Autohome (ATHM) Q2 2026 earnings call transcript

Thank you, operator. Hello, everyone, and welcome to Autohome's second quarter and interim 2026 earnings conference call. Earlier today, Autohome distributed its earnings release, which This can be found on the company's IR website at IR. AutoHome. com. cn. Joining me on today's call is our Chief Financial Officer, Ms. Kuid Yanzeng. Management will go through the prepared remarks first, which will be followed by a Q&A session where they will be available to answer all your questions. Before we begin, please note that today's discussion contains forward-looking statements made under the Safe Harbor provision of the U. S. Private Securities Education Reform Act of 1995.

These forward-looking statements are subject to risks and uncertainties that may cause actual results to defer materially from our current expectations. Potential risks and uncertainties include but are not limited to those outlined in public filings with the U. S. Securities and Exchange Commission and the Hong Kong Stock Exchange. Autohome undertakes no obligation to update any forward-looking statements except as required under applicable law. Please also note that Autohome's earnings press list and today's conference call include discussions of certain unaudited non-GAAP financial measures.

Thank you, Sterling. Hello, everyone. This is the first time I'm going to be talking about.

I will now turn the call over to Autohome CFO Ms. Craig Yanzeng for opening remarks. Ms. Zeng, please go ahead.

Thank you, Sterling. Hello, everyone. Hello everyone, this is Chris Zung, Chief Financial Officer of Autohome. Thank you for joining our earnings conference call today.

In the second quarter, our innovative business continued to make steady progress, driving auto home upgrades towards a comprehensive automotive service ecosystem for our new and new business. New retail business with the authorized dealer model in pilot operations and expanding into more cities, we launched the offline franchise chain brand Autohome Good Car, further extending our offline service network. In addition, our global expansion into used car trading is advancing steadily. Our cross-border export platform completed its first transaction in In July, providing valuable experience to further expand our service capabilities.

We also made major strides in AI, particularly in cutting-edge AI agent technology. In early July, we unveiled our proprietary intelligent agent product, Cheese Car Butler, and opened it for Buflick Beta. As the automotive industry's first standalone agent product, it represents not only a pioneering exploration of intelligent applications, but also key milestones. In the second, we have received a strong growth in the next month. We will now turn the call over to management for a new company. We have made a new product of the product of the product. We have made a new product of the product. Specifically, in the second quarter, we made solid progress across content offerings, productive capabilities, and traffic alliances. On content, in May, we launched our annual IP, China Intelligent Manufacturing Exploration Plan, jointly created with the news and publicity center of the Ministry of Industry and Information Technology.

Six episodes will be released throughout the year, covering exciting technological trends, including the low-attitude industry, intelligent cockpits, intelligent driving, and in-body The premiere episode focused on flying cars, combining immersive visits to the front lines of intelligence manufacturing with a fresh, innovative, user-oriented storytelling perspective to make cutting-edge technologies more relatable and engaging for younger users. This series also marks our first major content initiative following Autohome's brand refresh. After its launch, the program sparked lively discussion on social media, was covered by over 20 leading media outlets, and generated over 70 million views across various platforms. On the product side, we launched our intelligent driving channel, which systematically profiles The intelligent driving capabilities of nearly 200 mainstream models and provides easy comparisons to help users understand differences across models and choose cars efficiently.

This is the case of the Autohome Inc. In addition, we continue to advance collaboration across our multi-platform, multi-scenario traffic ecosystem. A notable example was our partnership with Adipay in June, under which our mini program became the exclusive provider of comprehensive automotive services for Adipay's auto-live channel, offering differentiated content to match the varied needs of first-time buyers, repeat buyers, and those upgrading their views. According to Quest Mobile, in June, our daily active users steadily increased year over year, reaching 76.5 million.

We will now turn the call over to management for the Autohome Inc. We will now turn the call over to management for a new company. In the new energy vehicle sector, in late April, we launched a pilot online car purchase model in Shenzhen and Xi'an in partnership with authorized dealers. Under this model, local partners, dealerships posted competitive pricing on the mall, enabling consumers to to select a vehicle and place a deposit online, and then complete the contract signing and take delivery offline. During this pilot period, over 400 dealers joined across these two cities, offering more than 1,000 models, and over 1,000 transactions were completed within 70 days, receiving positive feedback from both our dealer partners and the users.

