Meituan (3690) Q3 2025 earnings summary

Executive summary

• Revenue grew 2% year-over-year to RMB 95.5 billion in Q3 2025, but net loss reached RMB 18.6 billion, reversing a profit from Q3 2024, due to intensified competition and higher costs.

• Adjusted EBITDA and adjusted net profit both turned negative, at RMB -14.8 billion and RMB -16.0 billion, respectively.

• Maintained leadership in food delivery and quick commerce, expanding user and merchant bases, and enhancing membership programs to boost user stickiness and transaction frequency.

• Continued investment in AI, launching new models and smart life assistant apps, and integrating AI tools for merchants and consumers.

• Cash and equivalents plus short-term investments totaled RMB 141.3 billion as of September 30, 2025.

Financial highlights

• Gross profit dropped to RMB 25.2 billion from RMB 36.8 billion year-over-year, as cost-of-revenue ratio surged to 73.6%.

• Selling and marketing expenses nearly doubled to RMB 34.3 billion, or 35.9% of revenues, due to increased promotions and user incentives.

• R&D expenses rose 31% to RMB 6.9 billion, reflecting higher AI investments; R&D expenses ratio was 7.3%.

• Operating margin fell to -20.7% from 14.6% a year ago; segment operating loss was RMB 15.3 billion.

• Cash used in operating activities was RMB 22.1 billion, with net cash from investing activities at RMB 20.8 billion.

Outlook and guidance

• Management expects operating losses to persist in Q4 2025 for both Core Local Commerce and the company overall due to overheated competition.

• Confident in restoring profitability and achieving sustainable margins in quick commerce and new initiatives over the mid to long term.

• No expectation of larger losses in new initiatives segment next year compared to 2025.