Autohome Inc. (ATHM) Earnings

Management highlights

### Strategic Transformation - Ongoing transformation from an automotive information media platform to a comprehensive automotive service ecosystem, with parallel development of domestic and international markets - Prioritizes long-term shareholder value creation while maintaining strict cost control and a healthy balance sheet ### User Growth and Content Ecosystem - Average mobile daily active users reached 80.73 million in March 2026, a 4.9% year-over-year increase, hitting an all-time high - MCN influencer ecosystem expanded: number of premium creators exceeded 650, cumulative cross-platform new media reach approached 150 million users, and the share of top and mid-tier creators increased significantly, improving overall ecosystem health - Differentiated content competitiveness is built through creator incentives, holiday marketing, offline events, professional creator incubation, and development of an overseas influencer ecosystem ### New Retail Business Development - Launched one-stop online car purchase functionality in pilot cities Shenzhen and Xi'an, allowing users to complete vehicle selection, configuration selection, and deposit payment online, with offline contract signing and final delivery - Introduced four user protection guarantees: officially certified vehicle sources, end-to-end fund supervision, transparent pricing, and refundable deposits to deliver a secure purchasing experience - The business model remains in pilot testing, with expansion planned after full validation of the model ### Used Car Business Expansion - Launched two core platforms, forming a dual-engine growth model of domestic service upgrades and global market expansion 1. Full-process domestic used car selling service platform: Offers official inspections, dedicated steward services, and nationwide price inquiry, with a standardized digital service system covering the entire seller journey, currently in pilot operation in two cities with plans for national rollout 2. Cross-border used car export service platform: Enables dealers to list vehicles on both domestic and international platforms, provides standardized inspection and maintenance records to reduce cross-border transaction trust costs; plans to build a full end-to-end closed-loop system for compliant cross-border exports ### AI Technology Integration - AI and large language models are core infrastructure pillars of the platform - Externally, AI-powered intelligent product suites are provided to partners; internally, large model capabilities have been integrated across all core workflows, advancing from isolated efficiency gains to full end-to-end systematic transformation - AI reshapes content workflows: AI smart radar monitors online trends 24/7, paired with large model assisted content packaging and AIGC automated generation to create an efficient rapid response system, improving content relevance and operational efficiency - The reverse funnel and intelligent distribution models are applied to membership business: reverse inference from transactions builds accurate user profiles to improve content alignment with high-conversion needs; intelligent distribution integrates multi-platform data for more precise traffic matching ### Overseas Expansion - ES-Auto, Autohome's overseas content platform, officially launched operations in Thailand with a localized strategy, onboarding local creators and building a professional content system covering 100 Chinese new energy vehicle models and over 10,000 product specifications - A coordinated marketing campaign during the Bangkok International Motor Show generated over 140 million cross-platform views and 530,000 user interactions, delivering a strong market entry - Cross-border used car export platform has been launched, marking the start of the company's dual domestic-international growth strategy ### Shareholder Return Initiatives - Board of Directors approved a cash dividend plan for H1 2026, with a total dividend of approximately 500 million RMB - Board authorized a 200 million USD share repurchase program with an 18-month term; as of May 22 2026, 62.3 million USD worth of ADS have been repurchased, completing roughly one-third of the authorized amount

Guidance

Management maintained its commitment to existing guidance and key strategic targets, with the following forward-looking statements: - The full process used car sales platform will accelerate its rollout to more cities across China after the initial pilot phase - The new retail online car purchase business will expand to additional cities after the model is fully validated in the Shenzhen and Xi'an pilots - Management will continue to adhere to its commitment of a full-year 2026 cash dividend of no less than 1.5 billion RMB, maintaining stable and consistent dividend policy - Autohome will continue to execute its authorized share repurchase program in line with the approved plan - Online new car and used car transaction business is expected to become a core new growth engine for Autohome long-term

