Tuniu Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 15, 2025

Key Takeaways

  • Positive Sentiment: Net revenues rose 15% YoY to RMB134.9 million and packaged tour revenues grew 26% YoY.
  • Positive Sentiment: Tuniu achieved quarterly profitability on both GAAP and non-GAAP basis again in Q2.
  • Positive Sentiment: Emerging sales channels gained traction, with live streaming contributions rising from 15% to nearly 20% of transaction volume and offline store sales up over 20% YoY.
  • Negative Sentiment: Operating expenses increased 58% YoY, driven by higher research & product development (+29%) and sales & marketing costs (+12%).
  • Positive Sentiment: Management forecasts Q3 net revenues to grow 7%–12% YoY, backed by sustained demand into the peak travel season.
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Earnings Conference Call
Tuniu Q2 2025
00:00 / 00:00

There are 4 speakers on the call.

Speaker 3

Hello, and thank you for standing by for Tuniu Corporation's 2025 second quarter earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Ms. Mary Chen. Please go ahead.

Speaker 3

Thank you, and welcome to our 2025 second quarter earnings conference call. Joining me on the call today are Donald Yu, Tuniu Corporation's Founder, Chairman, and Chief Executive Officer, and Anqiang Chen, Tuniu Corporation's Financial Controller. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2025. Before we continue, I'll 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 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.

Operator

Thank you, Mary. Good day, everyone. Welcome to our second quarter 2025 earnings conference call. In the second quarter, we saw a robust performance across the travel sector, as the three holiday periods helped sustain strong consumer demand. During these holidays, Tuniu Corporation recorded year-over-year growth in both transaction volume and the number of trips. During the quarter, the company continued to maintain consistent growth momentum, with net revenues increasing by 15% year over year, and revenues from package tours growing by 26%. Tuniu Corporation's robust supply chain has allowed us to execute our product strategy effectively, with positive results. By expanding our range of offerings, we are meeting the needs of diverse customer segments while attracting more customers through competitive pricing. Together, these efforts are driving sustained growth across the business. In addition, our diversified sales channels have enabled us to reach a broader customer base.

Operator

We are seeing more and more of our sales coming from new channels like live streaming and offline stores. At the same time, we are closely monitoring the ROI of each channel and maintaining strict cost control over internal operations. In the second quarter, we once again achieved quarterly profitability on both GAAP and non-GAAP basis. Let me walk you through some of our key initiatives in more detail. In the second quarter, we continued to strengthen our supply chain, which remains central to delivering high-quality products at competitive prices. First, we further enhanced our direct and centralized procurement strategies in order to lower purchasing costs. Second, we focused on resource integration. For example, by leveraging our nationwide sales network, we consolidated international flight resources and introduced connecting flights for certain outbound travel products.

Operator

This approach allowed us to consolidate customers from across the country to depart from key hub cities, expanding our departure city coverage and making travel more convenient for customers in different regions. It also enabled us to take advantage of airline discounts available in those hubs, allowing us to offer even more competitive pricing to our customers. In addition, we support our suppliers by offering more favorable payment terms, as well as providing system and technical support. These initiatives help us attract high-quality suppliers to collaborate closely with us in delivering better products and services to our customers. On the product side, our various product lines continue to provide more targeted solutions for different types of customers. Niu Tour packages meet high-end customers and maintain a high repurchase rate by focusing on quality. Over half of the customers booking Niu Tour products are Tuniu's loyal customers.

Operator

Niu Select products have gained popularity among customers due to its cost-effective value proposition, especially on live streaming channels. We continue to expand the offerings of Niu Select products, covering more destinations and itineraries. In the second quarter, transaction volume for Niu Tour plus Niu Select products grew by more than 25% year over year. In terms of product innovation, we've continued to explore new destination offerings. For example, Niu Tour launched its first tour in the emerging destination of the Kolkata region, which received a 100% satisfaction rate. In response to strong demand, we expanded beyond the premium hotline tour and introduced more price-competitive Kolkata products under our Niu Select line. As the summer peak season approached, we conducted a live streaming show in the region in July. As a result, transaction volume for Kolkata products in the second quarter grew by over 150% year over year.

Operator

We also continue to diversify our sales network during the quarter, with emerging channels contributing an increasing share of total transaction volume. During the second quarter, both payment and the verification volume through our live streaming channels achieved double-digit year-over-year growth. Backed by our leading position in travel live streaming, as well as strong brand recognition and product reputation, we expanded our live stream offerings to include higher-priced items such as luxury hotels, upscale island destinations, and long-haul outbound tours. With over a decade of deep experience in the outbound travel segment, we've successfully brought our expertise into the live streaming channels, offering products tailored to live stream viewers, supported by professional presentations, and comprehensive services such as visa assistance. As a result, we've quickly emerged as a leading outbound travel supplier through live streaming.

Operator

For example, one of our in-house products for Dubai has already surpassed 10,000 paying customers since its launch earlier this year. For live streaming leader travel products, we've been encouraging more influencers to step out of their studios and conduct live streaming shows directly from the destination, offering customers a more immersive experience. At the same time, we've partnered with a number of top and mid-tier influencers to host dedicated live streaming shows and jointly promote our offerings. In the second quarter, live streaming's contribution to the company's total transaction volume continued to grow, rising from over 15% in the previous quarter to nearly 20%. In the second quarter, we continue to strengthen our offline store network. We expanded coverage in key cities, particularly popular departure cities, tourist destinations, and transportation hubs to build local skill and drive down operating costs.

