Q2 2026 YXT.COM Group Holding Ltd Earnings Call

August 13, 2026

Operator: Good day and thank you for standing by. Welcome to the YXT.COM H1 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Peter Lu, founder and Chairman of YXT.COM. Sir, please go ahead.

Operator: Good day and thank you for standing by. Welcome to the YXT.COM first six months of 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Peter Lu, founder and Chairman of YXT.COM. Sir, please go ahead.

Speaker #2: Good day, and thank you for standing by. Welcome to the YXT.COM first six months of 2026 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press *11 on your telephone.

Speaker #2: You will then hear an automated message advising that your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded.

Speaker #2: I would now like to hand the conference over to your speaker today, Peter Liu, Founder and Chairman of YXT.COM. Sir, please go ahead.

Peter Lu: Hello everyone. This is Peter Lu, founder and Chairman of YXT.COM. Thank you for joining our 2026 H1 earning conference call. In H1 2026, we saw an important shift in enterprise AI adoption. Customers didn't ask whether a product has AI capabilities. They asked whether AI can improve their business outcomes, shorten capability building cycles, accumulate organizational knowledge more thoroughly, and support actual execution. Having AI in the product suite was no longer an option for us. Not only that, having meaningful AI with productivity level value became the key differentiator. This was exactly the same direction YXT.COM took going into 2026. We achieved a nearly ninefold growth in AI product-related revenue. Our monthly recurring revenue from AI-related products reached 4.4 million RMB as of 30 June 2026, compared with 500,000 RMB a year earlier.

Speaker #3: Hello, everyone. This is Peter Liu, founder and chairman of YXT.COM. Thank you for joining our 2026 first half earnings conference call.

Speaker #4: In the first half of 2026, we saw an important shift in enterprise AI adoption. Customers didn't ask whether a product has AI capabilities; they asked whether AI can improve their business outcomes. Short capability-building cycles accumulate organizational knowledge more thoroughly and support actual execution.

Speaker #4: Having AI in the product suite was no longer an option for us. Not only that, having meaningful AI with productivity-level value became the key differentiator.

Speaker #4: This was exactly the same direction YXT.COM took going into 2026. We achieved a nearly ninefold growth in AI product-related revenue. Our monthly recurring revenue from AI-related products reached ¥4.4 million as of June 30, 2026, compared with ¥500,000 a year earlier.

Speaker #4: The driving force behind the ninefold growth of AI products is adding AI to our existing business and innovating AI-native new businesses. In terms of existing business, we integrated AI into our existing corporate learning business and improved our competitiveness in both acquiring new clients and expanding existing engagements.

Peter Lu: The driving force behind the ninefold growth of AI products are adding AI to our existing business and innovating AI-native new businesses. In terms of existing business, we integrated AI into our existing corporate learning business and improved our competitiveness in both acquiring new clients and expanding the existing engagements. In H1 2026, the number of newly signed customers increased by nearly 50% compared with the same period last year. Our net dollar retention rate also improved by about 2.3 percentage points. In terms of new business, SaleSmart, our AI-powered sales intelligence and enablement solution achieved sales of over 5 million RMB during the same period. This marked the first successful step in expanding from corporate learning business to productivity enablement business in the same sales domain.

Speaker #4: In the first half of 2026, the number of newly signed customers increased by nearly 50% compared with the same period last year. Our net dollar retention rate also improved by about 2.3 percentage points.

Speaker #4: And in terms of new business, Salesmart, our AI-powered sales intelligence and enablement solution, achieved sales of over RMB 5 million during the same period.

Speaker #4: This marked the first successful step in expanding from the corporate learning business to the productivity enablement business in the same sales domain. Through the first half of 2026, we proved our strategy of intelligent productivity to be effective, and we are even more confident about it now.

Peter Lu: Through the H1 of 2026, we proved our strategy of intelligent productivity to be effective, and we are even more confident about it now. We will strive to assist enterprises turn knowledge into capabilities, experiences into assets, and individual capacity into organizational intelligent productivity. As more and more companies embrace AI, as AI goes from a chatbot to productivity levers, we will see an even bigger addressable market with more and more definite needs. One last piece of information I'd like to share with you before handing over is the transformation of our own operation. During the H1 of 2026, we adopted AI more systematically and transformed how we build products, how we deliver customer value, and how we market ourselves. The benefits of such AI adoption and transformation can be indicated by our gross margin, our operational efficiency, and our cash flow.

