Autohome (NYSE:ATHM) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call.

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Summary

Autohome reported net revenues of 1.05 billion RMB for Q1 2026, with a decline in gross margin to 75.5% from 78.3% year-over-year.

The company is focusing on transforming into a comprehensive automotive service ecosystem, with initiatives including a brand refresh, an upgraded app, and new retail business features.

Autohome has launched operations in Thailand and aims to expand its cross-border used car export platform, marking a new development phase with international market focus.

AI and large language models are being integrated into the company's operations, enhancing content relevance and operational efficiency.

Despite challenges in the Chinese auto market, Autohome remains committed to shareholder returns, announcing a cash dividend plan and actively executing share repurchases.

Full Transcript

OPERATOR

Ladies and gentlemen, thank you for standing by for Autohomes first quarter 2026 earnings conference call. At this time, all participants are in listen only mode. A question and answer session will follow management's prepared remarks. As a reminder, this conference call is being recorded. If you have any objections, please disconnect at this time. A live and archived webcast of today's call will be available on Autohomes IR website. It is now my pleasure to introduce your host, Sterling Song, Autohome's IR Director. Mr. Song, please go ahead.

Sterling Song (Investor Relations Director)

Thank you. Hello everyone and welcome to Autohome's first quarter 2026 earnings conference call. Earlier today, Autohome distributed its earnings release which can be found on the company's IR website at ir.autohome.com.cn. Joining me on today's call is our Chief Financial Officer, Ms. Kui Yan Zheng. Management will go through the prepared remarks first, which will be followed by a Q and A session where they will be available to answer your questions. Before we begin, please note that today's discussion contains forward-looking statements made under the Safe Harbor provision of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange. Autohome undertakes no obligation to update any forward-looking statements except as required under applicable laws. Please also know that Autohome's earnings press release and today's conference call include discussions of certain unaudited non-GAAP financial measures. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in our earnings release. I'll now turn the call over to Autohome's Chief Financial Officer, Mr. Kui Yan Zheng for opening remarks. Kui Yan Zheng, please go ahead. Thank you. Hello everyone, this is Kui Yan Zheng. Thank you for joining our earnings conference call today. We began the year by rolling out a series of initiatives to accelerate the transformation of our platform from automotive information media into a comprehensive automotive service ecosystem. On the user front, we've initiated a major brand refresh and APB upgrade, shifting our focus towards users' interest and the end-to-end car purchase journey. To more precisely address consumers' demand by strengthening the development of premium content and expanding our new media matrix. We continue to grow our user base steadily with average mobile daily active users surpassing 80 million, a new all-time high. With regards to our transaction platform development, our new retail business launched online car purchase feature and began piloting collaborative initiatives with multiple dealers to explore new automotive e-commerce experiences. We also continue to advance our global expansion. Our overseas platform also went live, officially launching operations in Thailand and our global cross-border used car export platform also went live together. These advancements mark the beginning of a new development phase for Autohome characterized by a two circulation model spanning both domestic and international markets. As our front-end business continues to expand, we are strengthening our core platform capabilities in parallel. AI and large language models are increasingly becoming a foundational pillar of our infrastructure. On the external services front, we provide our partners with an AI-powered intelligent product mix. On the internal operations front, we've already integrated large language model capabilities into the company's workflow. As a result, AI-driven platform operations are rapidly advancing from isolated efficiency gains to end-to-end systematic transformation. Specifically, in March of this year, our overseas content platform officially launched operations in Thailand, extending our professional strength into international markets with a focus on localized operations. The platform has onboarded local creators and established a professional content system. To date, it covers 100 Chinese new energy vehicle model series and includes more than 10,000 product specifications, laying the groundwork for a China NEV database in Thailand. In addition, leveraging the momentum of the Bangkok International Motor Show, we partnered with six Chinese automotive brands and 12 media outlets to execute a comprehensive communications campaign and build a diverse topic matrix. This campaign generated over 140 million views and over 530,000 user interactions across platforms, giving us a strong start in our first overseas market and creating new opportunities to support the long-term diversified development of our business. In terms of Amstein development in the fourth quarter, Auto Home media Amstein ecosystem improved in both quantity and quality. The number of premium creators across various fields exceeded 650, and cumulative reach across new vineyard platforms approached 150 million users. The share of top-tier and