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Ladies and gentlemen, thank you for standing by for So-Young's first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After management give their prepared remarks, there will be a question-and-answer session. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Ms. Mona Qiao. Please proceed, Mona.

Thank you, operator, thank you everyone for joining So-Young's first quarter 2026 earnings conference call. Joining us today on the call is Mr. Xing Jin, our Chairman and CEO, and Mr. Sha Zhang , VP of finance. Before we begin, please refer to the safe harbor statements in our earnings release, which applies to this call as we'll be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP in our earnings release on our investor relations website and filings with SEC. Please also note all figures mentioned in this call are in RMB. At this time, I'd like to turn the call over to Mr. Xing Jin.

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Hello, everyone, and welcome to today's earnings call.

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Entering 2026, China's medical aesthetic industry continues to evolve, with demand becoming more routine and supply continuing to grow. Large-scale operational capabilities and a uniform delivery framework have become the key mode for top players to achieve high-quality growth. We capitalize on this by expanding our aesthetic center business and advancing our dual engine of scale and efficiency initiative. As a result, we achieved robust performance. In Q1, total revenue reached RMB 433 million, up around 46% year-over-year. Revenue from our aesthetic center business reached RMB 282 million, up around 186% year-over-year.

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Now let's take a closer look at our recent progress across a few core areas.

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Thus, So-Young Clinic continued to lead China's medical aesthetics chain market, ranking number one by center count, treatment volume and user base. Our operational efficiency and profitability also continued to improve.

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In terms of center footprint, as of today, So-Young Clinic has expanded into 17 cities with 59 centers in total. That is a net add of 10 centers compared to year-end 2025. On treatment volume in Q1, verified treatment visits exceeded 148,000, up 172% year-over-year. Number of verified treatments performed was over 325,000, up 164% year-over-year. Our active user base expanded further, reaching over 210,000 by March end. Within that, the number of level three and above core members exceeded 63,000. Core members maintain a high quarterly retention rate as before their LTV, driven by excellent user experience and positive word of mouth. The proportion of new customers from referrals rose to 52% in Q1. By enhancing platform partnerships and content marketing, new customers acquired through public domains continued to grow, while our overall CAC remained well under control.

We also enhanced brand awareness and drove conversion by deepening partnerships with renowned IPs. For example, we launched Disney co-branded pop-ups in major commercial areas nationwide for our Miracle Collagen product line. These campaigns attracted active participation from potential customers and generated remarkable results. On top of that, we invited famous Chinese actress Fan Bingbing and popular Thai actress Mai to experience and endorse our collagen products.

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Moreover, we continue to improve our per-center economic model. Through standardized operations, we accelerated the ramp-up of new centers. As we refined our product portfolio and customer acquisition, our per-center operational efficiency improved steadily. In Q1, the number of profitable centers rose to 41, and 48 centers generated positive operating cash flow. Aesthetic center business gross margin reached 27%, reflecting continued operating efficiency gains.

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This year, we will continue expanding our center footprint and broadening access. We will focus on major Tier 1 cities. As economics of scale take effect, new centers ramp faster and operational efficiency improves further, we expect per-center revenue to keep climbing and the chain's financial model to improve meaningfully.

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Next, let's turn to So-Young's professional medical delivery capabilities and reputation building. The long-term development of medical aesthetic chain business relies on high-quality medical service delivery. To this end, we continue to build core competitiveness across the physician team, diagnosis and treatment quality, and user experience. By March end, our full-time physicians reached about 230, up 9% from year-end 2025, maintaining industry leadership. We have also been enhancing physician capabilities and digitalizing operations to elevate the user experience and ensure consistent medical practice.

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In Q1, we established the So-Young Phoenix Medical R&D and Training Center and National Command and Control Center. Focusing on medical research and training, the R&D center includes in-house labs for energy-based devices, injectables, ex vivo, and testing. This enables us to thoroughly evaluate products and devices in the market. As upstream product offerings continue to diversify, this capability keeps us grounded in clinical fundamentals, not marketing claims. We evaluate products based on clinical evidence to determine whether they are safe, effective, and appropriate. From these findings, our R&D team develops treatment protocols and SOPs. Meanwhile, the training center is now fully operational. All physicians joining So-Young clinics must complete intensive comprehensive training at the center and pass all assessments before practicing.

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The command and control center is the brain of our clinic chain operations. Within it, the safety and compliance office closes the loop on compliance. It allows headquarters to remotely monitor safety and compliance at our clinics, receive offline alerts, and coordinate emergency responses. It enables real-time intervention to ensure medical safety. The user experience office manages the user journey, service design, and complaints. Any user feedback is immediately escalated to headquarters for action, which helps us continuously improve our medical workflows. In addition, the operations office tracks operating data across centers nationwide to keep operations healthy.