Speaker #4: We will strive to assist enterprises in turning knowledge into capabilities, experiences into assets, and individual capacity into organizational intelligent productivity. As more and more companies embrace AI, and as AI goes from a chatbot to productivity levers, we will see an even bigger addressable market with more and more definite needs.

Speaker #4: One last piece of information I'd like to share with you before handing over is the transformation of our own operation. During the first half of 2026, we adopted AI more systematically and transformed how we build products, how we deliver customer value, and how we market ourselves.

Speaker #4: The benefits of such AI adoption and transformation can be indicated by our gross margin, our operational efficiency, and our cash flow. And for those details, I will now turn the call over to our Chief Financial Officer to review our financial performance.

Shen Cao: And for those details, I will now turn the call over to Shen Cao, our Chief Financial Officer, to review our financial performance. Thank you, Peter, and hello everyone. In the H1 of 2026, our strategic transformation began to show clearer financial results. After a period of business mix optimization and customer portfolio adjustment, we returned to revenue growth, expanded gross margin, and significantly narrowed our losses. Total revenues increased by 6% year over year to RMB 162.1 million. Revenues from corporate learning solutions were RMB 158.2 million, compared with RMB 152.4 million in the same period last year. Subscription-based corporate learning solutions reached RMB 151.8 million, supported by our focus on large enterprise customers and AI-enabled products. Our customer structure continued to improve. As of 30 June 2026, we had 2,391 subscription customers, compared with 2,358 as of 30 June 2025.

Speaker #5: Thank you, Peter, and hello everyone. In the first half of 2026, our strategic transformation began to show clearer financial results. After a period of business mix optimization and customer portfolio adjustment, we returned to revenue growth, expanded gross margin, and significantly narrowed our losses.

Speaker #5: Total revenues increased by 6% year over year to RMB 162.1 million. Revenues from corporate learning solutions were RMB 158.2 million, compared with RMB 152.4 million in the same period last year. Subscription-based corporate learning solutions reached RMB 151.8 million, supported by our focus on large enterprise customers and AI-enabled products.

Speaker #5: Our customer structure continued to improve. As of June 30, 2026, we had 2,391 subscription customers compared with 2,358 as of June 30, 2025. More importantly, our net revenue retention rate improved to 102.6%, compared with 103% in the same period last year.

Shen Cao: More importantly, our net revenue retention rate improved to 102.6%, compared with 103% in the same period last year, shows the stability and the quality of our subscription customer base. Profitability improved meaningfully. Gross margin reached 70.1%, up five percentage points from 65.1% a year earlier. This improvement was driven by our higher quality revenue mix, continued focus on large enterprise subscription customers, AI-enabled productivity gains, and ongoing cost optimization. Cost of revenues decreased by 9.1% year over year to RMB 48.5 million. Sales and marketing expenses decreased by 3% year over year, reflecting improved productivity in customer acquisition, conversion, and retention. Research and development expenses increased by 9.8% as we continued to invest in AI product capabilities and R&D talent. We believe this is necessary to support our AI-native strategy and long-term product competitiveness. Our bottom line improved significantly.

Speaker #5: We continue to demonstrate the stability and quality of our subscription customer base. Profitability improved meaningfully, and gross margin reached 70.1%, up 5 percentage points from 65.1% a year earlier.

Speaker #5: This improvement was driven by our higher-quality revenue mix, continued focus on large enterprise subscription customers, AI-enabled productivity gains, and ongoing cost optimization. Cost of revenues decreased by 9.1% year over year to RMB 48.5 million. Sales and marketing expenses decreased by 3% year over year, reflecting improved productivity in customer acquisition, conversion, and retention.

Speaker #5: Research and development expenses increased by 9.8% as we continued to invest in AI product capabilities and RMB talent. We believe this is necessary to support our AI-native strategy and long-term product competitiveness.

Speaker #5: Our bottom line improved significantly; net loss narrowed to RMB 14.4 million from RMB 73.9 million in the same period last year. Adjusted net loss narrowed by 80.9% year-over-year to RMB 12.2 million.

