XREAL

XREAL is a Chinese maker of display-equipped augmented reality eyewear, founded in 2017 as Nreal and renamed in 2023. It sells tethered glasses that put a virtual screen in front of the wearer's eyes, currently the One series, the budget xbx a01 line and the legacy Air series, and is developing the XREAL Aura, a device running Google's Android XR that was announced for a fall 2026 release. On the figures in the market research XREAL commissioned for its listing document, it is the largest vendor of consumer AR glasses by revenue, but the category is small: the company sold 133,731 pairs in 2025 and booked total revenue of RMB 516.0 million (roughly US$74 million at the end-2025 rate of about RMB 7.0 to the dollar), of which RMB 402.9 million came from the glasses themselves, and it lost money on every pair ^[1][7]. On 2026-04-01 it filed a listing application with the Hong Kong Stock Exchange, which put three years of audited accounts for a leading AI glasses maker on the public record ^[1]. As of 2026-08-01 the offering had not been priced and the shares were not trading.

Company

The group traces its origin to Tairuo Technology (Shenzhen) Co., Ltd., established in the PRC on 2017-01-25 and originally registered in Hangzhou ^[1]. The founder and chief executive is Dr. Xu Chi, usually written Chi Xu in English; the prospectus names Xiao Bing, Wu Kejian and Zhang Yu as co-founders ^[1]. The listing vehicle, XREAL Ltd., is an exempted company incorporated in the Cayman Islands on 2018-06-05 ^[1].

The company traded as Nreal until 2023. Epic Games sued it in 2021, arguing that the Nreal mark looked and sounded too much like Unreal; when the rebrand was announced on 2023-05-31 the company said only that it had encountered "disputes regarding the Nreal mark" that were "resolved amicably" and that a new mark would better distinguish it ^[17]. Road to VR later described the change flatly as a forced rebrand following the Epic dispute ^[16].

XREAL markets itself as a global brand and takes most of its money outside China, which has obscured how Chinese the company is. The prospectus settles it. Operations run through PRC subsidiaries in Beijing (Beijing Unicorn, established 2018, and Beijing Tairuo), Wuxi (Matrixed Reality Wuxi, established 2020) and Shanghai (Infinite Reality Shanghai, established 2024); the iResearch competitive table in the same document lists XREAL's headquarters country as China ^[1]. The prospectus milestone table says the company "established our headquarters in Shanghai" in 2025, and gives its principal place of business in the PRC as Zhangjiang Hi-Tech Park in Pudong, Shanghai ^[1]. Outside sources still disagree: 36Kr called it "Shenzhen-based" in April 2026 and Road to VR called it "Beijing-based" in January 2026 ^[7][13]. The company had 364 full-time employees at the end of 2025, 188 of them in R&D and the vast majority based in the Chinese mainland, and held 382 patents in China plus 99 overseas ^[1].

Funding

The listing application names the investors in every round and gives the consideration paid and the post-money valuation, redacting only the implied discount to the offer price. Post-money valuation rose from RMB 40.9 million at the February 2017 seed round to US$833.5 million at the Series D ^[1].

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Source: prospectus milestone and shareholder sections ^[1]. HSG is a HongShan Capital vehicle whose ultimate shareholder is Neil Nanpeng Shen ^[1]; HongShan is the former Sequoia Capital China business. The China Internet Investment Fund is a PRC limited partnership whose largest limited partner is ICBC Credit Suisse Investment Management, with about 33% of the partnership interest ^[1]. Chi Xu told Bloomberg Television in January 2026 that the company had raised US$100 million from supply chain partners and other undisclosed backers, at a reported valuation of about US$1 billion; the prospectus records the Series D, agreed on 2026-01-23, as US$67.8 million of consideration at a post-money valuation of US$833.5 million ^[1][13]. Road to VR put cumulative outside funding at US$433 million using Crunchbase data ^[13].

The Hong Kong listing application

XREAL lodged an Application Proof with the Stock Exchange of Hong Kong on 2026-04-01, with China International Capital Corporation Hong Kong Securities and Citigroup Global Markets Asia as joint sponsors ^[1][8]. An Application Proof is a draft: the document itself carries a warning that it is incomplete, that the offer size and pricing are redacted, and that there is no assurance the company will proceed ^[1]. The latest practicable date used throughout is 2026-03-23.

