So-Young Reports Unaudited First Quarter 2024 Financial Results
So-Young International (Nasdaq: SY) reported financial results for Q1 2024. The company's total revenues increased to RMB318.3 million (US$44.1 million), a 2.6% rise year-over-year. However, the net loss rose to RMB21.2 million (US$2.9 million), compared to a net loss of RMB11.9 million in Q1 2023. Non-GAAP net income was RMB4.1 million (US$0.6 million), contrasting a non-GAAP net loss of RMB2.8 million the previous year.
Operational highlights include a drop in average mobile MAUs to 2.0 million from 3.4 million and a decrease in medical service providers on the platform to 1,160 from 1,419. Despite this, sales of medical products and maintenance services surged 23.3% to RMB86.5 million (US$12.0 million). The company also noted a significant increase in general and administrative expenses by 38.1%.
Looking forward, So-Young expects Q2 2024 revenues between RMB380.0 million (US$52.6 million) and RMB400.0 million (US$55.4 million), reflecting a potential year-over-year decrease.
- Revenue increased by 2.6% year-over-year to RMB318.3 million (US$44.1 million).
- Non-GAAP net income was RMB4.1 million (US$0.6 million), reversing a non-GAAP net loss of RMB2.8 million in Q1 2023.
- Sales of medical products and maintenance services jumped by 23.3% to RMB86.5 million (US$12.0 million).
- Newly established clinics have outperformed financial models.
- Expanding distribution network now covers 750 institutions.
- Net loss increased to RMB21.2 million (US$2.9 million) from RMB11.9 million in Q1 2023.
- Average mobile MAUs dropped to 2.0 million from 3.4 million a year earlier.
- Number of medical service providers on the platform decreased from 1,419 to 1,160.
- General and administrative expenses surged by 38.1% to RMB85.0 million (US$11.8 million).
- Reservation services revenue decreased by 22.3% to RMB23.1 million (US$3.2 million).
Insights
The revenue growth of 2.6% year-over-year to
While non-GAAP net income at
Short-term, the revenue growth is encouraging, but long-term sustainability will depend on how well the company can manage its costs and maintain efficient operations. With cash and equivalents at
The decline in average mobile MAUs from 3.4 million to 2.0 million is concerning as it indicates a reduction in user engagement. This metric is critical for a platform like So-Young, which relies heavily on its user base to drive interactions and transactions. The drop in the number of medical service providers subscribing to information services (1,160 down from 1,419) further supports this trend of decreasing engagement.
The business outlook for Q2 2024 projects a revenue decrease of up to 7.8% compared to the same period in 2023. This signals potential challenges in market and operating conditions, possibly indicating increased competition or market saturation. For a retail investor, this forecast suggests cautious optimism, as the company needs to stabilize and grow its user base to achieve long-term growth.
First Quarter 2024 Financial Highlights
- Total revenues were
RMB318.3 million (US [1]), compared with$44.1 million RMB310.1 million in the corresponding period of 2023, exceeding the high end of guidance. - Net loss attributable to So-Young International Inc. was
RMB21.2 million (US ), compared with net loss attributable to So-Young International Inc. of$2.9 million RMB11.9 million in the same period of 2023. - Non-GAAP net income attributable to So-Young International Inc.[2] was
RMB4 .1 million (US .6 million), compared with non-GAAP net loss attributable to So-Young International Inc. of$0 RMB2 .8 million in the same period of 2023.
First Quarter 2024 Operational Highlights
- Average mobile MAUs were 2.0 million, compared with 3.4 million in the first quarter of 2023.
- Number of medical service providers subscribing to information services on So-Young's platform was 1,160, compared with 1,419 in the first quarter of 2023.
- Total number of purchasing users through reservation services was 132.8 thousand and the aggregate value of medical aesthetic treatment transactions facilitated by So-Young's platform was
RMB367.1 million .
Mr. Xing Jin, Co-Founder and Chief Executive Officer of So-Young, commented, "In the first quarter, our business continued to showcase its remarkable resilience and adaptability, with top line exceeding guidance and increasing
Mr. Hui Zhao, Chief Financial Officer of So-Young, added, "Our sales of medical products and maintenance services business made solid progress in the first quarter as it increasingly contributes to revenue growth and gains traction in the market. Within just a few months, our newly established clinics are able to outperform our financial models. We will continue investing in and nurturing these promising businesses during their growth phases. At the same time, we are implementing disciplined cost controls to support a healthy and sustainable expansion of our bottom line."
