Autohome Inc. Q3 FY2025 earnings call

• Continued to advance AI and O2O strategies. Strengthened AI integration with products, enhanced user experience and operational efficiency. - Completed AI assistant upgrade, introduced new features like AI car selection system and AI vehicle diagnostics. - Launched Global AI Technology Conference, showcasing intelligent automotive tech. - Soft launched Autohome Mall, advancing O2O strategy. - In NEV, total revenues including new retail grew 58.6% year-over-year. - Digitalization: 5 major digital intelligence product lines, launched Tianshu Intelligence Service Platform. - Used car business advanced standardization, AI car inspection expert achieved high accuracy.

Net revenues for the third quarter reached RMB 1.78 billion. Media services revenues contributed RMB 298 million, leads generation services revenues were RMB 664 million, and online marketplace and others revenues increased by 32.1% year-over-year to RMB 816 million. Cost of revenues in the third quarter was RMB 646 million compared to RMB 408 million in the third quarter of 2024. Gross margin in the third quarter was 63.7% compared to 77% during the same period last year. Operating expenses: sales and marketing expenses were RMB 620 million, product and development expenses were RMB 279 million, general and administrative expenses were RMB 125 million. Operating profit was RMB 147 million. Adjusted net income attributable to Autohome was RMB 407 million. Non-GAAP basic and diluted earnings per share in the third quarter was RMB 0.87 and RMB 0.86, respectively. Non-GAAP basic and diluted earnings per ADS in the third quarter were RMB 3.47 and RMB 3.45 respectively. As of September 30, 2025, cash, cash equivalents and short-term investments were RMB 21.89 billion. Net operating cash flow was RMB 67 million. Share repurchase program details and dividend info were also provided.

• Market outlook: Price competition to shift to tech cost-effectiveness; NEV remains growth driver. Short-term challenges but long-term opportunities. - AI product progress: Continued AI-driven upgrade across products, leveraging Cangjie Large Language Model. - Traditional business: Media services revenue decline expected to continue slightly; lead generation services face pressure but customer penetration remains good. - Shareholder returns: Committed to stable dividend policy and share repurchases. - Gross margin: Will focus on cost controls and prudent investment scale. - Offline network: Continue integrating online/offline to improve transaction efficiency.

Potential risks include those outlined in public filings with SEC and HKEX, such as auto market price wars, policy changes, competitive pressures affecting results.

Q: Outlook for 2026 auto market and AI product progress?

A: Price war easing, NEV penetration high; AI product offerings include upgraded smart assistant, 5 major AI product lines leveraging Cangjie model.

Q: Outlook for traditional business and shareholder return plans?

A: Traditional business media revenue decline narrowed, lead generation faces pressure; fulfilled RMB 1.5 billion dividend commitment, share repurchase program over 70% completed.

Q: Gross margin drop and offline stores development?

A: Higher upfront investment for innovative businesses like new retail led to lower gross margin; offline network focuses on using digital tech to improve transaction efficiency.

Q: Used car market outlook?

A: Used car market has rising volume, falling prices; industry under pressure but long-term support from large vehicle ownership; Autohome to collaborate to advance used car industry.