Tuniu (TOUR) Q2 2026 earnings call transcript

Thank you, and welcome to our 2026 second quarter earnings conference call. Joining me on the call today are Donald Yu, Choonews founder, chairman, and chief executive officer, and An Changsheng, Choonews financial controller. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2026. Before we continue, I refer you to our Safe Harbor Statement in the Earnings Press Release, which applies to this call, as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.

Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB. I would now like to turn the call over to our founder, chairman, and chief executive officer, Donald Yu.

Thank you, Mary. Good day, everyone. Welcome to our second quarter 2026 earnings conference call. Sorted by favorable policies such as the introduction of spring break, the domestic travel market maintained steady growth in the second quarter. Meanwhile, the overall travel market faced some uncertainties, with certain outbound destinations experiencing high winds. by these challenges, we maintained revenue growth in the second quarter and achieved non-GAAP profitability for the sixth executive quarter. During the quarter, we continued to execute our diversified product and sales channels strategy. Guided by customer needs, we further enriched our product offerings across categories, destinations, and price tiers. For our sales channels, we continued to work with a broad range of partners to better reach different customer segments.

Let me walk you through some of our key initiatives in more detail. On the product side, as customers increasingly seek more personalized diverse and flexible travel options, we have continued to expand and refine our product portfolio.

First, we further expanded our product offerings to include more small growth tours, private tours, customized tours, self-driving tours, and other travel-related products.

Small growth tours have been well received by younger travelers for their flexibility and strong value proposition, while private tours have gained popularity among family travelers for their more personalized and private travel experience.

To better serve the needs of self-guided travelers, we also expanded our hotel-centric self-guided tour products and broadened our portfolio of other tower-related products, including hotels, car rentals, and the destination experiences.

Second, in addition to enhancing our new tour products for the mass market and our value-oriented selected new select series. We introduced a number of premium private tour products during the quarter to meet demand from customers seeking higher quality travel experiences. These products feature premium accommodations, dedicated car services, and other upgraded travel experiences. For example, our premium private tour package to Singapore for the summer season launched in late June has been well received by family travelers, with sales volume exceeded 10 million RMB to date We also continue to expand our product for different customer segments For family customers we launched a range of travel products during the spring break season centered on East China. For senior travelers, we introduced a longer duration organized tour of more than 15 days.

as well as off-peak travel products scheduled outside major holiday periods. By better aligning our products with the preferences of different customer segments, these offerings have delivered higher conversion and reduction rates.

On the sales side, we adopted more targeted marketing initiatives. We launched a series of online seminars inviting customers interested in specific products or destinations to learn more through detailed presentations and interactive activities. helping deepen customer engagement and interest.

Also introduced dedicated live streaming shows focused on specific products and destinations, providing viewers with more in-depth and specialized content. These targeted live streaming shows have generally delivered higher exemption rates. In addition to more targeted product offerings and marketing initiatives, we continued to expand our calendar shifts across sales channels. In live streaming, we further extended our presence to multiple major platforms while also depending cooperation with MCN agencies. Leveraging our comprehensive portfolio of high-quality linear travel products and well-established fulfillment capabilities. Together with the extensive viewers reach of our MCM partners, we are able to increase sales skills and expand our customer base. In the second quarter, both payment and verification volume generated through our live streaming channels continued to record double-digit year-over-year growth.

In the second quarter, transaction volume from our offline stores have also continued to record double-digit year-over-year growth. As of today, we operate approximately 500 offline stores. Our offline store network has contributed to sales growth and expanded the reach of our service network. While we continue to provide stores, we tailored products that help them better sell and attract local customers.

During the second quarter, demand for customized tour travel solutions from corporate clients increased. collaborating our industry experience and high-quality products and services. We worked with a number of well-known enterprises to plan and deliver corporate travel tools, including team-building activities and incentive travels. From a technology perspective, we have integrated AI into a broader range of workflows, such as building knowledge bases, creating promotional materials, and assisting with other processing. AI tools have become valuable assistance to many employees, helping them work more efficiently while reducing operating costs. On the customer side, we upgraded our travel AI agent, AI Assistant Xiaoniu, with integrated booking and other processing capabilities. can now complete the entire booking process for standalone travel products including flights, hotels, and attraction tickets through AI from initial inquiry to final booking.