The process was still running in late July 2026. On 2026-07-24 the China Securities Regulatory Commission published a supplementary-material request covering five areas, including the compliance of the group's restructuring and the unwinding of its VIE arrangements, the pricing fairness of newly admitted shareholders, and the fairness and legality of the share incentive plan, for which it asked for a conclusive legal opinion ^[8]. Chinese coverage has pitched the deal as the first listed pure-play smart glasses company ^[7]. TechCrunch reported in May 2026 that the listing was expected before the end of the year, though Xu declined to say much about it ^[6].

Financial results

All figures below are from the audited accounts in the listing application, in thousands of RMB ^[1].

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Two loss figures circulate and they are not interchangeable. The RMB 456.4 million figure for 2025 is the IFRS loss for the year, all of which is attributable to owners of the parent. It includes RMB 202.6 million of non-cash fair value movements on preferred shares, warrants and convertible notes, which the company says will stop once the listing completes, plus RMB 3.8 million of share-based payment ^[1]. Stripping those two items out gives the adjusted non-IFRS net loss of RMB 250.0 million, or 48.4% of revenue, down from 112.1% in 2023 ^[1]. The widely quoted claim that XREAL loses about RMB 1,800 on every pair of glasses comes from 36Kr and is the adjusted figure divided by units sold; the same arithmetic on the unadjusted loss gives roughly RMB 3,400 ^[1][7].

Cash is the tighter constraint. Cash and equivalents fell 69% during 2025, from RMB 204.7 million to RMB 63.6 million, against operating cash outflow of RMB 203.5 million for the year ^[1]. The Series D closed in 2026, after the balance sheet date.

Sales are concentrated outside China. Overseas markets were 71.0% of 2025 revenue, with the United States at 36.9%, Japan 14.6% and Europe 13.8%, leaving the Chinese mainland at 29.0% ^[1]. Direct sales through XREAL's own website and e-commerce storefronts were 70.8% of revenue, distributors the rest ^[1].

Unit volumes tell a different story from revenue. The prospectus reports sales volume by product line rather than a total.

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Adding the lines gives 137,239 pairs in 2023, 124,871 in 2024 and 133,731 in 2025, so XREAL shipped slightly fewer glasses in 2025 than in 2023 ^[1]. Revenue and margin rose because the mix moved from the cheap Air series to the One series, which sells for roughly twice as much: dividing AR eyewear revenue by units gives a blended average selling price rising from about RMB 2,205 in 2023 to RMB 3,013 in 2025. The Air series collapsed 83% in a single year. 36Kr called the resulting shape a shift "from volume-based to price-based" and a typical characteristic of a small market ^[7].

Products

XREAL's glasses are not standalone computers and, apart from Aura, do not carry an on-board assistant. They plug into a phone, laptop, handheld console or the company's own Beam Pro companion device over USB-C and present a large virtual display.

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Sources: prospectus specification tables, the XREAL store and Road to VR ^{[1][3][4][15]}.

The Ultra was a limited-edition developer-oriented product; it was discontinued in July 2025 after roughly 13,000 units ^[1]. The One series has held a five-star TÜV Rheinland Eye Comfort rating, which the company says makes it the only AR eyewear maker to have done so ^[1]. ROG XREAL R1, a 240 Hz co-branded gaming variant made with ASUS, was announced on 2026-01-06 at CES and sells for US$849 ^[1][4][22]. The xbx a01 and a01+ launched under a separate budget sub-brand, X by XREAL, in China in May 2026 and internationally on 2026-07-10 at US$300 ^[15][16]. Prices on the US store move well below list: as of 2026-08-01 the One was US$399, the Air 2 Pro US$249 and the Air 2 US$199 ^[4].