[1] This press release contains translations of certain Renminbi (RMB) amounts into [2] Non-GAAP net income/(loss) attributable to So-Young International Inc. is defined as net income/(loss) attributable to So-Young International Inc. excluding share-based compensation expenses attributable to So-Young International Inc. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release. |
First Quarter 2024 Financial Results
Revenues
Total revenues were
- Information services and other revenues were
RMB208.7 million (US ), a decrease of$28.9 million 0.7% fromRMB210.3 million in the same period of 2023. The decrease was primarily due to a decrease in the number of medical service providers subscribing to information services on So-Young's platform. - Reservation services revenues were
RMB23.1 million (US ), a decrease of$3.2 million 22.3% fromRMB29.7 million in the same period of 2023. The decrease was primarily due to the policy change for commission rates and subsidies. - Sales of medical products and maintenance services[3] were
RMB86.5 million (US .0 million), an increase of$12 23.3% fromRMB70 .1 million in the same period of 2023, primarily due to an increase in sales of cosmetic products and medical equipment.
Cost of Revenues[4]
Cost of revenues was
- Cost of services and others were
RMB74.2 million (US ), a decrease of$10.3 million 8.9% fromRMB81.5 million in the first quarter of 2023. The decrease was primarily due to a decrease in payroll cost. - Cost of medical products sold and maintenance services were
RMB43.1 million (US ), an increase of$6.0 million 33.7% fromRMB32.2 million in the first quarter of 2023. The increase was primarily due to an increase in costs associated with the sales of cosmetic products and medical equipment.
[3] Since the second quarter of 2023, in light of the better monitoring business development of upstream supply chain, the Company grouped the revenue generated from sales of cosmetic injectables and sales of equipment and maintenance services into one line item, which is renamed as sales of medical products and maintenance services. The sale of cosmetic injectables was previously reported in line item of information services and others. The information services and others for the first quarter of 2023 have also been retrospectively updated. The amount reclassified from information services and others to sales of medical products and maintenance services are [4] Since the second quarter of 2023, the previous line item cost of revenues was separated into two line items, which are cost of medical products sold and maintenance services and cost of services and others. Cost of medical products sold and maintenance services primarily consists of expenditures relating to medical products and maintenance services, and the remaining cost of revenues is reclassified into cost of services and others. The cost of medical products sold and maintenance services and cost of services and others for the first quarter of 2023 have also been retrospectively reclassified. |
Operating Expenses
Total operating expenses were
- Sales and marketing expenses were
RMB113.3 million (US ), an increase of$15.7 million 0.7% fromRMB112.5 million in the first quarter of 2023. The increase was primarily due to an increase in payroll costs associated with the expansion of marketing employees. Sales and marketing expenses included share-based compensation expenses ofRMB0.1 million (US ), compared with$0.0 million RMB1.5 million in the corresponding period of 2023. - General and administrative expenses were
RMB85.0 million (US ), an increase of$11.8 million 38.1% fromRMB61.5 million in the first quarter of 2023. The increase was due to an increase in payroll costs associated with the expansion of administrative employees to support our business upgrade and new strategic businesses. General and administrative expenses included share-based compensation expenses ofRMB24.5 million (US ), compared with$3.4 million RMB6.0 million in the corresponding period of 2023. - Research and development expenses were
RMB39.6 million (US ), a decrease of$5.5 million 29.0% fromRMB55.8 million in the first quarter of 2023. The decrease was primarily attributable to improvements in staff efficiency. Research and development expenses included share-based compensation expenses ofRMB0.8 million (US ), compared with$0.1 million RMB0.9 million in the corresponding period of 2023.
Income Tax Benefits
Income tax benefits were
Net Loss Attributable to So-Young International Inc.
Net loss attributable to So-Young International Inc. was
Non-GAAP Net Income/(Loss) Attributable to So-Young International Inc.
Non-GAAP net income attributable to So-Young International Inc., which excludes the impact of share-based compensation expenses attributable to So-Young International Inc., was
Basic and Diluted Loss per ADS
Basic and diluted loss per ADS attributable to ordinary shareholders were
Cash and Cash Equivalents, Restricted Cash and Term Deposits, Term Deposits and Short-Term Investments
As of March 31, 2024, cash and cash equivalents, restricted cash and term deposits, term deposits and short-term investments were
Business Outlook
For the second quarter of 2024, So-Young expects total revenues to be between
Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with generally accepted accounting principles in
Conference Call Information
So-Young's management will hold an earnings conference call on Tuesday, May 28, 2024, at 7:30 AM
International: | +1-412-902-4272 |
Mainland | 4001-201203 |
US: | +1-888-346-8982 |
+852-301-84992 | |
Passcode: | So-Young International Inc. |
A telephone replay will be available two hours after the conclusion of the conference call through 23:59
International: | +1-412-317-0088 |
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Passcode: | 5402361 |
Additionally, a live and archived webcast of this conference call will be available at http://ir.soyoung.com.
About So-Young International Inc.
