Uxin Limited (UXIN) Q4 2025 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to Uxin's Earnings Conference Call for the quarter ended December 31, 2025. [Operator Instructions] Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to your host for today's conference call, Ms. [ Ali Wang ]. Please go ahead, [ Ali ].

Thank you, operator. Hello, everyone. Welcome to Uxin's earnings conference call for the fourth quarter and full year ended December 31, 2025. On the call with me today, we have D.K., our Founder and CEO; and John Lin, our CFO. D.K. will review business operations and company highlights, followed by John, who will discuss financials and guidance. They will both be available to answer your questions during the Q&A session that follows. Before we proceed, I would like to remind you that this call may contain forward-looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our filings with the SEC. Now with that, I will turn the call over to our CEO, D.K. Please go ahead, sir.

[Interpreted] Good day to everyone, and thank you for your continued interest and support. It's a pleasure to welcome you on our earnings call today. To better communicate with our domestic and international investors, I will be discussing our performance over the last year as well as providing insights into our prospects in both Chinese and English. China's vehicle ownership has approached 370 million units, forming a large and growing base that continues to unlock significant potential for vehicle recirculation. In 2025, used car transaction volume in China exceeded 20 million units for the first time, accounting for approximately 5.5% of total vehicle ownership, well below the 10% to 15% level typically seen in more mature markets. As such percentage rises towards that level, annual used car transaction volume could reach 35 million to 50 million units based on current vehicle ownership alone. Consumer expectations for products, services and overall experience in the used car industry continue to rise. We have observed that they are no longer satisfied with availability alone and increasingly value transparency and vehicle conditions, fare pricing, professional service and reliable after-sales support. We believe that in the trillion RMB market, which remains at an early stage of development, those who can systematically address these pain points will be well positioned to lead the transformation and upgrading of China's used car industry. Against this backdrop, Uxin is redefining used car transactions through a modern retail approach. We leveraged our advanced self-operated reconditioning factory to ensure vehicle quality and provide a one-stop purchasing experience and comprehensive after-sales support through our off-line superstores and online marketplace. As a result, buying and selling used cars could become a simple, transparent and trustworthy as purchasing standardized retail products. In 2025, despite continued intense price competition in the new car market, which created challenges for the used car industry, our business maintained strong growth momentum. Our full year retail transaction volume reached 51,110 units, up 135% year-over-year, marking the second consecutive year of more than 130% growth. Total revenues reached RMB 3.24 billion, representing a 79% increase year-over-year. Meanwhile, as both inventory and sales continue to scale up, our inventory turnover days for vehicles available for sale remained stable at approximately 30 days. During the year, we also began large-scale replication and nationwide expansion of our superstore model. Building on our existing superstores in Hefei and Xi'an, we opened 3 new superstores in Wuhan, Zhengzhou and Jinan, establishing a scalable operating system that can be replicated across regions. Our mature superstores in Xi'an and Hefei continued to ramp up, each achieving over 20% market share in their respective cities. Wuhan as the first replicated superstore after our model has been validated, delivered stronger sales growth and profitability than our earlier superstores at the same stage. Zhengzhou and Jinan superstores further improved upon Wuhan's performance. These achievements are supported by core capabilities that we have built over time and continue to strengthen. First, our pricing capability continues to evolve. We have accumulated the industry's largest set of real transaction data from our self-operated used car sales, and this data continues to grow, roughly doubling each year. This enables our pricing model to become increasingly precise. Our digital systems respond rapidly to market changes, allowing us to maintain real-time pricing competitiveness on both sourcing and sales. As a result, we are well positioned to navigate industry volatility and systematically improve vehicle-level profitability while sustaining high inventory turnover efficiency. Second, we have built an innovative integrated factory warehousing retail business model. Each of our superstores is supported by a used car reconditioning factory forming China's largest, most advanced and most efficient supply system for high-quality used vehicles. We have established scalable advantages over traditional dealers in quality control, reconditioning efficiency and cost optimization. Leveraging the reconditioning capabilities at our self-operated factories, we have expanded the used car service value chain and are able to provide full life cycle vehicle services, including financing, insurance, extended warranties, accessories and repair and maintenance services, similar to those offered by new car dealers. Compared with traditional used car dealers that primarily offer financing services, our revenue streams are more diversified with greater potential for profitability improvement. Meanwhile, most of our superstores carry inventory of more than 2,000 vehicles and serves as a landmark used car retail destination in its local market. Landmark superstores help build customer trust. Through our in-store service, vehicle display and experience design, customers can enjoy a professional, transparent and trustworthy retail experience at our superstores. Our Net Promoter Score has reached 67 and customer satisfaction and brand reputation remain at industry-leading levels. We believe that our sales conversion efficiency, together with our ability to generate organic traffic through a strong word of mouth provides us with significant advantages over traditional used car dealers. We clearly see that Uxin is advancing rapidly along a validated and continuously strengthening development path. Looking ahead to 2026, we will continue to increase inventory and sales across our existing 5 superstores, and we plan to open 4 to 6 additional superstores during the year, further strengthening our nationwide network. Based on these plans, we expect both our full year retail transaction volume in 2026 and revenue to grow by more than 100%. The modernization of China's used car industry has only just begun, and Uxin is positioned to benefit from a significant market opportunity. We also recognize that truly sustainable growth is not simply about speed, but is built on the coordinated improvement of scalability, operational efficiency and customer value. We will remain focused on delivering better products and more professional services to our customers while driving higher standards for solutions across the industry and creating long-term value for our shareholders. Once again, thank you for your trust and support. With that, I'd like to turn the call over to our CFO to walk you through the financial results. John, please.

