SY — So-Young International Inc.

Summary of So-Young's Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: RMB 451 million, up 25% year-over-year, marking a record high for quarterly revenue.
• Aesthetic Center Revenue: RMB 248 million, up over 205% year-over-year, contributing over 50% of total revenue for the first time.
• Net Loss: RMB 108.8 million, an improvement from RMB 607.6 million in Q4 2024. Non-GAAP net loss was RMB 93.4 million.
• Cash Position: RMB 936.4 million, down from RMB 1,253.2 million in 2024, reflecting investments in expansion.
• Average Revenue per Center: Mature centers generated RMB 102.5 million, while growth centers contributed RMB 89 million.

2. Strategic Updates and Business Highlights

• Expansion: Opened 49 medical aesthetic centers, becoming the largest chain in China by center count. Plans to open at least 35 new centers in 2026, focusing on core cities and second-tier markets.
• Operational Efficiency: 25 centers achieved profitability in Q4, with 39 generating positive operating cash flow.
• Service Delivery Enhancements: Expanded physician team to 211, with a focus on quality and compliance, including a new initiative for physician recruitment and training.
• Supply Chain Development: Collaborated with 18 top-tier suppliers, enhancing procurement capabilities and product offerings.

3. Forward Guidance and Outlook

• 2026 Revenue Expectations: Anticipate aesthetic treatment services revenue between RMB 258 million and RMB 278 million, representing year-over-year growth of 171.2% to 181.3%.
• Focus Shift: Transitioning from rapid expansion to balancing growth with profitability, with an emphasis on improving gross margins and operational efficiency.

4. Bad News, Challenges, or Points of Concern

• Declining Segments: Revenue from information and reservation services decreased by 26.8%, and sales of medical products fell by 19.9%, indicating potential weaknesses in these areas.
• Increased Costs: Cost of revenues rose significantly, particularly in aesthetic treatment services, which may pressure margins.
• Cash Decrease: The reduction in cash reserves could limit flexibility for future investments or operations.

5. Notable Q&A Insights

• Gross Margin Prospects: Management highlighted plans to optimize center openings and consumable costs to enhance margins.
• Performance in Second-Tier Cities: Centers in these areas are performing well, with revenue growth comparable to first-tier cities, and showing higher margins due to lower operational costs.
• Customer Acquisition Costs: Maintained below 10% of revenue, supported by a referral model and co-branding initiatives with well-known IPs to enhance brand equity.
• Core Member Growth: Core members showed strong retention and spending, with plans to expand product offerings and optimize membership benefits to increase lifetime value.

This summary encapsulates the key points from So-Young's Q4 2025 earnings call, providing a clear overview of the company's financial health, strategic direction, and market challenges.