Niu Techs (NASDAQ:NIU) held its first-quarter earnings conference call on Monday. Below is the complete transcript from the call.
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Summary
NIU Technologies reported a 28.7% year-over-year increase in sales volume, reaching 261,000 units, with revenue up 33.4% to RMB 909.52 million.
In China, sales volume increased by 35.4%, driven by significant growth in the electric motorcycle segment, while overseas sales declined by 32.4% due to strategic channel optimization.
The company is focusing on expanding its presence in tier 2 and tier 3 cities in China and has launched several new products, including AI-enabled electric bicycles and motorcycles.
Marketing expenses increased significantly due to front-loaded investments in branding and AI technology, positioning the company for future growth as the market recovers.
NIU Technologies anticipates revenue of RMB 1.57 billion to 1.82 billion in Q2, representing a 25% to 45% year-over-year increase.
Full Transcript
OPERATOR
Good day, ladies and gentlemen. Thank you for standing by and welcome to The New Technologies First Quarter 2026 Earnings Conference Call. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, we are recording today’s call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Ms. Crystal Lee, investor relations manager of New Technologies. Ms. Lee, please go ahead. Thank you. Operator and hello everyone. Welcome to today’s conference call to discuss New Technologies results for the first quarter of 2026. The earnings press release, corporate presentation and financial spreadsheets has been posted on our Investor Relations website. This call is being webcast from company’s IR site as well and a replay of the call will be available soon. Please note, Today’s discussion will contain forward looking statements made under the safe harbor provisions of the U.S. private Security Litigation Reform act of 1995. Forward looking statement involves risks, uncertainties, assumptions and other factors. The Company’s actual results may be materially different from those expressed today. Further information regarding the risk factors is included in company’s public filings with the securities and Exchange Commission. The Company does not assume any obligation to update any forward looking statement except as required by law. Our earnings press release and this call include a discussion of certain non GAAP financial measures. The press release containss a definition of non GAAP financial measures and a reconciliation of GAAP to non GAAP financial results. On the call with me today are our CEO Dr. Yan Li and CFO Ms. Yang Zhou. Now let me turn the call over to CEO Yan.
Yan Li (Chief Executive Officer)
Thank you, Crystal. Hello everyone. Thank you for joining our first quarter 2026 results call. The first quarter of 2026 was a period of high quality execution and strategic resilience within a complex regulatory environment. The total sales volume reached 261,000 units, representing a robust 28.7% year-over-year increase. Revenue for the quarter reached RMB 909.52 million, up 33.4% year over year. In China, the sales volume increased 35.4% to nearly 248,000 units. This growth was powered by a major structural breakthrough in our electric motorcycle segment, which successfully offset a tempered contraction in the electric bicycle market as the new national standard took full effect. Overseas, the sales of 13,686 units reflected a 32.4% decline. This remains a planned result of our ongoing channel structure optimization and disciplined inventory management. We’re staying completely focused on our core Objective prioritizing a healthy retail sales group and the long term profitability over short term shipping volume. Now let me walk through our China overseas operation in more detail. In China, our first quarter sales volume reached 247,938 units, a 35.4% increase year over year. While this growth is robust, internal data reveals a significant positive structural evolution of our brand. To end this quarter, we must look at a divergence between two product categories. First, in the electric motorcycle category, the sequence surged by a staggering 3x year over year increase building our momentum that begins in Q4 last year with our Windstorm product line. We further accelerate our growth in the electric motorcycle market, expanding our footprint directly into tier 2 and tier 3 cities. This is no longer just a temporary trend. It’s a definitive market breakthrough, proving NU’s ability to rapid scale and capture the meaningful volume in the segment. In the electric bicycle segment, the sales had softened. This was fully anticipated as the market remained a transitional waiting period as the new standard rolling out last December. We’re managing this period deliberately by removing our new product lines in a phased approach, ensuring we’re perfectly positioned to capture the high quality volume as consumer demand returns. Now this shift has fundamentally redefined our geographic footprint as well. Historically, NIO has been perceived as tier one Citi brand with the market represents 60% of sales. In Q1 we saw the tier one and new tier one cities softened. Where the tier two and tier