Insta360 Invests One-Fifth of Revenue in R&D

Insta360 has released its half-year report, continuing to draw market attention. It sold 5.5 billion yuan in the first half, with net profit of 30.4 million yuan, down sharply year on year. More oddly, its revenue kept growing, up 50% year on year. A company sprinting at full speed suddenly saw its profit hit the floor. Rising revenue without rising profit is the most common refrain online, yet few explain why this is happening or what lies ahead.

1. One-fifth of revenue poured into R&D

Start with the numbers. In the first half of 2026, Insta360's R&D expenses exceeded 1 billion yuan, up nearly 80% year on year, lifting the share of revenue to 18.78%.

In other words, for every 100 yuan Insta360 earns, nearly 20 yuan goes into R&D. What does that mean in consumer electronics? Across all A-share listed companies, an 18% R&D expense ratio already exceeds that of the vast majority of tech firms. Taking a longer view: in full-year 2025, Insta360's R&D investment was 1.530 billion yuan, up 96.95% year on year, or 15.70% of revenue.

In the first quarter of 2026, revenue continued to grow 83.11%, while R&D investment rose about 101% year on year. In short, the faster revenue grows, the faster R&D investment grows.

"As one rises, the other rises even more" — this looks less like passive pressure than a deliberate choice. Founder Liu Jingkang put it plainly in his shareholder letter in the last annual report: "High-intensity strategic investment supports the company's long-term development plans, but also causes a decline in short-term profit metrics."

He also revealed a more detailed figure in the letter: in full-year 2025, beyond its existing business, Insta360 strategically invested RMB 762 million in new categories such as drones, gimbal cameras and wireless microphones, as well as three custom chips, equivalent to 80% of its net profit attributable to shareholders over the same period. By the first quarter of 2026, that ratio had surged to 300% — for every RMB 1 earned in profit, nearly RMB 3 was invested in the future.

For capital, that matters.

2. The money has been spent — have the products arrived?

The question most investors care about is: with so much cash burned, what exactly has it produced?

The answer: in 2026, Insta360's product density hit an all-time high.

Let's walk through the timeline:

In March, Insta360 launched the Snap phone selfie screen, a magnetic direct-connect accessory with real-time preview, entering the mobile imaging accessory market at a starting price of 499 yuan.

In May, it released the flagship wireless microphone Mic Pro, expanding its audio creation ecosystem.

In June, Insta360 introduced the Luna Ultra 8K dual-camera gimbal camera, co-developed with Leica. It features dual Leica Summicronoptical lenses and supports 8K 30fps Dolby Vision and 4K 120fps slow motion. On its launch day, it ranked first in action camera sales on Douyin and JD Sports, topped Tmall's livestream sales chart, and reached No. 1 on Amazon's US Best Sellers list. Soon after, the single-camera Luna Pro was released, bringing the starting price of handheld gimbal cameras down to 3,399 yuan.

In August, the flagship 360-degree camera X6 was officially unveiled. It is equipped with a custom Sony 1/1.1-inch square large-format sensor and supports 8K 50fps panoramic video and 120-megapixel panoramic photos. More importantly, the X6 continues the AI triple-chip design of its predecessor: a 4nm Qualcomm chip delivers five times the computing power, while two custom professional imaging chips handle noise reduction and image quality tuning respectively.

In addition, the thumb-sized Go Ultra camera features an AI voice assistant integrated with the Tongyi Qianwen large language model and Google Gemini, becoming the first to deliver an AI voice interaction experience breakthrough in the action camera segment. Sources also indicate that Insta360 is expected to update its Ace Pro 3 action camera by the end of this year, with the sensor upgraded from 1/1.3 inch to a 1-inch large format.

In just six months, the company launched more than five new products in quick succession, spanning gimbal cameras, 360-degree cameras, microphones, phone accessories and other categories. And every product was a genuine head-turner: when Luna launched, retail outlets worldwide saw queues of buyers, and it caused a major stir even in Japan, a traditional camera powerhouse, where Tokyo stores at one point had long lines for Luna. This hardly looks like "burning money" — it is clearly "mobilizing the troops."

