Autohome Q2 2025 Earnings Call - Accelerating AI and new retail expansion as margins compress

Conference Operator: Ladies and gentlemen, thank you for standing by for Autohome’s Second Quarter and Interim twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow management’s prepared remarks. As a reminder, this conference call is being recorded. If you have any objections, you may disconnect at this time.

A live and archived webcast of this earnings conference call will also be available on Auto Home’s IR’s website. It is now my pleasure to introduce your host, Mr. Sterling Song, Autohome’s IR Director. Mr. Song, please go ahead.

Sterling Song, IR Director, Autohome: Thank you, operator. Good morning, everyone, and welcome to Autohome’s second quarter and interim twenty twenty five earnings conference call. Earlier today, Autohome distributed its earnings release, which can be found on the company’s IR website at ir.autohome.com.cs. Joining me on today’s call are Chief Executive Officer, Ms. Hung Yang and Chief Financial Officer, Ms.

Craig Yanzeng. Management will go through their prepared remarks first, which will be followed by a Q and A session where they will be available for until question. Before we continue, please note that the discussion today will contain forward looking statements made under the Safe Harbor provision of The U. S. Private Securities Litigation Reform Act of 1995.

Forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to those outlined in our public filings with the US Securities and Exchange Commission and the Hong Kong Exchange. Autohome doesn’t undertake any obligation to update any forward looking statements except as required under applicable law. Please also note that Autohome’s earnings press release and this conference call includes discussions of certain unaudited non GAAP financial measures. A reconciliation of the non GAAP measures to the most directly comparable GAAP measures can be found in our earnings release.

I’ll now turn the call over to Autohome CEO, Ms. Yang, for opening remarks. Please go ahead, Mr. Yang. Thank you for calling.

Hello, everyone. This is Sung Yang. Thank you for joining our earnings conference call today. In the first half of the year, we made steady progress in advancing our auto strategy by effectively optimizing the synergy between our online and offline resources. We improved both user experience and a service quality.

At the same time, we accelerated AI driven product innovation and upgrade, leveraging intelligent technology as a core enabler to empower user decision making and help customers reduce cost while improving efficiency. On the new retail front, we are redefining the automotive consumer experience through technology. Online, our buy for me likely enables multi vehicle comparison and a fixed wide drive inquiry. Offline, we deliver differentiated experience through three key services, immersive e r movie, AI assisted test driving with customer guidance, and AI powered purchasing assistance. This innovation significantly reduce transaction cost for both end users and customers creating a complete online to offline service ecosystem.

As of the second quarter, the number of new retail franchise stores has surpassed 200, continuously expanding our service coverage and reaching a broader consumer base. In terms of AI technology application, we’ve created end to end intelligent solution. For consumer, our AI smart assistant now covers all scenarios for both new and used car with industry leading performance in question and answer. For for dealerships, they’ve integrated AI technology into the entire customer journey from marketing to customer acquisition to transaction conversion and to after sales services, creating a comprehensive and slow digital marketing loop that enhances operational efficiency. Today, we’ve already served over 50 automotive brand.

Additionally, we’ve established an extensive ecosystem of alliances and continued to expand our partnership network through a strategic collaboration with leading platforms, including ad pay. Through jointly developed channels and co branded marketing initiative, we’ve built a comprehensive user engagement network to amplify our brand’s influence. Notably, in late June, we officially launched the international version of Autohome website, featuring over one one thousand nine hundred vehicle models from 52 Chinese automobile brands going global. This not only provides substantial support for the globalization of China’s auto industry, but also must a quick step forward now with the national business expansion. Looking forward, we’ll continue to enhance AI application across our products and services and deepen the deployment of our auto automotive ecosystem by capitalizing on the industry trend of electrification, intelligence, and globalization will further drive the transformation of the automotive consumer experience.

With that, I’ll now turn the call over to our Chief Financial Officer, Craig Zeng, for a closer look at our 2025 operating and financial results. Thank you, miss Yang. Hello, everyone. I’m Chris Sung, the CFO of Autohome. In the second quarter, we reinspired our brand position as the go to platform of discovering new car launches with the position of for new car launching come to auto home.

