assessment.