So-Young International Inc. (Nasdaq: SY) ("So-Young" or the "Company") is the largest and most vibrant social community in
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the
For more information, please contact:
So-Young
Investor Relations
Ms. Mona Qiao
Phone: +86-10-8790-2012
E-mail: ir@soyoung.com
Christensen
In
Mr. Julie Zhu
Phone: +86-10-5900-1548
E-mail: julie.zhu@christensencomms.com
In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com
SO-YOUNG INTERNATIONAL INC. | |||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Amounts in thousands, except for share and per share data) | |||||
As of | |||||
December 31, | March 31, | March 31, | |||
2023 | 2024 | 2024 | |||
RMB | RMB | US$ | |||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | 426,119 | 448,036 | 62,052 | ||
Restricted cash and term deposits | 14,695 | 22,176 | 3,071 | ||
Trade receivables | 57,219 | 57,812 | 8,007 | ||
Inventories | 118,924 | 126,533 | 17,525 | ||
Receivables from online payment platforms | 23,158 | 31,386 | 4,347 | ||
Amounts due from related parties | 9,212 | 10,185 | 1,411 | ||
Term deposits and short-term investments | 900,823 | 874,890 | 121,171 | ||
Prepayment and other current assets | 171,774 | 177,620 | 24,600 | ||
Total current assets | 1,721,924 | 1,748,638 | 242,184 | ||
Non-current assets: | |||||
Long-term investments | 261,016 | 256,020 | 35,458 | ||
Intangible assets | 145,253 | 139,142 | 19,271 | ||
Goodwill | 540,693 | 540,693 | 74,885 | ||
Property and equipment, net | 116,782 | 113,159 | 15,672 | ||
Deferred tax assets | 78,034 | 79,621 | 11,027 | ||
Operating lease right-of-use assets | 118,408 | 122,035 | 16,902 | ||
Other non-current assets | 232,455 | 189,442 | 26,237 | ||
Total non-current assets | 1,492,641 | 1,440,112 | 199,452 | ||
Total assets | 3,214,565 | 3,188,750 | 441,636 | ||
Liabilities | |||||
Current liabilities: | |||||
Dividend payable | — | 43,573 | 6,035 | ||
Short-term borrowings | 29,825 | 29,931 | 4,145 | ||
Taxes payable | 56,894 | 56,128 | 7,774 | ||
Contract liabilities | 103,374 | 97,798 | 13,545 | ||
Salary and welfare payables | 86,290 | 52,662 | 7,294 | ||
Amounts due to related parties | 388 | 164 | 23 | ||
Accrued expenses and other current | 233,913 | 237,337 | 32,868 | ||
Operating lease liabilities-current | 29,739 | 26,261 | 3,637 | ||
Total current liabilities | 540,423 | 543,854 | 75,321 | ||
Non-current liabilities: | |||||
Operating lease liabilities-non current | 86,210 | 95,560 | 13,235 | ||
Deferred tax liabilities | 25,082 | 23,356 | 3,235 | ||
Other non-current liabilities | 1,536 | 1,855 | 257 | ||
Total non-current liabilities | 112,828 | 120,771 | 16,727 | ||
Total liabilities | 653,251 | 664,625 | 92,048 |
SO-YOUNG INTERNATIONAL INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Continued) (Amounts in thousands, except for share and per share data)
| ||||||
Shareholders' equity: | ||||||
Treasury stock | (358,453) | (359,089) | (49,733) | |||
Class A ordinary shares ( | 238 | 250 | 35 | |||
Class B ordinary shares ( | 37 | 37 | 5 | |||
Additional paid-in capital | 3,080,433 | 3,062,378 | 424,134 | |||
Statutory reserves | 33,855 | 33,855 | 4,689 | |||
Accumulated deficit | (330,166) | (351,406) | (48,669) | |||
Accumulated other comprehensive income | 18,185 | 19,861 | 2,751 | |||
Total So-Young International Inc. shareholders' equity | 2,444,129 | 2,405,886 | 333,212 | |||
Non-controlling interests | 117,185 | 118,239 | 16,376 | |||
Total shareholders' equity | 2,561,314 | 2,524,125 | 349,588 | |||
Total liabilities and shareholders' equity | 3,214,565 | 3,188,750 | 441,636 |
SO-YOUNG INTERNATIONAL INC. | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Amounts in thousands, except for share and per share data) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2023 | December 31, 2023 | March 31, 2024 | March 31, 2024 | |||||
RMB | RMB | RMB | US$ | |||||
Revenues: | ||||||||
Information services and others | 210,284 | 268,078 | 208,748 | 28,911 | ||||
Reservation services | 29,681 | 20,589 | 23,064 | 3,194 | ||||
Sales of medical products and maintenance services | 70,138 | 101,899 | 86,470 | 11,976 | ||||
Total revenues | 310,103 | 390,566 | 318,282 | 44,081 | ||||
