Tuniu Corporation 2026 Q2 Earnings Call

Thank you, and welcome to our 2026 second quarter earnings conference call. Joining me on the call today are Donald Yu, Tuniu's Founder, Chairman, and Chief Executive Officer, and Anqiang Chen, Tuniu's Financial Controller. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2026. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call, as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in CNY. I would now like to turn the call over to our Founder, Chairman, and Chief Executive Officer, Donald Yu.

Thank you, Mary. Good day, everyone. Welcome to our second quarter 2026 earnings conference call. Supported by favorable policies such as the introduction of spring breaks, the domestic travel market maintained steady growth in the second quarter. Meanwhile, the overall travel market faced some uncertainties, with certain outbound destinations experiencing headwinds. Despite these challenges, we maintained revenue growth in the second quarter and achieved non-GAAP profitability for the sixth consecutive quarter. During the quarter, we continued to execute our diversified product and sales channels strategy. Guided by customer needs, we further enriched our product offerings across categories, destinations, and price tiers. For our sales channels, we continued to work with a broad range of partners to better reach different customer segments. Let me walk you through some of our key initiatives in more detail.

On the product side, as customers increasingly seek more personalized tours and flexible travel options, we have continued to expand and refine our product portfolio. First, we further expanded our product offerings to include more small group tours, private tours, customized tours, self-driving tours, and other travel-related products. Small group tours have been well received by younger travelers for their flexibility and strong value proposition. While private tours have gained popularity among family travelers for their more personalized and private travel experience. To better serve the needs of self-guided travelers, we also expanded our hotel-centric self-guided tour products and broadened our portfolio of other travel-related products, including hotels, car rentals, and destination experiences.

Second, in addition to enhancing our new tour products for the mass market and our value-oriented New Select series, we introduced a number of premium private tour products during the quarter to meet demand from customers seeking higher quality travel experiences. These products feature premium accommodations, dedicated car services, and other upgraded travel experiences. For example, our premium private tour package to Singapore for the summer season, launched in late June, has been well received by family travelers, with sales volume exceeding 10 million RMB to date. We've also continued to expand our product offerings for different customer segments. For family-oriented customers, we launched a range of travel products during the spring break season centered on Eastern China. For senior travelers, we introduced longer duration organized tours of more than 15 days, as well as off-peak travel products scheduled outside major holiday periods.

By better aligning our products with the preferences of different customer segments, these offerings have delivered higher conversion and redemption rates. On the sales side, we adopted more targeted marketing initiatives. We launched a series of online seminars inviting customers interested in specific products or destinations to learn more through detailed presentations and interactive activities, helping deepen customer engagement and interest. We also introduced dedicated live streaming shows focused on specific products and destinations, providing viewers with more in-depth and specialized content. These targeted live streaming shows have generally delivered higher redemption rates. In addition to more targeted product offerings and marketing initiatives, we continued to expand our partnerships across sales channels. In live streaming, we further extended our presence to multiple major platforms while also deepening cooperation with MCN agencies.

Leveraging our comprehensive portfolio of high-quality leisure travel products and well-established fulfillment capabilities, together with the extensive viewer reach of our MCN partners, we are able to increase sales scale and expand our customer base. In the second quarter, both payment and verification volume generated through our live streaming channels continued to record double-digit year-over-year growth. In the second quarter, transaction volume from our offline stores have also continued to record double-digit year-over-year growth. As of today, we operate approximately 500 offline stores. Our offline store network has contributed to sales growth and expanded the reach of our service network. While we continue to provide stores with tailored products that help them better sell and attract local customers. During the second quarter, demand for customized tour travel solutions from corporate clients increased.

Leveraging our industry experience and high-quality products and services, we worked with a number of well-known enterprises to plan and deliver corporate travel tours, including team-building activities and incentive travel. From a technology perspective, we have integrated AI into a broader range of workflows, such as building knowledge bases, creating promotional materials, and assisting with order processing. AI tools have become valuable assistance to many employees, helping them work more efficiently while reducing operating costs. On the customer side, we upgraded our travel AI agent, AI Assistant Xiaoniu, with integrated booking and order processing capabilities. Customers can now complete the entire booking process for standalone travel products, including flights, hotels, and attraction tickets through AI, from initial inquiry to final booking.

In addition, AI Assistant Xiaoniu can search, plan, and compare itineraries based on different travel scenarios such as business trips or vacations, as well as customers' individual preferences, delivering a more personalized travel planning experience. As we enter the summer travel season, we are well-positioned to support the increased demand during the peak travel period. While there may still be some uncertainties in the second half of the year, we are confident in the growth of travel demand and the resilience of both the travel industry and our business. We remain committed to providing customers with high quality products and services. I will now turn the call over to Anqiang Chen, our Financial Controller, for the financial highlights.

Thank you, Donald Yu. Hello, everyone. Now, I will walk you through our Q2 2026 financial results in greater detail. Please note that all monetary amounts are in RMB unless otherwise stated. You can find the US dollar equivalents of the numbers in our earnings release. For Q2 2026, net revenues were RMB 138.9 million, representing a year-over-year increase of 3% from the corresponding period in 2025. Revenues from packaged tours were up 7% year-over-year to RMB 121.1 million and accounted for 87% of our total net revenues for the quarter. The increase was primarily due to the growth of organized tours. Other revenues were down 17% year-over-year to RMB 17.8 million and accounted for 13% of our total net revenues. The decrease was primarily due to the decrease in the fees for advertising services provided to tourism boards and bureaus.

Gross profits for Q2 2026 were RMB 76.4 million, down 11% year-over-year. Operating expenses for Q2 2026 were RMB 82.5 million, up 5% year-over-year. Research and product development expenses for Q2 2026 were RMB 13.8 million, down 16% year-over-year. The decrease was primarily due to the decrease in research and product development personnel-related expenses. Sales and marketing expenses for Q2 2026 were RMB 54.7 million, up 22% year-over-year. The increase was primarily due to the increase in promotion expenses. General and administrative expenses for Q2 2026 were RMB 14.1 million, down 20% year-over-year. The decrease was primarily due to the decrease in general and administrative personnel-related expenses. Net income attributable to ordinary shareholders of Tuniu Corporation was RMB 0.7 million in Q2 2026.

Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB 2.2 million in Q2 2026. As of June 30, 2026, the company had cash and cash equivalents, restricted cash, short-term investments, and long-term deposits of RMB 1 billion. Cash flow generated from operations for Q2 2026 was RMB 46.9 million. Capital expenditures for Q2 2026 were RMB 1.4 million. For the third quarter of 2026, the company expects to generate RMB 202.1 million to RMB 212.2 million of net revenues, which represents a 0% to 5% increase year-over-year. Please note that this forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change. Thank you for listening. We are now ready for your questions.