So-Young International (SY) Q2 2026 earnings call transcript

Thank you, operator, and thank you, everyone, for joining Soyang's second quarter 2026 earnings conference call. Joining the call today are Mr. Xin Xin, our founder, chairman, and CEO, and Ms. Shen Osheng, our CFO. Before we begin, please refer to the safe harbor statement in our earnings release, which applies to this call and will be making for looking statements. We will also discuss non-GAAP financial measures. Reconciliation between GAAP and non-GAAP measures are included in today's earnings price release Please also note all fingers mentioned in this call are in RMB unless otherwise stated With that, I'd like to turn the call over to Mr. Xin Jin 大家好,欢迎参加今天的财报电话会议 In the second year, we will be able to build a new and effective way of the two years.

同比增长约130% 超越指引上限约5个百分点 集团实现季度收入历史新高 整体收入同比增长33%至5.1亿元人民币 叠加集团运营效率的提升 规模净亏损同比大幅收载到2269万元人民币 Tong Bi Jian Kui, 37% revenue reached RMB $330 million, up roughly 130% year-over-year, beating the upper end of guidance by about 5%. As a result, group revenue hit a quarterly record, growing 33% year-over-year to about RMB $510 million. With better operating efficiency, net loss attributable to the company narrowed by 37% year-over-year to RMB $22.7 million.

Let's talk about the second year's second year's second year. 强化品牌认知有效占领了用户心智,从而驱动服务量与用户规模持续提升。 在服务量方面,二季度联手合销人次突破16.5万次,同比增长145%,合销服务点数量超过36.2万个,同比增长134%。 In the user level, the live-in user rate is in 6 years, over 25 million people. The L3-gible is over 7.8 million people. The live-in user rate is in the same way, which is the high-end user rate. In the user rate, the L3-gible is over 7.8 million people. 其中老代新裂变贡献的星客占比稳定在50%以上 不仅有效瘫薄了综合货客成本 更帮助我们沉淀了高年度的优质用户基盘 为后续提升用户全生命周期价值和留存率打下了坚实基础 同时公寓星客数量及占比也均实现稳步提升 展现出我们高效的权益货客策略 Now, turning to the key business developments in Q2, the DOOR-MJ approach delivered clear results this quarter. Soyang Clinic kept a healthy pace of expansion while operating quality improved. By the end of Q2, Soyang Clinic expanded into 18 cities with 65 centers in total. The larger footprint improved accessibility. More importantly, it reinforced blood awareness and captured consumer mind share.

Driving continued growth in treatment volume and user base. On treatment volume, verified visits exceeded 165,000 in Q2, up 145% year-over-year. Verified assented treatments performed were above 362,000, up 134% year-over-year. On the users' front, active users reached over 250,000 by the end of June. In particular, the number of Level 3 and both call members exceeded 78,000. The quarterly per chance rate of call members remained robust, reflecting high user regard for our quality. New customers' count also grew quarter to quarter, with over 50% of them being referrals. This lowers blended acquisition costs while building a loyal, high-quality user base, which in turn positions us to lift user LTV and extension.

Meanwhile, both the volume and mix of public domain new customers use, confirming that our full-channel acquisition playbook works. 此外,门店的營運能力也在持续改善. 通过系统性的优化运营流程 强化资源协同 门店运营效率得到了有效提升 得益于此 二季度实现电端盈利的门店数量增至47家 现今流为正的门店达到51家 联锁业务的整体劳力率同比提升约3.8个百分点 达到28.1% These results have been confirmed by our management and management.

28.1%. These outcomes validate our management approach. 其采用制胶帘技术,在不含胶帘剂的情况下,就能呈现出凝胶质地,可帮助填充眼周及面中部等区域,持续畜生胶原,让感官更自然。 We will now be in the work of the company We are now ready to start working with the first technology from the project to the real-time market. We are now ready to go to the real-time market. We are now ready to go to the real-time market. In Joule, we rolled out WaveCol. It adopts soft cross-laking technology to create a gel texture without a cross-laking agent. WaveCol helps fill the eye and mid-face areas while promoting ongoing collagen regeneration for a natural look. Our partnership with Symbol goes beyond a traditional buyer and vendor relationship. It is a move towards product co-creation, case development, and long-term value alignment.

