Yatsen (YSG) Q2 2025 earnings summary

Executive summary

• Achieved year-over-year revenue growth of 36.8% in Q2 2025, reaching RMB 1.09 billion, driven by strong performance in skincare and a return to growth in color cosmetics.

• Skincare brands led with 78.7% year-over-year growth, contributing RMB 581.3 million and 53.5% of total revenues; Galénic, DR.WU, and Eve Lom saw 88.1% combined growth.

• Gross margin improved to 78.3% from 76.7% year-over-year, reflecting a higher mix of premium products.

• Net loss narrowed to RMB 19.5 million, with non-GAAP net income reaching RMB 11.5 million and non-GAAP net income margin at 1.1% versus a non-GAAP net loss margin of 9.4% last year.

• Net cash generated from operating activities was RMB 77.7 million, compared to net cash used of RMB 148.2 million last year.

Financial highlights

• Total net revenue for Q2 2025 was RMB 1.09 billion, up from RMB 794.5 million year-over-year.

• Gross profit increased 39.5% to RMB 850.4 million; gross margin rose to 78.3%.

• Operating expenses rose 21.7% to RMB 905.9 million, but as a percentage of revenue, fell to 83.4% from 93.7%.

• Net loss was RMB 19.5 million, down from RMB 85.5 million; non-GAAP net income was RMB 11.5 million, compared to a non-GAAP net loss of RMB 74.9 million.

• Inventory turnover days improved to 171 days in Q2 2025 from 194 days in Q4 2024.

Outlook and guidance

• Q3 2025 net revenue expected between RMB 778.6 million and RMB 880.1 million, representing 15%-30% year-over-year growth.

• Management remains confident in achieving both growth and profitability, especially in skincare, but guidance is subject to risks and market conditions.