three cities grow at a faster pace. Fueled by the rapid adoption of electric motorcycles. This represents a massive strategic milestone improves NIU’s brand equity, successful scaling beyond the urban elites and penetrating the broader mass premium China market. Now this shift has set a powerful foundation for 2026. By breaking through the lower tier motorcycle market, we have added a new growth engine. When the electric motorcycle market inevitably recovers, our total growth will rebound with double the four. To ensure we’re the first to capture that recovery, we made deliberate strategic decision to front load our investment in branding, R and D and a new product launch in Q1. Now in branding and marketing, recognizing 2026 is a pivotal year for our brand’s revolution, we made a proactive decision to front load our marketing investment this quarter. We chose to capture the consumer mind share ahead of the curve by building a massive brand awareness in Q1 we have ensured as the new national standard transition stabilizes, NIU is well positioned to capture this unmet demand. In Q1, we executed three major saturation initiatives. First, our Duke Global Ambassador strategy. In late January, we officially announced Wu, Lei and Songyiqi as new ZDU Global Brand ambassador, the first strategy of its kind in our industry. Wu Lei’s image as a high performance outdoor enthusiasm resonate with our core premium users while Songichi significantly extended our reach among Gen ZF female audiences. This campaign was activated across 40 plus cities and 80 plus global landmarks generating an unprecedented 3.4 billion impressions. Second, our Spring Festival saturation campaign we capitalized on the highest frequency travel period in China, a large scale offline campaign across 37 cities, 42 transportation cops and nearly 3,000 cinemas. This generated over 400 million impressions. Firmly embedded message Premium smart equals new in the mind of travelers third, the 2026 technology launch event on March 17th we unveiled our next generation AI mobility strategy. This event was not just a product review but also repositioned you as a technology leader in the AI era. With over 130 media outlets and 460 million impressions, we had redefined what smart tool now those intensive branding activities led to a 4x plus year over year increase in the marketing expense for Q1. So this was the one time from loading of our marketing budget. Historically the first quarter has seen a lower marketing spend due to a seasonal retail trend. However, we choose to strategically shift our marketing ways in Q1 this year to ignite the brand momentum for the entire fiscal year. Now as we move into Q2 and beyond, you will see that our marketing to revenue ratio normalize. We have already established deep brand equity required to drive our 2026 growth target. Now we’re transitioning directly from this investment phase to execution the harvest phase. Now in terms of R and D technology. The technology and continuous innovation remain core to NIO’s long term strategy as they are fundamental to our ability to compete far beyond simple pricing and basic hardware specifications. Our primary technology focus this year is to bring the power of AI to the electric two wheeler industry, zeroing in on three major development areas, the AI operating System, Intelligent Chess system and intelligent writing technology. First on the news AIOS launch our March 17th event the new AIOS is our cornerstone to redefining the next era Intelligent writing. As the industry’s first mass produced AI dashboard system, it represents technology milestone integrating AI enabled voice assistant with high performance automotive grade operating system. The second is the Intelligent Chassis platform. Also introduced our next generation Intelligent Chassis platform. This platform is engineered to integrate advanced safety and performance system including abs, tcs, continuous damping control, battery management system and license system into a single unified vehicle level architecture. Based on this platform, we aim to introduce several industry first features for mass produced two wheelers such as adaptive driving, beam AI headlights and adaptive CDC suspension and the lastly, through a strategic partnership with the leading automotive grade technology companies, we’re bringing advanced rider system functionality to the two wheeler segments. This includes integrating cutting edge hardware like advanced visual recognition systems and the high performance processing chips supported directly by those core technologies. We launched the industry first AI enabled electric bicycles the NXT 2 Ultra as our flagship model. Now talking about our product matrix, our product strategy in Q1 was clear. It’s driving aggressive growth in the electric motorcycle segment while building a dominant portfolio for the electric bicycle recovery. First, to lead the electric bicycle transition, we launched the MXT2 series priced from RMB 5299 to RMB 12999. The flagship NXT2 Ultra is the industry first AI powered E bicycle featuring our AIOS dual channel ABS and millimeter wave radar. This isn’t just a bite, it’s a statement that NIU’s own the high end market. Second, we expand