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Thanks to our professional medical team, excellent treatment quality, and reliable premium services, we continued to cement our foundation of user trust and reputation. Looking ahead, we will harness So-Young's brand influence and wide market presence to attract more outstanding physicians. That will further enhance our medical delivery capabilities and service quality, reinforcing reputation and brand momentum. In turn, this creates a positive flywheel for long-term business growth.

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Moving to our supply chain. We remain committed to diversifying and reinforcing our supply chain. Through multi-dimensional, in-depth upstream partnerships, we aim for win-win outcomes while driving health industry growth. In April, we announced our partnership with Jinbo Bio-Pharmaceutical. Through joint development, both parties will leverage their respective advantages to pool resources and create value. The partnership grants us exclusive rights to Jinbo's new product, Wei Yi Mei ColPact. On that basis, we launched our Miracle Collagen, offering full-scenario anti-aging solutions using recombinant collagen for head and face. This is our 20th GREEN LABEL product. The launch further reinforces our GREEN LABEL system, one that focuses on compliance, traceability, and price transparency while allowing us to optimize products based on our user feedback. By connecting directly with upstream partners and using reverse customization, we are improving supply chain efficiency and meeting user needs better.

We also launched Enhanced Collagen, which combines Hydrolyse and Collagen Type XVII to address skin dermal irritation. The upgraded Sakura Skin Booster 2.0 further enriched our offerings. Through deep supply chain collaboration and accelerated rollout of proprietary products, our Blockbuster strategy is unlocking growth momentum. Revenue from Blockbuster products rose to 41% in Q1, driven by robust demand for BBL, Thermage, and other hints.

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In closing, I'd like to emphasize that as mass aesthetic industry enters a new phase of high quality, inclusive growth, companies with standardized medical delivery capabilities, scalable operating efficiency, and a powerful supply chain will be well-positioned for the future. Market leadership advantage will become increasingly evident. With full industry chain capabilities built over years, we have developed a unique competitive edge. Looking ahead, we will firmly advance our 1,000 center score.

While maintaining a measured expansion pace, we will continue optimizing our operating and financial performance. We aim to create value for users and shareholders, and to drive industry's long-term development.

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Now, I'll hand it over to our VP of Finance Sha Zhang , to walk through the financial results, followed by the Q&A session.

Thank you, Xing, and thank you everyone for joining us today. I'm Sha Zhang, Vice President of Finance. I will walk you through our first quarter 2026 financial results. For additional details on our first quarter performance, please refer to the earnings release issued earlier today. Unless otherwise noted, all amounts are in RMB. We started the year off strongly with a robust Q1 performance. Total revenue for the quarter grew 45.6% year-over-year to RMB 432.8 million, driven by the sustained growth momentum in our branded aesthetic center business. We are also encouraged that our strengthened supply chain is not only supporting our chain operations, but also fueling growth in our upstream supply chain business. Let's dive into each business segment. Revenue from aesthetic treatment services increased to RMB 282.4 million, up 185.8% year-over-year, and exceeding the high end of our guidance for the fourth consecutive quarter.

This segment accounted for over 65% of total revenue during the quarter. Its gross margin expanded by 8.4 percentage points year-over-year, and 3.3 percentage points quarter-over-quarter. We are pleased to see our core growth driver continue to gain traction in both revenue and profitability, as we execute our dual engine strategy focused on scale and efficiency. As of March 31st, we operated 54 So-Young clinics across 16 major cities, reflecting a net addition of five centers during the quarter. Breaking down revenue by center phase. Our 20 mature phase centers generated RMB 150 million in revenue, or roughly RMB 7.5 million per center. Our 23 growth phase centers contribute to RMB 109.5 million, or roughly RMB 4.8 million per center. The 11 ramp-up phase centers contribute to RMB 22.9 million or roughly RMB 2.1 million per center.

It's worth mentioning that average revenue per center for this in the ramp-up phase saw significant growth both year-over-year and quarter-over-quarter. This clearly validates how our increasingly standardized operations are effectively accelerating. Their ramp-up trajectory. In the meantime, average revenue per mature phase center remains solid and well above the level seen in ramp-up and growth feed centers. In terms of profitability, 41 centers were profitable and 48 centers generated positive operating cash flow during the quarter, reflecting a net addition of 15 and nine, respectively, from last quarter, with a robust pipeline steadily transitioning into maturity. Alongside our ongoing scale expansion and operational efficiency enhancement, we are confident in our ability to continue driving revenue growth and improving our profitability profile of this segment.

