AutoHome Inc. ((ATHM)) has held its Q1 earnings call. Read on for the main highlights of the call.
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AutoHome Inc.’s recent earnings call painted a mixed picture of the company’s financial health and strategic direction. While the call highlighted significant achievements in revenue growth from New Energy Vehicles (NEVs) and expansion of its retail network, it also underscored challenges in maintaining profitability, with declines in gross margin, operating profit, and adjusted net income. This dual narrative suggests that while operational successes are evident, financial performance pressures remain a concern.
Strong NEV Revenue Growth
AutoHome reported a remarkable 72.6% year-over-year increase in total revenues from its NEV segment, including contributions from its burgeoning new retail business. This growth underscores the company’s successful penetration into the NEV market, reflecting strong consumer demand and strategic positioning.
Expansion of Retail Network
The company has aggressively expanded its retail footprint, establishing 29 space stores and 170 franchised satellite stores nationwide. With a target to exceed 500 locations by the end of the year, AutoHome is positioning itself to enhance market presence and accessibility, supporting its long-term growth strategy.
AI Technology Integration
AutoHome has integrated AI technology across various platforms, including advertising, lease membership products, and smart tools for used cars. This integration aims to enhance user decision-making and improve marketing efficiency, positioning the company at the forefront of technological innovation in the automotive sector.
Increase in Daily Active Users
The company reported a 10.8% increase in average mobile Daily Active Users (DAUs), reaching 76.92 million in March 2025. This growth in user engagement reflects the effectiveness of AutoHome’s digital strategies and its appeal to a broader audience.
Decline in Gross Margin
Despite operational successes, AutoHome’s gross margin fell to 78.3% in the first quarter, down from 81.3% in the same period last year. This decline indicates rising costs or pricing pressures that the company needs to address to sustain profitability.
Decrease in Operating Profit
Operating profit also saw a decrease, with the first quarter figure at RMB 233 million compared to RMB 276 million last year. This reduction highlights the financial challenges the company faces amidst its expansion and technological investments.
Reduction in Adjusted Net Income
The adjusted net income attributable to AutoHome was RMB 421 million, down from RMB 494 million in the previous year. This decline further emphasizes the need for strategic financial management to balance growth initiatives with profitability.
Forward-Looking Guidance
Looking ahead, AutoHome remains committed to expanding its new retail business, with nearly 200 space and satellite franchise stores already in operation and plans to exceed 500 by year-end. The company is focused on integrating smart technologies to enhance user experience and drive growth. Despite the financial challenges, AutoHome’s robust balance sheet, featuring RMB 21.93 billion in cash, cash equivalents, and short-term investments, provides a solid foundation for future initiatives.
In conclusion, AutoHome Inc.’s earnings call reflects a company at a crossroads, with significant operational achievements tempered by financial performance challenges. The company’s commitment to expanding its retail network and integrating AI technology positions it well for future growth, but maintaining profitability will be crucial as it navigates the evolving automotive landscape.