Meituan Dianping ((HK:3690)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Meituan’s recent earnings call painted a mixed picture of the company’s current standing and future prospects. On one hand, the company demonstrated robust user growth and maintained its market leadership in the on-demand delivery sector. On the other hand, Meituan is grappling with increased costs and fierce competition, which have led to a notable decline in profitability and strategic scaling back in certain segments.
Revenue Growth
Meituan reported a commendable revenue increase of 11.7% year-over-year, reaching RMB 91.8 billion for the second quarter of 2025. This growth underscores the company’s ability to expand its financial footprint despite challenging market conditions.
User Engagement
The company achieved significant milestones in user engagement, with total Monthly Active Users (MAU) exceeding 600 million and the major app surpassing 500 million MAU. The annual transaction frequency reached a new record, highlighting the strong engagement of Meituan’s user base.
On-Demand Delivery Milestone
Meituan further solidified its market leadership in the on-demand delivery sector, with daily orders surpassing 150 million. This achievement underscores the company’s dominant position in the industry.
Expansion of Branded Satellite Stores
In a strategic move to enhance its market presence, Meituan partnered with over 800 restaurant chains to launch more than 5,500 branded satellite stores, with plans to expand to over 10,000 by the end of the year.
Instashopping Growth
Meituan Instashopping experienced strong growth, with Gross Transaction Value (GTV) showing much stronger growth than order volume. The service attracted 20 million new users, indicating its increasing popularity.
In-store Business Growth
The in-store business segment saw order volumes surge over 40% year-over-year, with annual transacting users increasing by more than 20%, reflecting robust growth in this area.
Increased Cost and Operating Loss
The cost of revenue ratio increased by 8.1 percentage points year-over-year to 66.9%, leading to a significant decline in total segment operating profit and adjusted net profit to RMB 1.8 billion and RMB 1.5 billion, respectively.
Intense Competition
The on-demand delivery sector faced unprecedented competitive intensity, resulting in record-high industry-wide subsidies, which have posed challenges to maintaining profitability.
Profitability Decline
The operating profit of core local commerce declined year-over-year to RMB 3.7 billion, with margins contracting significantly, highlighting the financial pressures faced by the company.
Strategic Scaling Back of Meituan Select
Meituan announced a significant scaling back of Meituan Select, indicating challenges in this segment and a strategic shift in focus.
Forward-Looking Guidance
Looking ahead, Meituan remains optimistic about its growth trajectory. The company plans to expand its network of branded satellite stores to over 10,000 by the year’s end. Additionally, Meituan is enhancing its courier support with expanded occupational injury insurance and pension insurance subsidy programs. The company is also focusing on overseas expansion, with notable growth in Saudi Arabia and a recent launch in Qatar.
In conclusion, Meituan’s earnings call reflects a company navigating through a complex landscape of growth opportunities and competitive challenges. While user engagement and market leadership remain strong, increased costs and competition have impacted profitability. The company’s forward-looking strategies, including expansion and enhanced support for couriers, indicate a proactive approach to sustaining growth and addressing challenges.