Ruijie Networks H1 Net Profit Up 53%, 800G Revenue More Than Doubles Full-Year 2024
Nashnova编辑部
Ruijie Networks posted RMB 8.8 billion in H1 2026 revenue and a 53% jump in net profit, with 800G switch revenue of RMB 1.9 billion already more than doubling the full-year 2025 figure; data-center networking now accounts for nearly two-thirds of total sales, though management cautioned the H1 margin level should not be extrapolated.
Why did profit growth far outpace revenue?
H1 revenue came in at roughly RMB 8.8 billion, up nearly 33% year-on-year; net profit attributable to shareholders reached RMB 690 million, up about 53%.
The driver was not margin expansion — gross margin actually fell roughly 1.5 percentage points to 31.6%. This means → profit outran revenue because scale grew while the expense ratio shrank, not because each unit sold earned more.
Operating expenses rose only 14%, well below revenue growth; selling expenses were up just 9%, and administrative expenses declined in absolute terms. In plain terms = revenue grew by a third, but spending grew by barely a tenth — the gap dropped straight to the bottom line.
Management explicitly cautioned: the H1 net margin of 7.8% is unusually high; the full-year normal range is 4–6%, and linear extrapolation would be misleading.
What made 800G the standout number?
Data-center networking revenue reached roughly RMB 5.6–5.7 billion, up 58%, accounting for about 64% of total revenue — this single segment delivered the bulk of the incremental growth.
Within that, 800G product revenue hit approximately RMB 1.9 billion, a year-on-year increase exceeding 300%; full-year 2025 800G revenue was only about RMB 900 million. This means → half a year already more than doubled the prior full year, a pace well ahead of market expectations.
Management sees at least 50%+ growth visibility for 800G volumes in H2, but stressed this is an operational judgment based on orders, not formal revenue guidance.
400G product revenue was about RMB 3.0 billion, up 27%, still accounting for nearly 50% of data-center switching revenue. Management noted that many 400G and 800G products share the same core switching chip, so gross margins between the two show no meaningful difference — 800G's significance lies in revenue scale and technology positioning, not per-unit margin uplift.
Direct sales keep rising — what does that signal?
Direct-sales revenue reached RMB 5.9 billion, up 50%, accounting for roughly 67% of total revenue; channel sales were about RMB 2.9 billion, up only modestly.
This reflects the fact that major internet customers buy directly; the faster AI orders grow, the higher the direct-sales share climbs.
In plain terms = the more large customers buy direct, the deeper the company's reliance on them — and direct sales exert structural pressure on blended gross margin, because large buyers have stronger bargaining power and thinner per-unit profit margins.
How far along is the super-node business, really?
H1 super-node-related 400G + 800G revenue totalled roughly RMB 100–120 million, less than 1% of total revenue and about 2% of data-center revenue. In plain terms = it has moved beyond the lab — real orders are coming in — but it is still far from becoming a core growth driver.
Ruijie currently ships mainly in Switch Tray form; the final product configuration is up to the customer — cloud operators may integrate compute, networking and liquid cooling themselves, or outsource to an ODM for a full-rack solution.
Management estimates that super-node products, given their greater structural, thermal and integration complexity, may carry roughly 30% or more higher value per unit than standard box switches — but higher value does not mean proportionally higher margins.
On the technology roadmap, current Ethernet super-nodes are built around Broadcom's Tomahawk 5 (a high-end switching chip); 51.2T-class chips may see limited shipments in H2 2026, with volume deployment expected in 2027.
Raw-material inventory nearly doubled — opportunity or risk?
Raw-material inventory jumped from roughly RMB 1.4 billion to RMB 2.7 billion, nearly doubling; quarter-end prepayments rose about 180% from the prior quarter. This means → the company proactively built strategic stockpiles as lead times for critical chips lengthened.
Management said H1 supply tightness did not materially impair deliveries — the stockpiling improved the probability of converting orders into revenue.
The flip side: inventory and prepayments tie up significant cash. If customer demand shifts, a product-generation transition occurs, or chip prices soften, elevated inventory could create turnover and impairment pressure.
Three variables need to be watched in tandem through H2: revenue growth, inventory turnover, and operating cash flow — whether all three improve together will determine if the stocking strategy was foresight or burden.
How did overseas and other segments perform?
Overseas revenue reached about RMB 2.1 billion, up roughly 84–85% year-on-year, with its share approaching 24% — a record for any first half.
Campus-network revenue was about RMB 1.12 billion, up 24%; SMB revenue came in at RMB 1.717 billion, up 15%.
R&D spending totalled RMB 1.02 billion, up 20%.
Management believes the value and volume share of AI networking within the broader AI infrastructure stack could grow faster than overall data-center capex. But validating that view ultimately depends on whether high-end switches sustain their ramp, critical chip supply keeps pace, and expense discipline continues to offset the gross-margin headwind from an evolving product mix.
Content is for reference only, not financial advice.