Chagee Announces First Quarter 2025 Unaudited Financial Results

SHANGHAI, May 30, 2025 (GLOBE NEWSWIRE) -- Chagee Holdings Limited (NASDAQ: CHA) (“Chagee” or the “Company”), a leading premium tea drinks brand serving healthy and delicious freshly-made tea drinks, today announced its unaudited financial results for the first quarter ended March 31, 2025. First Quarter 2025 Operational Highlights1 As of March 31, 2025, the Company operated a total of 6,681 teahouses in Greater China and overseas, representing 63.6% growth in the number of teahouses from March 31, 2024.Total GMV generated in the first quarter of 2025 was RMB8,226.8 million, representing a 38.0% increase from the same quarter of 2024, as driven by increased GMV of both Greater China and overseas teahouses.Average monthly GMV per teahouse in Greater China was RMB431,973 in the first quarter of 2025, compared to RMB455,996 in the fourth quarter of 2024 and RMB549,432 in the first quarter of 2024.Chagee’s Mobile Mini Program had a total of 192.4 million registered members as of March 31, 2025, representing 109.6% growth in the number of registered members from March 31, 2024.Chagee had 44.9 million active members in the first quarter of 2025, representing a 21.4% year-over-year increase. First Quarter 2025 Financial Highlights Net revenues increased by 35.4% to RMB3,392.7 million (US$467.5 million) from RMB2,506.6 million in the same quarter of 2024.Operating income in the first quarter of 2025 was RMB820.8 million (US$113.1 million), representing an operating margin of 24.2%, compared to RMB705.9 million, or an operating margin of 28.2%, in the same quarter of 2024.Net income increased by 13.8% to RMB677.3 million (US$93.3 million) from RMB595.1 million in the same quarter of 2024. First Quarter 2025 Financial Results Total net revenues increased by 35.4% to RMB3,392.7 million (US$467.5 million) from RMB2,506.6 million in the same quarter of 2024. Net revenues from franchised teahouses were RMB3,149.9 million (US$434.1 million), representing an increase of 31.8% from RMB2,389.7 million in the same quarter of 2024. The increase was primarily driven by the expansion of the Company’s franchised teahouse network. Net revenues from franchised teahouses represented 92.8% of the Company’s total net revenues for the first quarter of 2025.Net revenues from company-owned teahouses were RMB242.8 million (US$33.5 million), representing an increase of 107.7% from RMB116.9 million in the same quarter of 2024. The increase was mainly fueled by the new opening of company-owned teahouses. Net revenues from company-owned teahouses represented 7.2% of the Company’s total net revenues for the first quarter of 2025. Total operating expenses increased by 42.8% to RMB2,571.9 million (US$354.4 million) from RMB1,800.6 million in the same quarter of 2024. Cost of materials, storage and logistics were RMB1,590.3 million (US$219.1 million), representing an increase of 20.8% from RMB1,316.2 million in the same quarter of 2024. The increase was primarily due to increase in the sales of materials to the Company’s franchised teahouses as it continued to expand its teahouse network.Company-owned teahouse operating costs were RMB157.0 million (US$21.6 million), representing an increase of 170.0% from RMB58.2 million in the same quarter of 2024. The increase mainly resulted from an increase of 133 company-owned teahouses, which drove the increase in payroll, store rental, utilities, and other store operating expenses.Other operating costs were RMB172.5 million (US$23.8 million), representing an increase of 79.6% from RMB96.0 million in the same quarter of 2024. This was mainly due to the increase of RMB72.6 million in payroll, utilities, office expenses and travelling expenses, which was attributable to the Company’s expanded headcount to support the rapid expansion of its franchised teahouse network. Other operating costs as a percentage of total net revenues was 5.1%, compared to 3.8% in the same quarter of 2024.Sales and marketing expenses were RMB299.3 million (US$41.2 million), representing an increase of 166.0% from RMB112.5 million in the same quarter of 2024. The increase was mainly driven by increases of (i) RMB111.9 million in advertising expenses associated with branding activities, new product launches and related marketing campaigns, and (ii) RMB67.8 million in payroll, utilities, office expenses and travelling expenses due to the expansion of the Company’s sales and marketing team. Sales and marketing expenses as a percentage of total net revenues was 8.8%, compared to 4.5% in the same quarter of 2024.General