Based on the experience gained from the pilot cities in the second quarter, we replicated this model to three additional cities, Suzhou, Jinan, and Shijiazhuang, steadily broadening our network coverage in northern and eastern China. At the same time, to address the service gap in low-tier cities, we launched our offline franchise chain brand, Autohome Good Car, at At the end of June, with a focus on the underserved low-tier cities. Through precise traffic redirection, and standardized operating and management systems, and streamlined resource support systems, we help dealerships in low-tier cities achieve scalable growth. At present, over 100 franchise stores jointed Autohome Good Car. Going forward, the Autohome APP will remain the core of our On the AI and the big machine, we have developed the Thank you.

In the future, we will continue to exchange the底-層模型 ability, and experience the product-sharing products, and immediately access the more efficient and efficient service. In AI and the models, powered by Autohome's proprietary large language model, we launched CheeseCar Butler, our intelligent agent product. For the automotive vertical, the agent leverages our core assets accumulated in the automotive field, including our professional content, product database, MCN ecosystem, and offline service network to provide users with a broad range of services, including multi-dimensional vehicle comparisons, vehicle purchase guidance, and maintenance services, et cetera, establishing a unique differentiated competitive advantage.

Currently, Chase Ha Butler is available to users and has entered the feedback collection phase, with the initial market response being positive. In the future, we will continue to enhance the underlying model capabilities, optimize the product's interactive experience, and gradually integrate more offline service resources to steadily improve the product value and service quality.

We will continue to promote the international and international international services. Thank you In the used car business we continue to develop both our core and core For our full-process used car sales service platform, we continue to improve service quality through greater standardization. Recently, we completed an upgrade and iteration of our vehicle inspection system, expanding the number of inspection items from 128 to 265, including 82 newly added assessments, specifically designed for the vehicle inspection. for new energy vehicles, further improving the accuracy and reliability of our inspection reports. For our cross-border use car export service platform, we formally obtained the official export qualifications during the second quarter. We also established an online multilingual international website and an offline fulfillment network with business leads spanning over 100 countries.

In early July, we successfully completed the first used car export order on our platform, making a breakthrough from zero to one for our business. In the next phase, we will focus on three key areas, high-quality vehicle supply upstream, expanding overseas customer acquisition downstream, and improving platform operational efficiency. All of this supports our all-out effort to create a new one-stop channel for used car experts. We will continue to advance the current value of the company's long-term value.

In summary, since the beginning of the year, we achieved meaningful progress across all businesses. While steadily developing our businesses, we've consistently delivered on our commitment to shareholder returns. The US$200 million stock buy-buy program announced in March 2026 was completed ahead of schedule in less than six months. In late July, we announced a new 12-month US$400 million repurchase plan, demonstrating our strong confidence in the company's long-term value. In addition, the RMB 500 million cash dividend for the first half of the year was distributed at the end of July.

Looking ahead, we will continue to deepen our new business development, provide high-quality services to users and partners, and deliver sustainable returns to our shareholders.

With that, let me briefly walk you through the key financials for the second quarter of 2026. Please note that I will reference RMB only in my discussion today, unless otherwise stated. The second year's income is $12 billion. In general, the average income is $2.8 billion. The average income is $5.6 billion. The average income is $3.57 billion. Net revenues for the second quarter were $1.2 billion. To break it down further, media services revenues were $280 million, least generation services revenues were $560 million, and online marketplace and others revenues were $357 million. With respect to cost, cost of revenues in the second quarter was $274 million compared with $503 million in the second quarter of 2025. Rote margin in the second quarter was 77.1%, compared with 71.4% in the same period last year.

In the second quarter, the sales and marketing expenses were 552 million, compared with 630 million in the second quarter of the year. The product and development expenses were $223 million compared with $253 million in the second quarter of 2025. General and administrative expenses were $96 million compared with $133 million in the same period last year. In general, the second year's car cost is 1.3 billion, the last year's car cost is 2.97 billion. The second year's car cost is 2.77 billion. The last year's car cost is 4.76 billion.

