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The Decoder
ByteDance profit plunges on AI push as TikTok Shop fuels overseas surge
ByteDance, the parent company of TikTok and Douyin, reported a significant drop in operating profit for 2025, with profits falling approximately 33% to 16 billion yuan, according to reports citing a person familiar with the matter. The decline is attributed to increased investment in artificial intelligence (AI) and emerging businesses. At the same time, overseas revenue surged nearly 50%, driven by TikTok Shop, whose gross merchandise value grew nearly 70% last year. For the first time, overseas revenue accounted for more than 30% of ByteDance's total, up from 25% in 2024. Li Liang, vice-president of Douyin, noted that the profit drop is based on international accounting standards that include stock option costs, and that excluding those costs, overall profit and revenue actually grew. He also stated that the operating profit margin slightly decreased in the second half of 2025 due to slowing Douyin e-commerce growth and investments in new businesses. The report underscores ByteDance's strategic pivot toward AI while its e-commerce arm expands abroad, balancing short-term profitability with long-term growth ambitions. The results come amid ongoing regulatory challenges for TikTok in the United States and other markets.
MonitorConfidence: MediumShort term horizonData governance risk: High
Published 10 May 2026, 10:10 UTC1 min read
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Summary
TL;DR
- ByteDance's 2025 operating profit fell about 33% to 16 billion yuan.
- Overseas revenue grew nearly 50%, surpassing 30% of total revenue for the first time.
- TikTok Shop's gross merchandise value increased nearly 70% year-over-year.
- Profit decline attributed to heavy AI investments and stock option costs.
- Douyin e-commerce growth slowed in H2 2025.
- Company claims profit and revenue grew excluding stock option costs.
Interesting facts
- ByteDance's overseas revenue share jumped from 25% to over 30% in one year.
- The profit drop is explained by accounting rules that include employee stock option expenses, which the company says do not reflect actual operations.