YXT.COM (YXT) 2026 First-Half Earnings Call: AI Growth and Margin Expansion

YXT.COM (YXT) returned to revenue growth in the first half of 2026 as AI-related products gained traction, gross margin expanded and losses narrowed substantially.

Key Takeaways

• Total revenue increased 6% year over year to RMB 162.1 million, led by corporate learning solutions revenue of RMB 158.2 million.
• AI product-related revenue grew nearly ninefold. Monthly recurring revenue from AI products reached RMB 4.4 million as of June 30, 2026, versus RMB 500,000 a year earlier.
• Gross margin rose 5 percentage points to 70.1%, supported by a higher-quality revenue mix, AI-enabled productivity gains and cost optimization.
• Net loss narrowed to RMB 14.4 million from RMB 73.9 million, while adjusted net loss decreased 80.9% to RMB 12.2 million.
• Net revenue retention improved to 102.6% from 100.3%, and the number of newly signed customers increased nearly 50% year over year.
• Management expects gross margin in the second half of 2026 to exceed the first-half level and believes further expansion is possible as its AI transformation continues.

Key Financial Data

Business and Operating Performance

YXT.COM had 2,391 subscription customers as of June 30, 2026, compared with 2,358 a year earlier. Net revenue retention rose 2.3 percentage points to 102.6%, reflecting improved stability within the subscription customer base.

TalentNova remained the company’s main business line. YXT.COM signed more than 120 new TalentNova clients during the period, an increase of more than 48% year over year. Management attributed the improvement partly to integrating AI products into its corporate learning platforms.

NeoLearning generated RMB 32.7 million in signed contract value, up approximately 26.8%. Most of the increase came from AI-related offerings, including AI-augmented blended learning, AI-orchestrated practice and AI-curated courses.

SaleSmart, the company’s AI-native sales enablement product, added more than 20 clients and recorded signed contract value above RMB 5.3 million. Management also said SaleSmart generated sales of more than RMB 5 million during the first half.

YXT.COM no longer markets AI BOX as a separate business line. The company has integrated it into the TalentNova and NeoLearning suites, providing AI infrastructure as part of broader customer engagements.

Management Guidance

Management expects second-half 2026 gross margin to exceed the 70.1% recorded in the first half. The company also believes margins can expand further in future years as AI-driven operational efficiencies and workflow improvements continue.

YXT.COM plans to prioritize large enterprise customers, scale SaleSmart and other AI-enabled knowledge and productivity products, and maintain disciplined cost control while continuing to invest in AI capabilities and research talent.

Analyst Q&A Highlights

The analyst focused on progress across YXT.COM’s four product lines and whether the first-half gross margin expansion was sustainable. Management cited double-digit growth in TalentNova client additions and NeoLearning contract value, early SaleSmart adoption, and the integration of AI BOX into existing product suites.

On profitability, management confirmed that it expects a higher gross margin in the second half than in the first half. It linked the outlook to continued AI adoption, organizational optimization, lower staff costs and improving operational efficiency.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good day, and thank you for standing by. Welcome to the YXT.COM's First 6 Months of 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Peter Lu, Founder and Chairman of YXT.COM. Sir, please go ahead.

Xiaoyan Lu

Hello, everyone. This is Peter Lu, Founder and Chairman of YXT.COM. Thank you for joining our 2026 First Half Earnings Conference Call.

In the first half of 2026, we saw an important shift in enterprise AI adoption. Customers didn't ask whether a product has AI capabilities. They ask whether AI can improve their business outcomes, shorten capability building cycles, accumulate organizational knowledge more thoroughly and support actual execution. Having AI in the product suite was no longer an option for us. Not only that, having meaningful AI with productivity level value became the key differentiator. This was exactly the same direction YXT.COM took going into 2026.

We achieved a nearly ninefold growth in AI product-related revenue. Our monthly recurring revenue from AI-related products reached RMB 4.4 million as of June 30, 2026, compared with RMB 500,000 a year earlier. The driving force behind the ninefold growth of AI products is adding AI to our existing business and innovating AI-native new businesses. In terms of existing business, we integrated AI into our existing corporate learning business and improved our competitiveness in both acquiring new clients and expanding the existing engagements.

In the first half of 2026, the number of newly signed customers increased by nearly 50% compared with the same period last year. Our net dollar retention rate also improved by about 2.3 percentage points. And in terms of new business, SaleSmart, our AI-powered sales intelligence and enablement solution, achieved sales of over RMB 5 million during the same period. This marked the first successful step in expanding from corporate learning business to productivity enablement business in the same sales domain.

Through the first half of 2026, we proved our strategy of intelligent productivity to be effective, and we are even more confident about it now. We will strive to assist enterprises to turn knowledge into capabilities, experiences into assets and individual capacity into organizational intelligent productivity. As more and more companies embrace AI, as AI goes from a chatbot to productivity levers, we will see an even bigger addressable market with more and more definite needs.

One last piece of information I'd like to share with you before turning over is the transformation of our own operation. During the first half of 2026, we adopted AI more systematically and transformed how we build products, how we deliver customer value and how we market ourselves. The benefits of such AI adoption and transformation can be indicated by our gross margin, our operational efficiency and our cash flow.

And for those details, I will now turn the call over to Shen Cao, our Chief Financial Officer, to review our financial performance.