Overall, we recorded an operating profit of 130 million in the second quarter compared with 297 million in the same period of 2025. Adjusted net income attributable to Autohome was $277 million in the second quarter, compared with $476 million in the corresponding period last year.

The存在股金利润均為2.46元,上年同期分別為4.06元和4.04元. Non-GAAP basic and diluted earnings per share in the second quarter were 0.62 and 0.61 respectively, compared with 1.01 for both in the corresponding period of 2025. The non-GAAP basic undiluted earnings for ADS in the second quarter were both 2.46 compared with 4.06 and 4.04 respectively in the corresponding period of 2025. As of June 30, 2026, our balance sheet remains robust. Cash, cash equivalents, short-term investments, and other long-term investments, The Autohome Inc. earnings conference call. I am a member of the Autohome Inc. earnings conference call. I am a member of the Autohome Inc. earnings conference call. On March 5, 2026, our board of directors authorized a shared repurchase program under which we are permitted to purchase up to US$200 million of Autohomes ADS over a period not to exceed eight months.

As of July 30, 2026, we have completed this share repurchase program ahead of schedule, with a total of approximately 10.63 million EDS repurchased. In addition, on July 28, 2026, our Board of Directors authorized a new share repurchase program under which we may repurchase up to U. S. That concludes our financial summary. Now we are ready to open up the Q&A session. Operator, please.

Thank you for your question. I will answer a question. You know, since the beginning of this year, the overall retail sales in the auto market has remained under pressure. In the first seven months, domestic retail sales of the auto market has remained under pressure. In the first seven months, domestic retail sales of passenger vehicles declined by 20% year-over-year, while the domestic new vehicle sales fell by 22% year-over-year in Q2. Even the new energy vehicle, NEV, which had previously been the primary growth driver, it already see a sales decline of 8% in Q2 year over year for consecutive period. And the traditional ICE, that is internal combustion engine vehicles, performed even worse. The sales declining 38% year over year in Q2.

At the same time, the auto industry profitability has been deteriorated. In the first half of the year, the profits for the auto manufacturing industry declined by 20% year over year, with the profit margin at just 3.8%, which is a historical low.

The market expectations for the overall industry sales at the beginning of the year was optimistic, but now, Now, this expectation has been revised downward. The China Passenger Car Association, CPCA, now forecast that the full year for 2026 passenger vehicle retail sales will decline by 16% year over year. So it brings the overall total annual sales to fewer than 20 million units. So this This means that the overall China auto market will continue to face quite a lot of pressure in the second half this year. And we expect the auto industry to be characterized by combination of weak domestic demand structural differentiation and exports providing support The industry level we can see the new energy transition is accelerating and the auto exports Of course, it's becoming a new growth driver.

So for the China auto market, now it has entered into an existing market stage with the weak domestic demand becoming a major problem, major constraint. And at the same time, you can see the penetration rate for NEV continues to pick up. So in April, the penetration rate is 60%. And now in July, it climbed further to a new high of 65%. So in contrast to the weak domestic demand, the auto export has maintained its strong growth momentum. During the first seven months, 2026, passenger vehicle exports increased by 74% year-over-year, with NEV accounting for more than half of the total exports volumes. And with the weak domestic demand and strong overseas growth, simultaneously, auto exports have become a key engine for automakers For automakers to offset the weak domestic demand and drive profit growth.

The market level of market level is also changing. From the market level, we can see there is an increasing structural differentiation, and consumers are increasingly in a mode of weight and sea. The the the the the So currently the market is experience clear structural The price range, you can see the auto market is diverging at both ends. The entry-level market for vehicles priced below RMB 50,000 has contracted sharply, declining 55% year-over-year in the first half. On the other side, sales of high-end NEVs priced above RMB 400,000 surged 46% demonstrating greater market resilience. So overall, the sales of traditional ICE and low-end NEVs continue to decline, while the middle-to-high-end NEVs have emerged as a growth segment.

This is the first half of this year, which is the first half of this year. Domestic demand weakened year over year, while NEV penetration continued to increase, and auto exports became the primary growth driver for the overall industry. As China's auto market enters an existing market competition stage, currently, you know, only those companies who can capture consumers' needs throughout their entire life cycle and provide value-added services across the entire customer journey will be best positioned for the future development in the transforming period and the market. So this is also one of the key areas we will continue to focus on and explore going forward. The second question is about the used car export. You know, the used car export market is sufficiently fragmented with a sufficiently large and diverse supplier.