middle-tier influencers increased significantly and further enhanced the overall health of the ecosystem through various approaches including holiday-themed marketing campaigns, creator incentives, deep engagement at offline positions, professional driver incubation, and the development of an overseas influencer ecosystem, etc. We are comprehensively building our differentiated content competitiveness. According to Quest Mobile, Auto Home's average mobile daily active users reached 80.73 million in March, representing a year-over-year increase of 4.9%. In the new energy vehicle sector, we continue to focus on Autohome as we build a new transaction ecosystem for the automotive industry. In late April, we launched the online car purchase feature in two cities, Shenzhen and Xi'an. Local Partners dealerships posted competitive local pricing on the mall, enabling users to complete the entire car purchasing process in one go, including online vehicle selection, configuration, and deposit payments. Users can then sign the contract offline and pay the remaining balance before taking delivery. To streamline the car purchasing process and address user concerns, we introduced four key guarantees: officially certified vehicle sources, end-to-end supervision of funds, transparent pricing, and a worry-free refundable deposit policy. From sourcing compliance to fund security, and from transparent pricing to flexible purchasing options, the platform prioritizes user rights at every stage, delivering a secure and trustworthy car purchasing experience. In the area of AI and large language models, we are leveraging AI and large language models to reshape the entire workflow of our platform's content center. From tracking trending hot topics across the Internet to content distribution through an AI-powered smart radar, we continuously monitor online trends around the clock. Combined with larger language model-assisted content packaging and AI-generated automated content, we've effectively integrated professional automotive topics with broader public hot topics, establishing a highly efficient rapid response mechanism. As a result, we have improved content relevance while significantly enhancing operational efficiency. In addition, we have applied both the reverse funnel model and intelligent distribution model to our membership business. The reverse funnel model works by reasoning backward from transactions to derive accurate user profiles and extract the key characteristics of these users, improving alignment between platform content and the high conversion user needs. The Intelligent distribution model breaks through the limitations of isolated platform data by integrating multi-dimensional inputs such as omnichannel user behavior, scenario preferences, and transaction attribution data. This enables smarter, more precise traffic matching as well as more effective user targeting and reach. In the used car business, during the fourth quarter, we launched two core business platforms: a full process Used Car Selling Service platform and the Cross Border Used Car Export Service Platform. Together they form a dual engine model of improving quality and efficiency in domestic services while expanding into global markets. This platform provides individual car owners, domestic dealers, and overseas buyers with one-stop integrated solutions, helping the industry move into a new stage of high quality development defined by efficiency, transparency, and security. Our full process Used Car Selling Service platform offers free official inspection, dedicated concierge services, and nationwide price inquiry capabilities. Through deep integration of our underlying digital systems, we've established a standardized service system that covers the entire lifecycle of a car owner's selling journey. The platform is currently in pilot operation in two cities and we plan to accelerate the rollout to more cities nationwide. Our cross-border used car export service platform represents our initial effort towards capturing growth opportunities in overseas markets. It enables dealers to list vehicles on both domestic and international platforms with a single click. Each exported vehicle includes a detailed inspection report and complete maintenance and insurance records. These standardized services help address overseas buyers' concerns and reduce the trust gap associated with cross-border transactions. Going forward, we'll introduce more vehicle sourcing partners to further enrich the supply of export-qualified vehicles. We also plan to build an end-to-end closed loop system that integrates domestic vehicle sourcing and aggregation, cross-border transaction matching, and overseas delivery fulfillment, enabling used car dealers to execute compliant cross-border exports with no barriers. Overall, since the beginning of 2026, we've been actively advancing new initiatives and strategic deployments across multiple business areas including our content ecosystem, new retail, and used car businesses while driving business development. We've maintained a healthy balance sheet and continue to deliver on our commitment to providing stable shareholder returns. Today, our Board of Directors approved a cash dividend plan for the first half of 2026 and we have been actively executing share repurchases in the open market. Looking ahead, we will remain focused on emerging growth areas while maintaining stringent cost controls to ensure long-term value for our shareholders.

OPERATOR

Thank you. We will now begin the question and answer session. To ask a question now, please press Star 11 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 11 again. A moment for our first question and our first question comes from the line of Thomas Chong of Jefferies. Please ask your question. Thomas, your line is open. Good evening.