Turning to our other segments, information and reservation services revenues were RMB 8.3 million, down 30% year-over-year, primarily due to the increase in the number of medical service providers subscribing to our information services. Sales of medical products and maintenance services revenues were RMB 57.1 million, up 2.8% year-over-year, driven by an increase in order volume for medical products. Other services revenues were RMB 12.9 million, down 39.3% year-over-year due to lower insurance broker revenue. I will now walk you through our financials below revenue in more details. Cost of revenue were RMB 251 million, up 65.8% year-over-year, driven primarily by the expansion of our branded aesthetic centers. Breaking that down by segment. Cost of aesthetic treatment services was RMB 205.8 million, up 156.4% year-over-year. Cost and information and reservation services was RMB 6.4 million, down 72.5% year-over-year.

Cost of medical products and maintenance services was RMB 30.4 million, down 0.1% year-over-year. Cost of other services was RMB 8.4 million, down 51.6% year-over-year. Total operating expenses was RMB 239.7 million, up 26.6% year-over-year, and more notably, growing at a slower pace than total revenues. Sales and marketing expenses was RMB 130.8 million, up 33.7% year-over-year. The increase was mainly driven by higher branding and user acquisition spending, as well as higher payroll costs to support our branded aesthetic centers. G&A expenses were RMB 84.5 million, up 42.5% year-over-year, reflecting the continued expansion of branded aesthetic centers. R&D expenses was RMB 24.3 million, down 24.2% year-over-year, driven by improved staff efficiency. Income tax benefits were RMB 0.8 million, compared with RMB 1.6 million in the prior year period.

Net loss attributable to So-Young was RMB 49.2 million, compared with RMB 33.1 million in the prior year period. Non-GAAP net loss attributable to So-Young was RMB 46.6 million, compared with RMB 31.5 million in the prior year period. Basic and diluted loss per ADS was RMB 0.48, compared with RMB 0.32 in the prior year period. As of March 31st, 2026, our cash and cash equivalents, restricted cash and term deposits, term deposits and short-term investments total RMB 880 million, compared with RMB 936.4 million as of year-end 2025. The decrease reflects strategic capital allocation to accelerate the expansion of our branded aesthetic center and fuel the next phase of growth. Turning to our outlook Q2. Given our continued confidence in the branded aesthetic center business, we expect aesthetic treatment service revenues to be between RMB 307 million and RMB 317 million.

Repetition year-over-year growth of 102.6% to 119.5%. Looking at 2026, we are advancing key initiatives across supply chain optimization, medical delivery excellence, and operational efficiency. Together, these efforts will strengthen our leadership position, drive sustainable growth, and support a clear path to profitability. This concludes my remarks. Operator, we are now ready to begin the Q&A session.

We will now begin the question-and-answer session. To ask a question you may press star then one on your touch-tone phone. If you're using a speaker phone please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question please press star then two. At this time we will pause momentarily to assemble our roster. Our first question comes from Jinpeng He with CITIC. Please go ahead.

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So let me briefly translate for myself.

Thank you for taking my question. I'm Jinpeng He from CITIC Securities. I have a question about the medical aesthetics industry. We are seeing the industry has experienced a slowdown in overall growth and also intensified the competition in the past two years. Under this background, what are the development status and consumer characteristics in China's medical aesthetics industry? And looking ahead, what opportunities do you see? Thank you.

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We remain bullish on light medical aesthetics China. While the broader market is cooling, structural opportunities remain. As of 2025, China's medical aesthetics market had exceeded RMB 317 billion. Light medical aesthetics captured nearly 80% of the market, overtaking surgical treatment as the mainstream choice. This segment also has leading growth potential globally.

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This internal structural change is driven by evolving consumer habits in the following areas. First, medical aesthetic conception is evolving from changing appearance to anti-aging. People now want to look younger, not become someone else. Second, consumers are becoming more rational. They will pay a premium for better technologies, but not hype. Third, medical aesthetic is gaining rising popularity. Second and third tier cities now match first tier cities in both output and consumer awareness. We believe this new demand is difficult for traditional clinics to meet, as they focus on the affluent with these services, prepared card requirements and large single city centers. What's needed is what we offer: convenient, standardized, affordable and premium services through a clinic chain.

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Overall, the industry has entered a new phase: more device supply, greater price transparency, and fiercer yet more mature competition. Upstream supply has been accelerating since 2025, particularly in hot categories like PLLA and collagen. We've already seen more than 10 Class III certificate approvals in each category, and we expect more to come, eventually reaching the same level of diversity as HA products. For So-Young, that means more product choices, better procurement costs, and enhanced user experience.

