Full Transcript: So-Young Intl Q2 2026 Earnings Call

So-Young Intl (NASDAQ: SY ) held its second-quarter earnings conference call on Monday. Below is the complete transcript from the call. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary So-Young Intl reported Q2 2026 revenue of RMB 510 million, a 33% year-over-year increase, with the aesthetic treatment business contributing RMB 330 million, up 130% year over year.

7 million, showcasing improved operational efficiency and profitability across 47 centers. Strategic expansion continued with 65 clinics in 18 cities, leading to a 145% increase in verified visits and a broadening user base of over 250,000 active users. AI integration and strategic partnerships, such as those with Jingbo Biopharmaceutical, are enhancing operational capabilities and product offerings, aiming to drive future growth. 2% growth in aesthetic treatment services revenue for the following quarter, driven by scale and operational improvements.

Full Transcript OPERATOR Ladies and gentlemen, thank you for standing by for So-Young Intl's second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After management gives their prepared remarks, there will be a question-and-answer session. As a reminder, today's conference call is being recorded.

I would now like to turn the meeting over to your host for today's call, Ms. Bona Chiao. Please proceed. Bona Chiao, Investor Relations Thank you, operator, and thank you everyone for joining So-Young Intl's second quarter 2026 earnings conference call.

Joining the call today are Mr. Xinxing, our Founder, Chairman and CEO, and Ms. Shanhu Shen, our CFO. Before we begin, please refer to the safe harbor statement in our earnings release, which applies to this call, and we will be making forward-looking statements.

We will also discuss non-GAAP financial measures. Reconciliations between GAAP and non-GAAP measures are included in today's earnings press release. Please also note all figures mentioned in this call are in RMB unless otherwise stated. With that, I'd like to turn the call over to Mr.

Xinxing. Xinxing, Founder, Chairman and CEO Hello everyone and welcome to today's earnings call. In Q2 2026, we continued to expand our aesthetic treatment business guided by our dual MOs of scale and efficiency. Backed by our ever-improving medical capabilities, a uniform delivery framework and wider AI adoption, the business enhanced its operational ability and delivered a robust performance.

Its Q2 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. 7 million. Now turning to the key business developments in Q2, the Zhong approach delivered clear results this quarter.

So-Young Intl Clinic kept a healthy pace of expansion while operating quality improved. By the end of Q2, So-Young Intl Clinic expanded into 18 cities with 65 centers in total. The larger footprint improved accessibility. More importantly, it reinforced brand 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 aesthetic treatments performed were above 362,000, up 134% year over year. On the user front, active users reached over 250,000 by the end of June. In particular, the number of level three and above core members exceeded 78,000.

The quarterly repurchase rate of core members remained robust, reflecting high user regard for our quality. New customer count also grew quarter to quarter, with over 50% of them being referrals. This lowered blended acquisition cost while building a loyal, high-quality user base, which in turn positions us to lift user LTV and retention. Meanwhile, both the volume and mix of public-domain new customers improved, confirming that our full-channel acquisition playbook works.

Profitability also improved as we refined operating workflows and heightened resource coordination. As a result, in Q2 the number of profitable centers rose to 47, with 51 generating positive operating cash flow. 1%. These outcomes validate our management approach.

Healthy growth of our aesthetic treatment business relies on a robust supply chain and enriched product lineup. In late April, Miracle Collagen, our joint product with Jingbo Biopharmaceutical, launched to a warm reception with over 66,000 units sold to date. In June, we rolled out Wavecom. It adopts soft crosslinking technology to create a gel texture without a crosslinking agent.

Wavecom helps fill the eye and mid-face areas while promoting ongoing collagen regeneration for a natural look. Our partnership with Jingbo 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 iteration, bringing advanced technology from R&D to real-world use at a faster pace. We introduced a building version of Miracle PLLA. It uses a better-calibrated PLLA microparticle diameter to improve injection outcomes. Beyond the collagen category, we are also expanding the product portfolio to meet diverse anti-aging demand.