[Interpreted] Thank you, D.K., and hello, everyone. I will now share an update on our financial performance. We delivered another quarter of strong results in the fourth quarter of 2025. Retail transaction volume reached 19,160 units, representing a 37% sequential increase and a 124% increase year-over-year, significantly outperforming the overall China used car market, which recorded a year-over-year growth rate of approximately 6% during the same period. This demonstrates that our retail business remains firmly on a path of rapid growth. Total retail revenue for the quarter was RMB 1.129 billion, up 38% sequentially and 104% year-over-year. Our average selling price or ASP for retail vehicles decreased from RMB 65,000 in the same quarter last year to RMB 59,000 this quarter, but slightly increased from RMB 58,000 in the last quarter. While ASP declined as we shifted toward a more affordable inventory mix, the strong growth in transaction volume largely offset the pricing impact and supported overall revenue expansion. Our current inventory structure is well aligned with mainstream consumer demand, and we believe pricing has now stabilized at a rational level. As such, we expect ASP to remain relatively steady in the near term. On the wholesale side, we sold 2,474 units in the fourth quarter, up 31% sequentially and 180% year-over-year. Wholesale revenue for the quarter was RMB 38.2 million. Combining retail and wholesale operations, total revenue for the fourth quarter was RMB 1.198 billion, representing a 36% sequential increase and a 101% year-over-year increase. Our gross margin for the fourth quarter was 6.8%, down 0.7 percentage points from 7.5% in the last quarter. This was primarily due to promotional activities in the new car market during the fourth quarter, which put pressure on profitability across the used car industry. In addition, we opened a new superstore in Zhengzhou in September and another in Jinan in December. And newly opened superstores typically operate at lower gross margins during the early stages of ramp-up. Operating expenses also increased during the quarter, primarily due to the initial ramp-up of our new super stores, including investments in staffing and infrastructure. As a result, our adjusted EBITDA loss was RMB 27.2 million. Turning to our full year 2025 results. Retail transaction volume totaled 51,110 units, representing a 135% year-over-year increase. Full year retail revenue was RMB 3.021 billion, up 19% year-over-year. Total revenue reached RMB 3.24 billion, an increase of 79% year-over-year. In 2025, we opened 3 new superstores in Wuhan, Zhengzhou, and Jinan, marking a new phase of rapid nationwide replication and expansion. These new superstores have ramped up more quickly than our earlier locations, continuing to drive growth in both our sales volume and overall financial performance. Gross margin for the full year was 6.7%, remaining stable compared with last year despite lower margins during the early ramp-up stages of newly opened superstores. This continued improvement in profitability from our mature superstores enabled us to maintain stable margins while expanding rapidly. Turning to expenses. SG&A and R&D expenses totaled RMB 450 million, representing 13.9% of total revenue, a significant improvement from 24.3% last year, reflecting meaningful progress in cost control and operating leverage. Adjusted EBITDA loss for the full year was RMB 57.9 million, narrowing by 28% year-over-year. Adjusted EBITDA margin was minus 1.8%, an improvement of 2.7 percentage points from last year. We have disclosed additional details regarding our full year financial performance and our recently published fourth quarter and annual results. So I will not repeat all the figures here. Turning to our outlook for the first quarter of 2026. While the first quarter is traditionally a seasonally soft period for the used car industry due to the Chinese New Year holiday, we expect retail transaction volume to be between 16,200 and 16,500 units, representing year-over-year growth of over 110%. Total revenue is expected to be between RMB 1.05 billion and RMB 1.07 billion. Lastly, to reiterate D.K.'s comments on our full year outlook. In 2026, we plan to open 4 to 6 new superstores with sales volume and inventory continuing to ramp up at our existing superstores, along with new store openings, we are confident in achieving over 100% year-over-year growth in both retail transaction volume and revenues in 2026. This concludes our prepared remarks today. Operator, we're ready for questions.

[Operator Instructions] The first question today comes from Dai Wenjie with SWS.

[Interpreted] My first question is the company delivered another quarter of strong growth in both sales volume and revenue. Management also provide some color on the changes in gross margin. So as you plan to open 4 to 6 new superstores in this year, how should we think about the gross margin going into 2026 and ASP? Could management share your latest view on used car pricing trends this year? Are you starting to see some signs of stabilization?