Going forward, we plan to extend this model to more domestic and international medical device and treatment partners. This collaboration model will cover consumer insights, product definition, indication development, physician training, uniform protocols, post-launch evaluation, and continuous intervention. bringing advanced technology from R&D to real world use at a faster pace. 此外,我们还推出了奇迹同源Beauty版本, 以更合理的PLLA微求力竞改善注射效果。 除了胶原赛道,我们也在不断拓宽产品边界, 以更丰富的产品矩阵来承接用户多元化的抗衰需求。 We also introduced Beauty version of Miracle PLLA. It uses a better collaborated PLLA micro-particle diameter to improve injection outcomes.

Beyond the collagen category, we are also expanding the product portfolio to meet diverse anti-agent demand. We will continue to promote the clinical and clinical practice. We will also be able to improve the health care and care. Furthermore, we continued to enhance our uniform medical delivery capabilities.

First, we expand our physician team to meet growing market demand. As of June 30, 2026, the number of full-time physicians increased to around 280. On top of that, we have kept physician capabilities and treatment workflows aligned. This is made possible by our medical R&D and training center, treatment guidelines, radio audits and other training and corticone control mechanisms we have in place. In Q2 we partnered with leading up three manufacturers including Allergan and Jinbo to deliver nine specialized training workshops effectively enhancing our physicians expertise and clinical skills We also completed 12 regular training sessions as part of our new physician initiative.

By assessing theoretical knowledge and hands-on skills, we ensure our newly onboarded physicians are well prepared to deliver uniform and safe clinical care. Additionally, through the National Command and Control Center, we coordinate medical workflows end-to-end to further elevate the user's areas.

We will be able to improve the business of the business and the business of the business. We are building the real world-world technology area of the world-world technology industry and the clinical design. For example, we are launching a virtual platform of the mobile device and can also show the software software.

Finally, we are integrating AI with Meta-Asthetics to work as innovative tools for expansion. Under the constraints of medical safety, user privacy, and data compliance, we believe AI's core value lies in empowering physicians, keeping delivery rate quality consistent, and breaking the industry's ceiling on scale. This approach will ultimately bring premium medical care to more consumers. Right now, our focus is on the data foundation, which powers service quality, user experience, and upstream R&D enablement. Now, in our years of industry data and capabilities, so close to mid-platform, user operations, and clinical practices, we are now building a real-world database and clinical AI infrastructure tailored for the industry.

For example, our clinics launched a user-facing virtual medical dispensing platform, and those screens that display treatment SOPs in real-time, both have effectively boosted user trust. 展望未来,新养将继续秉持透明、标准与普惠的原则,构建优质的医疗服务体系和消费者信任壁垒,持续扩大规模效应与品牌影响力。 随着标准化运营体系的持续优化 我们预计门店运营效率将继续提升 经营利润率也将持续改善 进一步释放联锁模式的规模经济红利 同时,我们将进一步深化供应链多元化布局和AI数字化应用,提供更具竞争力的产品组合,为连锁业务的高质量增长,助劳根基。 Looking ahead, the principles of transparency, uniform delivery, and accessibility will continue to guide us. We remain focused on building a premium medical service framework and deepening consumer trust. We believe that as we expand, ongoing refinements of our operating framework will drive continued gains in operating efficiency and margins.

This will unlock greater economics of scale across our clinic chain. Meanwhile, we will further diversify our supply chain, advance AI-powered digital capabilities, and deliver a more competitive product portfolio. We are confident that these initiatives will drive high quality growth for our aesthetic treatment business.

Now, I'll hand over to our staff of Shenong Shen for a straight dive into Q2 financials, after which we will move to Q&A session.

Thank you, PS, and thank you, everyone, for joining our call today. It's my great pleasure to walk you through So Young's second quarter 2026 performance on behalf of the management team. I will now share with you our latest operational progress across three key dimensions, growth, efficiency, and organizational effectiveness. Please note that all financial data will be presented in RMD terms, unless otherwise noted.