Cost of revenues: | ||||||||
Cost of services and others | (81,500) | (94,079) | (74,222) | (10,280) | ||||
Cost of medical products sold and maintenance services | (32,221) | (43,555) | (43,093) | (5,968) | ||||
Total cost of revenues | (113,721) | (137,634) | (117,315) | (16,248) | ||||
Gross profit | 196,382 | 252,932 | 200,967 | 27,833 | ||||
Operating expenses: | ||||||||
Sales and marketing expenses | (112,511) | (126,175) | (113,256) | (15,686) | ||||
General and administrative expenses | (61,514) | (86,668) | (84,953) | (11,766) | ||||
Research and development expenses | (55,793) | (44,993) | (39,591) | (5,483) | ||||
Total operating expenses | (229,818) | (257,836) | (237,800) | (32,935) | ||||
Loss from operations | (33,436) | (4,904) | (36,833) | (5,102) | ||||
Other income/(expenses): | ||||||||
Investment income, net | 6,852 | 1,135 | 2,099 | 291 | ||||
Interest income, net | 11,927 | 10,820 | 12,313 | 1,705 | ||||
Exchange gains | 425 | 389 | 394 | 55 | ||||
Impairment of long-term investment | — | (444) | — | — | ||||
Share of losses of equity method investee | (3,171) | (2,031) | (3,996) | (553) | ||||
Others, net | 2,025 | 3,424 | 3,280 | 454 | ||||
(Loss)/income before tax | (15,378) | 8,389 | (22,743) | (3,150) | ||||
Income tax benefits | 4,264 | 10,835 | 2,557 | 354 | ||||
Net (loss)/income | (11,114) | 19,224 | (20,186) | (2,796) | ||||
Net income attributable to noncontrolling interests | (834) | (1,723) | (1,054) | (146) | ||||
Net (loss)/income attributable to So-Young International Inc. | (11,948) | 17,501 | (21,240) | (2,942) |
SO-YOUNG INTERNATIONAL INC. | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued) | ||||||||
(Amounts in thousands, except for share and per share data) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2023 | December 31, 2023 | March 31, 2024 | March 31, 2024 | |||||
RMB | RMB | RMB | US$ | |||||
Net (loss)/earnings per ordinary share | ||||||||
Net (loss)/earnings per ordinary share attributable to ordinary shareholder - basic | (0.15) | 0.23 | (0.27) | (0.04) | ||||
Net (loss)/earnings per ordinary share attributable to ordinary shareholder - diluted | (0.15) | 0.23 | (0.27) | (0.04) | ||||
Net (loss)/earnings per ADS attributable to ordinary shareholders - basic (13 ADS represents | (0.12) | 0.18 | (0.21) | (0.03) | ||||
Net (loss)/earnings per ADS attributable to ordinary shareholders - diluted (13 ADS | (0.12) | 0.18 | (0.21) | (0.03) | ||||
Weighted average number of ordinary shares used in computing earnings/(loss) per share, | 79,850,312 | 76,584,151 | 79,551,454 |
79,551,454 | ||||
Weighted average number of ordinary shares used in computing earnings/(loss) per share, diluted* | 79,850,312 | 77,011,890 | 79,551,454 | 79,551,454 | ||||
Share-based compensation expenses included in: | ||||||||
Cost of revenues | (805) | (165) | 55 | 8 | ||||
Sales and marketing expenses | (1,494) | (2,830) | (53) | (7) | ||||
General and administrative expenses | (6,018) | (13,190) | (24,453) | (3,387) | ||||
Research and development expenses | (877) | (1,615) | (843) | (117) | ||||
* Both Class A and Class B ordinary shares are included in the calculation of the weighted average number of ordinary shares outstanding, basic and diluted. |
SO-YOUNG INTERNATIONAL INC. | ||||||||
Reconciliation of GAAP and Non-GAAP Results | ||||||||
(Amounts in thousands, except for share and per share data) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2023 | December 31, 2023 | March 31, 2024 | March 31, 2024 | |||||
RMB | RMB | RMB | US$ | |||||
GAAP loss from operations | (33,436) | (4,904) | (36,833) | (5,102) | ||||
Add back: Share-based compensation expenses | 9,194 | 17,800 | 25,294 | 3,503 | ||||
Non-GAAP (loss)/income from operations | (24,242) | 12,896 | (11,539) | (1,599) | ||||
GAAP net (loss)/income attributable to So-Young International Inc. | (11,948) | 17,501 | (21,240) | (2,942) | ||||
Add back: Share-based compensation expenses | 9,194 | 17,800 | 25,294 | 3,503 | ||||
Non-GAAP net (loss)/income attributable to So-Young International Inc. | (2,754) | 35,301 | 4,054 | 561 |
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SOURCE So-Young International Inc.
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