Group revenue declined 6.9% to US$2,027.5 million
Gross profit margin improved from 31.5% to 32.7%
Profit attributable to shareholders of the Company decreased 14.5% to US$134.1 million
Final dividend of US36.0 cents per ordinary share, which brings the full-year dividend to US53.0 cents per ordinary share, representing a dividend payout ratio of 100%
Strong financial position with net cash and no bank borrowing
HONG KONG, May 21, 2026 /PRNewswire/ -- VTech Holdings Limited (HKSE: 303) today announced its results for the year ended 31 March 2026.
"VTech reported a decrease in revenue in the financial year 2026. Changes in US tariff policies and depressed consumer sentiment, driven by geopolitical uncertainty, resulted in lower revenue across electronic learning products, telecommunication products and contract manufacturing services. Consequently, despite continued improvements in the gross profit margin, Group profit declined," said Mr. Allan Wong, Chairman and Group CEO of VTech Holdings Limited.
Results and Dividend
Group revenue for the year ended 31 March 2026 decreased by 6.9% to US$2,027.5 million, from US$2,177.2 million in the previous financial year. Sales were lower in all regions.
Profit attributable to shareholders of the Company decreased by 14.5% to US$134.1 million. The decline in profit was mainly due to the lower revenue, an increase in total operating expenses as a percentage of Group revenue and a higher Group effective tax rate.
Basic earnings per share decreased by 14.7% to US52.9 cents, compared to US62.0 cents in the financial year 2025.
The Board of Directors has proposed a final dividend of US36.0 cents per ordinary share, providing a full-year dividend of US53.0 cents per ordinary share, a 13.1% decrease from the US61.0 cents declared in the previous financial year. This represents a dividend payout ratio of 100%.
Costs
The Group's gross profit margin in the financial year 2026 rose to 32.7%, as compared with 31.5% in the financial year 2025. This was mainly attributable to lower cost of materials, as material prices decreased. A more favourable product mix, increases in product prices, the strength of European currencies against the US dollar and lower freight charges also contributed to the improvement in margin. The gains were partially offset by additional tariffs imposed on the US-bound products and higher direct labour costs as a percentage of Group revenue.
Segment Results
North America
Group revenue in North America decreased by 9.1% to US$811.6 million in the financial year 2026, as sales of electronic learning products (ELPs), telecommunication (TEL) products and contract manufacturing services (CMS) all declined. North America was VTech's second largest market, accounting for 40.0% of Group revenue.
ELPs revenue in North America fell by 12.7% to US$388.5 million. This was mainly driven by sales declines in the US following the change in US tariff policy. The new tariffs caused a temporary suspension of shipment to the US for several weeks and induced the Group to raise prices for most of its US-bound products, while retailers delayed store sets for the Autumn season. These developments negatively affected orders and in-store sales in the first half of the financial year 2026. Matters improved in the second half, however, with US sales essentially flat as compared with the comparable six-month period of the previous financial year. In the calendar year 2025, the Group—comprising the VTech and LeapFrog brands—retained its leadership in electronic learning toys from infancy through toddler to preschool in the US[1]. In Canada, despite a sales decline in the financial year 2026, the Group maintained its position as the largest manufacturer of infant, toddler and preschool toys[2].
Standalone products saw sales decrease, with declines across all key product categories. This was mainly due to the lower shipment to the US in the first half of the financial year 2026 following the change in US tariff policy. Core learning products and key product lines all posted sales decreases, for both the VTech and LeapFrog brands. Despite this, seven VTech and LeapFrog products ranked among the top 20 best-selling infant and toddler toys in the US during the calendar year 2025. Notably, VTech's First Steps® Baby Walker and LeapFrog's Learning Friends 100 Words Book™ claimed the second and the fifth position respectively.
Platform products sales grew, driven by new product launches. The LeapFrog brand was boosted by the launch of the exciting new motion-based learning system LeapMove™, which performed well during the holiday seasons. This offset lower sales of children's educational tablets. Sales of Magic Adventures® Globe and the interactive reading system, meanwhile, held steady. By contrast, VTech branded platform products reported a sales decline, mainly because of lower sales of KidiZoom® Smartwatch and Touch & Learn Activity Desk™. Subscriptions to LeapFrog Academy™ were stable.
The Group gained eight awards from trusted parenting websites, toy industry experts, toy advisory boards and major retailers in North America during the financial year 2026. In the US, LeapMove made both Walmart's "2025 Top Toys List" and Target's "2025 Bullseye's Top Toys List". VTech's Bluey Road Trip Playset and Get Growing Tractor & Mower Ride-On™ were named TOTY (Toy of the Year) finalists by The Toy Association, and there were awards from Good Housekeeping for Get Growing Tractor & Mower Ride-On and VTech Baby® 4-in-1 Steps & Stages Activity Center™. In Canada, VTech Baby 4-in-1 Steps & Stages Activity Center and VTech Baby Explore & Move With Puppy™ were included in the Walmart and Toys"R"Us "2025 Top Toys" lists, respectively.
TEL products revenue in North America fell by 9.7% to US$161.5 million in the financial year 2026. Sales of all three categories declined.
Sales of residential phones fell amid the ongoing contraction of the US market. Despite these headwinds, the Group continued to introduce new products and retain its popularity with consumers. The AT&T DLP73290 residential phone saw particularly strong sales throughout the financial year 2026, complemented by a good reception for the new AT&T BL108 cordless phone, which hit US shelves in March 2026. Consequently, the Group—comprising the AT&T and VTech brands—remained the number one cordless phone brand in the US in the financial year 2026[3].
Commercial phone revenue also experienced a decline, as higher sales of hotel phones were insufficient to offset weakness in SIP (Session Initiation Protocol) phones, multi-line analogue phones and headsets. Growth in the hotel phone category was driven by increasing sales of the "Next Gen" product line. SIP phones, however, recorded fewer sales owing to decreased orders from a customer, though the new Snom D8 series of SIP desktop phones launched successfully in the US and was well received by the market. Multi-line analogue phones posted a decline as the products reached the end of their life cycle, while headset sales were lower due to reduced orders from a customer.
Other telecommunication products reported a sales decrease, as higher sales of IoT (Internet of Things) products were offset by lower sales of baby monitors and CareLine® residential phones. IoT products posted higher sales of thermostats for hotel channels. However, this was offset by lower sales of baby monitors due to increasing competition. In addition, CareLine residential phones experienced lower orders owing to weak end-user demand. During the financial year 2026, VTech maintained its position as ...