[Interpreted] Thank you for the question. Let me take this one. Okay. It's John. Gross margin declined sequentially in the fourth quarter, mainly due to the ramp-up of newly opened superstores. We opened our Zhengzhou superstore in September and our Jinan superstore in December. During the initial ramp-up phase, we adopt a more competitive pricing strategy to drive traffic and establish market presence, resulting in a narrower spread between sourcing costs and selling prices compared to our mature stores. In addition, the penetration of value-added services also takes time to ramp up as our market share and brand recognition improve in these markets. It generally takes around 6 to 9 months for new stores to reach the gross margin level of our mature stores. At the same time, our new car market experienced a slowdown in sales last December and dealers stepped up promotional activities, which put pressure on used car margins. According to our operating data for the first quarter of 2026, we have already seen meaningful improvement in the gross margins of our newly opened superstores in Zhengzhou and Jinan. Overall gross margin has begun to recover compared to the fourth quarter of 2025, and we expect it to return to above 7%. Regarding ASP, according to data from the China Automobile Dealers Association, the national average transaction price of used cars has started to recover since the fourth quarter of last year. We're seeing a similar trend in our own operating data. Our retail ASP increased sequentially for 2 consecutive quarters, reaching RMB 59,000 in the fourth quarter of 2025, and we expect it to exceed RMB 61,000 in the first quarter of 2026. In addition, due to factors such as rising raw material costs, the phaseout of purchase tax incentives and government subsidies as well as regulatory guidance aimed at reducing excessive price competition, we expect new car pricing to become more stable in 2026 compared with the past 3 years. More stable new car pricing will also support used car prices. As a result, we expect our retail ASP to show a stable to upward trend in 2026 compared with 2025. Given that we expect retail transaction volume to grow by over 100% year-over-year in 2026, revenue growth is expected to outpace transaction volume growth. That's my answer. Thank you.

The next question comes from Fei Dai with TF Securities.

[Interpreted] I have a question on customer acquisition. How should we think about the customer acquisition channels for new superstores compared with your mature stores? Are there any key differences?

Thank you for the question. Let me address your question. Customer acquisition for new superstores mainly comes from 3 channels. First, Uxin is a well-recognized brand in China's used car market. As a result, whenever we enter a new city, we already have a certain level of traffic accumulation on the Uxin Used Car app in that market. This is a key difference compared with many regional dealers. In other words, during the initial ramp-up phase of a new superstore, we are able to leverage our existing brand awareness and online traffic base to reactivate and reengage existing users, bringing in the first batch of users and leads into the new market. Second, we typically carry out a series of marketing and PR campaigns around new superstore openings. In addition to targeted marketing on digital platforms, we also collaborate with local governments when launching new superstores. Local governments often provide promotional resources and local media support, which helps us quickly build awareness and reach potential customers in the new market. Third, we also partnered with vertical automotive platforms and media to capture traffic and leads from third-party channels. Given the competitiveness of our vehicle quality and pricing, we are able to achieve strong exposure and conversion on these platforms. As the new stores continue to operate and mature in local markets, the cities where our superstores are located to gradually become destination markets for car purchases and walking traffic increases over time. At the same time, as transaction volume scales up, customer distraction and brand reputation continue to build. And referrals from existing customers also increased, further improving conversion and creating a positive customer acquisition cycle. Service quality and customer experience continues to increase, and our customer acquisition costs continue to decline. That's my answer. Thank you. .

The next question comes from [ Shinjing Li ] with China Merchant Securities.

[Interpreted] Congratulations on entering a new phase of nationwide expansion. From a long-term perspective, could management share some color on your store expansion potential across China and how many stores do you think you can ultimately roll out over time?

Thank you for the question. Let me take this one. As of the end of 2025, we had 5 superstores in operation. In March this year, we opened a new superstore in Tianjin. We expect to open 4 to 6 superstores in 2026 with a goal of having more than 10 stores in operation by the end of 2026. We are very confident in our long-term store expansion potential across China, primarily because of the sheer size of the used car market. China's vehicle ownership has already exceeded 350 million units. And on top of this large base, there are many cities that are well suited for deploying Uxin's large-scale used car superstores. Our assessment of store expansion potential is mainly based on the level of vehicle ownership in each city as well as our target market share. At a high level, for a city with vehicle ownership of 500,000, we believe it can support Uxin superstore with around 1,000 units of inventory, assuming 10% to 15% of vehicle ownership is transacted as used cars annually, such a city would generate annual used car transactions of approximately 50,000 to 80,000 units. Based on the over 20% market share that our mature stores have already achieved a Uxin superstore could achieve annual sales of over 10,000 units, which corresponds to an inventory level of around 1,000 units. Applying this framework today, there are more than 30 cities in China with vehicle ownership exceeding 3 million, which can support super stores with over 5,000 units of inventory. There are more than 70 cities with vehicle ownership exceeding 1 million, which can support superstores with over 2,000 units of inventory. In addition, there are more than 100 cities with vehicle ownership exceeding 500,000, which can support superstores with over 1,000 units of inventory. In the long run, we believe there are more than 200 cities across China where we can potentially operate supporting annual retail transaction volume of over 3 million units. Thank you. That was my answer.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you all for participating on today's conference call. We look forward to reporting to you soon.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]