Youlife revenue more than doubles as profit falls

Youlife Group more than doubled first-half revenue, but the growth came with thinner economics. Revenue rose 114.8% to RMB1,961.9 million (US$288.1 million), while net profit fell to RMB30.3 million from RMB37.7 million and gross margin narrowed to 8.6% from 14.1%, according to the Chinese blue-collar workforce provider’s unaudited results released Oct. 15.

Employee management services generated RMB1,884.2 million in the six months ended June 30, 2026, up 122.3%. Youlife attributed the increase to more corporate customers, demand for large-scale outsourcing and revenue from YouheHR, acquired on Jan. 31. The acquired business operates at a lower gross margin than some of Youlife’s other services.

The much smaller HR recruitment business grew 93.7% to RMB17.7 million, which the company attributed to increased client demand.

Gross profit increased 31.7% to RMB169.2 million, but operating expenses rose faster, up 67.9% to RMB138.8 million. Youlife linked the expense increase to sales, marketing and administrative costs following the acquisition, alongside higher research and development spending.

A three-year nationwide outsourcing agreement signed in January gives Youlife additional work covering production operations and business support for a domestic retail group’s stores and large warehouses. Management expects the agreement to support recurring employee management services revenue.

Alongside that expansion, Youlife entered a partnership with Anhui Thingo Intelligent Technology on June 18 to develop AI recruitment products and intelligent-agent services. Chief executive Yunlei Wang said the objective is to improve job matching, workforce delivery and workforce management. The agreement has an initial term of at least ten years and includes plans for an AI industry academy.

Research and development spending reached RMB8.3 million in the first half, compared with RMB1.6 million a year earlier. Acting chief financial officer Haijun Zhang said integration, operating efficiency and gross-margin improvement are priorities as the company continues selective investment.