We did this by developing a comprehensive new vehicle content matrix centered around live streaming. This means that it focuses on four key dimensions, the visual pacing, initial test driving, professional testing, and technical intelligence, effectively driving the content growth around new vehicle consumption. For example, in June, we launched the Autophone new car first test program and created a special feature titled the ultimate new energy SUV showdown. This intensive testing miracle delivered more than fifty hours of intensive testing, live streaming across five vehicles in five days, generating over 160,000,000 views across various platforms. The program not only strengthens consumer understanding of newly launched vehicles, but also significantly enhance auto home industry influence as a trusted authority in professional vehicle assessment.

In June, at the international automotive and supply chain exposition in Hong Kong, we took Chinese brand globalization as our core theme Through our continuous six hour bilingual live streaming in both Chinese and English, we showcase the exhibition highlights while establishing a dedicated interactive technology zone to demonstrate Autohome’s cutting edge AI technology and the VR innovation to global audiences. This initiative gathered the launch of the international version of Autohome website mentioned by miss Young, underscore our strong progress in supporting Chinese auto brand in their global expansion and promoting our global capabilities. Additionally, we continue to expand our traffic alliance network by promoting market platform and the market scenario collaboration to create synergies across the entire value chain, further enhancing Autohome’s brand popularity and the industry influence. A prime example is our strategic partnership with AbiPay auto life service sector in May. Together, we launched a dedicated car billing and a selection service for AbiPay users and a certified car owner, including a special subsidy section to serve trade ins and potential car buyers.

According to Piped Mobile, our average mobile DAU reached 75,740,000.00 in June 2025, up by 11.5% from same period last year, reflecting our sustained growth in user scale and expanding platform influence. Turning to NEV, our new retail business is committed to building a one stop auto automotive ecosystem empowering customer survey through emerging technology. Online, we use polygraphics live streaming technology and enhance digital services into offline experiences. The Autumn Space Store leverage immersive via movie as a new driver of store traffic and perform multi vehicle testing driving with real time owner to increase trust and improve conversion rate. Meanwhile, our AI powered car purchasing assistant provides objective and neutral vehicle recommendation for the improving in store service efficiency.

As of the second quarter, total number of auto auto home space and satellite stores has reached more than 200. Total revenues from ABB in the second quarter, including sales from the new retail business, continues to grow, increasing by 27% from last year. Digitalization, we’ve adopted a development strategy centered on data plus technology as the core development driver, integrate our proprietary data resources and industry analysis model to upgrade and launch five major digital intelligence product line, including AI marketing brain, AI customer acquisition, AI lead master, AI sales engine, and AI vehicle inspector. These two impound a comprehensive range of marketing needs, including enabling accurate marketing decision making, automating content creation with intelligent distribution, improving user engagement efficiency and store visits conversion, strengthening frontline sales consultant capabilities, as well as providing vehicle condition and pricing inquiry system. Powered by AI, we’ve redefined the entire marketing value chain, delivering a comprehensive set of intelligent solution from insight to conversion for our partner, which effectively drive improvements in customer business efficiency.

In our used car business, we continue the account integration of our online and offline services system. In this room, we officially launched our flagship certified used car section featuring carefully selected top tier brand for corporation and strictly controlling used car dealer qualification. Each used vehicle in the store comes with comprehensive inspection report to ensure the safety and transparency of vehicle condition. Additionally, we also provide reliable after sales support, ensuring that what consumers see online is what they get offline. At present, we have already onboarded our first group of dealers to our platform.

In the future, we will continue to prioritize integrity and a standardized processes as our principle expand operation with leading auto dealers, increase the coverage of high quality vehicle sources, and enable consumers to purchase this greater peace of mind in their purchasing In summary, we are accelerating the implementation of our auto development strategy. We are continuously incubating new growth drivers and are fully committed to building Autohome into an auto authoritative professional information platform and a family transactions platform. We will focus on the long term, continue to broaden our business horizon with new technology, and create a more efficient automotive service ecosystem to promote our steady development. With that, now please let me briefly walk you through the key financials for the second quarter twenty twenty five. Please know that our reference are the only in my discussion today unless otherwise stated.

Net revenues for the second quarter were 1,676,000,000, breaking it down. Media services revenues were 279,000,000. Lead generation services revenue were 733,000,000, and online marketplace and other revenues were 746,000,000, up 20.5% year over year. On top, cost of revenues in the second quarter was $5.00 $3,000,000 compared to $346,000,000 in the 2024. Gross margin in the second quarter was 71.4% compared to 81.5% through the same period last year.