and administrative expenses were RMB352.8 million (US$48.6 million), representing an increase of 62.1% from RMB217.7 million in the same quarter of 2024. The increase was primarily driven by increase of (i) RMB53.6 million in research and development expenses resulting from fine-tuning existing tea drinks recipes and developing new products and IT systems, (ii) RMB36.2 million in professional service fees incurred to support business development and operations, and (iii) RMB25.9 million in payroll expenses due to the headcount expansion of the Company’s administrative staff to support its growing business and global expansion. General and administrative expenses as a percentage of total net revenues was 10.4%, compared to 8.7% in the same quarter of 2024. Net income was RMB677.3 million (US$93.3 million), representing a net income margin of 20.0%, compared to RMB595.1 million, or a net income margin of 23.7%, in the same quarter of 2024. Basic and diluted net income per ordinary share was RMB3.92 (US$0.54), compared to RMB3.32 in the same quarter of 2024. Cash and cash equivalents, restricted cash, and time deposits were RMB5,392.4 million (US$743.1 million) as of March 31, 2025, compared to RMB4,868.7 million as of December 31, 2024. Key Operating Data For the three months ended March 31, 2024 December 31, 2024 March 31, 2025 Total teahouses4,083 6,440 6,681 Franchised teahouses4,025 6,271 6,490 Greater China market3,931 6,145 6,362 Overseas markets94 126 128 Company-owned teahouses58 169 191 Greater China market58 139 150 Overseas markets- 30 41 Total GMV (RMB in million)5,962.2 8,177.2 8,226.8 Greater China market5,865.9 7,975.7 8,048.4 Overseas markets96.3 201.5 178.4 Average monthly GMV per teahouse in Greater China (RMB)549,432 455,996 431,973 Same store GMV growth46.0%(18.4)%(18.9)%Greater China market45.8%(19.3)%(19.1)%Overseas markets49.8%29.2%(8.4)%Registered members (in million)91.8 177.3 192.4 Active members (in million)37.0 42.5 44.9 Recent Developments On April 17, 2025, the Company announced the pricing of its initial public offering of 14,683,991 American Depositary Shares, at an initial public offering price of US$28.00 per ADS, before underwriting discounts and commissions. Each ADS represents one Class A ordinary share of Chagee. The gross proceeds from the Offering, before deducting underwriting discounts and commissions and other offering expenses payable by Chagee, were approximately US$411.2 million. On May 1, 2025, the Company announced that the Underwriters of its previously announced U.S. initial public offering exercised their over-allotment option to purchase an additional 2,202,598 ADSs at an initial public offering price of US$28.00 per ADS, resulting in additional gross proceeds of approximately US$61.7 million, before underwriting discounts and commissions. The issuance and sale of the over-allotment option closed on April 30, 2025. Key Definitions GMV (gross merchandise value) refers to the transaction amount from the sales of freshly-made tea drinks from franchised teahouses and company-owned teahouses.Average monthly GMV per teahouse in Greater China is calculated by dividing (i) the sum of GMV generated by the monthly fully operational teahouses in Greater China in each calendar month during the specific period by (ii) the sum of the total number of the monthly fully operational teahouses in Greater China in each calendar month during the corresponding period.Same store GMV growth refers to the growth rate of GMV generated by same stores in Greater China and/or overseas during that specific period compared to GMV generated by these same stores during the corresponding period in the preceding year. Same stores are defined to be teahouses that (i) have been in operation for at least 13 months, and (ii) without material operational changes in both comparison periods.Active members refer to registered members who placed an order for the Company’s products at least once in a given period. Conference Call The Company’s management team will hold a conference call at 8:00 A.M. U.S. Eastern Time on Friday, May 30, 2025 (or 8:00 P.M. Hong Kong Time on the same day) to discuss the financial results. Details for the conference call are as follows: All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers and a unique access PIN, which can be used to join the conference call. A live and archived webcast of the conference call will be available at the Company’s investor relations website at investor.chagee.com. About Chagee Chagee is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks. Founded in 2017, Chagee has transformed