On June 11, 2025, 34-year-old founder Liu Jingkang rang the bell for Insta360's listing on the STAR Market with the Insta360 X5 panoramic camera, propelling the company into the first tier of hard-tech enterprises with a market value exceeding 70 billion yuan. Dubbed the 'first global smart imaging stock,' the title resonated throughout the market.

At the time, the market labeled the company with three tags: global niche leader, AI hardware pioneer, and benchmark for overseas expansion. Insta360's market value once approached 150 billion yuan.

Now, over a year later, the script has flipped. According to Insta360's 2026 interim report, first-half revenue reached 5.517 billion yuan, up 50.29% year-on-year; net profit attributable to shareholders plummeted 94.15% to just 30.4073 million yuan; Net profit after extraordinary items (non-recurring profit/loss adjusted net profit) swung to a 15.3392 million yuan loss, marking the first post-listing shift from profit to loss. Second-quarter net loss attributable to shareholders hit 54.2129 million yuan, compared to a 343 million yuan profit last year, representing a sharp reversal in profitability.

The capital market's response was harsher. In early September, Insta360's stock price plunged to a record low of 108.18 yuan, down about 71% from its peak, with market value shrinking from over 150 billion yuan at its zenith to roughly 44 billion yuan. By mid-September, the stock hovered near 94 yuan, with a total market cap of 37.8 billion yuan. In one year, Insta360's market value evaporated by over 100 billion yuan.

What exactly happened to Insta360 this year?

Insta360 Forced into Two-Front War

Reviewing Insta360's rise over the past decade, its success stemmed from creating new categories rather than competing in existing markets. Around 2017, as GoPro sales fluctuated, Insta360 addressed pain points in action cameras—difficult framing, shaky footage, and selfie stick intrusion—through panoramic technology, pioneering a 'shoot first, frame later' experience revolution.

In 2019, it launched the thumb-sized GO series, solving wearability and weight issues; by late 2023, the Ace series with flip screens expanded action cameras from sports to Vlog scenarios. As Liu Jingkang noted in a December 2025 internal memo, original niche categories now account for over 70% of total revenue.

But after July 2025, this category-creation logic shifted to a dual-front war of attrition.

On July 28, 2025, Insta360 announced its panoramic drone brand, Antigravity, entering the consumer drone market—DJI's core territory for years. Just three days later, DJI launched its first panoramic camera, the Osmo 360, priced at 2,999 yuan, undercutting Insta360's flagship X5 by about 800 yuan.

'You attack my backyard, I raid your stronghold'—the cross-raiding war escalated. DJI's offensive intensified: in September 2025, it released the Osmo Nano to rival Insta360's GO Ultra, priced about 900 yuan lower with subsidies; in October, it slashed prices across Pocket 3, Action 4, Osmo 360, and other lines by over 1,000 yuan in some cases. Insta360 retaliated during the 2026 618 shopping festival, cutting prices on the thumb camera GO Ultra, handheld gimbal camera Luna Ultra, and panoramic drone Antigravity A1—even its flagship X5 saw a 1,370 yuan discount.

More pressuring, the war extended beyond products and pricing. In March 2026, DJI sued Insta360 in Shenzhen Intermediate People's Court, claiming six patents related to drone flight control, airframe structure, and imaging processing were Service invention (work-related inventions) by former employees and should belong to DJI. In June, DJI filed a 'willful infringement' lawsuit against Insta360 in the U.S., prompting Insta360 to counter-sue DJI in the same U.S. court for infringing five patents and request invalidation of DJI's relevant patents with China's National Intellectual Property Administration.

A company with hundreds of billions in revenue, forced to fight on two fronts: defending its panoramic camera stronghold against DJI's saturation attacks while challenging DJI's drone hegemony in a hostile market, using subsidies and losses to secure entry tickets.

Insta360 CEO Liu Jingkang's response to the lawsuits encapsulated the nature of this war of attrition: 'It's completely understandable for a giant to feel threatened when its market is encroached upon.' The sentiment is mutual—Insta360's market grabs come with the cost of a two-front war. To counter DJI's price cuts, Insta360's first-half operating costs surged over 80% year-on-year, far outpacing the 50% revenue growth; gross margin collapsed from about 51.2% to 41.4%, nearly ten percentage points vanished in a year.

Critically, new category expansions lack scale to generate cash flow, while old categories' profit margins are heavily compressed. The Profitable chassis (profit base) is rapidly shrinking. When category-creation dividends collide with a giant's retaliatory attrition, Insta360 must trade profits for time and losses for market share—the real logic behind 'revenue up, profits gone' one year after listing.

Where Did the War of Attrition's Billions Go?

Insta360's interim report clearly tallies the costs of this war: costs rose faster than revenue, and expenses surged even quicker than costs.

The most direct pressure came from upstream suppliers. Global storage chip supply-demand shifts drove DDR prices sharply higher, slashing Insta360's gross margin from 51.22% to 41.42%, with a further drop to 38.33% in Q2.

Insta360's counterstrategy was to 'bet on chips.' First-half strategic procurement of storage chips neared 2 billion yuan, directly causing net cash from operating activities to swing from a 241 million yuan inflow last year to a 2.761 billion yuan outflow, a 1,245.12% plunge; ending inventory soared to 6.212 billion yuan, more than doubling from 2.919 billion yuan at year-end.