Birdbath optics, not waveguide

The prospectus divides AR eyewear optics into two families, birdbath and waveguide ^[1]. Waveguide etches light into a thin transparent lens and allows a frame that looks like ordinary glasses, and it is where the rest of the smart glasses market has been heading: Counterpoint Research reported that waveguide display devices grew more than 600% year on year in the second half of 2025, against 148% for AR glasses overall ^[21]. It is the approach behind Meta Ray-Ban Display and Rokid Glasses; Counterpoint groups RayNeo, XREAL and Viture together in the birdbath-led video-centric segment instead, where those three held 96% of shipments in the same half ^[21]. XREAL went the other way. Its glasses use birdbath optics, in which light from a micro-OLED panel bounces off a beamsplitter and a curved combiner. The prospectus grants birdbath high clarity, accurate color, low cost and high manufacturing yield, and blames it for thick modules and a narrow field of view ^[1]. XREAL's answer is X-Prism, an in-house engine that keeps the birdbath approach and reworks the internal element arrangement into a folded light path. The prospectus says this cuts module thickness from a typical 15 to 20 mm down to 8 to 12 mm and widens the field of view from 46 to 57 degrees, with Aura's second generation targeting about 70 degrees ^[1]. Road to VR, which has been openly sceptical of the approach, describes the newer optics as a flat prism and grants that they deliver good clarity ^[13].

The other half of the strategy is manufacturing. XREAL owns its AR optical module plant in Wuxi, Jiangsu, which it calls the world's first dedicated facility of its kind; the prospectus dates it to 2021 while XREAL's own About page says 2020 ^[1][2]. Owning the optics line is unusual among glasses vendors, most of which buy modules from contract suppliers.

The X1 coprocessor

X1, launched in 2024, is XREAL's own silicon, an unusual thing for a glasses vendor to build when the merchant parts in this category come from Qualcomm, whose Snapdragon AR1 Gen 1 it describes as the first Snapdragon XR platform designed for smart glasses ^[20]. X1 is not an application processor. It is an edge coprocessor that sits in the frame and runs the spatial pipeline locally: it integrates an AI inference engine and an AR rendering engine, fuses data from multiple sensors and performs SLAM on device ^[1]. The point is the Spatial Anchor feature, which keeps a virtual screen pinned in space as the wearer's head moves, with motion-to-photon latency under 3 milliseconds against 20 to 30 milliseconds on the older Light and Ultra ^[1]. Because the edge AI work happens in the glasses, a One connected to a laptop or console needs no software installed on the host, which is the practical difference from the Air series ^[1]. X1 is a shipped program rather than a slide: 111,355 One series units carried it in 2025 alone ^[1]. A follow-on part, X1S, sits in the Aura frame.

XREAL Aura and Android XR

XREAL unveiled Project Aura at Google I/O in May 2025 and productised it as XREAL Aura in a press release on 2026-06-16 ^[1][5]. It splits computing between the eyewear and a pocketable puck. The frame carries the X1S coprocessor and handles sensors, pose estimation and display rendering; the puck runs Qualcomm's Snapdragon Reality Elite platform, announced the same day, which Qualcomm says delivers 48 TOPS of AI processing and is coming first to XREAL Project Aura ^[5][11]. Published specifications are a 70 degree field of view, Sony micro-OLED panels at 1920 by 1200 per eye up to 120 Hz, five-level electrochromic dimming and a frame the press release renders as "less than 95g", which the prospectus puts at approximately 95 grams ^[1][3][5]. The platform is Android XR with Gemini multimodal AI, replacing XREAL's own NebulaOS ^[1][3].

The commercial terms are set out in the prospectus and are unusually favourable to the hardware partner: XREAL provides design, development and manufacturing services for developer kit products to Google's specifications and is paid service fees on a milestone basis, while intellectual property it develops for the hardware and optics stays with XREAL, which also sets its own prices, keeps hardware revenue and keeps its brand ^[1]. Those service fees are already visible in the accounts: services and other revenue jumped from RMB 6.0 million in 2024 to RMB 40.3 million in 2025, which the prospectus attributes primarily to technical development services for Project Aura ^[1].

Nothing has shipped. As of 2026-08-01 Aura was reservation-only, with a US$99 launch credit convertible to US$199 of purchase credit and a sold-out US$299 Founder Priority Pass; XREAL's own page says "Coming in Fall 2026" and states the retail price "will be no more than US$1,500 before tax", which is a ceiling rather than a price ^[3][12][19]. Xu told TechCrunch in May 2026 that the glasses were available only to developers at that point ^[6]. First-wave countries are the United States, United Kingdom, Japan, Canada and South Korea ^[5].

