NIU's Q3 Earnings Beat Expectations: Chinese Market Fuels 65% Revenue Surge

2025-12-31 09:02:15

Niu Technologies (NASDAQ: NIU), the global leader in smart urban mobility solutions, just released its third quarter 2025 financial results, and the numbers tell a compelling story about where the e-scooter market is heading.

The Numbers That Matter

In Q3 2025, Niu posted revenues of RMB 1,693.9 million—a striking 65.4% year-over-year jump from RMB 1,023.9 million in the same period last year. More impressively, the company swung from a net loss of RMB 40.9 million in Q3 2024 to a net income of RMB 81.7 million this quarter. That’s not just recovery; it’s a complete turnaround.

The adjusted net income (excluding share-based compensation) reached RMB 88.4 million, further underscoring the strength of the underlying business.

Where’s the Growth Coming From?

Sales volume tells the real story. Niu sold 465,873 e-scooters globally in Q3 2025, up 49.1% year-over-year. But here’s the kicker: China absolutely dominated, with 451,455 units sold—a massive 74.2% increase compared to Q3 2024. This is peak season performance at its finest.

Meanwhile, international markets faced headwinds, with sales dropping 73.0% year-over-year to just 14,418 units. The company is adjusting to evolving market dynamics, but the China momentum is undeniable.

Margin Expansion Signals Operational Excellence

Gross margin improved significantly to 21.8%, compared with just 13.8% in Q3 2024. This 800 basis point expansion reflects a combination of higher product mix (more high-margin products) and effective cost-reduction initiatives in the China market.

Revenue per e-scooter increased 11.0% year-over-year to RMB 3,636, driven by stronger pricing power and a favorable product mix shift toward higher-value offerings.

Breaking Down the Revenue Stream

The breakdown reveals China’s outsized contribution:

China e-scooter sales: RMB 1,481.9 million (+85.8% YoY), representing 87.5% of total revenue
International e-scooter sales: RMB 67.0 million (-48.6% YoY), down to just 4.0% of total revenue
Accessories, spare parts & services: RMB 145.0 million (+50.8% YoY), capturing 8.6% of total revenue

The channel expansion strategy is working. As of September 30, 2025, Niu operated 4,542 franchised stores across China and maintained a network of 57 distributors covering 53 countries internationally.

Operating Leverage in Action

Operating expenses rose 48.1% to RMB 297.1 million, but crucially, this grew slower than revenue. Selling and marketing spending increased 68.3% to RMB 214.9 million, reflecting aggressive market push in China. However, operating expenses as a percentage of revenue actually decreased to 17.5% from 19.6%, showing improving operational efficiency.

R&D spending climbed 43.2% to RMB 43.4 million, supporting product innovation and the transition to new national standards. G&A expenses surprisingly declined 8.9% to RMB 38.8 million, thanks to a reversal of bad-debt provisions.

Balance Sheet Strength

As of September 30, 2025, Niu maintained a solid financial position with RMB 1,582.8 million in combined cash, term deposits, and short-term investments. The company also held RMB 213.2 million in restricted cash against short-term bank borrowings of RMB 220.0 million.

Looking Ahead

Management guided for Q4 2025 revenues between RMB 737 million and RMB 901 million, representing -10% to +10% year-over-year change. This accounts for the seasonal low period and ongoing market transitions.

CEO Dr. Yan Li emphasized the company’s agility: “Our remarkable 74.2% growth in China reflects the strength of our product portfolio and store expansion momentum. As we navigate the seasonal low and implement new national standards, we’re advancing channel expansion and product transition strategies with discipline.”

Investment Takeaway

Niu’s Q3 performance demonstrates the company’s ability to drive profitability while scaling revenues. The dramatic margin expansion, combined with powerful domestic growth, suggests the company has found the right formula for the China market. The international headwinds warrant monitoring, but they don’t overshadow the fundamental momentum at home.

Basic net income per ADS stood at RMB 1.02 (US$0.14) on a GAAP basis, with diluted earnings per ADS at RMB 0.99 (US$0.14).

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