Thomas Chong (Equity Analyst)

Thanks management for taking my question. My first question is about the industry trend we have seen. Auto industry is a bit soft in Q1. Can management provide more color about your thoughts about the auto industry outlook? And my second question is about auto, home and hire. Can management comment about the updates regarding the synergies? Thank you. Thank you. Thank you for your question. As you mentioned, in China the auto market weakened in the fourth quarter this year. Retail sales of a passenger vehicle declined 17% year over year while nav sales declined 21% year over year. So it is the first quarter in history where EUV sales recorded a year over year decline in the past the first time. And in April this year, retail sales for both passenger vehicles and EVs both continued to fall further declining 22% and 7% respectively compared to the same period in 2025. So this is the result of multiple pressures converging from government policy, industry conditions as well as consumer. The fiscal government policy judgment and the putting forward of consumer demand, you know is the core reason main reason behind the sales decline. As you know the policy exempting the new energy vehicle from purchase tax expired at the end of December last year. So this policy exploration of really caused consumers to bring forward their car purchases. So we saw EV retail sales reach nearly 1.34 million units in December last year alone. So this is a record high in history. This also directly put forward part of the demand that would otherwise have appeared in the first quarter this year. Jinyana Chung for the Gobuan. So since the beginning of 2026 as you know the government subsidies have been scaled back. The policy driven boost to demand weakened. At the same time the overall consumer confidence still remains relatively cautious in Q1. So this further dampens consumers willingness to purchase vehicles. In addition, the auto market in the first quarter last year was a period of cyclical recovery. So it creates a relatively high base for comparison. The combination of a tougher year over year comparison last year and the softer demand this year underscores the market pressures seen in the first quarter. So it formed the primary backdrop for the short term decline auto sales. So from an industry perspective we can see the overcapacity in the auto sector further exacerbated the market pressure and reinforce consumers wait and see attitude. So on one hand dealer invention, dealer inventories still remain at high level. Since the beginning of this year the dealer inventory warning index has stayed above the kosher threshold for several months already. So it increased the pressure on dealers cash flows, the dealers losses bread border. So in order to recover capital dealers have increased their discounts. So this drive the prices lower. So in this way it has strengthened our consumers expectations that the auto prices will continue to fall down. It further lessening the purchasing decision cycle and slowing the transaction conversion. O yeah. So on the other hand operating pressures on major OEMs also continue to spread. Among the top 10 OEMs in the fourth quarter this year, nine of them reported year over year sales declines. We also observed that the profit margin for the China auto manufacturing industry fell to just 3.2% for three months this year. This is a record low in history and it is further declining from 4.1% compared with last year. So this really reflects the widespread reality facing the whole industry. The OEMs are relying on pricing cut to drive sales volumes while both prices and volumes are simultaneously under great pressure. Lee Farming. Another point is that you know in the future exports auto exports will serve as the key stabilizing force for the auto industry. According to the data from CPCA China Passenger Car Association, China exported cumulative 1.83 million vehicles in the first quarter this year which is a year over year growth of 61%. So Nevada exports continue to account for large percentage still significantly a high share. So it remains as the core growth driver in overseas expansion. So yeah, go ahead about the Synergies collaboration with Higher Group. You know the transaction has completed more than six months so the current collaboration is still focused on Synergies execution in the used car business and offline services scenario etc. For Cartech, its used car business has been developing for so many years with a presence across multiple cities nationwide in China and it has extensive experience in integrated online to offline operations and dealership store management, etc. For Higher Group it also brings us expertise in consumer service systems and management models which are all areas for collaboration and knowledge share with us. For example, our new retail business has already began cooperation with Cartek in the used car segment including the vehicle sourcing and vehicle inspection processes. Cartek's vehicle customization and the charging port charging station business have also created synergistic opportunities with so going forward in the future, you know we plan to continue deepening and expanding cooperation in the above area. Thank you.

OPERATOR

Thank you. We will now take our next question from Brian Gong of City. Please ask your question. Brian, your line is open.

