Yatsen Holding Limited Q4 FY2025 earnings call

First, leveraged R&D infrastructure to fuel innovative products, with brands like Galanix benefiting from refined R&D ecosystem. Second, focused on deepening brand value and market positioning across multi-brand portfolio, with Dr. Wu and Galanix as drivers. Third, remained dedicated to enhancing profitability and operational excellence, optimizing product mix, marketing efficiency, and operational workflows.

Fourth quarter 2025: Total net revenue grew by 20.1% year-over-year. Skincare brands accounted for 61.1% of total net revenues. Full year 2025: Total net revenue increased by 26.7% year-over-year to RMB 4.3 billion. Skincare brands contributed 53% of total net revenues.

Expect total net revenues for the first quarter of 2026 to be between $958.6 million and $1.08 billion, representing a year-over-year increase of approximately 15% to 30%.

Discussion of risk factors that could affect Yat-Sen's business and financial results, including risks beyond the company's control that could cause actual results to differ materially from mentioned in the press release and discussion.

Q: Firstly, congratulations for achieving a non-GAAP net income turnaround for the whole year. And I have two questions. My first question is that how do we plan to improve our net profit margin in this year? And my second question is about our plan to expand our profit portfolio for skincare brands in this year.

A: Regarding the first question, this year we're going to continue to grow our skincare business much faster than our color cosmetics business. And with skincare business, the gross margin, net margin, are typically much higher than color cosmetics brands. So by doing that, we're going to be able to improve our margin profile. And secondly, our top line will continue to grow this year. And as a leveraging effect, we do believe that our net margin will improve significantly accordingly. And for the second question regarding the growth of our skincare business, the most important thing that we're going to do to grow our skincare business is R&D. In the last five, six years, we've been investing aggressively in our R&D capabilities. And if you look at the past, especially the past one or two years, the phenomenal top-line growth of our skincare business has largely been due to the contribution of our R&D team in terms of better products which meet our consumer's demand