Yatsen (YSG) Q1 2025 earnings summary

Executive summary

• Net revenues for Q1 2025 increased by 7.8% year-over-year to RMB 833.5 million, driven by a 47.7% surge in skincare brands, despite a 9.9% decline in color cosmetics.

• Gross margin improved to 79.1% from 77.7% year-over-year, reflecting a shift to higher-margin products.

• Net loss narrowed to RMB 5.6 million from RMB 124.9 million year-over-year; non-GAAP net income reached RMB 7.1 million, a turnaround from a non-GAAP net loss of RMB 83.8 million last year.

• Operating expenses decreased by 8.6% year-over-year, with significant reductions in general and administrative costs.

• Cash and short-term investments stood at RMB 1.28 billion as of March 31, 2025, supporting ongoing strategic initiatives.

Financial highlights

• Gross profit for Q1 2025 was RMB 659.1 million, up 9.7% year-over-year.

• Net loss margin improved to 0.7% from 16.1% year-over-year; non-GAAP net income margin was 0.9%.

• Operating loss reduced to RMB 34.1 million from RMB 157.7 million year-over-year; non-GAAP operating loss was RMB 14.9 million.

• Net cash generated from operating activities was RMB 23.8 million, compared to net cash used of RMB 121.8 million last year.

• Skincare brands' net revenues grew from RMB 245.3 million to RMB 362.4 million year-over-year.

Outlook and guidance

• Q2 2025 net revenues expected between RMB 810.4 million and RMB 889.9 million, representing a year-over-year increase of 2% to 12%.

• Forecasts reflect current market and operational conditions and are subject to change.