Shares of NIO Slip After Mixed Q3 Earnings

NIO -2.52% NIOIF 0.00%

Quick Read

• NIO (NIO) posted an adjusted loss of $0.16 per share and beat earnings expectations by 11%.

• NIO revenue grew just 1.8% year over year to $3.06B and missed estimates by 2.9%.

• Gross margin expanded to 13.9% from 10.7% a year earlier despite competitive pricing pressure.

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NIO Inc. (NYSE: NIO) reported mixed Q3 2025 results before the bell on Tuesday, beating earnings expectations while missing on revenue. The stock opened volatile, spiking as high as $6.28 in pre-market trading before settling near $5.78 by mid-morning. Investors seemed torn between the narrower-than-expected loss and weaker top-line growth. I thought the earnings beat was meaningful, but the revenue miss kept enthusiasm in check.

Loss Narrows More Than Expected

NIO posted an adjusted loss of $1.49 per share, beating the consensus estimate of $1.67 by about 11%. That’s a notable improvement from recent quarters, where the company consistently missed expectations. Revenue came in at RMB 21.69 billion, roughly $21.7 billion, falling short of the RMB 22.35 billion estimate by 2.9%. While the miss wasn’t dramatic, it signals demand challenges or pricing pressure that management will need to address. Gross profit for the quarter hit RMB 1.90 billion with a 10.0% margin, down slightly from 10.7% a year earlier. The margin compression suggests rising costs or competitive pricing dynamics in China’s crowded EV market.

Sequential momentum looked stronger. Compared to Q1 2025, revenue jumped 58% and the net loss improved 25%. That kind of trajectory shows operational progress, even if the year-over-year comparison was more muted.

Revenue Growth Stalls Out

The revenue miss is the headline concern. NIO grew top-line sales just 1.8% year over year, a sharp deceleration for a company still in growth mode. At this stage, investors expect double-digit expansion, not low single digits. The shortfall likely reflects softer vehicle deliveries or weaker average selling prices as competition intensifies. Operating expenses remained elevated at RMB 6.81 billion, with R&D spending of RMB 3.01 billion and SG&A costs of RMB 3.96 billion. Those are necessary investments for a company building out battery-swapping infrastructure and new models, but they weigh heavily on profitability.

The company’s operating loss came in at RMB 4.91 billion, translating to a 25.8% operating margin on a trailing twelve-month basis. That’s deep in the red, and it underscores how far NIO still has to go before reaching breakeven.

Key Figures

Adjusted EPS: RMB -1.49, or -16 cents, vs. -1.67, or -24 cents, expected Revenue: RMB 21.79B, or roughly $3.06 billion, vs. RMB 22.35B expected; miss by 2.9%Gross Margin: 13.9% in the third quarter of 2025, compared with 10.7% in the third quarter of 2024 and 10.0% in thesecond quarter of 2025Gross Profit: RMB 3,024.6 million ($424.9 million)Net Loss: RMB 3,480.5 million ($488.9 million)

The earnings beat matters because it shows better cost control than analysts anticipated. The revenue trajectory is a key metric for investors. Growth is slowing at a time when the company needs scale to offset massive operating expenses.

Management Stays Focused on Execution

Leadership emphasized progress on battery-swapping infrastructure and new vehicle launches, though specific guidance details weren’t immediately available in the earnings release. The tone suggested confidence in long-term demand, particularly as NIO expands beyond China into European markets. Management has consistently highlighted their differentiated technology, especially the battery-swap model, as a competitive advantage. Whether that translates into sustained revenue growth remains the open question.

Watch the Delivery Numbers Next

Monthly delivery figures will be a key indicator over the next quarter. If vehicle sales accelerate, the revenue miss could prove temporary. If they stagnate, margin pressure will intensify. Analysts currently peg the consensus price target at $6.84, implying modest upside from current levels around $5.78. With 11 analysts rating the stock a hold, Wall Street is clearly waiting for more proof that NIO can turn operational momentum into sustainable profitability. Gross margin trends will be important to watch. That’s where investors will see whether pricing power is improving or eroding.

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