traditional tea culture into a modern lifestyle experience, leveraging cutting-edge technology and innovative branding. With its commitment to quality, innovation, and cultural connection, Chagee continues to reshape the global tea industry. Use of Non-GAAP Financial Measures The Company considers adjusted net income, a non-GAAP financial measure, as a supplemental measure to review and assess the operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company presents this non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. The Company also believes that the use of this non-GAAP measure facilitates investors’ assessment of the operating performance. This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using this non-GAAP financial measure is that it does not reflect all items of income and expense that affect the operations. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited. The Company compensates for these limitations by reconciling this non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the performance. The Company encourages you to review the financial information in its entirety and not rely on a single financial measure. The Company non-GAAP financial measure reflects adjustments for share-based compensation expense. The Company believes that the exclusion of share-based compensation expense is appropriate because it eliminates the impact of non-cash expenses that are based upon valuation methodologies and assumptions that vary over time, and the amount of the expense can vary significantly between companies due to factors that are unrelated to their core operating performance and that can be outside of their control. Although the Company excludes share-based compensation expense from the non-GAAP measure, equity compensation has been, and will continue to be, an important part of future compensation strategy and a significant component of future expenses and may increase in future periods. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2567 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of March 31, 2025. Safe Harbor Statement This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “potential,” “continue,” “ongoing,” “targets,” “guidance” and similar statements. Chagee may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Chagee’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Chagee’s growth strategies; its future business development, results of operations and financial condition; its ability to retain and attract its customers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with its suppliers and business partners; trends and competition in China’s freshly-made tea drinks industry or China’s food and beverage sector in general; changes in its revenues and certain cost or expense items; the expected growth of China’s freshly-made tea drinks industry or China’s food and beverage sector in general; governmental policies and regulations relating to Chagee’s industry; and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks, uncertainties or factors is included in Chagee’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Chagee undertakes no obligation to update any forward-looking statement, except as required under applicable law. Contact Investor RelationsRobin Yang, PartnerICR, LLCEmail: Chagee.IR@icrinc.com Phone: +1 (212) 537-5825 Media RelationsBrad Burgess, SVPICR, LLCEmail: Chagee.PR@icrinc.com __________________________ 1 Please refer to the section “Key Definitions” for detailed definitions on certain terms used. CHAGEE HOLDINGS LIMITEDUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(All amounts in thousands, except for share, per share data or otherwise noted) As of December 31, 2024March 31, 2025 RMBRMBUS$Assets Current Assets Cash and cash equivalents4,754,783 5,110,533 704,250 Restricted cash13,898 22,853 3,149 Time deposits100,000 259,000 35,691 Accounts receivable, net121,967 131,327 18,097 Inventories132,069 117,438 16,183 Prepayments and other current assets, net315,404 339,028 46,719 Amounts due from related parties1,547 1,370 189 Total current assets5,439,668 5,981,549 824,278 Non-current assets Long-term investments2,403 2,531 349 Property and equipment, net249,003 265,244 36,552 Deferred tax assets, net253,210 251,761 34,694 Right-of-use assets, net542,202 625,104 86,142 Goodwill11,837 11,837 1,631 Intangible assets8,440 9,607 1,324 Other non-current assets89,343 105,598 14,552 Total non-current assets1,156,438 1,271,682 175,244 Total Assets6,596,106 7,253,231 999,522 Liabilities, mezzanine equity and shareholders' equity Current liabilities Short-term borrowings- 