Operator

As a result, transaction volume from offline stores grew by over 20% year over year during the quarter. On the technology front, we continue to explore the application of AI agents across various scenarios, with a focus on enhancing customer experience and improving internal operational efficiency. We are pleased to see that more and more customers and employees are actually using our AI tools to help book trips and complete tasks. We will continue to enhance and update our technology tools in response to user feedback. In conclusion, with the arrival of the summer season, the travel industry is entering its peak period. While managing the surge in travel demand, we are also closely observing shifts in customer behavior, including booking habits, travel preferences, and product choices, and are continuously refining our products and services in response.

Operator

Our goal is to ensure that more new and regular customers think of Tuniu first when it comes to planning their trips. I'll now turn the call over to Anqiang Chen, our Financial Controller, for the financial highlights.

Speaker 2

Thank you, Donald. Hello, everyone. Now I'll walk you through our second quarter of 2025 financial results in greater detail. Please note that all the monthly figures are in RMB, unless otherwise stated. You can find the U.S. dollar equivalents of the numbers in our earnings release. For the second quarter of 2025, net revenues were $134.9 million, representing a year-over-year increase of 15% from the corresponding period in 2024. Revenues from package tours were up 26% year over year to $113.4 million, and accounted for 84% of our total net revenues for the quarter. The increase was primarily due to the growth of offline tours and self-drive tours. Other revenues were down 21% year over year to $21.5 million, and accounted for 16% of our total net revenues. The decrease was primarily due to the decrease in the fees for advertising services provided to prison boards and bureaus.

Speaker 2

Gross profit for the second quarter of 2025 was $86 million, up 2% year over year. Operating expenses for the second quarter of 2025 were $78.9 million, up 58% year over year. Research and product development expenses for the second quarter of 2025 were $16.4 million, up 29% year over year. The increase was primarily due to the increase in research and product development personnel-related expenses. Sales and marketing expenses for the second quarter of 2025 were $45 million, up 12% year over year. The increase was primarily due to the increase in sales and marketing personnel-related expenses and promotion expenses. General and administrative expenses for the second quarter of 2025 were $17.8 million, down 18% year over year. The decrease was primarily due to the reversal of current expected credit losses allowance.

Speaker 2

Net income attributable to ordinary shareholders of Tuniu Corporation was $14.5 million in the second quarter of 2025. Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which excluded share-based compensation expenses and amortization of acquired intangible assets, was $16.5 million in the second quarter of 2025. As of June 30, 2025, the company had cash and cash equivalents, restricted cash, short-term investments, and long-term deposits of $1.2 billion. Cash flow generated from operations for the second quarter of 2025 was $46 million. Capital expenditures for the second quarter of 2025 were $1 million. For the third quarter of 2025, the company is about to generate $199 million to $208.3 million of net revenues, which represents a 7% to 12% increase year over year. Please note that this forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change.

Speaker 2

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

Speaker 3

Thank you. We will now begin the question and answer session. In order to be fair to all callers who wish to ask a question, we will take one question at a time from each caller. If you have more than one question, please request to join the queue again after your second question has been addressed. We'll pause momentarily to assemble a roster. The first question is Ms. Lisa Lu, investor. Please go ahead.

Speaker 1

Hi, management. Thank you for taking my questions. I've got two questions. First, can management share the revenue breakdown by destinations for this quarter? Which destinations drove the growth of package tour revenues? Second, can you give more details about the bookings in the summer vacation? That's all. Thank you.

Operator

Thank you for your questions. As you know, our package tour revenue increased 26% year over year, making a solid growth. In terms of the key drivers for the growth, domestic destinations achieved double-digit growth during the quarter. Outbound tours grew faster than domestic tours in terms of GMV. Europe, Japan, and the Maldives all posted double-digit year-over-year growth. Some emerging destinations had higher growth rates. For example, South America increased over 50%. Sri Lanka and Kolkata both increased over 100%. The headwinds from some Southeast Asia countries have slowed down and lowered the demand for the destination. Southeast Asia declined roughly 30% during the quarter. In terms of destination breakdown, domestic tours contributed about two-thirds of our total GMV, and outbound tours about one-third during the quarter. Within outbound destinations, Europe is the top one destination, which contributed about one-third of our outbound tour GMV.

Operator

Japan and the Maldives each contributed over 10%. Middle East and Africa, as well as America, less than 10% respectively. For the rest of the outbound destinations, each contributed less than 5%. For the second question about summer vacation, the demand has increased significantly during the peak season. Families with children are one of the main customer growths during the summer. Domestic city tours are hot, especially cities with museums, such as Xi'an and Nanjing, as well as cities with theme parks, such as Shanghai and Guangzhou. For long-haul tours, Guizhou is a popular destination due to its cool weather. Following the shift of customer habits, this summer we launched more small group tours at more competitive prices and sell our products through live streaming shows at scenic spots in Guizhou.

Operator

For outbound travel, although we don't have a full picture now, we've seen double-digit year-on-year growth in Japan, Europe, and certain islands, including Maldives, in July. For Southeast Asia, in spite of headwinds in Thailand and Cambodia, Singapore and Malaysia are gaining popularity since the summer vacation. Our Niu Select itineraries covering both Singapore and Malaysia launched this summer have surpassed 10,000 paying customers through live streaming shows so far. In general, the market continues its growth momentum in the peak season. As a result, we expect a 7% to 12% net revenues growth in the third quarter, and we'll try to make profit again. Thank you.

Speaker 3

Again, if you have a question, please press star, then one. We are now approaching the end of our conference call. I would now like to turn the call over to Tuniu Corporation's Director of Investor Relations, Ms. Mary Chen. Please go ahead.

Speaker 1

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.

Speaker 3

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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