Shen Cao: Net loss narrowed to RMB 14.4 million from RMB 73.9 million in the same period last year. Adjusted net loss narrowed by 80.9% year over year to RMB 12.2 million. These results demonstrate the operating leverage created by our improved revenue mix, higher gross margin, and disciplined expense management. Looking ahead, we will continue to execute around three priorities. First, we will deepen our focus on large enterprise customers and improve customer lifetime value. Second, we will scale AI-related products including SaleSmart and other AI-enabled knowledge and productivity solutions. Third, we will continue to balance investment in AI innovation with disciplined cost control and operational efficiency. In summary, the H1 of 2026 was a period in which our AI-native transformation began to translate into business momentum and financial improvements. We are encouraged by our progress and remain focused on driving sustainable high-quality growth. Thank you.

Speaker #5: These results demonstrate the operating leverage created by our improved revenue mix, higher gross margin, and disciplined expense management. Looking ahead, we will continue to execute around three priorities.

Speaker #5: First, we will deepen our focus on large enterprise customers and improve customer lifetime value. Second, we will scale AI-related products, including Salesmart and our other AI-enabled knowledge and productivity solutions. Third, we will continue to balance investment in AI innovation with disciplined cost control and operational efficiency. In summary, the first half of 2026 was a period in which our AI-native transformation began to translate into business momentum and financial improvements.

Speaker #5: We are encouraged by our progress and remain focused on driving sustainable, high-quality gross. Thank you. We are now happy to take your questions.

Shen Cao: We are now happy to take your questions.

Operator: Thank you. To ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. One moment while we compile our Q&A roster. Our first question is going to come from the line of Katherine Thompson with Edison. Your line is open. Please go ahead.

Speaker #2: Thank you. To ask a question, please press star one-one on your telephone and wait for your name to be announced. To withdraw your question, please press star one-one again.

Speaker #2: One moment while we compile our Q&A roster. Our first question is going to come from the line of Catherine Thompson with Edison. Your line is open.

Speaker #2: Please go ahead.

Katherine Thompson: Hi there. Just check you can hear me okay?

Speaker #6: Hi there. Just checking if you can hear me okay.

Alan Wang: Yes, sounding clear.

Speaker #4: Yes, sounding clear.

Katherine Thompson: Yeah, great. Thank you. A couple of questions for you. The first one, could you just talk me through the progress you've made with each of your four product lines, so TalentNova, NeoLearning, SaleSmart and AI Box?

Speaker #6: Yeah, great. Thank you. A couple of questions for you. The first one: could you just talk me through the progress you’ve made with each of your four product lines?

Speaker #6: So, Talent Nova, NeoLearning, SalesMart, and AI Box.

Alan Wang: Thank you, Katherine, for the question. I will try to answer the questions and provide some of the updates in the four lines of business. This is Alan Wang. I am the Vice President of YXT.COM. To answer your question, TalentNova is our main business line. As the market leader in corporate learning platform, in 2026, we continue to sign new customers. We signed more than 120 clients, a more than 48% increase compared to last year's same period. The boost in competitiveness is our successful integration of AI products into our existing corporate learning solutions and platforms. In terms of NeoLearning, during the H1 of 2026, we signed 32.7 million RMB engagement in terms of contract value. That is approximately 26.8% increase compared to last year's same period.

Speaker #4: Thank you, Catherine, for the question. I will try to answer the questions and provide some updates on the four lines of business.

Speaker #4: This is Alan Wong. I'm the Vice President of YXT.COM. And to answer your question, Talent Nova is our main business line. As the market leader in corporate learning platforms, in 2026, we continue to sign new customers, and we signed more than 120 clients—a more than 48% increase compared to last year's same period.

Speaker #4: And the boost in competitiveness is our successful integration of AI products into our existing corporate learning solutions and platforms. In terms of NeoLearning, during the first half of 2026, we signed RMB 32.7 million in engagement contract value.

Speaker #4: That's approximately a 26.8% increase compared to the same period last year. The majority of the increase came from AI-related products, such as AI-augmented blended learning, AI-orchestrated practice, or AI-curated courses.

