HTC's losses narrowed in Q4 2020, but it's still far from profitable

HTC's losses narrowed in Q4 2020, but it's still far from profitable
With the exception of Q1 2018, which saw Google complete its $1.1 billion purchase of the brand’s engineering team, HTC has been consistently bleeding money since Q2 2015, and last quarter was no different.

HTC cut costs in Q4 2020, but it still lost money


The Taiwanese brand has reported another huge loss of NT$ 1.3 billion ($46 million) on revenues of NT$ 1.6 billion ($56 million) during the most recent quarter, which ran from October to December 2020.

Clearly, HTC is still far from achieving profitability, but the former smartphone giant continues to make progress. A year earlier, its operating loss stood at NT$ 2.2 billion ($77 million), despite reporting higher revenues of NT$ 1.8 billion ($63 million).

The brand’s gross margin has gone from 25.7% to 27.9% in the past twelve months, a small but important improvement. And its all-important operating margin now stands at -80.9%, much better than the -122.1% operating margin seen in Q4 2019.

HTC hasn’t announced its plans for 2021, but a continued focus on improving profitability is likely. The brand has been consistently reducing expenses for the past few years, and this year should be no different.

Throughout 2020, HTC cut its operating expenses by implementing reductions to its marketing budget, lowering general administration costs, and even reducing R&D. Whether the lower R&D expenditure means fewer products in the future is unclear.

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