Turning to operating expenses, sales and marketing expenses in the second quarter were 630,000,000 compared to 753,000,000 in the 2024. Product and development expenses were 253,000,000 compared to 350,000,000 in the second quarter of last year. General and administrative expenses were 133,000,000 compared to 180,000,000 during the same period last year. Overall, we delivered an operating profit of 297,000,000 in the second quarter compared to 412,000,000 for the same period of 2024. Adjusted net income attributable to Autohome was 476,000,000 in the second quarter compared to $57,272,000,000 in the corresponding period of 2024.

Non GAAP basic and diluted earnings per share in the second quarter were both 1.01 compared to 1.18 in the corresponding period of 2024. Non GAAP basic and diluted earnings per ADS in the second quarter were four point zero six and four point zero four respectively compared to four point seventy two and four point seventy one respectively in the corresponding period of 2024. As of 06/30/2025, our balance sheet remains robust with cash, cash equivalents, and short term investments of 22,050,000,000.00. We generated net operating cash flow of $495,000,000 in the second quarter. 09/04/2024, our board of director authorized a new share repurchase program under which we are permitted to repurchase up to 200,000,000 US dollar of auto home ABS for a period not exceed twelve months thereafter.

As of 07/25/2025, we have repurchased approximately 5 5,350,000.00 ADS for a total cost of approximately US dollar by 142,000,000. Okay. The above is our financial summary. With that, now we are ready to open up the q and a session. Operator, please open the line for q and a.

Conference Operator: Thank you. As a reminder, ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press 11 again. One moment for our first question. Our first question coming from the line of Thomas Chong with Jefferies.

Your line is now open.

Sterling Song, IR Director, Autohome: Thanks management for taking my question. My question is about the media services revenue. Can management share your thoughts about the trend in the second half and also the expectation? Thank you.

Hung Yang/Craig Zeng, CEO/CFO, Autohome: Okay. Thank you for raising this question. As for the media service business, I believe that we’ll continue to look at the OEM budgeting trend. Because we’re still experiencing the price fall, as a result, we still need some time for the price to go stable. And I believe that with the government intervention and the the policy can relate, actually, we will expect that actually the OEM process will gradually recover and the OEM will invest more in advertising budget during the traditional peak season of golden September and silver October in the second half of this year.

Well, at the same time, auto home can also meet the needs of different manufacturers through online, offline integrated services and obtain automakers’ budget through multiple channels. As a result, we think that in the second call in the second half of the year, we’re more bullish about the media service business than the first half of the year. Thank you.

Conference Operator: Thank you. Our next question coming from the line of Piotrang Chen with CICC. Your line is now open.

Hung Yang/Craig Zeng, CEO/CFO, Autohome: So thanks management for taking my questions. So first of all, could management share your outlook on the auto market for the 2025? And are there any updates on the shareholder return plans? Thank you. Thank you for reading this question.

I’ll take the first two questions, and the second question will be addressed by new system. First of all, let me share some of your recent market dynamics and the future trend. So first of all, we think that in order to cope with the price war of the auto industry, recently, we can see that the multiple government authorities have been releasing all kinds of policies for the guidance to fight against this kind of rat racing trend. So since July, we have seen that the price has been gradually gone stable. And even at long run, we think that the price will will going to be eased, and this will be very positive for the entire industry as well as auto home.

And the second thing, we see that the auto market differentiation is intensifying. On the first half, you can see sales volume and profits of the automakers are concentrating on the top player with the share of independent brands continue to rise. However, at the same time, due to trading price for volume, the overall profit of the auto industry is still under a lot of pressure. And thirdly, we can see that NEV continue to grow, but the growth rate has slowed down comparing with the second half of this year. And the third point I want to talk about is that the auto export has performed just rightly.

And according to the data from the China Passenger Car Association, in the 2025, the China passenger vehicle exports increased by 6.8% year on year, among which new energy vehicle exports increased by 48% Y o Y. So you can see that the Chinese automakers are accelerating their overseas expansion, and this will be very positive for Autophor. And based on the above mentioned, there’s three understanding and forecast about the market trend. Actually, in auto form, we will also have the following strategy. First of all, we should say that we have been heavily investing in AI technologies, and there are lots of AI related technologies as well as deliverables.

