Q1 2026 Yatsen Holding Ltd Earnings Call Transcript
Key Points
- Yatsen Holding Ltd (YSG) reported a 22.5% year-over-year increase in total net revenues for the first quarter of 2026, reaching RMB1.02 billion.
- The company's skincare brand experienced substantial growth, with net revenues increasing by 58.5% year-over-year.
- Gross margin reached a historical milestone of 80.2%, indicating strong structural health of the business model.
- Yatsen's R&D investments increased, with expenses rising to 3.9% of total net revenues, supporting product innovation and scientific initiatives.
- Successful completion of the first tranche of a private placement of convertible notes and warrants, with Hillhouse joining as a key investor, demonstrating confidence in Yatsen's strategic direction.
- Operating expenses increased by 32.5% year-over-year, reaching RMB918.1 million, which is 89.9% of total net revenues.
- The company reported a net loss of RMB61.9 million for the first quarter of 2026, compared to a net loss of RMB5.6 million in the prior year period.
- Selling and marketing expenses rose significantly to 72.2% of total net revenues, driven by investments in brand equity and higher traffic acquisition costs.
- Net cash used in operating activities was RMB90 million, compared to net cash generated of RMB23.8 million in the prior year period.
- The company's cash, restricted cash, and short-term investments decreased to RMB934.2 million as of March 31, 2026, from RMB1.05 billion as of December 31, 2025.
Ladies and gentlemen, good day, and welcome to the Yatsen first quarter 2026 Earnings conference call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investment and Capital Markets. Please go ahead.
Thank you, operator. Please note the discussion today will contain forward-looking statements relating to the company's future performance and are intended to qualify for the safe harbor from liability as established by the US Private Securities Litigation Reform Act.
Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors.
Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.
A general discussion of the risk factors that could
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