Furthermore, we continued to enhance our uniform medical delivery capabilities. First, we expanded 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 RMD and training center, treatment guidelines, video audits and other training and quality control mechanisms we have in place. In Q2, we partnered with leading upstream manufacturers including Allergan and Jingbo 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, the National Command and Control Center coordinates medical workflows end to end to further elevate the user experience. Finally, we are integrating AI with medical aesthetics to innovate 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 quality consistent and breaking the industry's ceiling on scale, which 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.

Leveraging our years of industry data and capabilities across 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 dual screens that display treatment SOPs in real time. Both have effectively boosted user trust. 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 customer trust. We believe that as we expand, ongoing refinement of our operation rating framework will drive continued gains in operating efficiency and margins. This will unlock greater economies 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 it over to our CFO, Shanhu Shen, for a deep dive into Q2 financials, after which we will move to the Q&A session. , and thank you everyone for joining our call today. It's my great pleasure to walk you through So-Young Intl's second quarter 2026 performance.

On behalf of the management team, I will now share with you our latest operational progress across three key growth, efficiency, and organizational effectiveness. Please note that all financial data will be presented in RMB 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 tenth consecutive quarter of triple-digit year-over-year revenue growth.

Not only has this propelled 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 is our scaled capacity to deliver high-quality products and services for digital natives. We offer one-account 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 unit economics, we recently have raised our aesthetic center capacity utilization benchmark by 50%, reflecting elevated expectations for per-person revenue, labor productivity, and sales per square meter. Through operational excellence—streamlining customer flow to reduce redundant waiting periods, optimizing dynamic staffing, leveraging intelligent inventory management—we expect to drive meaningful margin expansion at aesthetic 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.

Rapid 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 inflection 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 continued 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. 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 point deferral between service delivery and recognized accounting revenue. Today's services generate future membership benefits. While this tempers near-term reported revenue, it builds a deferred revenue base that underpins long-term growth. Net of this deferral impact, revenue still grew approximately 103%.

Looking at aesthetic centers data, as of June 30, we operated 65 So-Young 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 6 and 3 respectively from last quarter. We also achieved same-store sales growth of 52%, substantially improved from 14% in the prior-year period. 9 million, down 35% year over year, primarily due to the decrease in the number of medical service providers subscribing to our information services.

8% year over year, primarily due to the decrease in order volume for medical equipment. 2% year over year due to lower insurance brokerage revenue. 4 million, up 53% year over year, driven primarily by the expansion of our branded aesthetic centers. 4% year over year.

5 million. From an aesthetic treatment service perspective, our comprehensive customer acquisition cost remains at a healthy level, accounting for less than 10% of revenue. Coupled with strong user retention, our overall customer acquisition model remains sustainable. 5% year over year, reflecting the continued expansion of our branded aesthetic centers.

7% year over year, driven by continued improvements in staff efficiency. Moving forward, we will continue to deepen AI integration across our operations, streamlining workflows and driving efficiency gains in R&D, clinical diagnosis and treatment, and beyond. 9 million in the prior-year period. 7 million, which narrowed by 37% compared with 36 million in the prior-year period.

5 million in the prior-year period. 35 in the prior-year period. 2 million. 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.

2%. That concludes my prepared remarks. Operator, we are now ready for the Q&A section. OPERATOR Thank you.

We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

At this time we will pause momentarily. The first question today comes from Jinping Hee with CITICS. Please go ahead. Jinping Hee, Analyst at CITICS Let me briefly introduce myself.

Thank you, management, for taking the questions. Firstly, congratulations on the company's continued strong performance and impressive growth in the second quarter. So I have a question regarding the collaboration with Gen4. The collaboration is generating great momentum with an innovative partnership model.

What have both parties liked and what are the benefits? Thank you. Xinxing, Founder, Chairman and CEO We are pleased to have reached a reliable, mutually beneficial partnership with Jingbo. As medical aesthetic demand moves toward natural restoration, tissue regeneration, and long-lasting outcomes, the component, humanized collagen, will have a long lifespan.

A dependable upstream relationship with Jingbo therefore benefits our long-term growth. More importantly, 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 repurchasing behavior. From there we can pinpoint which products fit which population area and treatment combination.

This helps us optimize doctor training program decisions and inventory planning, which greatly reduces buying guesswork and excess inventory. It also lets upstream 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. Going forward, we will expand this data-feedback co-creation model to more quality partners at home and abroad.