Tuniu Corp (TOUR) Q2 2026 Earnings Call Transcript

Hello, and thank you for standing by for 2 News 2026 Second Quarter Earnings Conference Call. At this time, all participants are in a 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.

And welcome to our 2026 second quarter earnings conference call. Joining me on the call today are Donald Yu, Choonews founder, chairman, and chief executive officer, and An Changsheng, Choonews financial controller. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2026. 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 Yu.

Thank you, Mary. Good day, everyone. Welcome to our second quarter 2026 earnings conference call. supported by durable policies such as the introduction of spring briefs. The domestic travel market maintained steady growth in the second quarter. Meanwhile, the overall travel market faced some uncertainties. and outbound destinations experiencing heaven despite these challenges in the second quarter and achieved non-GAAP profitability for the sixth executive quarter. During the quarter, we continued to execute our diversified product and sales channels. customer needs, we further enriched our product offerings across destinations and the price tiers. Our sales channels, we continued to work with a broad range of partners to better reach different customer segments. Let me walk you through some of our key initiatives in more detail. On the product side, as customers increasingly seek more personalized divers and flexible travel options, we have continued to expand and refine our product portfolio. we further expanded our product offerings for small growth tools, customized tools, self-driving tools, and other travel-related products have been well received by younger travelers for their flexibility and strong value proposition, while private tools have gained popularity among family travelers for their more personalized and private travel experience. To answer the needs of self-guided travelers, we also expanded our hotel-centric self-guided tour products and broadened our portfolio of other travel-related products, including hotels, car rentals, and destination experiences. In addition to enhancing our new tour products for the mass market and our value oriented new select series, we introduced a number of premium private tour products during the quarter to meet demand from customers seeking higher quality travel experiences, accommodations, dedicated car services, and other upgrades. For example, our premium private tour package to Singapore for the summer season, launched in late June, has been well received by family travelers, with sales volume exceeded 10 million RMB to expand our product offerings for different customer segments. For family-oriented customers, we launched a range of travel products during the spring break season centered on districts. For senior travelers, the longer duration organized the tours of more than 15 days. All products scheduled outside major holidays aligning our products with the preferences of different customer segments with conversion and reduction rates. We adopted more targeted marketing initiatives. We launched a series of online seminars inviting customers interested in specific products or destinations to learn more through detailed presentations and the interactive customer engagement dedicated live streaming shows focus on specific products and the destination providing viewers with more in depth and specialized content targeted live streaming shows have generally delivered higher marketed product offerings and the marketing initiatives, we continued to expand our partnerships across sales channels. In live streaming, we further extended our presence to multiple major platforms while also depending cooperation with FDN agencies. Our comprehensive portfolio of high-quality linear travel products and the well-established fulfillment capabilities. Together with the Steam Viewers, Viewers, Ramsey & Partners, we are able to expand our customer base. In the second quarter, both payment and verification volume generated through our live streaming channels continued to record double-digit year-over-year growth. In the second quarter, transaction volume from our offline stores have also continued to record double-digit year-over-year growth. As of today, we operate approximately 500 offline stores. Our offline store network has contributed to sales and expanded the reach of our service network to provide stores with tailored products that help them better sell and attract local customers. In the second quarter, demand for customized tour travel solutions from corporate clients, Providing our industry experience and high-quality products and services, we worked with a number of well-known enterprises to plan and deliver corporate travel tools, into building activities and incentive travel. From technology perspective, we have integrated AI into a broader range of workflows, such such as building knowledge bases, solve materials, and assisting with other processing. AI tools have become valuable assistance to many employees, helping them work more efficiently while reducing operating costs. On the customer side, we upgraded our travel AI agent, AI assistant Xiaomi, integrated booking and other processing capabilities. Customers can now complete the process for standalone travel products, including flights, hotels and attraction tickets through AI. from initial inquiry to final cooking, and compare itinerary based on different travel scenarios, customers' individual preferences, a more personalized travel planning experience. To enter the summer travel season, we are well positioned to support the increased demand during the peak travel period. There will be some uncertainties in the second half of the year. We are confident in the growth of travel demand and the resilient things of our industry and our business to providing customers with high quality products and services. I will now turn the call to over to Anqiang, our financial controller for the financial.

