ZTO Q2 2025 Profit Declines Despite Revenue Growth

ZTO Express (ZTO.US) reported second-quarter 2025 adjusted net income of RMB2.05 billion (US$286.5 million), a 26.8% decrease from RMB2.81 billion in the prior year. Revenues for Q2 2025 increased by 10.3% year-over-year to RMB11.83 billion (US$1.65 billion), compared to RMB10.73 billion in Q2 2024. Adjusted basic and diluted earnings per American depositary share were RMB2.53 (US$0.35) and RMB2.48 (US$0.35), respectively, a 27.3% and 26.6% decrease from RMB3.48 and RMB3.38 in the same period last year. This adjusted EPS of US$0.35 is above analyst estimates of US$0.30.

Operational Performance and Efficiency

ZTO's parcel volume grew by 16.5% year-over-year, reaching 9.8 billion parcels in Q2 2025. This growth was accompanied by a 4.7% decrease in parcel unit price, partially offset by a 17-cent increase in KA (Key Account) unit price. The company saw core express ASP (average selling price) decrease by 6 cents due to higher volume incentives and lower average weight per parcel.

Despite the decrease in unit price, ZTO achieved a 7-cent reduction in combined unit sorting and transportation costs due to strong operational efficiency gains. The number of self-owned line-haul vehicles increased to over 10,000, with 9,400 being high-capacity models, demonstrating continued investment in infrastructure. As of June 30, 2025, ZTO had 690 sets of automated sorting equipment, up from 515 sets in June 2024, contributing to a 3.8% decrease in sorting hub operating cost per unit.

Management Outlook

Management emphasized their strategic focus on 'Quality Is Number One' to drive differentiated product and service experiences. The company plans to continue enhancing capabilities and reducing costs through last-mile initiatives, aiming for a more competitive and profitable partner and courier network.

However, ZTO has revised its annual parcel volume guidance for 2025 downward. The new expected range is 38.8 billion to 40.1 billion parcels, representing a 14.0% to 18.0% increase year over year. This adjustment reflects current economic, competitive, and policy environments, though the company remains committed to staying ahead of the industry average growth rate.