Meituan has posted a robust quarterly scorecard following an intense period of industry rivalry, with core profitability staging a broad recovery and multiple financial metrics comfortably surpassing market consensus.

MEITUAN-W reported second-quarter 2026 revenue of RMB 104.64 billion, approximately RMB 3.5 billion ahead of the Bloomberg consensus estimate. Adjusted net profit came in at RMB 2.52 billion, sharply above the projected RMB 340 million, while adjusted EBITDA reached RMB 4.1 billion, up 47.3% year-on-year and also beating expectations. The company recorded operating profit of RMB 2.69 billion for the quarter, versus market forecasts of an RMB 850 million loss.

The core local commerce segment emerged as the standout performer — operating profit rebounded to RMB 5.67 billion, a 52.3% improvement year-on-year, reversing the RMB 2 billion operating loss posted in the prior quarter. Operating margin expanded to 7.9% from 5.7% in the same period last year. Meituan attributed the sharp profitability recovery to continued improvements in order mix and user composition, alongside more disciplined marketing spend.

Revenue Beats Across the Board with Return to Profitability

Meituan's overall second-quarter revenue grew 14.4% year-on-year to RMB 104.64 billion, roughly RMB 3.5 billion above the Bloomberg consensus. Cumulative first-half revenue stood at RMB 195.68 billion.

Quarterly profit attributable to the company reached RMB 2.16 billion, compared with RMB 365 million in the year-ago quarter and a RMB 6.83 billion loss in the first quarter of this year — a marked sequential improvement. Management noted this marked the first profitable quarter after multiple periods of intense industry competition.

By segment, core local commerce revenue rose 10.1% year-on-year to RMB 71.53 billion, while new initiatives revenue grew 25.0% to RMB 33.11 billion, both exceeding market projections. Gross profit reached RMB 35.09 billion, above the RMB 31.73 billion consensus, with gross margin improving year-on-year.

Core Local Commerce: Profitability Rebounds Sharply

Operating profit for the core local commerce division climbed to RMB 5.67 billion from RMB 3.72 billion in the same period last year, with operating margin expanding 2.2 percentage points year-on-year to 7.9% — a substantial 11.1 percentage point improvement sequentially.

Meituan attributed this turnaround to two key drivers: proactive curtailment of user incentive spending in favor of high-quality growth, and seasonal factors that lowered the per-order cost of instant delivery. Delivery service revenue resumed positive growth, up 13.1% year-on-year to RMB 26.8 billion. Product sales revenue tied to self-operated categories, including pharmaceuticals and alcohol, surged 78.9% year-on-year to RMB 3.59 billion.

The company observed that the food delivery industry is gradually shifting from heavy subsidy competition toward operational efficiency, with core user stickiness strengthening further. Verticals such as Meituan Flash Warehouse, Waima Liquor Delivery, and Squirrel Convenience continue their expansion, while repeat purchase frequency among existing Meituan Instashopping users has steadily improved, with particularly strong growth among younger new users.

New Initiatives Narrow Losses While Overseas Expansion Accelerates

Revenue from the new initiatives segment grew 25% year-on-year to RMB 33.1 billion, with operating losses narrowing to RMB 1.74 billion from RMB 1.88 billion in the prior-year period. The operating loss margin improved to 5.3% from 7.1%.

Fresh grocery retail business Xiaoxiang Supermarket accelerated its city expansion, with private-label products contributing an increasing share of transaction value, and opened its third physical store in Hangzhou in July.

International operations under the Keeta brand sustained strong growth across markets. Hong Kong has achieved stable profitability, Middle East operations continue to show sequential operating efficiency gains, and the Brazil market remains in the exploration phase centered on São Paulo. Meituan stated it will continue leveraging its product, technology, and operational strengths to enhance consumer and delivery experiences in international markets.

AI Investment Accelerates with R&D Spending Up Over 20%

Second-quarter research and development spending increased 22.5% year-on-year to RMB 7.67 billion, representing 7.3% of revenue compared to 6.8% previously — the fastest-growing expense line, driven primarily by heightened investment in AI technology at the corporate level.

Meituan launched the industry's first full-scenario AI solution for instant retail and deployed specialized AI agents across catering, service retail, healthcare, and hotel travel to help merchants enhance operational efficiency. The company is repositioning itself from a mere "online channel" for merchants to an "AI operations partner."

Usage of the AI assistant Xiaotuan has increased, contributing to a noticeable uptick in overall platform user activity. Meituan indicated that deep integration of AI with local life scenarios will be a core differentiator in future competition.

Disciplined Marketing Spend Improves Cost Structure

Sales and marketing expenses totaled RMB 24.72 billion in the quarter, up 11.5% year-on-year — below the pace of revenue growth. As a percentage of revenue, these expenses declined 0.6 percentage points to 23.6% from 24.2% a year ago, reflecting more rational subsidy deployment.

Cost of revenue reached RMB 69.55 billion, up 13.2% year-on-year, with its share of revenue dipping 0.6 percentage points to 66.5% from 67.1%, benefiting from operating leverage on revenue growth and improved profitability in the grocery retail segment.

As of June 30, 2026, Meituan held RMB 104.7 billion in cash and cash equivalents plus RMB 63.6 billion in short-term wealth management investments, for a combined liquidity buffer of over RMB 168 billion.

Operating activities generated net cash inflows of RMB 9.7 billion in the second quarter, while financing activities saw net outflows of RMB 18.2 billion, primarily for debt repayment and redemption of convertible bonds. Additionally, the company holds strategic investments classified as long-term holdings, including a 12.66% stake in Li Auto, 3.86% in Zhipu AI, and 7.61% in Unitree Robotics. A fair value gain of approximately RMB 22.2 billion on the Zhipu investment was recognized during the quarter in other comprehensive income, without affecting the income statement.

For the first half of the year cumulatively, Meituan recorded a net loss of RMB 4.67 billion, mainly reflecting the significant first-quarter loss, although first-half operating cash inflows reached RMB 2.72 billion, underscoring the resilience of its cash-generation capability.