III. Stockpiling Chips Worth 2 Billion Yuan: A Prepared Winter

If the flood of new products shows Insta360 is on the "offensive," another outlay reveals its "defensive" thinking.

The interim report shows that Insta360 made strategic purchases of memory chips worth nearly 2 billion yuan in the first half. Why memory chips? The reason is simple: global prices for memory chips such as DDR keep climbing, and Insta360 chose to build up large inventories at this point in time.

The financial report puts it this way: "This forward-looking stockpiling is expected to secure the company stable memory chip supply volumes and costs, providing strong support for the company's future development."

In plain terms: if you don't buy now, it will cost more later.

In fact, research from multiple semiconductor industry organizations and the world's leading investment banks points to the same conclusion: amid the structural supply-demand imbalance triggered by AI demand, the upward trend in memory chip prices is highly likely to persist through all of 2026 and may even continue into 2027-2028.

Insta360's move is essentially doing two things:

First, locking in costs. By stockpiling chips at current prices in advance, the company gains a cost advantage once prices rise.

Second, securing supply. Amid a global chip shortage, being able to get the goods matters more than how much cheaper they are.

The results show up in the inventory line of the financial report. As of the end of the reporting period, the company's inventory had a book value of 6.212 billion yuan, up 112.82% from the beginning of the period, with memory chips alone accounting for a book balance of 1.748 billion yuan.

Of course, stockpiling chips carries risks. If memory chip prices fall, these inventories face the risk of write-downs. Insta360 also issued a risk warning in its financial report.

But viewed another way, a company willing to spend nearly 2 billion yuan in real cash to stock up in advance while profits are already under pressure shows it has ample confidence in future sales.

Otherwise, stockpiling a pile of chips that sits in the warehouse is the real danger.

4. Cameras are just the entry point

Put R&D, new products and chip stockpiling together, and Insta360's strategy becomes clear. It does not want to be merely a company that "sells cameras." In his letter to shareholders, Liu Jingkang sketched a scenario: "Could there come a day when everyone has a portable 'photography robot,' like a professional photographer you hire for a company trip, automatically moving through space, finding angles and capturing those wonderful moments, while you simply enjoy the present?"

To reach that goal, Insta360 has done three things over the past six years: building up technologies such as optical modules, sensors and imaging algorithms across different camera categories — these are the "eyes." Developing two types of drones and gimbal technology — this is the "body."

Starting R&D on automatic editing six years ago, developing panoramic flight simulation and panoramic depth prediction technologies — this is the "brain." Today, the "eyes" and "body" already exist as physical products, and the "brain" is evolving faster. The PanoMind multimodal model in the X6 can already recognize scenes automatically and intelligently match camera moves and filters, delivering a finished video in one tap with zero editing. The AI voice assistant on the Go Ultra lets users control the camera with natural language. A

The cloud-based automatic editing feature "Moment Pro" has seen its export rate rise to 60%. Users keep shooting, then keep editing, then keep saving, continuously stretching the relationship between device and user. That is the business Insta360 truly wants to build.

V. A Well-Prepared Battle

Back to the original question: what is Insta360 betting on? It is betting on one thing — trading R&D for time, and products for space. Over the past few years, Insta360 has validated a path: identify a new category, create a hit product, and sell it worldwide.

It has already proven the model on this path. The next step is a harder one: use hardware to win users, then retain them with software, AI and data. Along this road, Luna Ultra, X6, Go Ultra, Mic Pro, the Yingling drone — every product is a move on the board. The 2 billion chip stockpile is ammunition for this battle.

One-fifth of R&D spending is building a moat for the next stage of competition. Short-term profit pressure is the price of admission this transformation demands.

It is still too early to judge Insta360.

But one thing is certain: the company's management came prepared for this fight.

The first signs are emerging, and the future looks promising.

       Original title : One-fifth of R&D spending: What is Insta360 betting on?