That is attributable to our assets over the past twenty years, in particular, in terms of the database, content creation, as well as AI related research and development. So we have been quickly taking advantage of our AI strength in the above mentioned area and turn it into the actual productivity. And specifically speaking, this will be showcasing online, offline, as well as the product that we deliver to our OEMs as well as dealers. Which is featuring online plus offline. We’re actually the only Internet company with very large deal of the social media deployment in the auto sector.

We understand that for the auto industry, it heavily rely on the closed loop with both online plus offline. As a result, you cannot only rely on online service delivery to resolve all the consumer’s demand. So in the future, you’re going to see that we will better connect our offline network with our online platform so as we continue to innovate our business models and deliver better performance. And the third strategy is to actually closely go in line with the going global trend of the Chinese market. As a result, Autopharm is also very busy deploying our overseas resources.

For example, in June, in the Hong Kong Auto Expo, we actually set as the only official auto media partner of this Auto Expo, and we have been introducing the Chinese branded auto to the rest of the world. Well, in the same time, on June 30, we also launched the overseas version of Autohome website. This is for the very first time we actually introduced the Chinese auto brands to the global consumers. And so far, we have been covered six countries and the regions, including China, Hong Kong, Thailand, Saudi Arabia, United Kingdom, Australia, and Brazil. It also covers more than 1,900 models.

So you can see that, actually, this is the first first time ever that we have been doing this kind of media introduction in this way. And we also hope that through this international website, we we can actually reach Chinese auto brands with the global consumers. I expect that this year, the overall Chinese auto export will be around the 7,000,000 units. And in the next one or two years, it this number will increase to 10,000,000. So I think that this kind of overseas business deployment will also become the new growth curve for our business.

So that’s the answer for the first two questions. Now I would like to hand the floor to mister Dong. So in terms of the stock repurchase plan, I already gave you some briefing about this number. So I think that this will remain unchanged. And as connected by the board, actually, in the year 2025, the whole year cash dividend payout will be no lower than 1,500,000,000.0 on the debt, and this will remain unchanged.

And in the future, we will continue to get return and reward our shareholder in the sustained manner.

Conference Operator: Thank you. Our next question coming from the line of Brian Gum with Citi. Your line is now open.

Sterling Song, IR Director, Autohome: I will translate myself. Just management for taking that question. So management just mentioned after the government’s intervention, you have seen some, you know, improvements on the OEM’s competition. How does management think about the the competition in the second half this year? And if the competition for new car sales are used, when could we see the used car industry could recover?

Thank you.

Hung Yang/Craig Zeng, CEO/CFO, Autohome: So let me take these two questions. We have been saying that since May till now, we have been witnessing that the government has been releasing the policies for several times and calling for the stop of the evolution related growth and asked the OEM to stop this kind of immoderate price war. Well, at the same time, we also see some of the brands, for example, BYB and China Ultimate View, etcetera, abolished that their one price policy and only returns the trading policy. Now that reducing volume to maintain the price, etcetera. So you can see that fundamental reason for this is because of the overcapacity.

Because the production capacity keeps expanding, we have been witnessing data sales as well as profit margin shifting towards the top tier players. As a result of the small and medium sized OEMs will face a bigger pressure. And in the segmented area, we can see that the luxury as well as joint venture brands have been losing shares. And the self owned brand sales has been reducing from less than 50 has been increasing from less than fifty percent three years ago to more than 60% in the first half of this year. Well, at the same time, this kind of pressure on profit margin also caused the OEM to shift it from size first or scale first to quality first.

We also expect that through all of this policy guidance, the market will quickly go back to reasonable competition. Okay. The second question is about the secondhanded vehicle. When can the market recover? We can see that this is closely related to the total car parcel, car ownership, as well as the car age.

On travel speaking, you can see that in China, the car ownership keep increasing while the average car age reaching at 6.8. Well, in the same time, a lot of people, a lot of clients are interested in the second hand vehicle, but they are still hesitant to purchase the second hand vehicle. The reason can be attributable to the following several aspects. The first thing is because of the policy. Even though eight government authorities, including Mosscom, has been initiated the car circulation consumption reform pilot and also optimized the car registration mechanism.

