Meituan Posts First Operating Profit, Revenue Rises 14.4%

Meituan, China’s leading local services platform, reported its first operating profit in recent quarters, reaching RMB2.7 billion for the second quarter of 2026, a dramatic shift from the RMB6.5 billion operating loss reported during the same period last year. This positive swing signals a successful focus on operational efficiency and disciplined spending, particularly within its core on-demand delivery business.

Total revenues for the quarter increased by 14.4% year-over-year to RMB104.6 billion. Revenue from the Core Local Commerce segment rose by 10.1% to RMB71.5 billion, fueled by a 13.1% increase in delivery services revenue. The New Initiatives segment experienced even stronger growth, with revenues increasing by 25.0% to RMB33.1 billion, driven by its grocery retail and overseas businesses. The company attributes improved profitability to a dynamic optimization of its marketing strategy and favorable seasonality, lowering delivery-related costs.

Cost of revenues increased by 13.2% to RMB69.5 billion, but the company managed to improve its gross margin, decreasing to 66.5% of revenues from 67.1% in the same period last year. Selling and marketing expenses increased by 11.5% to RMB24.7 billion, but as a percentage of revenue decreased to 23.6%, indicating more disciplined spending. Research and development expenses also rose, increasing by 22.5% to RMB7.7 billion, driven by increased investment in artificial intelligence.

The turnaround in operating profit is particularly notable within the Core Local Commerce segment, which shifted from an operating loss of RMB2.0 billion in the first quarter of 2026 to a profit of RMB5.7 billion this quarter. This improvement reflects the company’s strategic focus on quality growth and efficiency gains. The results come amidst a complex macroeconomic environment, with ongoing geopolitical tensions and disruptions to Asian shipping and port logistics potentially impacting supply chains.

Meituan’s results demonstrate a clear improvement in operational efficiency and profitability. The company’s ability to turn an operating loss into a profit, coupled with strong revenue growth, positions it favorably within the competitive local services market. The shift towards profitability in the core business, alongside continued expansion in new initiatives, suggests a strengthening financial foundation.