Key Takeaways
So-Young International Inc. (NASDAQ: SY) reported a 45.6 percent surge in first-quarter revenue to RMB 432.8 million, driven by rapid expansion of its aesthetic treatment centers, though net losses also increased.
"Large-scale operational capabilities and a uniform delivery framework have become the key mode for top players to achieve high-quality growth,” Chairman and Chief Executive Officer Xing Jin said, emphasizing the shift toward standardized operations in China's medical aesthetic industry.
The company's core aesthetic treatment services revenue grew 185.8 percent year-over-year to RMB 282.4 million. However, net loss attributable to So-Young widened to RMB 49.2 million, or RMB 0.48 per ADS, from RMB 33.1 million a year earlier.
Despite the strong top-line growth, shares fell about 4.5 percent in pre-market trading following the announcement. The company guided for second-quarter aesthetic treatment revenue to grow between 102.6 percent and 119.5 percent, a key metric for investors watching if the clinic expansion strategy can lead to profitability.
The primary driver for the revenue increase was the company's aesthetic center business. As of March 31, So-Young operated 54 clinics, a net addition of five during the quarter. By the time of the earnings call, that number had grown to 59 centers across 17 cities.
Revenue from aesthetic treatment services reached RMB 282.4 million, accounting for over 65 percent of total revenue. The company saw verified treatment visits jump 172 percent year-over-year to more than 148,000. Management highlighted improving unit economics, with 41 of its centers achieving profitability and 48 generating positive operating cash flow in the quarter.
The expansion came with higher costs. Cost of revenue increased 65.8 percent to RMB 251 million, while total operating expenses rose 26.6 percent to RMB 239.7 million. Sales and marketing expenses climbed 33.7 percent, reflecting higher spending on branding and user acquisition for the growing clinic network.
The widening net loss to RMB 49.2 million, compared with RMB 33.1 million in the same period last year, reflects the heavy investment in scaling the business. The company's cash and short-term investments stood at RMB 880 million as of March 31, down from RMB 936.4 million at the end of 2025.
For the second quarter, So-Young expects aesthetic treatment services revenue of RMB 307 million to RMB 317 million. The strong guidance suggests management is confident in its expansion strategy, but investors will be watching closely to see if the focus on scale can translate into a narrower bottom line in the coming quarters.
This article is for informational purposes only and does not constitute investment advice.
