Li Auto (NASDAQ:LI) stock declined on Thursday after it reported fiscal second-quarter 2025 results.
The company reported a quarterly revenue decline of 4.5% year-on-year (Y/Y) to 30.2 billion Chinese yuan ($4.2 billion), missing the analyst consensus estimate of 31.8 billion Chinese yuan.
Its adjusted net earnings per ADS were 1.37 Chinese yuan (19 cents), missing the analyst consensus estimate of 1.73 Chinese yuan.
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Vehicle sales decreased 4.7% to $4.0 billion, primarily attributable to lower average selling price due to different product mix, interest subsidies provided to customers and increased sales incentives, partially offset by increased vehicle deliveries.
Total vehicle deliveries reached 111,074 units in the second quarter of 2025, marking a 2.3% year-on-year increase compared to 108,581 units in the second quarter of 2024 and a notable rise from 92,864 units in the first quarter of 2025.
The vehicle margin climbed 70 bps to 19.4%, and the gross margin rose 60 bps to 20.1%.
Adjusted income from operations was $167.3 million, up 37.7% Y/Y. Adjusted net income decreased 2.3% Y/Y to $204.9 million.
Li Auto held cash and equivalents of $14.9 billion as of June 30, 2025, and used $423.8 million in operating cash flow for the quarter, up 607.1% Y/Y. The company recorded a free cash flow outflow of $536.3 million, up 107.4% Y/Y.
As of June 30, 2025, the company had 530 retail stores covering 151 cities, 511 servicing centers, Li Auto-authorized body and paint shops operating in 222 cities, and 2,851 supercharging stations with 15,655 charging stalls.
Li Auto CEO Xiang Li highlighted Li MEGA’s rise as the best-selling MPV over 500,000 Chinese yuan since May and noted advancements in BEV and intelligence initiatives, including the July launch of the Li i8 SUV, the in-house VLA Driver large model, and Li Xiang Tong Xue Agent.
He added that the company’s recent brand upgrade aims to deliver premium, family-oriented spaces, with continued investment in products and intelligence ahead of the Li i6 launch in September to strengthen Li Auto’s position in the premium BEV market.
Tie Li, chief financial officer of Li Auto, added, “In the second quarter, we remained focused on cost optimization and operational efficiency enhancement while navigating a dynamic market, achieving solid profitability that underscores our financial resilience and effective execution.”
Outlook
For the third quarter of 2025, Li Auto expects revenue of 24.8 billion Chinese yuan to 26.2 billion Chinese yuan ($3.5 billion to $3.7 billion), representing a decrease of 38.8%-42.1% Y/Y compared to the analyst consensus estimate of 43.44 billion Chinese yuan.
Li Auto expects vehicle deliveries of 90,000-95,000 for the third quarter of 2025, representing a decrease of 37.8%-41.1% Y/Y.
Price Action: LI stock is trading lower by 4.69% to $21.54 premarket at last check Thursday.
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