Shen Cao

Thank you, Peter, and hello, everyone. In the first half of 2026, our strategic transformation began to show clear financial results. After a period of business mix optimization and customer portfolio adjustment, we returned to revenue growth, expanded gross margin and significantly narrowed our losses. Total revenues increased by 6% year-over-year to RMB 162.1 million. Revenues from corporate learning solutions were RMB 158.2 million compared with RMB 152.4 million in the same period last year. Subscription-based corporate learning solutions reached RMB 151.8 million, supported by our focus on large enterprise customers and AI-enabled products.

Our customer structure continued to improve. As of June 30, 2026, we had 2,391 subscription customers compared with 2,358 as of June 30, 2025. More importantly, our net revenue retention rate improved to 102.6% compared with 100.3% in the same period last year, show the stability and the quality of our subscription customer base. Profitability improved meaningfully. Gross margin reached 70.1%, up 5 percentage points from 65.1% a year earlier. This improvement was driven by our higher-quality revenue mix, continued focus on large enterprise subscription customers, AI-enabled productivity gains and ongoing cost optimization.

Cost of revenues decreased by 9.1% year-over-year to RMB 48.5 million. Sales and marketing expenses decreased by 3% year-over-year, reflecting improved productivity in customer acquisition, conversion and retention. Research and development expenses increased by 9.8% as we continued to invest in AI product capabilities and R&D talent. We believe this is necessary to support our AI-native strategy and long-term product competitiveness. Our bottom line improved significantly. Net loss narrowed to RMB 14.4 million from RMB 73.9 million in the same period last year.

Adjusted net loss narrowed by 80.9% year-over-year to RMB 12.2 million. These results demonstrate the operating leverage created by our improved revenue mix, higher gross margin and disciplined expense management.

Looking ahead, we will continue to execute around 3 priorities. First, we will deepen our focus on large enterprise customers and improve customer lifetime value. Second, we will scale AI-related products, including SaleSmart and other AI-enabled knowledge and productivity solutions. Third, we will continue to balance investment in AI innovation with disciplined cost control and operational efficiency.

In summary, the first half of 2026 was a period in which our AI-native transformation began to translate into business momentum and financial improvements. We are encouraged by our progress and remain focused on driving sustainable high-quality growth. Thank you.

We are now happy to take your questions.

Operator

[Operator Instructions] Our first question is going to come from the line of Katherine Thompson with Edison.

Question-and-Answer Session

Katherine Thompson

Just can you hear me okay?

Xiaoyan Lu

Yes, sounding clear.

Katherine Thompson

Great. A couple of questions for you. The first one, could you just talk me through the progress you've made with each of your 4 product lines? So TalentNova, NeoLearning, SaleSmart and AI BOX.

Haihua Huang

Thank you, Katherine, for the question. I will try to answer the questions and provide some of the updates in the 4 lines of business. This is Haihua Huang. I'm the Vice President of YXT.COM. And to answer your question, TalentNova is our main business line. As the market leader in corporate learning platform, in 2026, we continue to sign new customers. We signed more than 120 clients, a more than 48% increase compared to last year's same period. And the boost in competitiveness is our successful integration of AI products into our existing corporate learning solutions and platforms.

In terms of NeoLearning during the first half of 2026, we signed RMB 32.7 million engagement in terms of contract value. That's approximately 26.8% increase compared to last year's same period. And the majority of the increase came from AI-related products such as AI augmented blended learning or AI orchestrated practice or AI curated courses.

In terms of SaleSmart, our AI-native sales enablement and productivity boost business, we won over 20 new clients with a total signed contract value of more than RMB 5.3 million.

And lastly, in terms of AI BOX, adjusting to the market landscape, we decided not to market AI BOX as a separate business line, but integrated AI BOX into our TalentNova and NeoLearning product suite. In the first half of 2026, we saw clients needing AI infrastructure, and we provided AI BOX as part of our TalentNova service to the clients. So we have quite successfully pushed all 4 business lines to the market and saw significant growth in terms of revenue.

Katherine, I think that's the answer to your question.

Katherine Thompson

That's really helpful. And then just secondly, looking at the gross margin. So clearly, there was a big expansion year-over-year in H1. Are you able to give any sense of whether that margin can carry on increasing into H2 and then also into future years?

Shen Cao

Okay. Thank you. Thank you for your question. Gross margin, was 70.1% in the 6 months ended June 30, 2026, compared with 65.1% in the same period of last year, representing an increase of 5 percentage points to growth in revenue, gross margin and customer base. The significant decrease of net loss reflected the benefit of our AI transformation, AI-driven operational efficiencies and also helped optimize our organizational structure and workflows, leading to meaningful reductions in staff costs. Our improvements in revenue growth and cost efficiencies continue and strengthen our financial foundation, which means we expect we would achieve a higher gross margin in the second half of 2026.

Katherine Thompson

Sorry, I missed the last part of that. Do you expect to get a higher gross margin in H2 compared to H1?

Shen Cao

Yes.

Katherine Thompson

Okay. And in future years, do you think you can still expand it further?

Haihua Huang

Yes, we believe we'll continue to boost our gross margin because our AI transformation is a continuous progress, and we will continue to see benefits in both operational efficiency and business outcomes. So yes, we do expect to see that.

Operator

And this is going to conclude today's question-and-answer session. Ladies and gentlemen, this will also conclude today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.