However, you can see there’s still a lot of interest currency in terms of the car maintenance, repair, as well as the other historical data. And the second day, we can see that Autohome as the top player in this industry, we have been making efforts to enhance industrial standards as well as the transparency. And this is June 27, we have been launched the second hand vehicle official flagship store. And the first deal signed was with Li Xinghan, and we have Li Xinghan to build a brand and promote online offline integration of the services. And the consumer, if they want to find a source of the vehicle, they can directly come to the flagship store in the Autocom second hand vehicle column.

And all of the sources are validated pretty much in in terms of the policy. In addition, we also developed our own AI tools such as the used car AI smart assistant, photo car recognition, vehicle condition tracking, and car price tracking tools. As we all know, used car for secondhand vehicles are nonstandard products, which requires our AI smart assistant to have higher accuracy in reply. And reply to each of the cars of the users is very different. This product constantly being polished and upgraded.

And to this year, we also see that the car circulation association predicts that the secondhand vehicle sales will increase by 6.5% year on year. If actually the price war can be eased and mitigated and the price go to a stable trend, I believe that there will be more consumers choosing that they can hand vehicle. Okay. Next two questions, please.

Conference Operator: One moment for next question. Our next question coming from the line of Richie Sun with HSBC. Your line is open.

Sterling Song, IR Director, Autohome: Thank you management for taking my questions. I have two. First of all, regarding the NUP business including the franchise stores. So what are the progress over there? And what is our thought on the second half and next year’s development plan and expectations?

And secondly, for the data products, so what is the progress? And can you update us on the late product suite that we have and any new product pipeline? Thank you.

Hung Yang/Craig Zeng, CEO/CFO, Autohome: And, actually, thank you for raising this question. In terms of the scale, by the end of the second quarter, we can see that the total number of the stores already exceeds 200, covering both major cities as well as the lower tier cities. And in terms of the functionality innovation, our space stores have already integrated a lot of functions such as three d naked eye watching the cars and the multiple cars same screen comparison and multiple brands one stop purchase, etcetera. And also rely on our AI technologies. We’re also, you know, in business, we created a lot of AI function related experiences such as AI buyers and car owners accompany AI comparison test drive as well as the VR state of blockbuster movie, etcetera, that you reshape the car consumption experience.

In terms of the future development plan, actually, we will continue to defend our business model and focusing on the product and the services, refined operation as well as iteration and upgrading, and to enhance the single store operating efficiency as well as the customer reputation. And, well, at the same time, the revenue generation capacity after a re new retail module will also be gradually enhanced. Well, at the same time, we will also continue to strengthen technology integration to integrate with AI big model, not only serving the terminal end consumer experience upgrading, but also to deliver more products and services based on this technology. And in the same time, we will also continue to defer our market in fact just to serve our customers when they do have going global request. And in terms of our product metrics as well as business progress from the Centimeters, you know, we have launched the AI smart assistance for both new cars and the second half cars based on the self developed and Tangier large model integrating almost twenty years of industrial accumulation of auto form and professional knowledge base.

Actually, we professionally answer users’ card related questions. Well, at the same time, for offline, we also have AI buyers. The industry’s first intelligent voice assistance integrating AI, large model, and ultra high definition three d interaction technology, supporting natural language dialogue and helping users customize car purchase plans and compare car sources and improve car selection efficiency. And for the end product, actually, I already said in my opening remarks, and for all the OEMs, we have integrated five AI related functions, both covering marketing, customer acquisition, and customer retail, as well as the store services. I already mentioned all of this content in my opening remarks.

In terms of the future development trend of our data products, I believe that Autohome’s strength is attributable to our more than twenty years professional content accumulation. We have those data users as well as the industrial know how, and we all kinds of solutions. In the future, we will continue to combine all of these strengths together to as to further exaggerate our professional capability. On the one hand, we will continue to think about how to assist our customers to do refined operation to satisfy their individual life as well as personal demands. While on the other hand, we will continue to build Autohome’s knowledge base to build the moat of the large language model era and continue to better serve our users and clients.

Thank you.

Sterling Song, IR Director, Autohome: Okay. Operator?

Conference Operator: Thank you. There are no further questions at this time. I will now turn the conference back to management for closing comments.

Sterling Song, IR Director, Autohome: Thank you, everyone. Thank you for joining us today. We appreciate your support and look forward speaking on our next quarter of the conference in my time. In the meantime, please feel free to contact us if you have any further questions or comments. Thank you.

Bye bye.

Conference Operator: This concludes today’s conference. Thank you for your participation. You may now disconnect.