Hi, here Donald. Hello everyone. Now I'll walk you through our second quarter of 2026 financial results in greater detail. Please note that all the monetary amounts are INB unless otherwise stated. You can find the US dollar equivalent of the numbers in our earnings release. Quarter of 2026 net revenues were 138 representing a year-over-year increase of three percent from the corresponding period in 2025. Revenues from package tours were up seven percent year-over-year to 121.1 million and accounted for 87 percent of our total net revenues for the quarter. It was primarily due to the growth of overnight tours. Other revenues were down 17% year-over-year to $17.8 million and accounted for 13% of our total net revenues. This was primarily due to the decrease in the fees for advertising services provided to tourism boards and bureaus for the second quarter of 2026 were 76.4 million down 11% year-over-year. In the expenses for the second quarter of 2026 were 82.5 million up 5% year-over-year. Research and product development expenses for the second quarter of 2026 were 13.8 million percent year-over-year. It was promoted due to the decrease in research and product government personnel-related expenses. Sales and marketing expenses for the second quarter of 2026 were 54.7 million, up 22% year-over-year. It was primarily due to the increase in promotion expenses, and administrative expenses for the second quarter of 2026, 0.1 million, up 20% year-over-year. This was primarily due to the decrease in general and administrative personnel-related expenses attributable to ordinary shareholders of two new corporations was $0.7 million in the second quarter of 2026. Non-GAAP net income attributable to ordinary shareholders of two new corporations, which excluded share-based compensation expenses and amortization of acquired internal assets was $2.2 million in the second quarter of 2026. As of June 30, 2026, the company had cash and cash equivalents, short-term investments, and long-term deposits of $1 billion. Cash flow generated from operations for the second quarter of 2026 was $46.9 million. for the second quarter of 2026 were 1.4 million of 2026 the company expected generate two hundred and two point one million to two hundred and twelve point two million of net revenues which represents a zero percent to five percent increase year-over-year that this focus reflect a new current and preliminary review on the industry and its operations, which is subject to change.

Thank you for listening. We are now ready for your question.

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 request to join the question queue again after your first question has been addressed. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Sarah Zhao, a private investor. Please go ahead.

Hi, management.

Thank you for the opportunity. Two questions here. First, could you please share the reasons for the decrease in net profit in the second quarter? Second, could you provide more details about travel bookings in the summer and also the outlook for the profitability of the quarter.

Thank you.

In the second quarter, the domestic travel market continued to grow steadily. Outbound travel market met some headwinds at certain destinations. For example, the Middle East and recorded over 20% year-over-year decrease of transaction volume during the quarter. As a result, outbound tools accounted for about 30% of our total GMV for the second quarter compared to over one-third in the same period last year. Promotional activities from certain destinations were suspended. In the second quarter, our other revenues decreased about 70% year-over-year, mainly due to reduction market growth in self-guided tour products, such as our Hotel Plus X products. These products are usually less profitable than open-minded. Tomorrow's occasion, domestic travel markets maintain steady growth momentum. High-quality organized tour products such as small growth tours and private tours are welcomed by customers. Some of our MCN partners select only small growth tour products to recommend to outbound market. It continues to face some uncertainties, which drag down the growth of outbound travel, such as Middle East still recorded negative growth in July. But other destinations such as Singapore, Malaysia and America grew healthily during the summer to off-peak travels this year with more holidays introduced we are seeing transaction volume because of the month. For example, coming mid-autumn back to war and national day holidays are very close to each other. Many people plan to take a longer location connecting the holidays therefore in the last two as America and Oceania during the week although we don't scale well try to

achieve the profitability for another quarter thank you did that answer your questions Sarah thank you again if you have a question please press star then 1. We are now approaching the end of the conference call. I will now turn the call over to 2NEWS Director of Investor Relations, Mary, for closing remarks.

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.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.