150,000 20,671 Accounts payable597,091 508,005 70,005 Contract liabilities, current265,341 223,177 30,755 Taxes payable217,387 253,926 34,992 Operating lease liabilities, current195,438 203,914 28,100 Accrued expenses and other liabilities1,022,671 799,520 110,176 Total current liabilities2,297,928 2,138,542 294,699 Non-current liabilities Contract liabilities, non-current257,305 266,926 36,783 Operating lease liabilities, non-current352,618 434,146 59,827 Total non-current liabilities609,923 701,072 96,610 Total liabilities2,907,851 2,839,614 391,309 CHAGEE HOLDINGS LIMITEDUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(All amounts in thousands, except for share, per share data or otherwise noted) As of December 31, 2024March 31, 2025 RMBRMBUS$Mezzanine equity933,780 950,019 130,916 Shareholders' equity Class A Ordinary shares27 27 4 Class B Ordinary shares49 49 7 Treasury stock(210,082)(210,082)(28,950)Additional paid-in capital90,853 90,853 12,520 Statutory reserve18,437 18,437 2,541 Retained earnings2,752,024 3,414,643 470,550 Accumulated other comprehensive income/(loss)2,597 (2,423)(334)Total shareholders' equity of the Company2,653,905 3,311,504 456,338 Non-controlling interests100,570 152,094 20,959 Total shareholders' equity2,754,475 3,463,598 477,297 Total liabilities, mezzanine equity and shareholders' equity6,596,106 7,253,231 999,522 CHAGEE HOLDINGS LIMITEDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(All amounts in thousands, except for share, per share data or otherwise noted) For the three months ended March 31, 2024 2025 RMBRMBUS$Net revenues Net revenues from franchised teahouses2,389,684 3,149,922 434,071 Net revenues from company-owned teahouses116,887 242,789 33,457 Total net revenues2,506,571 3,392,711 467,528 Cost of materials, storage and logistics*(1,316,240)(1,590,285)(219,147)Company-owned teahouse operating costs(58,166)(157,043)(21,641)Other operating costs(96,009)(172,458)(23,765)Sales and marketing expenses(112,540)(299,323)(41,248)General and administrative expenses(217,673)(352,826)(48,621)Total operating expenses(1,800,628)(2,571,935)(354,422)Income from operations705,943 820,776 113,106 Financial income, net9,217 15,694 2,163 Others, net29,340 (407)(56)Income before income tax744,500 836,063 115,213 Income tax expenses(149,398)(158,746)(21,876)Net income 595,102 677,317 93,337 Less: Net (loss)/income attributable to non-controlling interests(840)1,541 212 Net income attributable to the Company594,262 678,858 93,549 Accretion of convertible redeemable preferred shares to redemption value(14,613)(16,239)(2,238)Cumulative undeclared dividends on convertible redeemable preferred shares(11,917)(12,758)(1,758)Net income attributable to ordinary shareholders of the Company567,732 649,861 89,553 Weighted average number of ordinary shares used in computing net income per share, basic and diluted − Basic104,443,500 98,743,892 98,743,892 − Diluted104,443,500 98,743,892 98,743,892 Net income per ordinary share − Basic3.32 3.92 0.54 − Diluted3.32 3.92 0.54 * Cost of materials, storage and logistics was previously reported separately under cost of materials and storage and logistics costs. It consists primarily of costs for materials and ingredients used for resale or production, as well as costs incurred for inventory storage and related logistics activities. This reclassification has been applied retrospectively. CHAGEE HOLDINGS LIMITEDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(All amounts in thousands, except for share, per share data or otherwise noted) For the three months ended March 31, 2024 2025 RMBRMBUS$Net cash provided by operating activities523,473 360,032 49,615 Net cash used in investing activities(43,837)(192,479)(26,524)Net cash provided by financing activities13,874 202,172 27,861 Effect of exchange rate changes on cash and cash equivalents, restricted cash817 (5,020)(692)Net increase in cash and cash equivalents and restricted cash494,327 364,705 50,260 Cash and cash equivalents, restricted cash at the beginning of the period2,322,680 4,768,681 657,142 Cash and cash equivalents, restricted cash at the end of the period2,817,007 5,133,386 707,402 CHAGEE HOLDINGS LIMITEDRECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES(Unaudited, all amounts in thousands, except for share, per share data or otherwise noted) For the three months ended March 31, 20242025 RMBRMBUS$Net income595,102677,31793,337Add: Share based compensation360--Adjusted net income595,462677,31793,337

Chagee Announces First Quarter 2025 Unaudited Financial Results

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