So-Young International Inc. (NASDAQ: SY) reported Q1 EPS of ($0.05), $0.04 worse than the analyst estimate of ($0.01). Revenue for the quarter came in at $25.8 million versus the consensus estimate of $24.75 million.

First Quarter 2020 Financial Highlights

• Total revenues were RMB182.6 million (US$25.8 million1), exceeding the high-end of the Company’s previous guidance of RMB160 million to RMB180 million.
• Net loss was RMB35.9 million (US$5.1 million), compared with a net income of RMB45.9 million in the same period of 2019.
• Non-GAAP net loss2 was RMB21.6 million (US$3.1 million), compared with a non-GAAP net income of RMB51.9 million in the same period of 2019.

First Quarter 2020 Operational Highlights

• Average mobile MAUs were 4.17 million, an increase of 116.8% from 1.92 million in the same period of 2019.
• Number of paying medical service providers on So-Young’s platform were 3,295, an increase of 22.0% from 2,701 in the same period of 2019.
• Number of medical service providers subscribing to information services on So-Young’s platform were 1,862, representing a slight increase from 1,853 in the same period of 2019.

Mr. Xing Jin, Co-Founder and Chief Executive Officer of So-Young, commented, “Despite the significant impact of the COVID-19 pandemic on our business, we delivered solid results during the quarter and are strategically adapting our business to ensure growth when normal operating conditions resume in the second half of 2020. COVID-19 has created a challenging operating environment for the industry and caused great loss globally. We previously anticipated that it would be a difficult quarter and have accelerated the deployment of resources to enhance the user experience.”

“Our strategic focus on enhancing engagement expanded our vibrant community of users and medical aesthetic professionals as average mobile MAUs increased by 116.8% to 4.2 million compared to the first quarter of 2019. We are using a series of creative and incentivizing promotion plans, working more closely with medical aesthetic influencers to generate valuable content. Meanwhile, in order to build a healthier and more regulated ecosystem, we have established an “Authentic Alliance” to enhance information governance on our platform. We are confident that we have the right strategies in place to navigate through this challenging business environment and are well positioned for healthy and sustainable growth once normal operating conditions return.”

“As the COVID-19 pandemic continues to impact consumer behaviors, efficient management of resources and investment in areas that can position us for strong growth once conditions normalize were a priority during the first quarter,” added Mr. Min Yu, Chief Financial Officer of So-Young. “We believe that our strategic investments and expenditure in the first quarter will significantly improve the stickiness of our platform, further enhance the quality of our rich content portfolio and better leverage synergies created across our community. We are well positioned to capitalize on a rebound in macroeconomic conditions and the drivers of our long-term business growth remain very strong.”

GUIDANCE:

So-Young International Inc. sees Q2 2020 revenue of $45.2-49.4 million, versus the consensus of $47.44 million.

For the second quarter of 2020, So-Young expects total revenues to be between RMB320 million (US$45.2 million) and RMB350 million (US$49.4 million), representing a 12.3% to 22.8% increase from the same period in 2019. The above outlook is based on the current market conditions and reflects the Company’s preliminary estimates of market and operating conditions, and customer demand, particularly in view of the potential impact of the COVID-19, the effects of which are difficult to analyze and predict, which are all subject to change.

For earnings history and earnings-related data on So-Young International Inc. (SY) click here.