Autohome Q3 Earnings Call Highlights

Key Points

• Profitability weakened despite better gross margin: Q3 revenue was CNY 1.31 billion, while operating profit fell to CNY 96 million and adjusted net income declined to CNY 253 million year over year. Gross margin improved to 67.2%, and major expense categories decreased.
• Autohome is expanding services and investing in AI: Its online car-purchasing network and used-car services grew, while its new AI app supports existing products and efficiency; AI has not yet generated revenue at scale. Mobile daily active users rose 3.4% to 79.14 million.
• The company expects a weak 2026 auto market and modest recovery in 2027: Management projects China passenger-vehicle retail sales will fall 22% in 2026, followed by low-single-digit growth in 2027. Autohome also approved an approximately CNY 1 billion dividend and had repurchased about $155 million of shares under its $400 million program.

Autohome NYSE: ATHM reported third-quarter 2026 revenue of CNY 1.31 billion and lower operating profit and adjusted net income, even as its gross margin improved and expenses declined from a year earlier.

Chief Financial Officer Craig Yan Zeng said the company is expanding its automotive transaction services and investing in artificial intelligence while maintaining a streamlined cost structure. He also said China’s domestic auto market remains under pressure, though he expects stabilization and a modest recovery next year.

Profit Declines Despite Improved Margin

Third-quarter operating profit fell to CNY 96 million from CNY 147 million a year earlier. Adjusted net income attributable to Autohome declined to CNY 253 million from CNY 407 million.

Gross margin increased to 67.2% from 63.7%, while cost of revenue fell to CNY 431 million from CNY 646 million. Sales and marketing expenses declined to CNY 575 million from CNY 620 million, and product and development expenses fell to CNY 195 million from CNY 279 million. General and administrative expenses decreased to CNY 91 million from CNY 125 million.

Revenue included CNY 241 million from media services, CNY 526 million from leads generation services and CNY 547 million from online marketplace and other services. Non-GAAP diluted earnings per American depositary share were CNY 2.42, compared with CNY 3.45 a year earlier.

Cash, cash equivalents, short-term investments and other long-term investments totaled CNY 17.65 billion at Sept. 30. Net cash provided by operating activities was CNY 360 million for the quarter.

Retail Network and Used-Car Services Expand

Autohome Mall’s online car-purchasing model had reached 38 cities by the end of the quarter, with more than 1,700 authorized dealers and over 600 vehicle series listed, Zeng said. Autohome Good Car had more than 170 franchise stores and cumulative transactions of over 700 vehicles.

Asked about offline expansion, Zeng said the company is focused on channel quality and business synergies as well as store count. Its objective is to build a fulfillment network combining Autohome Mall, authorized dealers, franchise stores and Cartech synergies.

In used cars, Autohome expanded a pilot of its full-process sales service to six cities during the third quarter. The service covers appointment scheduling, inspection, buyer and seller matching and delivery. Zeng said initial results for transaction conversion and customer satisfaction were encouraging, and the company plans to refine the model for broader replication.

Autohome’s cross-border used-car export platform averaged more than 3,000 vehicles listed online per day during the quarter. Monthly transaction volume has risen since its first export order in July, although Zeng said total volumes remain relatively small.

AI Investment and User Growth

Autohome launched its Cheese Car Butler AI application on Sept. 5. Built on the company’s Cangjie Automotive Large Model, the application supports services ranging from vehicle research and test-drive appointments to valuations, inspections and maintenance, according to Zeng.

Responding to an analyst’s question about AI’s financial impact, Zeng said the technology and product investments are reflected in the company’s financial results, but AI has not yet begun generating revenue at scale. Instead, he said, its capabilities support existing products and operational efficiency.

Average mobile daily active users rose 3.4% year over year to 79.14 million in September, according to QuestMobile data cited by the company.

Market Outlook and Shareholder Returns

Zeng projected China’s passenger-vehicle retail sales would reach 18.5 million units for 2026, down 22% from the prior year. He attributed the weakness in part to a high comparison base from earlier subsidy policies, demand pulled forward by those subsidies and softer consumer sentiment.

For 2027, he said Autohome expects low-single-digit growth, broadly in line with a China Passenger Car Association forecast of 0% to 5%. Zeng expects new energy vehicles to remain the main driver of growth and leading automakers to gain share as weaker brands face consolidation or exit.

Autohome’s board approved a cash dividend of $1.58 per ADS, or $0.395 per ordinary share, for holders of record on Jan. 5, 2027. The aggregate dividend is expected to be approximately CNY 1 billion, with payments expected around March 15 for ordinary shares and March 22 for ADS holders.

Under a $400 million share repurchase program authorized in July, Autohome had bought approximately 7.06 million ADS for about $155 million as of Oct. 30. Zeng said the company plans to continue executing the program in the open market.

About Autohome (NYSE:ATHM)

Autohome Inc NYSE: ATHM operates an online automotive platform serving consumers, automobile manufacturers, dealers and other industry participants primarily in China. Through its websites and mobile applications, the company provides information and digital tools to help users research vehicles, compare models, read reviews, explore pricing and connect with sellers.

The company's services include automotive news and editorial content, vehicle specifications, user-generated discussions, professional evaluations, sales-lead generation and online marketing solutions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.