This is a fair of for us to build our long-term competitive advantage and sustainable barriers for entry. And if the market was more highly concentrated, it would be more difficult for platform companies. The other is the brand. As a brand, we also have a very strong country and a variety of products. And the other is a better and proper care of the car. And the whole brand is a good quality of the car. I will now turn the call over to management for the seller. This number of customers are gonna be able to provide a better or better. Numerable customer service is also a benefit for this year. On the line, the customer service is a good addition to the customer service.

The customer service is a good addition to the sales service and the customer service. And for our advantages in this area, you know, first is the brand, strong brand from Autohome. You know, we are the leading auto vertical media platform, so we have a strong brand recognition and credibility. And also, you know, we are newly listed. This also helps us in our branding. Second is the stable supply, a used car vehicle supply and a standardized system. You know, we have access to a stable and compliant supply of used cars, supported by a standardized industry-linked vehicle inspection system, which can enable comprehensive assessments of the vehicle condition. So overseas buyers value accurate and complete and comprehensive vehicle inspection reports, as well as those maintenance and the inference claim records.

So Autohome can provide all of this. So this gives overseas buyers greater confidence in their purchase process. Third is the digital one-stop service. This is our advantage. We leverage our online digital tools to improve the operational efficiency, including the 24-7 customer support, those dynamic matching of the vehicle supply, and those multilingual website services, etc. So all these capabilities facilitate more effectively communication between buyers and sellers.

For our business progress update on the use car, you know, in the second quarter, we just mentioned we officially obtained the government's qualification for the use car expert. And we successfully completed the first used car export transaction on our platform. So this represents an important zero to one breakthrough for this business segment. And for the work ahead of us, on one hand, we'll expand our high quality used car vehicle sourcing. On the other hand, we'll focus on expanding our overseas customer base. And also at the same time, we will continue to optimize our used car export service platform and improve the overall operation efficiency with the goal to build a one-shot new channel for the used car export.

Thank you. Thank you for your question. Autohome has always placed a strong emphasis on the shareholder return and the long-term multi-value management. To further enhance our shareholder return mechanism and improve investment value, we have established a dual-track return framework, combining a regular cash dividend policy with share repurchases, making our shareholder return policy more transparent and predictable.

For the share report, as we just mentioned, the US dollar tool is going to be done. So the 200 million share buyback program, we completed a head of schedule at the end of July. And also on July 28th, the company announced a new US dollar 400 million share repurchase program. And as of last week, approximately 10% of this buyback program has been completed. So going forward in the future, we will continue to actively execute this buyback program. In the open market, in accordance with our established strategy. For the cash dividends, you know, in March, the company announced the RMB 500 million cash dividends. For the cash dividends, you know, in March, the company announced the RMB 500 million cash dividend for the first half of this year, and this was successfully distributed to all our shareholders at the end of July.

And also this year, we'll continue to execute our commitment to pay at least RMB 1.5 billion in cash dividends for the full year.

For our long term capabilities, Autohome has a health and health care. We have ample cash reserves and stable business operations So this gives us the capacity to deliver sustainable stable and long returns to all shareholders So in the future we will continue to improve operation efficiency and strengthen our business ensuring we can fulfill our commitment to all the shareholders We will now turn the call over to management for the Autohome Inc. For the new retail business, you know, it is an important strategic initiative for Autohome, as we build our transaction ecosystem and address gaps in our offline service capabilities. For online, we are leveraging the Autohome APP to build an automotive transaction service platform, Autohome More.

For offline, we leverage offline car purchase and the Autohome Good Car to expand offline service network, connecting online demand with offline service fulfillment. So on the online to offline scenarios, we are leveraging our AI technologies to provide end-to-end support, including the vehicle selection through our AI car selection assistance and purchase support through AI price inquiry, etc. So going forward, we are planning to expand AI-eable services into the vehicle ownership stage.

