SY Q3 2025 Earnings Call Summary

Summary of So-Young's Q3 2025 Earnings Call

1. Key Financial Results and Metrics

Total Revenue: RMB 387 million, up 4% year-over-year, exceeding guidance.
Aesthetic Center Revenue: RMB 184 million, a significant increase of 305% year-over-year and 26% quarter-on-quarter.
Net Loss: RMB 64.3 million, compared to a net income of RMB 20.3 million in Q3 2024.
Non-GAAP Net Loss: RMB 61.6 million, down from a non-GAAP net income of RMB 22.2 million in the previous year.
Basic and Diluted Losses per ADS: RMB 0.64, compared to earnings of RMB 0.20 in Q3 2024.
Cash Position: RMB 942.8 million as of September 30, 2025.

2. Strategic Updates and Business Highlights

Expansion of Aesthetic Centers: The company operates 42 centers, aiming for 50 by year-end, with 20 centers achieving profitability.
User Engagement: Active users exceeded 130,000, with verified treatment visits up 33% quarter-on-quarter.
Membership System: Enhanced tiered membership system with core members (Level 3 and above) contributing significantly to revenue and showing a 70% repurchase rate.
Product Launch: Successful introduction of Miracle PLLA version 3, with strong presales and positive market feedback.
Quality Control: Implementation of a comprehensive quality control framework to ensure safety and compliance across all centers.

3. Forward Guidance and Outlook

Q4 Revenue Expectations: Projected treatment services revenues between RMB 216 million and RMB 226 million, indicating a year-over-year increase of approximately 166% to 178%.
Future Expansion Plans: Anticipation of opening at least 35 new centers in 2026, focusing on fourth-tier cities for growth.

4. Bad News, Challenges, or Points of Concern

Increased Net Loss: The significant increase in net loss raises concerns about profitability amidst expansion.
Declining Revenue Streams: Revenue from information and reservation services decreased by 34.5%, and sales of medical products fell by 25%, indicating potential weaknesses in these segments.
Cost Increases: Cost of revenues rose by 43.4%, driven by the expansion of aesthetic centers, which may pressure margins.

5. Notable Q&A Insights

Expansion Strategy: Management confirmed plans to maintain a balanced pace of new center openings while leveraging digitalization and AI for operational efficiency.
Membership Operations: The membership system is crucial for driving repeat purchases, with core members showing significantly higher spending.
Product Strategy: The upgrade of Miracle PLLA is seen as a key component for enhancing supply chain efficiency and product competitiveness.
Safety and Compliance: The company emphasized its commitment to safety, detailing a robust quality control framework and rapid response mechanisms for customer feedback.

Overall, while So-Young demonstrated strong growth in its aesthetic center business, challenges remain in achieving profitability and addressing declining revenues in other segments. The company remains optimistic about future expansion and operational improvements.

SY — So-Young International Inc.