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In this environment, medical aesthetic clinics, the key bridge connecting upstream manufacturers and consumers, will succeed only if they can deliver effective, affordable, safe, and reliable products and services. In 2026, we expect competition to remain intense across the industry. Weaker players will continue to exit, and survivors will need differentiated positioning. In our case, So-Young Clinic is positioned like a Sam's Club of medical aesthetics, known for consistency, affordability, and accessibility. Combined with our established supply chain and diversified customer acquisition channels, this gives us a competitive edge over traditional high-end and single-store private centers. As we scale, our advantage will compound.

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Looking ahead, China's medical aesthetic market is forecast to exceed RMB 600 billion by 2030, making it the world's most promising market in this industry. We believe the industry's biggest opportunity lies in network expansion through uniform services. China's market capacity can accommodate thousands clinic chain brands. So-Young is confident in becoming one of them.

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Thank you.

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Thank you much. Thank you.

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Our next question comes from James [Zhang] with GF Securities. Please go ahead.

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This is James from GF Securities.

My question is, we can see that the purchase rate among core members is very high, indicating strong user stickiness. Can you help us understand whether there is still upside potential for high-value users' annual spending? Or will you grow ARPU through SKU expansion? Which blockbuster products can we expect? [Non-English content].

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Yes, indeed. We are seeing strong repurchase intent and consumption stickiness among core members. This gives us a solid foundation to build user value over time.

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Going forward, we will increase ARPU in two ways. First, we will provide dedicated services for core members at levels three and above. Through differentiated benefits and personalized services, we will enhance brand value. Combined with curated SKUs, this allows us to meet our users' diverse and evolving medical aesthetic needs while increasing lifetime value. Second, we will continue expanding our mid to high-end offerings while promoting coordinated diagnosis and bundled complementary treatment solutions. This will meaningfully boost ARPU.

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For blockbuster products, popular treatments like Thermage and BBL have been strong drivers of ARPU. New products launched with upstream partners are also gaining traction. Our skin booster series with Xihong Biopharma and collagen products with Jinbo Bio-Pharmaceutical have shown strong market reception and sales momentum. These new products enrich our mid to high-end product portfolio while also driving with trust, behavior and ARPU. They are definitely something to look forward to.

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Thank you.

Our next question comes from Daisy Chen with Haitong Securities. Please go ahead.

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I'll translate myself. Could management elaborate more on talent reserve and organizational capability building? How is the reserve of high quality doctors and what unique mechanism does the company adopt for the long-term retention of the professional talents? Thank you.

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We have always said that premium services are defined by high quality medical delivery. This is critical for earning user trust and driving consumption, which is why talent development is so central for us.

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It all starts with rigorous hiring and training standards. As China's largest light medical aesthetic chain, So-Young continues to attract high quality doctors with physician team keeping expanding. We now have about 230 full-time physicians. All hires undergo rigorous selecting, and we require every physician to complete theoretical and hands-on training and assessments before practicing. As mentioned in our remarks, our physician training center and R&D center at Beijing headquarters are now up and running. These facilities further strengthen our already high standards for skills and treatment consistency across our network.

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In terms of talent retention, we have built a multilayer long-term retention mechanism. Our physician turnover rate is currently in line with the industry average. First, on performance incentives, we offer competitive commission linked to treatment volume to reward high performers. Second, we design clear progression path for our physicians at different levels. For instance, doctors at PT2 level or above can receive customized training through our deep collaborations with leading partnerships like Allergan. We also help them to professional influence through live streaming visibility and other reputation building opportunities. Additionally, we have a well-defined promotion ladder from in-clinic physician to regional physician and ultimately to master group physician.

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Meanwhile, as an internet company, So-Young has established a comprehensive talent incentive system. We offer equity plans to core and outstanding employees. By aligning individual growth with company development, employees share the benefits of our success, fostering both motivation and a deeper sense of belonging. We are confident that So-Young's brand awareness, robust training system, and diversified talent retention mechanism will continue to underpin a solid pipeline of quality physicians and other outstanding talents, further reinforcing our medical delivery capabilities.

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Thank you.

Our next question comes from Jessie Xu with CICC. Please go ahead.

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So, could you walk us through what innovations the company has introduced in restructuring the traditional clinical service model?

What are the specific changes in the roles and positioning of physicians and consultants? Thank you.

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We are driving innovation through two main paths: upgrading our diagnosis and treatment systems, and advancing our physician-led initial consultation policy.

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On the system front, we are working with experts to categorize users' skin types by their underlying causes. This work enables us to build templates and create treatment guidance that ensures standard services. We also plan to upgrade skin detectors, integrating big data and AI to enable automatic treatment recommendations. We believe these initiatives will help us automate our diagnosis and treatment process, boosting operational efficiency across our clinics.