Alan Wang: The majority of the increase came from AI-related products, such as AI-augmented blended learning or AI-orchestrated practice or AI-curated courses. In terms of SaleSmart, our AI-native sales enablement and productivity boost business, we won over 20 new clients with a total signed contract value of more than 5.3 million RMB. Lastly, in terms of AI Box, adjusting to market landscape, we decided not to market AI Box as a separate business line, but integrated AI Box into our TalentNova and NeoLearning product suites. In the H1 of 2026, we saw clients needing AI infrastructure, and we provided AI Box as part of our TalentNova service to the clients. So we have quite successfully pushed all four business lines to the market and saw significant growth in terms of revenue. Katherine, I think that is the answer to your question.

Speaker #4: In terms of Salesmart, our AI-native sales enablement and productivity boost business, we won over 20 new clients with a total signed contract value of more than RMB 5.3 million.

Speaker #4: And lastly, in terms of AI Box, adjusting to the market landscape, we decided not to market AI Box as a separate business line, but to integrate AI Box into our Talent Nova and NeoLearning product suites.

Speaker #4: In the first half of 2026, we saw clients needing AI infrastructure, and we provided AI Box as part of our Talent Nova service to the clients.

Speaker #4: So, we have quite successfully pushed all four business lines to the market and saw significant growth in terms of revenue. Catherine, I think that that's the answer to our question.

Katherine Thompson: Yeah. That is really helpful. Thank you. Then just secondly, looking at the gross margin, so clearly there was big expansion year-over-year in H1. Are you able to give any sense of whether that margin can carry on increasing into H2 and then also into future years?

Speaker #6: Yeah, that's really helpful. Thank you. And then just secondly, looking at the gross margin—clearly, there was big expansion year-over-year in H1.

Speaker #6: Are you able to give any sense of whether that margin can continue increasing into H2, and then also into future years?

Shen Cao: Okay. Thank you. Thank you question. Gross margin was 70.1% in the six months ended 30 June 2026, compared with 65.1% in the same period of last year, representing an increase of 5 percentage points. The growth in revenue, gross margin, and customers base. The significant decrease of net loss reflected the benefits of our AI transformation, AI-driven operational efficiencies, and also helped optimize our organizational structure and the workflows, leading to meaningful reductions in staff costs. Our improvements in revenue growth and cost efficiencies continues and strengthens our financial foundation, which means we expect we would achieve a higher gross margin in the H2 of 2026. Thanks.

Speaker #4: Okay, thank you. Thank you for your question. Gross margin was 70.1% in the six months ended June 30, 2026, compared with 65.1% in the same period of last year.

Speaker #4: Representing an increase of 5 percentage points, the gross revenue, gross margin, and customer base. The significant decrease in net loss reflected the benefits of our AI transformation.

Speaker #4: AI-driven operational efficiencies have also helped optimize our organizational structure and workflows, leading to meaningful reductions in staff costs. Our improvements in revenue growth and cost efficiencies continue, and this strengthens our financial foundation.

Speaker #4: This means we expect to achieve a higher gross margin in the second half of 2026. Thank you.

Katherine Thompson: Sorry, I missed the last part of that. You expect to get a higher gross margin in H2 compared to H1?

Speaker #6: Sorry, I missed the last part of that. You expect to get a higher gross margin in H2 compared to H1.

Shen Cao: Yes.

Speaker #4: Yes.

Katherine Thompson: Yeah. Okay. In future years, do you think you can still expand it further?

Speaker #6: Yeah, okay. And in future years, do you think you can still expand it further?

Alan Wang: Yes. We believe we will continue to boost our gross margin because our AI transformation is a continuous progress, and we will continue to see benefits in both operational efficiency and business outcomes. Yes, we do expect to see that.

Speaker #4: Yes, we believe we'll continue to boost our gross margin because our AI transformation is a continuous process, and we will continue to see benefits in both operational efficiency and business outcomes.

Speaker #4: So yes, we do expect to see that.

Katherine Thompson: Right. Okay. Thank you.

Speaker #6: Right. Okay. Thank you.

Speaker #4: Thank you, Catherine.

Alan Wang: Thank you, Katherine.

Speaker #2: Thank you. And this is going to conclude today's question and answer session. Ladies and gentlemen, this will also conclude today's conference call. Thank you for participating, and you may now disconnect.

Operator: Thank you. This is going to conclude today's question and answer session. Ladies and gentlemen, this will also conclude today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.