Tuniu 2025 Q3 Earnings Call - Solid Revenue Growth Fueled by Domestic and Outbound Tour Expansion

Conference Call Operator: Hello, and thank you for standing by for Tuniu’s 2025 third quarter earnings conference call. At this time, all participants are in listen-only mode. After management’s prepared remarks, there will be a question-and-answer session. Today’s conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today’s conference call, Director of Investor Relations, Mary. Please go ahead.

Mary, Director of Investor Relations, Tuniu: Thank you and welcome to our 2025 third quarter earnings conference call. Joining me on the call today are Donald Lu, 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 third quarter of 2025. 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 RMB. I would now like to turn the call over to our founder, chairman, and Chief Executive Officer, Donald Lu.

Donald Lu, Founder, Chairman, and CEO, Tuniu: Thank you, Mary. Good evening, everyone. Welcome to our third quarter 2025 earnings conference call. In the third quarter, with the peak travel season approaching, demand for travel accelerated, and the tourism industry demonstrated thriving growth. Tuniu also recorded year-over-year growth in both transaction volume and the number of trips booked. From a definition perspective, both domestic and outbound travel achieved year-over-year growth in transaction volume and the number of trips booked. In the third quarter, net revenues increased by 9% year-over-year, with revenues from our core packaged tour products growing by 12%. Since the beginning of this year, quarterly revenues from our packaged tours have consistently achieved double-digit year-over-year growth. We also continued to deliver quarterly profitability on both a GAAP and a non-GAAP basis.

As customer needs continue to evolve this quarter, we tapped into our core capabilities across products, supply chain, and sales channels to better tailor our portfolio to market demand. In addition, we further enhanced our operational efficiency by leveraging technology tools. Next, I will elaborate in detail on some of our key initiatives. In terms of products, we continue to focus on customer needs and enhance our offerings to meet their evolving expectations. For experienced travelers and repeat customers who tend to prioritize the travel experience and rarely have more time and budget, we leverage the company’s strength in outbound tourism to introduce a wider range of niche destination products. For example, in October, our Niu Tour launched its first organized tour to South America. Our Niu Tour series now spans all major regions across Asia, Europe, Africa, the Americas, and Oceania.

In addition, to meet the surge in leisure travel demand during the summer, we expanded our long-haul island offerings, including destinations such as Seychelles and Mauritius. In the third quarter, transaction volume for these long-haul island products grew by several times year-over-year. We fully leveraged our supply chain advantages to continuously expand destinations for our new select products and attract customers with compelling, high-value offerings. For key domestic destinations such as Guizhou, we adopted on-site live streaming to offer customers a more immersive experience. In the outbound travel market, we expanded our destination coverage and offered more price-competitive options, helping value-conscious customers reach their preferred destinations on a smaller budget. In the third quarter, transaction volume for our new select outbound travel products increased by more than 100% year-over-year.

In response to the growing number of self-guided travelers in China, we continue to leverage Tuniu’s advantages in dynamic packaging technology to expand our Hotel Plus X product offerings. Our self-drive tour products now cover all provinces in Chinese mainland. During the National Day holiday this year, transaction volume for our self-drive tour products increased by five times year-over-year. For our sales channels, live streaming is playing an increasingly important role for our sales. In the third quarter, both payment and verification volume through our live streaming channels continued to record double-digit year-over-year growth, while maintaining single quarter profitability. On the product side, we fully leveraged our supply chain strength during the peak season to maintain a wide, reliable product range and deliver price-competitive offerings. In terms of format, we expanded our outdoor live streaming activities, including inviting live streamers to broadcast live from destination sites.

We formed a professional verification team and specialized systems support, which together have improved efficiency across the entire process from product supply to verification. In terms of external partnerships, we collaborate with top-tier live streamers to create synergies, and we work closely with mid and long-tail creators, providing them with support and resources so we can grow together. We are pleased to see that more and more external live streamers are choosing partners with Tuniu, with some even becoming our exclusive live streamers, focusing solely on selling our products. Offline stores remain an essential part of our overall sales and service network. Their personalized face-to-face service makes them particularly popular among senior travelers and community-based customers, who are also key customer segments for our organized tour products.

In the third quarter, we continued to expand our offline store footprint, adding locations in major cities as popular tourist destinations and key transportation hubs. In September, we opened two flagship stores in Xi’an on the same day to better serve customers, preparing for National Day holiday travel. In the third quarter, transaction volume from offline stores increased by nearly 20% year-over-year. The summer season is a peak period for leisure travel, and while serving individual travelers, we also continued to provide high-quality services to corporate clients. In addition to business travel bookings, we leveraged our extensive experience and strengths in the leisure travel sector to offer tailored vacation products to corporate clients. We provide customized MICE trips for some corporate clients and further extended our products and services to offer their employees with a range of personal and family vacation options.

In the third quarter, transaction volume from corporate customers also recorded double-digit year-over-year growth. In terms of technology, various technology tools and methodologies have been embedded across all aspects of our operations and management, including product development and marketing, supply chain management, and financial management. This has strengthened communication and collaboration between internal and external teams and further improved our operational efficiency. We will continue to explore advanced technologies such as dynamic packaging and AI applications and apply them across more scenarios to further enhance our operational efficiency and profitability. We were pleased to see the robust travel demand during this year’s National Day holiday, supported by favorable factors such as the extended holiday period. Although the industry typically enters a low season in the fourth quarter, we continue to see active demand for off-peak travel, ice and snow trips, and other niche segments.