First, in the second quarter of 2026, our aesthetic treatment business exceeded $330 million in revenue, growing approximately 130% year-over-year and marking its tense consecutive quarter of triple-digit year-over-year revenue growth. Not only has this propiled our total revenues to an all-time high with a 33% year-over-year increase, but it has also enabled our aesthetic treatment business to achieve feasible economics of scale.

Behind this clear upward growth trajectory and our rising brand momentum, it's our scaled capacity to deliver high-quality products and services. For digital natives, we offer one-of-a-kind product value that aligns with their consumption pattern, aesthetic preferences, and online purchasing habits, thereby driving sustainable growth characterized by high frequency and high retention. While sustaining rapid top-line growth, we remain unwavering in our commitment to growth quality and long-term sustainability with a laser focus on strengthening unique economics.

We recently have raised our aesthetic-centered capacity utilization benchmark by 50%, reflecting elevated expectations for personal revenue, labor productivity, and sales per square meter.

Through operational excellence, straightlining customer flow to reduce redundant waiting period, optimizing dynamic staffing, leveraging intelligent inventory management, we expect to drive meaningful margin expansion at Aztec centers. Going forward, our expansion strategy will be more disciplined and market responsive. We will dynamically calibrate our opening cadence based on regional utilization levels, enabling us to sustain high revenue growth while striking an optimal balance between scale and profitability. We prioritize sustainable growth over pure top-line expansion. In the second quarter of 2026, we delivered a 37% year-over-year improvement in profitability.

Dry-pid expansion places extraordinary demand on organizational capabilities. Best-in-class organizational excellence is fundamental to sustaining high growth over the long term. To that end, we have made systematic investments in organizational infrastructure with a particular focus on compliance and user experience. We continue to advance end-to-end visibility across treatment workflows to enhance transparency and reinforce trust. Furthermore, we have closed the loop on user feedback. This cross-functional coordination enables us to maintain acute market sensitivity and continuously elevate service delivery quality and user satisfaction, even as the business scales rapidly. The company stands at a pivotal infection point, pursuing high growth and operational efficiency in parallel, while advancing scale and profitability in lockstep. Ten consecutive quarters of triple-digit revenue growth validate our market acumen and execution discipline.

This continuous refinement of center-level unit economics, together with our market-responsive expansion strategy, ensures that our growth remains high-quality and sustainable. Complementing this, our systematic investments in organizational capabilities provide the bedrock for long-term value creation.

Next, let's dive into each business segment. Revenues from aesthetic treatment services reach $331.4 million, exceeding the upper end of guidance for the fifth consecutive quarter. The rollout of our loyalty program and systematic treatment protocols creates a 3 to 5 percentage points deferral between service delivery and recognized accounting revenue. Today's service generated future membership benefits. While this temporary near-term reported revenue, it builds a deferred revenue based that underpins long-term growth. Night of this deferral impact, revenue still grew approximately 103%. Looking at aesthetic center data as of June the 30th, we operated 65 Soyang clinics across 18 major cities, reflecting a net addition of 11 centers during the quarter. Among them, 47 centers were profitable and 51 centers generated positive operating cash flow during the quarter, reflecting a net addition of six and three respectively from last quarter.

We also achieved same-store sales growth of 52 percent, substantially improved from 14 percent in the prior year period. Turning to our other segments, revenues from information and reservation services were 187.9 million, down 35 percent year-over-year, primarily due to the decrease in the number of medical service providers subscribing to our information services. Sales of medical products and maintenance services revenues were $73.9 million, down 2.8 percent year-over-year, primarily due to the decrease in order volume for medical equipment. Other services revenues were $12 million, down 48.2 percent year-over-year, due to a a lower insurance brokerage revenue. Cost of revenues was $282.4 million, up 53% year-over-year, driven primarily by the expansion of our branded aesthetic centers. Total operating expenses were $266.5 million, up 10.4% year-over-year.