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In parallel, we are rolling out a physician-led consultation policy where doctors are involved from the very first customer visit to provide professional in-person consultations. Under this model, the role of consultant shifts from leading consultation to supporting the doctor in diagnosis and treatment. This adjustment highlights the medical nature of our services, which will enhance customer trust and improve conversion. We have piloted this policy in selected clinics. In future, we plan to have 100% of new customers consulted by a physician, with physician-led consultation gradually expanding to returning customers.

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Thank you.

This concludes our question-and-answer session and today's conference call. Thank you for joining us. You may now disconnect.

Ladies and gentlemen, thank you for standing by for So-Young's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Ms. Mona Qiao. Please proceed, Mona.

Thank you, operator, and thank you, everyone, for joining So-Young's Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining me today on the call is Mr. Xing Jin, our Founder, Chairman and CEO, and Ms. Hui Zhao, VP of Finance. Before we begin, please refer to the safe harbor statements in our earnings release, which applies today's call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP in our earnings release on our Investor Relations website and filings with SEC. Please also note all figures mentioned in this call are in renminbi or otherwise stated. At this time, I'd like to turn the call over to Mr. Xing Jin.

[Interpreted] China's medical aesthetic industry structural adjustments as upstream capacity expanded and consumers become more value driven. Return to value has become the common theme. For institutions pursuing scaled and repeatable models, this offers a critical window to build long-term edge. In Q4, we continued to improve our investment and make progress in 3 directions. First, delivering scale breakthrough stand and operational improvements in our aesthetic center business; second, reinforcing medical service delivery capabilities to build a long-term trust-driven mode; and third, building our supply chain barriers to enhance brand and seize opportunities. We are pleased to see these choices are reflected in our financial results. The total revenue was RMB 451 million in Q4, up around 25% year-over-year, hitting a record high for quarterly revenue. Revenue from our aesthetic center business reached RMB 248 million, up over 205% year-over-year and about 10% above the high end of guidance. Our aesthetic center business has become our largest revenue contributing segment and growth engine with So-Young Clinic becoming the largest medical aesthetic chain in China by a number of centers. Now let me walk you through our progress in Q4 and our 2026 deployment, focusing on our aesthetic center business. -- our aesthetic center business has recently achieved 2 milestones. The first is our center footprint. By year-end 2025, we have opened 49 medical aesthetic centers, ranking first nationwide among all tiers by center count. The second is the treatment volume. In Q4, verified treatment visits exceeded 125,000, up 178% year-over-year. Verified aesthetic treatment performed exceeded 289,400, up 168% year-over-year. As of December end, our total active users surpassed 170,000. The growth in both treatment volume and user base validates the market demand and ongoing recognition from consumers. As we scale, center level operational efficiency continues to improve. In Q4, 25 centers achieved profitability and 39 centers generated positive operating cash flow. In 2026, we will accelerate the expansion, opening at least 35 new centers. We will deepen density in core cities, including Beijing, Shanghai, Guangzhou and Shenzhen, while also expanding our presence in second-tier cities. As our operations mature, we are confident in further improving profitability while maintaining expansion and driving the overall profitability at an early date. Second, we are enhancing our medical service delivery capability to build a long-term trust-driven mode. In Q4, we enhanced our service across 3 dimensions: physician team, compliance framework and data security. The improvements reinforced the user trust. Year-end 2025, our full-time physician team expanded to 211, up 41% from the end of Q3, ranking first nationwide among our peers by physician count. In terms of quality, all our physicians have a public hospital background and pass our regular internal certification before practicing. Over half of them hold attending physician qualifications or hires. On average, our team possesses over 6 years of clinical experience and those with a year or more and So-Young have delivered over 6,200 treatments per physician, reflecting our solid clinical capabilities. In 2026, we will launch a new physician initiative to accelerate recruitment and build talent pipeline. The program will provide industry-leading hands-on practice, systematic training and clear care path, enabling physicians to quickly achieve top-tier performance and our physician team's expertise deepens and user wordfmouth growth, we expect her physician productivity to grow, driving continued improvement in profitability. On compliance, we established a 6-pillar compliance framework and a regular inspection mechanism. With digital software, we deliver full process traceability of medical services. On data security, So-Young is the first in the industry to obtain the TIA certification, setting a benchmark for the industry. Our ongoing investments are reflected in user behavior. Core members have a quarterly rate of 80% and their average annual spending is around 16,500. The growing user trust is the foundation of our low-cost sustainable growth. we will continue to build on our supply chain, enhance and seize market opportunities. As of Q4, we worked with 18 top-tier domestic suppliers and have procured nearly 1,400 devices. For injectables, we have 42 top-tier upstream partners with a cumulative procurement of over 700,000 units -- in 2025, the upstream supply expanded sharply. The NMPA issued over 50 certificates for Class II medical devices, up over 60% year-over-year. For So-Young, this delivers a broader product portfolio, more durable procurement cost and enhanced user experience. Backed by the China's largest light medical aesthetic chain, we continuously enhance our supply chain layout capabilities. We have also built long-term partnerships with core suppliers and established a volume price linkage mechanism, securing the industry's best procurement prices. On our product layout in Q4, we launched a light version Merle PLLA version 3 printing, which lowers the customers' barrier to trail. We are also the exclusive distributor of [indiscernible] Biopharma's HP solution, now approved for marketing in China, which expands our portfolio. For BPL treatment, we improved bra influence and conversion through IP co-branding and immersive experiences. In Q4, we partnered with [indiscernible] and launched the Youth [indiscernible] Radiant campaign. The campaign leveraged multiple channels and formats, including celebrity treatment experience, pop-up events and in-store visits by bloggers on notes. Our corporate wins generated about 2 million on-site visits and total exposure on that note exceeded 40 million. This online and offline synergy reinforced our brand awareness and lead sales conversion for BBL, aligning brand building with revenue. Our product integration, new products launches and market activities reflect our commitment to the blockbuster strategy. In Q4, this blockbuster products delivered strong results contributing over 37% of revenue with sequential growth and remain a core engine for our aesthetic business. Meanwhile, our brands have been fully validated in off-line scenarios. To date, we have successfully established a presence in high-end shopping malls nationwide including Beijing H1, Guangzhou ICC Mall, Hangzhou Care Center, and so on. These premium shopping malls reinforce our brand recognition and help us reach target customer groups. Finally, let me share our outlook for the future. As the industry gradually shifts back to a regional quality-driven path, value distribution is being reset. We believe that in the long run, the industry will be led by the closest consumers and capable of delivering the most trusted services. For So-Young, 2026 is a turning point. We are moving from scale first to a engine of scale and efficiency. Our aim is not only to open centers, but also to prove the model is profitable as we expand. Our systematic capabilities over the past 2 years give us great confidence that our ambition is to beyond that. As our center network, supply chain and medical service delivery create a flywheel, we will lower access barriers and let more consumers enjoy safe, transparent and inclusive services while delivering sustainable returns to shareholders. We believe companies that create value will earn long-term recognition from the market. Now I'll hand it over to our VP of Finance, Ms. Hui Zhao, to walk through the financial results, followed by the QA session.