Segment performance

Total revenue for Q1 2026 was 1.05 billion RMB, broken down by segment as follows: - Media Services: 163 million RMB, accounting for approximately 15.5% of total revenue - Lead Generation Services: 503 million RMB, accounting for approximately 47.9% of total revenue - Online Marketplace and Others: 382 million RMB, accounting for approximately 36.4% of total revenue Additional financial performance metrics: - Cost of revenue: 257 million RMB (down from 316 million RMB in Q1 2025) - Gross margin: 75.5% (down from 78.3% year-over-year) - Sales and marketing expenses: 506 million RMB (down from 544 million RMB year-over-year) - Product and development expenses: 274 million RMB (flat year-over-year) - General and administrative expenses: 120 million RMB (down from 131 million RMB year-over-year) - Non-GAAP diluted earnings per ADS: 1.54 - Total cash, cash equivalents, short-term and long-term investments as of March 31, 2026: 20.04 billion RMB

Risks & headwinds

- Weak consumer confidence and softening auto market demand in China: Q1 2026 saw a 17% year-over-year decline in passenger vehicle retail sales and 21% decline in new energy vehicle sales, with declines continuing into April 2026 - High dealer inventory pressure: Dealer inventory warning index has remained above the caution threshold since the start of 2026, leading to tight cash flow, widening dealer losses, and increased discounting that reinforces consumer price cut expectations and lengthens purchase decision cycles - OEM operating pressure: 9 of the top 10 Chinese OEMs reported year-over-year sales declines in Q1 2026, and the industry profit margin fell to a record low of 3.2%, putting widespread pressure across the entire supply chain - The expiration of the new energy vehicle purchase tax exemption at the end of 2025 pulled forward consumer demand that would have otherwise occurred in Q1 2026, exacerbating short-term sales weakness - The new online retail transaction business model is still in the pilot exploration phase, and its path to scalable profitability has not yet been validated

Analyst Q&A

• Q: Given the soft Q1 auto industry environment, what is Autohome's view on the industry outlook, and what is the progress on synergies with Hire Group? /

  A: Management confirmed that multiple pressures have converged to create a soft auto market in 2026: the 2025 NEV purchase tax expiration pulled forward demand, policy support has weakened, consumer confidence remains cautious, and a strong 2025 Q1 base creates tough year-over-year comparisons. Auto exports remain a bright spot, with Q1 2026 Chinese vehicle exports up 61% year-over-year, and NEV exports leading growth. On synergies, six months post-transaction, collaboration is focused on used car operations and offline services: Hire Group brings valuable offline and used car operational experience, with ongoing collaboration in vehicle sourcing, inspections, vehicle customization, and charging services that will be deepened going forward.

• Q: Given dealer financial pressure, should we expect continued declines in lead generation sales leads? Is the new retail business ready for rapid scaling, and what is its future growth outlook? /

  A: Management noted that 2026 dealer membership renewals are complete, and overall customer coverage remains stable, even amid dealer margin pressure and inventory issues. Despite the industry downturn, dealer demand for high-quality leads remains strong, with Autohome still a core customer acquisition channel. The company has improved lead accuracy and efficiency via AI-powered data models, and will continue to help dealers improve conversion and profitability. New retail is still in early pilot testing in two cities; after the model is validated and refined, it will be expanded to additional markets.

• Q: What are Autohome's future plans for shareholder returns? /

  A: Management reaffirmed its strong commitment to shareholder returns, confirming that the board approved a 500 million RMB interim dividend for H1 2026, and maintains its target of a full-year 2026 dividend of no less than 1.5 billion RMB. The company will maintain a stable, consistent dividend policy regardless of industry fluctuations. Roughly one-third of the 200 million USD authorized share repurchase has been completed in less than three months, reflecting strong execution of the return framework combining dividends and buybacks that will continue long-term.

• Q: Can management share progress and outlook for the Autohome mall business for the second half of 2026? /

  A: Management stated that it is still too early to share specific performance metrics, as the business remains in early exploration. The mall offers standardized certified new and used vehicles with platform-level consumer protections, addressing key user pain points of opaque pricing and uncertainty over vehicle quality. Used car offerings leverage partnership with Hire Group to deliver unified inspection and warranty standards. While the full online auto transaction business model is still evolving for the industry, management believes online transactions are the inevitable future direction and will become a core new growth engine for Autohome long-term.