In terms of our new retail business update and progress, you can see that the implementation has been moving at a relatively rapid speed. For online car purchase, it began its pilot program in late April, and now it expanded to five cities, Xi'an, Shenzhen, Suzhou, Jianan, and Shijiazhuang, primarily targeting at high-tier cities. For Autohome Good Car, it opened up its franchise program in late June and has now more than 100 franchise stores, with a primary focus on low-tier markets. So ultimately, our goal is to become a comprehensive automotive service ecosystem that delivers value throughout the entire auto lifecycle from car discovering to car selection to purchasing, owning, and eventually replacing.

Thank you.

Thank you. I think that the price of the market is going to be a good deal. But even though the price of the market is also going to be a good deal. For example, the price of the market is going to be a good deal. As we mentioned, the price of the market is going to be a good deal. This market is a very clear view. I think that if the car is really wanting to stay in the world, it will still be the same as the whole world of the world of the world of the world.

Regarding the drivers for the auto industry recovery, we just mentioned the auto market sales for the whole year expected to decline about 16% year over year. This has been a downside. However, it doesn't mean there is not any growth opportunities in the market. For example, the vehicle's prepaid and replacement will still contribute more for more new vehicle purchasing demand. And we just mentioned that sales of the high-end NEVs priced over RMB 400,000. It increased 46% year over year. So in our opinion, a sustainable stabilization and recovery of the auto market still depend on improvement in the broader microeconomic environment. And the strength, strengthening of the consumer confidence.

And the export, auto export is another, you know, important growth opportunity. In the first half of this year, the passenger vehicle PV exports increased by more than 70% year-over-year, and the NEV exports surging 124%. And for NEVs, it accounted for over 50% of the total passenger vehicle exports. So it represents new opportunities in the auto market. For the regarding the media business in the second half of this year, as you know, there is always a saying that golden September and silver October.

And besides, there will be a multiple of new car, you know, new vehicle and new car launching in the market. So in our opinion, we believe the market will show kind of a recovery, a second half of this year.

Thank you. I will translate myself. Since management is taking my question, Given the pressure over auto dealers, how does management think about auto for our sales piece business? Thank you.

Uh, the business of the business and the sales are more similar. In the second year, the business of the business and the whole city is basically the same. That's another factor. It's a big deal. And the storage is a lot. So we think the last year's forecast, the new car sales is a low-referring situation. So we think this will be a big deal. For the least generation, the performance is highly related with the overall sales volume. sales volume in the market. In Q2, the market and the sales of the autos decreased. So that is the main reason for the least generation segment. So on one hand, for dealer, continue to face significant operating pressures in the market.

Many of them fail to meet their sales target for the first half this year. And according to the statistics data from the China Automobile Dealer Association, CADA, 77% of the dealers achieved less than 90% of their first half-year sales target. And so many of them, you know, many of those dealers, they, you know, respond with more losses and with high volumes of event rates. So that's why we believe, as we just mentioned, the sales volumes for the new cars do face pressure and decrease for second half of this year. This is a chance to do this. We also need to use our own power to increase the value and value of the amount and value of the year.

We can say that AI is a tool to provide the technology to the company's business and value of the company. We still see some opportunities in the market. On one hand, we are increasing our traffic and upgrading our products to improve the quality and the contingent quality of the lead. And they started foundation for the renewal of our dealership products, for example, the Chesshan Hui for the second half of this year and the next year as well. I'll give you some examples. For example, we're using our AI technology. We use the AI live streaming. We are leveraging the AI technology to empower dealers' new media live streaming operations. So we can help them to reduce costs and improve their efficiency, increase their operation efficiency, and help them to enhance their conversion capabilities.

And also, we have smart stores, so we can upgrade the intelligent guided tour function. So when users browse a dealer's online store, AI generated voice commentary can match the content on the screen, and it can be played automatically. So it can help to create an immersive watch and the listen experience, helping to increase the number of users who will submit and leave their contact information. So we expect through those products and service upgrades and technologies, we can build a solid foundation for the renewal of our products next year.

Thank you very much everyone for joining us today. We look forward to speaking with you all again our next quarter's conference call, and to sharing the latest updates on the company's corporate strategy and business. If you have any further questions or suggestions, please feel free to contact us at any time.

Thank you, everyone. Goodbye.