Thank you, [indiscernible], and thank you, everyone, for joining us today. I'm [indiscernible], Vice President of Finance. On behalf of our CFO, I will walk you through our fourth quarter 2025 operating and financial results. For additional details on our fourth quarter and full year performance, please refer to the earnings release we issued earlier today. Unless otherwise noted, all amounts are in RMB. 2025 marked a transformational year for So-Young. The rapid scaling of our branded extent extended network fundamentally reshaped our business profile, and we are pleased with where we are today. Total fourth quarter revenues reached RMB 46.7 million, up 24.8% year-over-year. This was driven by continued expansion of our branded aesthetic center business. As of year-end, our cash position stood at RMB 936.4 million, providing solid runway to fund our expansion plans while preserving financial flexibility. Let me now walk you through performance by business segment. Our branded aesthetic center business sits at the core of our growth with our platform and upstream supply chain businesses serving as complementary dealers. Together, they form an integrated value chain across the medical aesthetics industry. Revenues from aesthetic treatment services reached RMB 248.1 million, up 205.3% year-over-year. This has been our largest revenue segment since Q2 and this quarter, it crossed the 50% revenue contribution threshold for the first time. Also, this marks our third consecutive quarter of exceeding the high end of our segment guidance. This strong performance was driven by both continued network expansion and improving cost center economic. As of December 31, we operated 49 So-Young clinics across 15 major cities, reflecting a net addition of 10 centers during the quarter. Now breaking down revenue by central development phase. Our 17 mature phase centers generated RMB 102.5 million in revenue or roughly RMB 8.4 million per center. Our 19 growth-based centers contributed RMB 89 million or roughly RMB 4.7 million per center. The 13 ramp-up phase centers contributed RMB 16.6 million Notably, average revenue per center nearly doubles as centers progressed from growth phase to maturity. With 19 centers currently in the growth phase, we see a clear built-in revenue growth driver as these centers continue to mature. And for their profitability, 25 centers achieved profitability during the quarter, including 15 mature phase centers generated positive operating cash flow as intense move through their development cycle, profitability has consistently followed. This gives us confidence in the financial trajectory of our newer centers. Turn to other statements. Information and reservation services revenues were RMB 125.7 million, down 26.8% year-over-year, primarily due to a decrease in the number of medical service providers subscribing to information services on our platform. Sales of medical products and maintenance services revenues were RMB 69.3 million down 19.9% year-over-year, primarily due to a decrease in the order volume for medical equipment. Other services revenues were RMB 17.7 million, down 40.7% year-over-year, primarily due to a decrease in revenues from So-Young Prime. I will now walk you through our financials below revenue in more detail. Cost of revenues was RMB 255.9 million, up 67.2% year-over-year, primarily driven by the expansion of our branded aesthetic centers to break this down further. Cost of aesthetic treatment services was RMB 189 million, up 189.9% year-over-year. Cost of information and reservation services was RMB 10.1 million, down 5.6% year-over-year. Cost of medical products sold and maintenance services was RMB 41.6 million down 4% year-over-year. Cost of other services was RMB 15.3 million, down or 7% year-over-year. Total operating expenses were RMB 327.7 million compared with RMB 815.2 million in the same period of 2024. Excluding the impact of goodwill impairment charges in both periods, total operating expenses increased moderately year-over-year, reflecting continued investment in scaling our aesthetic center business. Sales and marketing expenses were RMB 168.7 million, up 25.8% year-over-year. This was primarily driven by branding and user acquisition investments according branded aesthetic center growth. G&A expenses were RMB 101.9 million, up 3.5% year-over-year due to the business expansion of the branded aesthetic centers. R&D expenses were RMB 37.4 million, down 12.4% year-over-year due to improved staff efficiency. We also recorded an impairment of goodwill and longest assets charge of RMB 19.7 million based on our annual [indiscernible] impairment assessment. Income tax benefit amounted to RMB 0.6 million compared with income tax expenses of RMB 2.1 million in the same period of 2024. The net loss attributable to So-Young was RMB 108.8 million compared with RMB 607.6 million in the same period of 2024. Non-GAAP net loss attributable to So-Young was RMB 93.4 million, compared with RMB 53.2 million in the same period of 2024. Basic and diluted loss per ADS improved to RMB 1.08 compared with RMB 5.92 in the same period of 2024. As of December 31, 2025, our cash and cash equivalents restricted cash and term deposits, term deposits and short-term investments totaled RMB 936.4 million compared with RMB 1,253.2 million as of December 31, 2024. The decrease primarily reflects our accelerated investment in brand aesthetic center expansion. Looking ahead, the fourth quarter of 2026, we expect aesthetic treatment services revenue to be between RMB 258 million and RMB 278 million, representing year-over-year growth of 171.2% to 181.3%. This guidance reflects our confidence in the sustained momentum of our branded aesthetic center business. As of today, our standard network has crossed the 50 center milestone. In 2026, we will shift our focus from peer network expansion towards balancing growth with profitability improvement. We plan to add no fewer than 35 new centers in 2026, while leveraging our expanding scale to improve gross margins and drive efficiency gains across the network. This concludes my remarks. Operator, we are now ready for the Q&A session.