Specifically, sales and marketing expenses were From an aesthetic treatment service perspective, our comprehensive customer acquisition cost remains at a healthy level, accounting for less than 10% of the revenue. Coupled with strong user retention, our overall customer acquisition model maintains sustainable. G&A expenses were $88.6 million, up 12.5% year-over-year, reflecting the continued expansion of our branded athletic centers R expenses were million down 21 year driven by continued improvements in staff efficiency. Moving forward, we will continue to deepen AI integration across our operations, striplining workflows and driving efficiency gains in R&D, clinical diagnosis, and treatment and beyond. Income tax benefits were $2.5 million compared with income tax expenses of $1.9 million in the prior year period. Net loss achievable to so young was $22.7 million, which narrowed by 37 percent, compared with $36 million in the prior year Non-Gap net loss attributable to Soyang was 21 million compared with 30.5 million in the prior year period.

Basic and diluted loss for ATS were both 0.22 compared with 0.35 in the prior year period. As of June 30, 2026, our cash and cash equivalents, restricted cash and term deposits, and short-term investments totaled $800 and $48.2 million.

Turning to our outlook, please allow me to remind everyone that this contains forward looking statements, which include risks and uncertainties that are beyond our control and could cause the actual results to differ materially from our predictions. Based on our current estimates, we expect revenues from aesthetic treatment services to be between $362 million and $362 million, representing year-over-year growth of 91.7% to 97.2%. That concludes my prepared remarks.

Operator, we are now ready for the Q&A section.

So, it has a stable connection with Cingbo and has a stable connection with Cingbo. It has a very good connection with Cingbo. We are pleased to have reached a reliable, mutually beneficial partnership with Cingbo. As medical aesthetic demand moves toward natural restoration, tissue regeneration, and long-lasting outcomes, the component humanized collagen will have a long lifespan. A dependent-game upstream relationship Therefore, it benefits our long-term growth.

and to determine the quality of the product, we are using real-world data to drive product and supply chain decisions. We analyze connections between user age, skin condition, treatment details, post-treatment reaction, feedback, and repercussing behavior. From there, we can pinpoint which products face which population area and treatment combination. This helps us optimize doctor training, program decision, and inventory planning, which greatly reduces buying, guesswork, and excess inventory. It also lets up-stream manufacturers move out of a closed R&D environment and integrate their products based on actual clinical insights. This enhances our operational efficiency and builds leverage in joint research, project integration and partnerships. 推动技术创新和产品接待, 也让更多的消费者受益。 to deliver R&D. We aim to accelerate technology innovation and product innovation, ultimately delivering value to more consumers.

Thank you.

medical aesthetics is a highly medical field with a low tolerance for errors. It relies heavily on individual expertise. The core value of AI lies in transforming experience-driven, hard-to-perceive procedures into uniform, visible and traceable offerings. This approach also helps distribute premium medical resources to lower-tier cities, which helps address imbalances in medical delivery. Thank you. In practice, our current focus is applying AI to project authentication, background-based quality control, and data foundations and governance. QR code authentication verifies medicine and device traceability immediately. Medigating counter-disability concerns and building trust. End-to-end transparency raises the user's confidence in the care and overall experience. We also use AI to break down top physicians' experience into database. We then embedded it into our SOPs, case libraries, and post-treatment feedback modules.

That accelerates new physicians' development, aligns quality across centers, and identifies irregularities in real time, lifting overall quality and customer experience. 今年四季度,我们还将正式推出第一代全智慧门店,开启AI工具在门店的大规模落地应用。 我们希望通过AI复制和输出我们高标准的医疗交付及运营能力。 基于信仰在行业中的领导地位和签发数据基建优势,我们有信心以AI为引擎,引领行业迈向高质量发展的新阶段。 In Q4 this year, we will rule out our first generation of fully intelligent centers, initiating widespread AI deployment across our network. We aim to replicate our high-quality medical delivery and operating capabilities via AI. Given our industry leadership and early mover advantage in digital infrastructure, we are confident that driven by AI, we can lead the industry into a new phase of high-quality growth.

Thank you.