We will continue to seize these market opportunities by strengthening product development and adjusting our marketing efforts for seasonal needs. With a richer, more distinctive, and more value-for-money product portfolio, we aim to attract both new and existing customers while also preparing fully for the peak travel period during the Chinese New Year holiday. I will now turn the call over to Anqiang, our financial controller, for the financial highlights.

Anqiang Chen, Financial Controller, Tuniu: Thank you, Donald. Hello, everyone. Now, I’ll walk you through our third quarter of 2025 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 the third quarter of 2025, net revenues were RMB 202.1 million, representing a year-over-year increase of 9% from the corresponding period in 2024. Revenues from packaged tours were up 12% year-over-year to RMB 179 million and accounted for 89% of our total net revenues for the quarter. The increase was primarily due to the growth of Niu tours and self-drive tours. Other revenues were down 14% year-over-year to RMB 23 million and accounted for 11% of our total net revenues. The decrease was primarily due to the decrease in the commission fees received from other travel-related products.

Gross profit for the third quarter of 2025 was RMB 109.6 million, down 10% year-over-year. Operating expenses for the third quarter of 2025 were RMB 95.8 million, up 3% year-over-year. Research and product development expenses for the third quarter of 2025 were RMB 15.7 million, up 15% year-over-year. The increase was primarily due to the increase in research and product development personnel-related expenses. Sales and marketing expenses for the third quarter of 2025 were RMB 61.5 million, up 2% year-over-year. The increase was primarily due to the increase in sales and marketing personnel-related expenses. General and administrative expenses for the third quarter of 2025 were RMB 18.5 million, which was almost in line with general and administrative expenses in the third quarter of 2024. Net income attributable to ordinary shareholders of Tuniu Corporation was RMB 19.8 million in the third quarter of 2025.

Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which included share-based compensation expenses and amortization of acquired intangible assets, was CNY 21.8 million in the third quarter of 2025. As of September 30, 2025, the company had cash and cash equivalents, restricted cash, short-term investments, and long-term deposits of CNY 1.1 billion. Capital expenditures for the third quarter of 2025 were CNY 2.1 million. For the fourth quarter of 2025, the company is bound to generate CNY 111 million to CNY 106.1 million of net revenues, which represents an 8% to 13% 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. Operator.

Conference Call Operator: Thank you. The question-and-answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please rejoin the question queue again after your question has been addressed. To join the question queue, please press star then one, and to remove yourself from queue, please press star then two. We’ll pause for just a moment to assemble our roster. And today’s first question comes from Emma Liu, a private investor. Please go ahead.

Emma Liu, Private Investor: Thanks for taking my question, and congratulations on solid quarter. I’ve got two questions. First, can management share the revenue proportions by domestic and outbound tours in the third quarter? Well, second, can you please elaborate on travel performers during this year’s National Day holiday? Will our companies still remain profitable in the fourth quarter? That’s all. Thank you.

Donald Lu, Founder, Chairman, and CEO, Tuniu: Thanks for your questions. For your first question, currently, domestic tours still dominate. In the third quarter, domestic tours consisted of about two-thirds of our total GMV, and overseas tours consisted of one-third, which is almost the same as the previous quarter. For the second question, we observed a healthy increase in both domestic and outbound travel markets during the National Day holiday. Both our GMV and the number of trips recorded during the holiday have had double-digit growth compared with the same period last year. This reinforced our confidence in the sustained growth of China’s travel market. For domestic market, we saw growing numbers of self-guided tours. In particular, our self-drive tours increased over five times during the holiday. As self-guided tour is prevailing in the domestic market, we leveraged our dynamic packaging technology to enrich the supply of Hotel Plus X products.

We used to focus our self-guided tour products on popular regions such as Yangtze River Delta and hot scenic spots such as Changlong Surfing Park. This year, we extended our product offerings to all provinces throughout Chinese mainland, penetrating to lower-tier cities. We will continue to adopt this strategy as we see great potential in lower-tier cities. For outbound travel market, we recorded double-digit growth during the holiday. We saw nearly 50% increase in GMV from APAC regions. Popular destinations included Singapore, Malaysia, and certain islands such as Maldives and Bali. For long-haul destinations, the Americas ranked number one in terms of growth rate. Niche destinations are gaining appeal, especially for sophisticated travelers by their natural beauty and unique local experiences. For the fourth quarter, we expect an 8%-13% year-over-year increase in our net revenues, and packaged tours may grow faster.

We will also try our best to achieve non-GAAP break-even profitability for the quarter. Thank you.

Conference Call Operator: Thank you. We are now approaching the end of the conference call. I will now turn the call over to Tuniu’s Director of Investor Relations, Mary, for closing remarks.

Emma Liu, Private Investor: Once again, thank you for joining us today. Please don’t hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to speaking with you in the coming months.

Conference Call Operator: Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect your lines.