[Operator Instructions] Our first question comes from [indiscernible] with Citi Securities.

[Interpreted] Let me briefly translate. I'm [indiscernible] from Citi Securities. So firstly, congratulations on the accelerating growth in Q4. And we are glad to see that there is improving gross margins in the aesthetic centers business and service business. So I have a question regarding the gross margin prospects. So could you share more about the gross margin plan and source further margin expansion.

[Interpreted] Thank you for your question. We believe that 3 core factors shape margin performance. The pace of center openings, consumable costs and seasonal promotions. Based on these factors, we have planned to enhance gross margin. First, we will continue optimizing the pace of center openings and the ramp-up efficiency of new centers. Upfront investments to new centers can create short-term margin pressure and license approval timing in our industry is often predictable. Going forward, we aim to adopt a more even cadence throughout the year combined with our integrated operating system. This accelerates each center's path to efficient operations and short-term ramp-up cycle. For 2026, new openings will represent a smaller share of total centers compared to last year. This will reduce margin dilution of concentrated new center investments. Meanwhile, the proportion and profit contribution from mature centers will rise, driving the overall gross margin levels. Second, we will optimize consumable costs. Currently, we have built deep collaborations with upstream partners, including [indiscernible] Biopharma, China Medical System [indiscernible] Farm and [indiscernible] Medical. This guarantees reliable supply and ongoing cost optimization. Looking ahead, we will strengthen empower with our partners and convert more high-quality upstream manufacturers in 2 long-term partners. At the same time, we will continue advancing our broad faster strategy. In the fourth quarter, our 4 major products accounted for over 37% of revenue as our core offering through the procurement cost panties will become more pronounced. Third, we will refine our seasonal promotions. Digital accounting remains a critical channel for user base expansion, customer conversion and building long-term user assets. Going forward, we will optimize our product mix and integrate campaigns more deeply with the membership system, targeting repeat transit among core members. We aim to transform short-term traffic into customers' LTV. This will drive gross margin.