Market position

Share figures for this category differ wildly depending on who is counting and what they put in the basket, so each one needs its firm, basket and period attached.

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The iResearch numbers are the ones XREAL quotes in its own marketing, and they come from a report the company commissioned and paid RMB 510,000 to produce for the listing document ^[1][2]. The prospectus says the report was prepared independent of the influence of XREAL and other interested parties, but it is paid research inside a document written to sell shares, and its basket, AR eyewear only, is the one basket in which XREAL leads. Widen the basket and XREAL is a minor player: IDC put it fifth at 2.0% in Q1 2026, behind Meta on 69.2%, RayNeo, Xiaomi and Viture, in a count that combines display-less glasses with AR and VR headsets ^[9]. In China's consumer AI/AR device market, CINNO XResearch put XREAL third at 14% of Q1 2026 sell-through, behind RayNeo on 24% and Rokid on 20% ^[10]. Counterpoint Research measured the wider intelligent eyewear market up 83% year on year in the same quarter ^[18].

Litigation

XREAL has run an aggressive patent campaign against Viture, a rival birdbath viewer maker. In Germany it obtained a preliminary injunction from the District Court Munich I on 2025-11-13 against a Viture affiliate over European patent EP 3 754 409 B1, covering optical systems for AR devices; the affiliate appealed but the injunction stayed in force while the appeal ran, with a hearing expected on 2026-11-19, and the court fined the affiliate EUR 75,000 in February 2026 for non-compliance ^[1]. In the United States, XREAL's Wuxi subsidiary sued Viture entities in the Eastern District of Texas on 2026-01-15 over US Patent 11,988,839 ^[1]. Viture responded publicly that the case "bears striking resemblance to a patent-troll-style action that targeted XREAL" and accused XREAL of weaponising intellectual property "to create fear, confusion, or artificial barriers" ^[14]. Viture countersued in the PRC: XREAL received a utility model infringement complaint before the Beijing Intellectual Property Court on 2026-03-05 naming the One, One Pro and 1S and seeking RMB 20 million in damages ^[1].

Assessment

XREAL leads a category that has not yet become a market. Its own commissioned research gives it 27% of global AR eyewear revenue, and the company behind that share turned over RMB 516 million in total, which 36Kr compared to the annual takings of a mid-sized restaurant chain ^[7]. The company has genuinely improved: gross margin nearly doubled in two years, the adjusted loss fell by 43% from 2023, and operating expenses dropped from 137.6% of revenue to 82.7% ^[1]. It has also shipped its own silicon, owns its optics factory, and holds a partnership with Google that pays it cash rather than costing it control. Set against that, unit volumes have not grown since 2023, cash covers only a few months of burn at 2025 rates, its flagship product has not shipped, and the litigation with Viture cuts both ways. Xu's own summary to TechCrunch was blunter than anything in the prospectus: "Everybody's losing money", he said, followed by "Next year is the year when we could actually break even" ^[6]. Whether the Hong Kong listing completes, and at what price, is the near-term test of that claim. For scale, Meta's Ray-Ban glasses underpin the 69.2% share IDC gave Meta in the same quarter XREAL held 2.0% ^[9], while at the other end of the market Apple Vision Pro belongs to a different product class. Among specialist display-glasses vendors, Vuzix has filed audited annual accounts with the US Securities and Exchange Commission for years ^[23], but XREAL's are the first from the vendor that leads AR eyewear on revenue, which makes its numbers unusually good evidence on how the category as a whole is doing.

