AR glasses pioneer XREAL makes a bold move into Hong Kong stocks

Source: Zebra Consumption

The commercialization of AR glasses still remains difficult to break through.

Recently, industry leader XREAL submitted its prospectus to the Hong Kong Stock Exchange, revealing the current situation in this track: AR glasses are still in the pioneering stage, with high R&D intensity and low adoption, and continuous operating losses have become the norm.

From 2023 to 2025, XREAL’s cumulative losses exceeded RMB 2 billion. But as the company reduced losses year by year and its gross margin continued to grow, it may have already made it through the most difficult stage.

As the first company in the world dedicated solely to pure AR glasses to rush into the capital markets, XREAL’s move to launch an IPO in Hong Kong is intended not only to open a larger financing window, but also to leverage its technological and market advantages to tell a new growth story in the global AR glasses market.

Bloodshed that doesn’t stop

In 2017, Xu Chi and others founded XREAL and designated AR glasses as the company’s core product. At that time, AR glasses were still blank territory in the wearable device market. After nearly 10 years of development, smart glasses have become a popular consumer electronics sector, and the company has also moved into the leading ranks of that sector.

Recently, XREAL submitted its prospectus to the Hong Kong Stock Exchange. This makes it possible for the outside world to glimpse the tortuous journey of AR glasses from concept to commercialization, and also makes XREAL the first pure-play AR glasses company worldwide to rush into the capital markets.

According to disclosures in the prospectus, from 2023 to 2025, the company’s operating revenue was approximately RMB 390 million, RMB 394 million, and RMB 516 million, respectively, while net profit attributable to the parent company recorded losses of approximately RMB 882 million, RMB 709 million, and RMB 456 million, respectively. On an adjusted basis, adjusted net profit losses were approximately RMB 437 million, RMB 375 million, and RMB 250 million, respectively.

XREAL presses forward despite losses, betting on the future of the smart glasses market. According to data from iResearch, in 2025 the global smart glasses market size was approximately USD 2.3 billion, and it is expected to grow to about USD 24 billion by 2030. With AR glasses combining the convenience of everyday wear and immersive digital display functions, they are expected to become the market’s main growth driver.

XREAL has already firmly established itself as the leader of the sector. From 2022 to 2025, it ranked first in the global AR glasses market for four consecutive years, with a market share of 27% in 2025. The company focuses on overseas markets. From 2023 to 2025, overseas revenue was approximately RMB 255 million, RMB 260 million, and RMB 366 million, respectively, accounting for 65.3%, 65.9%, and 71.0% of total revenue, respectively. Among them, the U.S. market accounts for more than half of revenue.

Over the past 10 years, Google, Meta, and Ray-Ban have successively sparked two waves of the smart glasses industry. As AR glasses rode the trend, they became a new growth hotspot, and XREAL has continued to win favor from capital.

Since its founding, the company has completed 12 rounds of financing, totaling approximately RMB 2.3 billion. Major institutions and industrial capital—including Alibaba, Yunfeng Fund, Sequoia China, and Hillhouse—have all participated. Consumer electronics manufacturing giants such as the fashion eyewear brand Gentle Monster and Luxshare Precision also completed their arrangements on the eve of XREAL’s capitalization.

Affected by the dual demand of technological R&D and market expansion, the AR glasses industry is still in the investment period. XREAL is no exception, with relatively weak self-sustaining “cash-blood” capability. From 2023 to 2025, its cash and cash equivalents were approximately RMB 181 million, RMB 205 million, and RMB 64 million, respectively, and it mainly relies on financing to maintain day-to-day operations.

During the reporting period, the net amount of current liabilities was approximately RMB 1.932 billion, RMB 2.562 billion, and RMB 3.084 billion, respectively, and as of February 28, 2026 it further increased to RMB 3.254 billion.

Betting on the mass market

XREAL’s main revenue comes from the sales of AR glasses hardware products. From 2023 to 2025, it was approximately RMB 303 million, RMB 308 million, and RMB 403 million, respectively, with each year accounting for more than 70% of the company’s total revenue. Among them, the Air series products, which target the mass consumption market, especially support about half of the company’s hardware business.

From 2023 to 2025, the sales volume of the Air series was 134,074 units, 103,991 units, and 17,403 units, respectively, corresponding to average selling prices per unit of RMB 2,151, RMB 2,325, and RMB 1,656.

This series of products has a relatively wide range of application scenarios. It not only covers immersive movie viewing, console gaming, and mobile office work, but also offers a wearing experience close to that of ordinary glasses, and can connect to smartphones, PCs, and gaming consoles.

Relying on the market foundation of the Air series, in 2024 the company further strengthened product performance and interaction capabilities, launching the One series products, which are priced slightly higher than the Air series.

From 2024 to 2025, the One series products’ average selling prices were RMB 2,709 per unit and RMB 3,196 per unit, respectively. Sales increased from 13,512 units to 111,355 units, achieving growth in both volume and price.

The optimization and upgrade of product structure has improved XREAL’s profitability. According to the prospectus, the company’s gross profit from AR glasses sales increased from RMB 54 million in 2023 to RMB 67 million, and its gross margin rose from 19.3% to 21.8%.

Outside the two major series, the Light-Ultra-Aura product line launched by the company targets the ultra-high-end market and offers even more room for technological imagination. This product line is equipped with a front-facing camera and environmental sensors, enabling intelligent perception of the surrounding environment. During the reporting period, the product line’s average selling price was RMB 4,515, RMB 4,014, and RMB 3,665 per unit, respectively, and sales were 3,165 units, 7,368 units, and 4,973 units, respectively.

Just before dawn

At present, the core users of AR glasses are limited to groups such as gamers. Although broad consumers have an urgent demand for AR products that combine immersive image entertainment with portable wear, for this industry to achieve explosive growth like smartphones, it still needs a long cultivation period.

From the hardware perspective, at this stage, AR glasses products on the market still have substantial room for iteration and upgrades in core areas such as battery life, device weight, and display performance. This also means that industry companies need to continue investing heavily in R&D.

In its prospectus, XREAL disclosed that from 2023 to 2025, the company’s R&D expenditures were approximately RMB 216 million, RMB 204 million, and RMB 183 million, respectively, accounting for 55.3%, 51.8%, and 35.5% of total revenue, respectively. In the future, it will also invest via financing, focusing on core technology areas such as optics and chips.

As of the end of 2025, the company had 481 patents, including more than 50 invention patents. Core technologies include the self-developed X-Prism optical engine, a customized on-device coprocessor, advanced algorithms, and a self-developed operating system, among others.

Members of the company’s core team all come from top universities such as Zhejiang University, and many core members previously held key R&D positions at global technology companies such as Magic Leap and Apple, with an average age of around 40.

As a technology-driven high-tech company deeply engaged in the AR sector, XREAL has reached the just-before-dawn stage of industry development. At present, Google has become an important technology partner for the company’s next-generation products. The two sides will jointly develop core areas such as lightweight optical technologies and AI interaction, further strengthening the company’s technological leading position in Android-based AR devices.

As disclosed in the prospectus, the two sides will jointly develop the next-generation AR product Project Aura, focusing on the integration of lightweight design, cinema-grade experience, and AI technologies. The planned launch date for this high-end flagship product is 2026, and it is expected to become a key strategic move for the company to open the high-end market and achieve commercialization of its technology.

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Responsible editor: Yang Ci