Meituan-W (Meituan) reported a 5.6% year-on-year revenue increase to RMB91.04 billion for the three months ended 31 March 2026, but swung to a net loss of RMB6.83 billion from a RMB10.06 billion profit a year earlier as cost escalation outpaced topline growth.
Gross profit dropped 19.0% to RMB25.97 billion, with the gross margin contracting to 28.5% from 37.2%. Cost of revenues surged 20.2% to RMB65.07 billion, equivalent to 71.5% of sales versus 62.8% in the prior-year period, reflecting higher courier incentives, expanded retail operations and overseas business growth.
Operating expenses amplified pressure on margins: • Selling and marketing expenses jumped 51.1% to RMB22.97 billion, rising to 25.2% of revenue from 17.6%. • Research and development spending increased 22.0% to RMB7.04 billion (7.7% of revenue) as the company accelerated AI investment. • General and administrative costs grew 11.9% to RMB2.94 billion, steady at 3.2% of revenue.
Consequently, Meituan recorded an operating loss of RMB6.47 billion versus a RMB10.57 billion profit in Q1 2025, pushing the operating margin to –7.1% from +12.3%. Adjusted EBITDA deteriorated to –RMB3.05 billion from +RMB12.30 billion, while adjusted net loss reached RMB4.97 billion against a RMB10.95 billion profit a year earlier. A RMB745.7 million fine from the State Administration for Market Regulation weighed on other gains.
Segment performance diverged. • Core Local Commerce revenue was broadly flat at RMB64.06 billion (+0.1%), but the business moved from a RMB13.49 billion profit to a RMB2.03 billion loss; the margin slid to –3.2% from +21.1% amid intensified competition and higher user-acquisition costs. • New Initiatives revenue rose 21.3% to RMB26.98 billion, driven by grocery retail and overseas operations. Segment operating loss narrowed to RMB2.12 billion, with the margin improving to –7.8% from –10.2%.
On a sequential basis, group revenue dipped 1.1% versus Q4 2025 due to seasonality, while the operating loss narrowed markedly from RMB16.07 billion, aided by lower promotional spending and improved efficiency in grocery and overseas units.
Liquidity remained solid. Cash and cash equivalents stood at RMB117.03 billion and short-term treasury investments at RMB63.34 billion as of 31 March 2026. The gearing ratio was approximately 71%, reflecting increased borrowings of RMB42.69 billion and notes payable of RMB58.04 billion. Net operating cash outflow amounted to RMB7.01 billion, offset by RMB24.79 billion raised from new bank borrowings during the quarter.
Post-period, Meituan redeemed US$1.48 billion of its zero-coupon convertible bonds due 2028 on 27 April 2026, as previously announced.