HTC, once a pioneer in smartphones and now a major player in virtual and extended reality (XR), reported a rare return to profitability in the first quarter of 2025 after finalizing a US$250 million deal with Google to transfer a portion of its XR research team and license certain non-exclusive patents.
The transaction, completed at the end of the first quarter, brought much-needed financial relief to the company, ending a 27-quarter losing streak and signaling a temporary rebound. HTC posted a net profit of NT$4.05 billion (approx. US$133 million), equivalent to earnings per share of NT$4.86. The company's revenue for the quarter stood at NT$710 million, with a gross margin of 37.6%, although it still reported an operating loss of NT$1.14 billion before the Google windfall.
The core question now facing investors and industry watchers: Can HTC translate this one-time gain into sustainable profitability?
HTC's future remains closely tied to its strategy in the XR space, where it continues to position its Vive brand as a cornerstone of immersive technology. This is not the company's first significant asset deal with Google; back in 2017, HTC sold a large portion of its smartphone operations—including personnel and patents—for US$1.1 billion.
While HTC describes the current transaction as a strategic move to streamline operations and focus on long-term platform development, higher operational efficiency, and financial flexibility, concerns linger that these windfalls are masking deeper structural challenges.
If these deals with Google remain one-offs, without meaningful follow-up in platform or product collaboration, investor enthusiasm may wane.
Beyond its balance sheet, HTC has continued pushing forward in XR innovation. It has launched the VIVE Mars CamTrack, a real-time camera tracking solution for virtual production environments, and VIVERSE Create, a no-code 3D content creation platform. The company has also introduced VIVERSE Worlds, a content hosting and sharing ecosystem, and showcased cutting-edge 6G hybrid computing technologies in partnership with MediaTek.
These efforts reflect HTC's ambition to evolve beyond hardware manufacturing into an integrated tech provider offering a full stack of hardware, systems, and digital services. Yet its core business remains under pressure. Without the Google deal, the first quarter would have marked HTC's 28th consecutive quarterly loss.
The company's long-term viability hinges on whether it can successfully monetize its technologies and platforms, boost sales of new XR products and demonstrate operational innovation. Without tangible progress in these areas, HTC risks falling back into familiar financial distress—despite its momentary return to the black.
Article edited by Jack Wu