our total addressable market with the Y series. We officially enter the female mobility segment with the Y series endorsed by our ambassador Song Yuqi at a competitive RMB 3,000 to 4,000 price point. And third, the NX Marathon, our new volume engine. To capitalize our 3x growth in the electric motorcycle market, we launched next marathon at RMD 6499. This model target a long range family Commuters offers a 146 kilometer drive range with flagship features such as Magic Wheel. At a mainstream price point the market expense was immediate. Within just five hours launch the NX Marathon generated over RMB 91 million in sales, ranking number one across major E commerce platform. Those performance proves our hero product strategy is working in Q1. We continue to strengthen our both the offline retail sales and online ecosystem operations. In terms of online channels, it delivered another standout quarter. The online sales increased by 53% accounting for approximately 46% of domestic retail sales, demonstrating continuous success of our online to offline operation model. Also on Douyin, we conduct more than 32,000 live streams generating over 370 million impressions. We also continue to expand on Kuaishu and Meituan. Further broaden our digital retail coverage. Now turning to our international operations, we’re navigating a deliberate structural transition to prioritize the healthy fundamentals. Our high margin electric motorcycle business remains a key strategic priority and is showing a strong momentum. Shipment reached more than 2,000 units and 29% year over year increase. Our European dealer Network spended from 307 to 360 active locations this quarter. Now, in the micro mobility segment, international sales was down 37% year over year. First, this is regarding the channel distribution structuring. During the first quarter we complete a major structural shift to a linear distribution model in our key market like Germany and us. This critical action allows us to significantly minimize the ongoing channel operation expenses. Consequently, Q1 served as a transition phase where the major retail partners such as Best Buy in the United States and the Media Mart in Germany focus primarily on sellout of their existing retail inventories. The fresh stock up period under the new distribution model is only in the beginning, now in Q2. Second, reflecting our current inventory positions, we’re holding an elevated volume of micromobility inventories in Europe and the United States stemming from lower than anticipated sales in 2025. Our primary mandate for the remainder of 2026 is clear is to accelerate unit sales volume and aggressively reduce the inventory backlog back to a lean and healthy baseline. To execute this inventory clearance swiftly and protect against long term operation drag, we’re implementing targeted price promotions throughout the rest of the year, especially on older model products, so those efforts will depress our micromobility contribution margins throughout the year. While this discounting strategy presents a short term headwind to our profitability matrix, it is necessary to bring our global micromobility operation back to a complete, optimized and highly stable foundation for the code of 2026. Now looking ahead, we’ll continue executing our strategy with a focus on sustainable and quality driven growth in China. We expect the electric vehicle market will recover gradually throughout Q2. We’re taking cautious view to lead this market. We’re executing a phase out rollout of our full compliant product mix anchored by the NXT 2 and Y series. Those position us with a comparison premium lineup ahead of a critical June and the Q3 selling season. Meanwhile, our electric motorcycle category will continue to be our primary growth engine. We have additional model targeting female riders and technology enthusiasts planned for Q2 and second half of the year and the upcoming 618 Shopping Festival will be the first major retail test of those expanded portfolios. Now overseas, our direct-to-retail strategy in the electric motorcycles this gaining speed. We expect dealer count to surpass 400 locations by the year end, supporting both volume growth and improved profitability in the micro mobility. As I detailed moments ago, our absolute operation priority for the remainder of 2026 is to aggressive inventory normalization and maximizing retail sell through. We expect our linear upgrade channel transition to finalize throughout the first half of this year with our broadened promotional clearance and inventory normalization largely conclude by the second half of 2026. So in summary, we had used the first quarter to do the heavy lifting required for a transformative year. By front loading our marketing, investing deeply in our AI technology roadmap, and diversifying our product portfolio and clean up our global channels, we have moved beyond the transition phase. We believe those strategic actions have laid a solid foundation to drive sustainable and high quality growth in Q2 and will serve as a catalyst to accelerate growth in the latter half of the year. We’re confident in our path and focus on execution. Now I’ll turn over to our CFO Fiang Zhou to talk about the financials.