Brian Gong (Equity Analyst)

Thanks management for taking my questions. I have two questions. First is that commencement shares feedback from dealers during the contract renewal period this year. Should we expect continuous decline on sales lease business given dealer's worsening conditions? And secondly for new retail business, what is our strategies for expansion now? Does this business approaches the fix that we can scale up very quickly and how should we view its growth potentials ahead? Thank you. Thank you. Thank you for your question as present. You know for the dealer membership renewal this has been completed this year and overall the dealer customer coverage still remains at stable level even though there is ongoing price wars in the auto market and they are shrinking margins at the retail level. So it's really bring a lot of high inventory pressures for most of the dealers. So for most of the dealers they adopted a more conservative operating approach and the loss making coverage in the Dealer segment has widened and the profitability pressure still remain at the high level in the retail end for the dealers. Despite there the pressure on the overall vehicle sales for dealers, their demand for high quality sales needs still continue to increase. You know, autohome still remains one of the most important customer acquisition channels for dealer customers. So on the membership services side, you know, we are improving the traffic matching accuracy and distribution efficiency through the data driven reverse funnel model and the intelligent distribution model So going forward, Autohome will continue to work closely with the dealer customers to further explore solutions which can help them to break through the current operation challenges for the dealer customers. We aim to support dealerships in increasing the customer traffic and improving the conversion rate while also, you know, expand we try to expand the integrated O2O business initiatives. You know, our goal is to help dealer customers improve their revenues and profitability while mitigating as much as possible the operational impact caused by the broader auto industry downturn. Choya, For our new retail business, you know, we are still currently exploring, you know, to allowing local dealer customers to join in our network which is the hotel, auto, home, more platform and display dealer vehicle inventory and the final transaction pricing online. So this model is just quite similar to Taobao marketplace model. So through cooperation with such dealers, we are able to provide users with a seamless O2O online to offline one stop. We incorporate the experience so which can cover the entire process from the online vehicle selection, browsing personalized the configuration to online deposit payment and convenient offline vehicle delivery and pickup. And our target is to create an e commerce like auto transaction platform which can deliver an efficient user friendly experience for our customers. You know, at present we are piloting this model online car purchasing model in two cities, Xi' an and Shenzhen. So far so good. And once this model has been fully, you know, upgraded and validated, you know, we will further to expand it into other additional cities. Thank you.

OPERATOR

Thank you. We will now take our next question from the line of Jing Yuan from cicc. Please ask your question. Jing, your line is open. Sense for miment. Taking my question, I wonder what's the company's future plan for shareholder returns going forward?

Jing Yuan (Equity Analyst)

Thank you for your question. As we said, we'll continue to implement our commitment for shareholder returns. And today our board of directors announced the interim cash dividend plan of RMB 500 million for the first half of this year. And we will continue to fulfill our commitment for the full year cash dividend of no less than RMB 1.5 billion. So regardless of the fluctuations in the auto industry, we will consistently place strong emphasis on the shareholder returns and we will maintain continuity and stability in our dividend policy. For the share buyback. You know the our new share by bike program was ratified in March by the board. So until today is almost three months so far, you know we have completed roughly one third of the authorized share repurchase amounts. And so it really reflects our determined attitude and execution. You know we have for Auto Home. We have been consistently prioritized shareholder returns and you know, we established our shareholder return framework, you know, including the cash dividend plus the share buyback. So going forward we'll continue to adhere to our comprehensive shareholder return policy in the future. Thank you.

OPERATOR

We will now take our next question from the line of Richie sun of hsbc. Please go ahead Richie. Your line is open.

Richie Sun (Equity Analyst)

Thank you management for taking my question. I want to ask about the autohom mall business progress. Any metrics to share in the second half outlook? Thank you. Champion. Thank you for your question for detailed number still too early at the moment. You know, for our old home shopping mall, you know our target is try to provide our users with more standardized new cars, certified used car products and the multiple platform level safeguards. For example for the new standard vehicles we aggregate the best selling models from major brands and offer exclusive benefits as well as other transparent final pricings. And so it can address key user pain points such as the difficulty in the price comparison and customers concerns about overpay. And for the high quality used cars, you know, we can rely on our deep cooperation with Cartech to establish a unified inspection and warranty system. So for the online auto industry the overall business model is still not very clear. But we firmly trust that this is the right direction for the whole industry. So from our point of view we do expect that both the new car and the used car transaction business will become new engine for auto homes future growth. So this is our deep understanding for the future of the industry. Thank you.

OPERATOR

Thank you. There are no further questions at this time. I'll turn the call back to management for closing remarks.

Sterling Song (Investor Relations Director)

Thank you everyone. Thank you very much for joining the call today. We appreciate your continuous support and we look forward to updating you on our next quarter's conference call in a few months time. And in the meantime please feel free to contact us if you have any further questions. Thank you very much. Goodbye. Thank you.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.