References

1. ^"Application Proof of XREAL Ltd." HKEXnews, 2026-04-01. www1.hkexnews.hk/...sehk26040104415.pdf
2. ^"XREAL About Us." XREAL, accessed 2026-08-01. xreal.com/about
3. ^"XREAL AURA." XREAL, accessed 2026-08-01. xreal.com/aura
4. ^"All products." XREAL US store, accessed 2026-08-01. us.shop.xreal.com/...all
5. ^"A New Era of XR Begins: XREAL Launches XREAL AURA, Powered by Android XR, This Fall." PR Newswire, 2026-06-16. prnewswire.com/...y-android-xr-this-fall-302802018
6. ^Ropek, Lucas. "Xreal, Google's smart glasses partner, thinks it has finally mastered this notoriously tricky industry." TechCrunch, 2026-05-24. techcrunch.com/...this-notoriously-tricky-industry
7. ^"With a market share of 27% and annual sales of only 500 million yuan: The 'No. 1' dilemma of AR glasses XREAL." 36Kr (Guangzhui Intelligence), 2026-04-03. eu.36kr.com/...3750612889649669
8. ^"新股消息 | 无限现实拟港股上市 中国证监会要求就股权激励对价公允性出具结论性意见." Sina Finance, 2026-07-24. finance.sina.com.cn/...doc-iniixfyi1629318.shtml
9. ^Ubrani, Jitesh. "Smart Glasses Surge: The XR Market Is Rewriting Its Own Rules." IDC, 2026-06-15. idc.com/...he-xr-market-is-rewriting-its-own-rules
10. ^"Q1'26消费级AI/AR市场销量持续增长，同比增幅108%." CINNO Research, 2026-05-22. cinno.com.cn/...r_ai_ar_sales_grow_108_percent_yoy
11. ^"Qualcomm Takes Spatial Computing into the AI Era with Snapdragon Reality Elite." Qualcomm, 2026-06-16. qualcomm.com/...ng-into-the-ai-era-with-snapdragon
12. ^Heaney, David. "Xreal Aura Ships This Fall, With Snapdragon Reality Elite In Its Puck." UploadVR, 2026-06-16. uploadvr.com/...apdragon-reality-elite-in-its-puck
13. ^Hayden, Scott. "Google's Leading AR Glasses Partner XREAL Raises $100M." Road to VR, 2026-01-12. roadtovr.com/...-android-xr-xreal-raises-100m-2026
14. ^"VITURE Calls XREAL Lawsuit 'patent-troll-style' in Escalating AR Glasses IP Battle." Road to VR, 2026-01-20. roadtovr.com/viture-response-to-xreal-patent-troll
15. ^"XREAL's First Budget AR Glasses Go on Sale Internationally, Priced at $300." Road to VR, 2026-07-10. roadtovr.com/...dget-ar-glasses-price-release-date
16. ^"XREAL Launches AR Glasses Sub-brand That Could Cause Another Trademark Dispute." Road to VR, 2026-05-26. roadtovr.com/xreal-launches-xbx-glasses-brand-china
17. ^"Nreal Rebrands To Xreal, Reveals iPhone & Consoles Adapter." UploadVR, 2023-05-31. uploadvr.com/nreal-rebrand-xreal-beam-adapter
18. ^"Global Intelligent Eyewear Market Up 83% YoY in Q1 2026 Driven by Strong AR, Smart Glasses Demand." Counterpoint Research, 2026-06-24. counterpointresearch.com/...iven-by-demand-q1-2026
19. ^"XREAL AURA AR Glasses Get Fall Release Window, $1,500 Price Ceiling." Road to VR, 2026-06-17. roadtovr.com/xreal-aura-release-date-price-1500
20. ^"Snapdragon AR1 Gen 1 Platform." Qualcomm, accessed 2026-08-01 (page metadata; body renders client-side). qualcomm.com/...snapdragon-ar1-gen-1-platform
21. ^"Global AR Smart Glasses Shipments Grow 148% YoY in H2 2025; Waveguide-based Devices Surge Over 600%." Counterpoint Research, 2026-04-09. counterpointresearch.com/...Surge-Over-600-Percent
22. ^"ASUS Republic of Gamers Announces ROG XREAL R1 AR Gaming Glasses." ASUS Pressroom, 2026-01-06. press.asus.com/...rog-xreal-r1-ar-gaming-glasses
23. ^"Vuzix Corporation, Form 10-K for the fiscal year ended December 31, 2025." US Securities and Exchange Commission, filed 2026-03-12. sec.gov/...vuzi-20251231x10k