In addition, Xiang Yu can search, plan, and compare itineraries based on different to travel scenarios such as business trips or vacations as well as customers individual preferences, delivering a more personalized travel planning experience. As we enter the summer travel season, we are well positioned to support the increased demand during the peak travel period. While there may still be some uncertainties in the second half of the year, we are confident in the growth of travel demand and the resilient things of both the travel industry and our business. business. We remain committed to providing customers with high quality products and services. I will now turn the call over to Anqiang, our financial controller for the financial highlight.

Thank you, Donald. Hello, everyone. Now I will walk you through our second quarter of 2016 financial results in greater detail. Please note that all monetary amounts are in INB unless otherwise stated. You can find the US dollar equivalent of the numbers in our earnings release. For the second quarter of 2026, net revenues were $138.9 million, representing a year-over-year increase of 3% from the corresponding period in 2025. Revenues from package tours were up 7% year-over-year to $121.1 million and accounted for 87% of our total net revenues for the quarter. The increase was primarily due to the growth of offline tours. Other Total revenues were down 17% year-over-year to $17.8 million and accounted for 13% of our total net revenues.

The decrease was primarily due to the decrease in the fees for advertising services provided to toys and boards and bureaus. Growth profits for the second quarter of 2026 were $76.4 million, down 11% year-over-year. Operating the expenses for the second quarter of 2026 were 82.5 million, up 5% year-over-year. Research and product development expenses for the second quarter of 2026 were 13.8 million, down 16% year-over-year. The decrease was promoted due to the decreasing research and product government personnel related expenses. Sales and marketing expenses for the second quarter of 2026 were 54.7 million, up 22% year-over-year. The increase was primarily due to the increase in promotion expenses. General and administrative expenses for the second quarter of 2026 were 14.1 million.

The decrease was primarily due to the decrease in general and administrative personnel-related expenses. Net income attributable to ordinary shareholders of two new corporations was $0.7 million in the second quarter of 2026. Non-gap net income attributable to all new shareholders of two new corporations, which excluded share-based compensation expenses and amortization of acquired internal assets was $2.2 million in the second quarter of 2026. As of June 30, 2026, the company had cash and cash equivalents, restricted cash, short-term investments and long-term deposits of $1 billion. Cash flow generated from operations for the second quarter of 2026 was $46.9 million. Capital expenditures for the second quarter of 2026 were $1.4 million. For the third quarter of 2026, the company expected to generate $202.1 million to $212.2 million of net revenues, which represents a 0% to 5% increase year-over-year.

Please note that this forecast reflects a new current and preliminary review on the industry and its operations, which is subject to change.

Thank you for listening. We are now ready for your questions.

Thank you for the questions. In the second quarter, the domestic travel market continued to grow steadily, whereas The outbound travel market met some headwinds at certain destinations. The headwinds directly impacted a little travel to certain destinations. For example, the Middle East and Africa recorded over 20% year-over-year decrease of transaction volume during the quarter. result, outbound tools accounted for about 30% of our total GMV for the second quarter compared to over one-third in the same period last year. Moreover, the promotional activities from certain destinations were suspended. In the second quarter, our other revenues decreased about 70% year-over-year, mainly due to reduction in fees for advertising services we provided. In the domestic market, we see more rapid growth in self-guided tool products, such as our Hotel Plus X products.

products are usually less profitable than organized tours. For the summer occasion, domestic travel markets maintain steady growth momentum. High-quality organized tour products such as small growth tours and private tours are welcomed by customers. Some of our MCN partners select only small growth toward products to recommend to their viewers. Outbound market continues to face some uncertainties, which drag down the growth of outbound travel. Destinations such as Middle East still recorded negative growth in July. But other destinations such as Singapore, Malaysia and the Americas grow healthily during the summer. Besides many people to the off-peak travels this year, with more holidays introduced, we are seeing transaction volume become more evenly spread across the month. For example, since the coming mid-autumn basketball and the National Day holidays are very close to each other, many people plan to take longer vacations connecting the holidays.

Therefore, we are seeing bookings in the last week of September surging. This place, as of today, travels to long-haul outbound destinations such as America and the Oceania during the week. We have already surpassed the same period last year.

Lastly, although we don't scale specific profit outlook, we are trying to achieve profitability for another quarter. Thank you.

Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to speaking with you in the coming months.