Thanks, Nelson. This is Shannon. I'll let you know your question. We've got a lot of money in this year. We've got a lot of money in this year. We've got a lot of money in this year. We've got a lot of money in this year. Especially when we think about we've got a lot of money in Q2 in the 11th of the company. We've got a lot of money in this year. That's a great result. It also shows us a lot of money in the way. The growth of the change is mainly to keep the two-way movement in the both-way movement and the development of the two-way movement. Our growth margin increased by 3.8% year-over-year and 1% quarter-quarter.

An excellent result that domestic trade is a clear trade of sustained improvement. Particularly consider our pace of opening 11 new centers in Q2. The growth margin improvement mainly reflects our dual NJ of scale and efficiency approach to sensor operation and management.

We have to do the same thing to do with the same thing to do with the same thing to do with the same thing. and the 51% of the current We are restructuring our service workflows around this new benchmark to reduce customer wait times. This not only improves the user experience, but also fully unlocks the operating leverage of our centers, thereby boasting both close margin and operating profits. With a maturing operating framework, mature centers take a growing share of our footprint. The ramp-up period of our new centers are getting shorter and making positive contributions to groups margins.

In Q2, 47 centers achieved center-level profitability and 51 generated positive operating cash flow. is to continue to increase the power to the power of the power.

high-demand categories. Meanwhile, the momentum of our blockbuster products proves our capability in building blockbusters while further increasing our appeal to upstream manufacturers. We will keep pushing existing blockbusters, and over the next two years, we have a robust pipeline of new products to help us improve growth margin.

We can also provide a better management system. Meanwhile, backed by a central operations platform and AI, we can allocate resources and manage equipment, warehousing, and customer operations more precisely, driving better presenter economics. In short, with continued optimization of upstream costs and percent of upgrading efficiency, we are confident about ongoing growth margin improvement. We will keep leveraging our mix of scale, deepen upstream collaboration, and broadening AI adoption to drive high-quality growth.

what are the core levers for the loss reduction this year and how do you plan to move toward the group level's profitability thank you thank you Today, to sum up our core level for loss reduction this year in one word, it is focused. We are focused on the main track of our clinic business and on profitable operations.

First, from an operating portfolio perspective, our pulp and injectable sales business continue to generate profits and operating cash flow. Our clinic business is in a high-glue space and remains in a strategic investment stage. This represents a real-balanced business mix. On the one hand, we remain solid profit levels for our existing profitable business. On the other hand, we keep improving the operational efficiency of our clinic business to drive its overall profitability.

Meanwhile, we scale back investments in other loss-making businesses through short closures, disposals, and reduced capital allocations, so that group resources can be increasingly focused on these two priorities. The cost of the increase of the increase is quite clear. The current rate is also a lot of the cost and the speed of the market. The break-even point for our clinic business is relatively clear. Under our current cost base, fixed costs can be anchored based on the number and pace of new store openings.

Contribution margins depend on scale groups. the rate of growth margin improvement and consumer acquisition efficiency. Our clinic business has maintained a high growth rate of over 30% for the past 10 quarters. Growth margins have been rising and customer acquisition efficiency keeps improving. We expect to see substantial continued improvement in clinic growth margins in Q3 and Q4 of this year. With operating leverage kinking in, fixed costs being diluted by scale effects, plus the upcoming peak business season in autumn and winter, overall profitability for the clinic segment is a very near and achievable target.

Through standard-driven communication, digital management and AI's performance, it will gradually increase the ability and ability to make a better-to-do-do-do. Second, on cost optimization, back-office resources will also follow the same focus principle mentioned above. We will concentrate on key business and critical tasks. Through standardized operations, digital management, and AI enablement, We will boost capabilities and efficiency to continuously drive cost reduction and operational improvements.

As a footprint expense, brand awareness and consumer mindshare have taken root. The followers now account for over 50% of new customers. On top of that organic traffic, we will prioritize ROI as a core metric to refine brand marketing investment. Taking together with continued revenue growth, operating efficiency gains, and a linear expense profile, we are confident in group-level profitability going forward.

Thank you.