Your next question comes from John Wong with GF Securities.

This is John Wang from Guangfa Securities. Congratulations to the company on this outstanding performance. My question is about the development of So-Young Clinic in second-tier cities. And I would like to know whether the current operating performance of these centers has met management's expectations. Could management also share some operational updates on the several representative centers?

Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we reconnect the line for the management. Thank you for patiently holding, ladies and gentlemen. The line for the management has been reconnected. Yes, please go ahead.

[Interpreted] From an industry perspective, while China's medical aesthetic market in second-tier cities have reached relative maturity, they like to have first-tier cities in medical service delivery capabilities and operational standards. We ensure that our centers in second-tier cities deliver the same level of medical service quality as is in first tier cities. Based on our operational track record, centers in second-tier cities are also growing well, both the traffic and per customer treatment are rising, and the revenue per center is close to first tier levels. As of December, mature centers in secondary cities such as Wuhan Tiandi Center and Changshu Center generated an average sales per square meter of RMB 7,000 per month. Among the opening in second-tier cities, [indiscernible] stood out. These centers have maintained robust revenue growth with industry-leading CAGR. For example, goudaSuzhou Su Plaza broke 1 million in monthly revenue with 3 months since opening, proving that our model works in second-tier cities. In terms of profitability, mature centers in second-tier cities enjoyed slightly higher margins due to lower staff payroll and rental expenses compared to the first tier cities. [Interpreted] We believe that the fundamental advantage of a chain model line in reduced transaction costs and enhanced brand trust, scale and accessibility. At present, most players in secondary cities are single center operators without meaningful density. Based on how we involved in both tier cities and So-Young's live trust grows, customers will tend to to push out multiple treatments per visit. Looking ahead, we believe the process improvement, resource synergy and traffic management will drive continued gains in our second-tier centers and economics of scale will take effect across our network. We are confident that this will lead to stronger profitability and market competitiveness in second-tier cities.

And let me translate my question. This is Maggie Huang from CICC. Congratulations for our excellent performance. And we would like to know whether the competitive advantages in customer acquisition costs has been maintained amid its continued scaled expansion. And could management also share the customer acquisition strategy for 2026?

[Interpreted] Our edge in customer acquisition cost has been preserved and further strengthened. During the quarter, we opened a significant number of new centers and seize the opportunities brought by major shopping campaigns, including Double 11 and Double 12, bringing a new quarterly record for new customers. For the full year, our average CAC remained below 10% of revenue, a highly competitive benchmark in this industry. We sustained this advantage primarily through our customer referral model. Through our membership system and differentiated benefits, we will incentivize existing high-value users to refer new customers. This will not only lower CAC, but also improve the quality and retention rate of new users. Second, we will continue to optimize the mix of our public and private domain customer acquisition channels and enhance their LTV through refined operations. Meanwhile, we will continue to roll out co-branding initiatives with the world's top IP. Recently, we launched co-branding programs with 2 renowned IP, Little Print and Disney. Through brand storytelling, we reached a broader customer base and resonated with users emotionally, further amplifying our brand equity. As our footprint expands and user base grows, we anticipate further reductions in tax.

Your next question comes from the line of David Chang with Haipeng International.

[Interpreted] I'll translate my question. Thank you management for taking my question. My question is about the user growth and the membership operations, especially for core members. Could management share the specific measures you will take to improve the LTV of core members going forward?

[Interpreted] For our core members, Level 3 and higher members continue to show solid growth momentum. Our user service show that core members still have significant room for growth in their annual medical aesthetic budgets, laying a foundation for us to boost user LTV. This quarter, revenue contribution from core members and their quarterly return rate both exceeded 80% with new core members surpassing 14,000. Consumer performances are shifting towards efficiency and clinical capabilities. Against this background, we will focus on, first, expanding our product portfolio. We will introduce more comprehensive product offerings, including standardized side treatments and mid- to high-end services. We expect this to elevate user value. Second, we will further optimize our membership system by offering differentiated benefits and service touch points so as to realize tiered user segmentation and provide corresponding services. This will strengthen co- members' perception of our brand value, building a positive feedback loop, which will drive their loyalty. These measures will lead to improved presenter profitability and provide strong momentum for our long-term growth.

This concludes our question-and-answer session, and this concludes our conference for today. Thank you for attending today's presentation. You may now disconnect.