This is a double-edged sword: if storage prices stay high, forward locking secures cost advantages; if demand underperforms, 6.2 billion yuan in inventory becomes a looming write-down risk—a point the company itself acknowledges in risk disclosures.

More concerning are expenses. First-half operating expenses totaled 2.35 billion yuan, with the expense ratio climbing to 42.60%: selling expenses hit 1.017 billion yuan, up 61.96%; R&D expenses reached 1.007 billion yuan, up 79.26%; administrative expenses were 249 million yuan, up 86.74%—all exceeding the 50.29% revenue growth. Combined R&D and selling expenses of 2.024 billion yuan consumed 36.7% of revenue.

Drones are the undisputed money burner. Financials show the four subsidiaries under Antigravity drone business racked up 367 million yuan in first-half losses. Product-wise, the Antigravity A1 launched at 6,799 yuan but saw an official 1,300 yuan cut to 5,499 yuan by March 2026. Third-party teardowns estimate A1's standard kit's post-tax hardware cost at about 5,512 yuan—selling near break-even.

Insta360's management clearly prioritizes long-term competitiveness over short-term profits. Equity incentive targets set 2025 revenue at no less than 7.246 billion yuan and 2026 at no less than 8.361 billion yuan, with no profit metrics. In 2025, actual revenue hit 9.741 billion yuan, vastly exceeding targets; 2026 first-half revenue reached 5.517 billion yuan, making annual targets almost certain.

This growth-over-profit strategy isn't rare for tech firms in expansion phases. The question is: how long is the investment window? Where is the burn rate limit? When will new businesses turn profitable? These are market concerns without clear answers.

Where Is the Next Growth Cure?

With panoramic cameras under pressure and drone operations sustaining losses, Insta360 needs a new long-term growth engine. The mirrorless camera segment is seen as the third growth curve, following panoramic cameras and drones.

Liu Jingkang publicly confirmed the project: 'We're fully advancing R&D for mirrorless cameras.' Insta360 is developing two interchangeable-lens mirrorless models with distinct form factors and user targeting, including one with an 'unimagined' new design. The goal isn't to replicate traditional mirrorless cameras but to integrate AI and smart imaging capabilities from action and panoramic cameras, making them more accessible to average users.

Market size justifies the choice. China is the world's largest mirrorless consumer market, with CIPA data showing it accounted for about 29.2% of global mirrorless camera shipments in 2024. Stylistically, mirrorless cameras align with Insta360's mission to 'lower creative barriers.'

However, mirrorless is a tougher mountain to climb than drones. For decades, Canon, Sony, and Nikon have dominated the mirrorless market, with little room for Chinese brands. BCN's 2024 Japan market data shows Sony at 35.8%, Canon at 26%, and Nikon at 14.5%—the top three holding over 70% combined. Domestically, Xiaoyi and Yongnuo tried mirrorless before; Xiaoyi exited after autofocus issues in its first model, while Yongnuo retreated to live-streaming cameras—a cautionary tale.

Deeper concerns linger: Insta360's AI-differentiation path remains unproven and equally capital-intensive. Imaging algorithms, AI chips, and lens optics demand long-term, high-cost R&D, while Insta360's cash reserves are strained by inventory stockpiling and new business investments.

Notably, the segment's value is eroding: by 2026, flagship smartphones widely feature one-inch sensors, narrowing the gap with entry-level APS-C sensors to about 3-4x. In daylight, non-professional users struggle to distinguish smartphone and camera output quality, squeezing demand for entry-level mirrorless models. Meanwhile, DJI's acquisition of Hasselblad gives it a stake in high-end imaging, while smartphone makers and gimbal newcomers are all vying for a slice of professional imaging democratization.

In other words, Insta360 is choosing to launch a third front amid its tightest cash flow, lowest core business margins, and most fatigued two-front war—against opponents far older, more closed, and tougher than DJI.

Strategically, this is a high-risk move. Mirrorless R&D cycles span years, with optical and autofocus tuning requiring long-term accumulation. Whether Insta360 can survive until product mass production and market stabilization remains uncertain. If the third curve fails to generate cash while storage chip prices and drone losses keep dragging financials, the company's cash cushion will thin further. By then, even with impressive revenue scale, will capital markets still pay for 'growth without profits'? That's an open question.

Epilogue

One year after listing, Insta360 shifted from high-growth, high-profit to high-growth, low-profit. As category-creation dividends fade and giants cross borders, Insta360 must spend continuously to secure survival and future tickets.

But the over-90% profit decline is a warning: the war of attrition can't last indefinitely; new businesses must deliver value soon. Whether mirrorless cameras become the next growth engine, if AI can build true differentiation barriers, and when drone operations escape losses will define Insta360's future.

From category creation to Stock competition (stock competition), from single-point breakthroughs to all-front warfare, Insta360 is undergoing its most critical strategic transformation since inception. Pain is inevitable, but with the right direction, short-term profit sacrifices may yield longer-term growth. The question is how much patience the market has—and which side time favors—answers that only performance can provide.