Meituan Returns to Profitability with 14.4% Revenue Growth

Meituan reported a net profit of RMB2.2 billion for the second quarter of 2026, reversing prior losses and marking a substantial improvement in its financial performance. This profit was achieved on revenues of RMB104.6 billion, a 14.4% increase compared to RMB91.5 billion in the same period of 2025. The return to profitability signals a potential stabilization after a period of intense competition within the Chinese food delivery and local services market.

Core Local Commerce revenue grew 10.1% year-over-year to RMB71.5 billion, fueled by a recovery in on-demand delivery profitability. Importantly, the Core Local Commerce operating margin turned positive at 7.9%, a 2.2 percentage point improvement year-over-year, demonstrating increased operational efficiency. The New Initiatives segment, encompassing grocery retail and overseas businesses, saw revenue increase by 25.0% to RMB33.1 billion, with product sales specifically growing 45.1% year-over-year. However, this segment still registered an operating loss, though it narrowed by 7.6% year-over-year to RMB1.7 billion.

Overall, the company demonstrated improved profitability metrics. Adjusted EBITDA increased by 47.3% to RMB4.1 billion, and adjusted net profit jumped 69.0% to RMB2.5 billion. The net operating cash inflow was a robust RMB9.7 billion. As of June 30, 2026, Meituan held RMB104.7 billion in cash and cash equivalents, alongside RMB63.6 billion in short-term treasury investments, indicating a strong liquidity position. Net provisions for impairment losses on financial and contract assets increased to RMB320.9 million, a notable shift from RMB19.2 million in the prior year.

The company’s cost of revenues increased by 13.2% to RMB69.5 billion, but as a percentage of revenues, it decreased to 66.5% from 67.1% in the same period of 2025, reflecting operating leverage. Selling and marketing expenses rose by 11.5% to RMB24.7 billion, while research and development expenses increased by 22.5% to RMB7.7 billion, largely driven by investments in artificial intelligence. Meituan’s financial results indicate a successful navigation of a dynamic consumer environment and intensified industry competition. The shift to profitability, coupled with strong cash reserves and improving operating margins, demonstrates a strengthening financial foundation for the company.

Meituan’s return to profitability and revenue growth reflects a broader stabilization within the Chinese tech sector, following a period of regulatory scrutiny and economic uncertainty. The company’s ability to increase revenue while simultaneously improving operating margins suggests successful execution of its strategic initiatives, including a focus on operational efficiency and disciplined marketing spending. The increased investment in AI, while contributing to higher R&D expenses, signals a commitment to long-term innovation and competitive advantage, although the ultimate return on these investments remains to be seen.