Yatsen (YSG) investor relations material

Executive summary

• Net revenues for Q2 2025 rose 36.8% year-over-year to RMB1.09 billion, driven by strong growth in skincare and a return to growth in color cosmetics, with non-GAAP profitability for the third consecutive quarter.

• Gross margin improved to 78.3% from 76.7% year-over-year, reflecting a higher mix of premium and higher-margin products.

• Net loss narrowed by 77.2% to RMB19.5 million, with non-GAAP net income reaching RMB11.5 million versus a loss last year.

• Operating leverage, efficiency gains, and R&D-driven innovation contributed to improved profitability and brand portfolio development.

• Net cash from operating activities was RMB77.7 million, reversing a cash outflow in the prior year.

Financial highlights

• Skincare brand revenues surged 78.7% year-over-year to RMB581.3 million, now over half of total revenues; color cosmetics brands grew 8–8.8%.

• Gross profit increased 39.5% to RMB850.4 million; operating expenses rose 21.7% but fell as a percentage of revenue to 83.4% from 93.7%.

• Net loss margin improved to 1.8% from 10.8%; non-GAAP net income margin was 1.1% versus a non-GAAP net loss margin of 9.4% prior year.

• Inventory turnover days improved to 171 days from 194 days in 4Q2024.

• Cash, restricted cash, and short-term investments totaled RMB1.35 billion as of June 30, 2025.

Outlook and guidance

• Q3 2025 net revenues expected between RMB778.6 million and RMB880.1 million, representing 15%–30% year-over-year growth.

• Management is confident in achieving both growth and profitability, especially as high-end skincare outpaces color cosmetics, but guidance is subject to market and operational risks.