ZTO Express (Cayman) (ZTO) Q2 2025 earnings summary

Executive summary

• Parcel volume grew 16.5% year-over-year to 9.8 billion in 2Q25, maintaining #1 market share at 19.5% and outpacing industry growth.

• Adjusted net income was RMB 2.05 billion, down 26.8% year-over-year, reflecting margin compression from price competition.

• Retail parcel volume grew over 50% year-over-year, now exceeding 8% of total volume and supporting product mix optimization.

• Strategic focus on operational excellence, automation, technology-driven cost efficiencies, and ESG initiatives.

• Extensive network covers over 31,000 outlets, 6,000 direct partners, and 110,000 last-mile posts, reaching >99% of county-level cities.

Financial highlights

• 2Q25 revenue was RMB 11.8–12.9 billion, up 10.3% year-over-year, driven by higher parcel volume but offset by a 4.7% decline in ASP.

• Gross profit fell 18.7% to RMB 2.9 billion, with gross margin dropping to 24.9%.

• Adjusted EBITDA for 2Q25 was RMB 3.5 billion, down 18.5% year-over-year.

• Operating cash flow was RMB 2.2 billion, down 37.7% year-over-year, supporting continued investment and dividend payments.

• Capital expenditure for the quarter was RMB 1.1 billion; cash and equivalents at quarter-end were RMB 13.3 billion.

Outlook and guidance

• Annual parcel volume guidance revised to 38.8–40.1 billion for 2025, representing 14–18% growth.

• Management expects industry growth to slow in the second half, with a focus on balancing quality, volume, and profit.

• Guidance reflects macroeconomic, competitive, and regulatory uncertainties.

• Continued investment in logistics ecosystem, last-mile expansion, and green initiatives.

• Targeting further development in LTL, cloud warehousing, international, and cold-chain logistics.