Foxconn's Historic Q2 2025: AI Server Revenue Overtakes iPhones

Foxconn (Hon Hai Precision Industry) reported its highest-ever second-quarter results in 2025, driven overwhelmingly by surging demand for AI servers. The numbers mark a historic shift: for the first time, the company earned more from building AI infrastructure than from assembling iPhones. Here's a breakdown of the results, the key drivers, and the risks that could challenge the momentum.

Q2 2025 Revenue and Profit: Records Across the Board

Foxconn reported Q2 2025 revenue of NT$1.79 trillion (approximately US$55.5 billion), a 15.82% year-over-year increase and a roughly 9% sequential rise from Q1 . This figure beat the LSEG SmartEstimate of NT$1.7896 trillion and marked the highest Q2 revenue in company history .

Key profit metrics for the quarter were also records:

• Net profit: NT$44.36 billion (US$1.48 billion), up 27% YoY — also a Q2 record .
• Earnings per share: NT$3.19 .
• Operating profit and net profit both set records for a second-quarter period .

Key Driver: AI Server Demand Overtakes iPhones

The single biggest growth catalyst was surging demand for AI servers, especially for key customer Nvidia. In a historic shift, Foxconn's Cloud and Networking Products division — encompassing AI servers and related infrastructure — generated more revenue than its Smart Consumer Electronics division (iPhones, consumer devices) for the first time in Q2 2025 . The cloud and networking segment accounted for approximately 41% of total revenue, with consumer smart devices falling to 35% . As Reuters noted, "Foxconn's Apple era fades as AI servers drive growth" .

This pivot represents a fundamental transformation of Foxconn's business model. For years, Apple's iPhone was the engine of Foxconn's growth. Now, AI infrastructure is taking the lead.

Record Monthly Figures and Rising Momentum

The momentum built through the quarter. In May 2025, Foxconn posted a 39.57% year-over-year revenue surge, driven by rising demand for AI racks. The company raised its Q2 growth forecast as a result . Monthly data from Foxconn's investor relations page shows exceptionally strong results continuing: March 2025 alone recorded NT$803.7 billion in revenue, up 45.6% YoY . June also set a new monthly revenue record of NT$540.24 billion, up 10.09% YoY .

Rising Share of Cloud & Networking Products: A Structural Shift

The Cloud and Networking Products segment became the company's largest revenue contributor for the first time. By full-year 2025, this category reached 40% of total revenue, overtaking consumer electronics at 38% . This marks a fundamental shift in Foxconn's business mix from iPhone assembly toward AI infrastructure. Foxconn's subsidiary, Foxconn Industrial Internet (FII), reported AI server revenue growth of over 60% year-on-year in Q2 2025, with cloud service provider server revenue rising 150% . For the full year 2025, FII's net profit grew more than 50%, including a more than threefold increase in AI server revenue .

Cautious Outlook on Geopolitical Tensions and Currency

Despite the record results, Foxconn's management issued explicit caution on two fronts :

• Geopolitical tensions: The company flagged risks from escalating US-China trade frictions and potential supply chain disruptions.
• Currency fluctuations: Foreign exchange volatility was cited as a headwind, particularly impacting iPhone-related revenue denominated in US dollars.

These risks are not hypothetical. Foxconn's revenue in US dollars outperformed its NT-denominated figures because of the strengthening of the US dollar, but the reverse could also be a headwind. The company's guidance for Q3 2025 projected continued substantial revenue growth, but with these risk factors acknowledged .

Broader Full-Year 2025 Context and Improving Margins

Foxconn's Q2 results were part of an accelerating trajectory through 2025:

Period	Revenue	Key Highlights
Q1 2025	NT$1.64 trillion	Record for the period; net profit jumped 91% YoY to NT$42.1 billion
Q2 2025	NT$1.79 trillion	Record Q2; AI server revenue surpassed iPhones
Q3 2025	NT$2.06 trillion	Record Q3; revenue and profit set records
Q4 2025	NT$2.61 trillion	22% YoY increase; operating profit rose 33%
FY2025	NT$8.1 trillion (~US$260 billion)	Record full-year revenue; EPS of NT$13.61 (strongest since listing)

For the full year 2025, Foxconn's net profit grew 24% to NT$189.4 billion (~€5.16 billion) . Margins improved notably: the higher-margin AI server and cloud business lifted overall profitability, with operating profit rising 33% in Q4 alone . The company declared a record cash dividend of NT$7.2 per share (payout ratio of 52.9%), reflecting confidence in sustained earnings power . Foxconn maintained its outlook for "significant growth" through the year and entered 2026 with optimism, calling AI the "core driving force" of its new five-year transformation strategy .