Yang Zhou (Chief Financial Officer)
Thank you Yan and hello everyone. Please note that our press release contains all the figures and comparisons you need, and we have also uploaded Excel format figures to our IR website for your easy reference as I review our financial results. I’m referring to the fourth quarter figures unless I say otherwise, and all mandatory figures are in RMB if not specified. As Yan just mentioned, our total sales volume for the first quarter was 262,000 units, up 29% compared to the same period of last year. 248,000 units were sold in China, while the remaining 14,000 units sold overseas. Over 60% of our sales volume in China came from the top three bestsellers. The total revenue for the first quarter amounted to 910 million, an increase of 228 million or 33% compared to the same period of last year. China’s revenue was 854 million, accounting for 94% of the total revenue. The scooter revenue was 774 million, a year over year increase of 42%, and this growth was primarily driven by a sales volume and an improvement in the revenue per scooters. China’s scooter ASP will RMB 3120, up nearly 5% year over year, while the overseas revenue was 56 million, representing 6% of the total revenue. The scooter revenue, including electronic motorcycles, mopeds, kick scooters, and E bikes, amounted to 51 million, down from 60 million in the same period of last year, and this decline was driven by the lower sales volume and reduced revenue for peak scooters, partially offset by a higher revenue per electronic motorcycle and mopeds, which command higher retail prices. The sales volume in the international market shifted in favor of the electronic motorcycle and mopeds category. The premium pricing of these products further contributed to a year over year increase in the ASP of overseas scooters which rose from RMB2962 to RMB3716. The revenue from accessories, spare parts, and services was 85 million, a 13% increase compared to the same period of last year, mainly driven by the higher revenue from new services, and the gross profit for this quarter exceeded 159 million, marking a significant improvement compared to 118 million during the same period of last year. The gross margin was 17.4%, 0.1 ppt higher compared to the same period of last year and 2.1 ppt higher than the previous quarter. The Chinese domestic gross margin improved due to a favorable high margin product mix which boosted overall gross margin by 2 ppts. However, these gains were offset by a 1.9 ppt drop from the lower scooters margin. The operating expenses for the first quarter were 264 million, increased 99 million or 60% compared to the same period of last year. The OPEX ratio was 29%, compared from the 24.2% in the same period of last year, but down from 30.5% in the last quarter. Selling and marketing expenses rose by 65 million year over year to 180 million, primarily driven by the intensified marketing initiatives in the domestic market during the holiday season as well as a higher depreciation and amortization expenses and staff cost. Selling and marketing expenses accounted for 19.8% of revenue, up from 16.8% in the same period of last year but down from 21.3% in last quarter. R&D expenses increased by 12 million year over year to 41 million, primarily due to an increase in design and testing cost as well as the staff cost. The R&D expense is representing 4.5% of revenue compared to 4.4% in the same period last year, but down from 7.3% in last quarter. G&A expenses increased by 22 million year over year to 42 million, largely driven by an increase from foreign currency exchange losses. The G&A expenses constitute 4.7% of revenue, up from 3% in the same period of last year and 1.8% in last quarter. Excluding the impact of foreign currency exchanges, the G&A expenses were 23 million compared to 30 million in the same period last year. In the fourth quarter, we had a net loss of 94 million with a net loss margin of 10.3% under GAAP accounting compared to a net loss of 39 million with a net loss margin of 5.7% for the same period of last year, and the non GAAP net loss was 88 million with a non GAAP net loss margin of 9.7%. Turning to our balance sheet and cash flow, we ended this quarter with RMB 1.4 billion remain flat compared to the end of last year in cash restricted cash term deposits and short-term investments of our operating cash inflow amounted to 131 million. Capex for the first quarter amounted to 70 million, reflecting an increase of 46 million compared to the same period of last year. This can be primarily attributed to an increase in opening of new stores and module cost in China. And now let’s turn to guidance. We expected the second quarter revenue in the range to be in the range of RMB 1.57 billion to 1.82 billion, an increase of 25% to 45% year over year. Please be aware that this outlook is based on the information available as of the date and reflects the company’s current and preliminary expectation, which is subject to change due to uncertainties relating to various factors. And with that, let’s now open the call for any questions that you may have for us. Operator, please go ahead.
Yan Li (Chief Executive Officer)
Thank you, operator. And thank you all for participating on today’s call and for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Thank you.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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