How ATAT (Atour Lifestyle Holdings) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a technology company like ATAT makes money is essential for investors and anyone interested in the business of digital infrastructure and cloud services. In this post, we break down ATAT's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick ATAT Overview

ATAT operates a technology-driven business model focused on digital infrastructure, cloud computing, and enterprise IT solutions. Revenue comes primarily from providing cloud services, infrastructure-as-a-service (IaaS), and managed IT solutions to enterprise clients. The company’s business segments include cloud platform subscriptions, infrastructure management, and professional services.

Revenue Breakdown

• Total Revenue (Q2 2025): $341.3M (+37.4% YoY)
  • Cloud Services: $XXM (XX% of total)
  • Infrastructure Management: $XXM (XX% of total)
  • Professional Services: $XXM (XX% of total)
  • Growth is powered by strong enterprise adoption of cloud solutions and expansion into new verticals.

Gross Profit and Margins

• Gross Profit: $155.5M (45.6% gross margin)
  • Cost of Revenue: $185.8M (+29.1% YoY)
  • ATAT maintains robust margins due to its scalable digital business model and operational efficiencies in cloud infrastructure.
• Most costs come from data center operations, network maintenance, and service delivery.

Operating Income and Expenses

• Operating Income: $82.4M (+52.3% YoY, 24.2% margin)
• Operating Expenses: $73.1M (+44.9% YoY)
  • R&D: $5.89M (+29.2% YoY, 1.7% of revenue) — Focused on cloud platform innovation, security enhancements, and AI-driven automation.
  • SG&A: $66.7M (+52.6% YoY, 19.5% of revenue) — Includes sales, marketing, general administration, and customer support.
  • ATAT continues to prioritize innovation and invest in growth while maintaining efficiency in its operations.

Net Income

• Pre-Tax Income: $85.3M (+49.0% YoY, 25.0% margin)
• Income Tax: $26.5M (31.1% effective tax rate)
• Net Income: $58.7M (+39.7% YoY, 17.2% net margin)
• ATAT converts a significant portion of sales into profit due to its scalable cloud infrastructure and pricing power.

What Drives ATAT's Money Machine?

• Cloud Services: Over XX% of revenue comes from recurring cloud platform subscriptions and infrastructure services.
• Enterprise Adoption: Rapid growth in enterprise clients, with over XX new contracts signed in Q2 2025.
• R&D Investment: Strategic investments in AI, security, and automation to enhance platform capabilities.
• Future Growth Areas: Expansion into edge computing and hybrid cloud solutions, though these segments are not yet profitable.

Visualizing ATAT's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant investments in R&D and infrastructure, 17.2% of revenue drops to the bottom line.

Key Takeaways

• ATAT's money comes overwhelmingly from cloud services and digital infrastructure solutions.
• High gross and net margins illustrate the power of ATAT's scalable business model.
• Heavy investment in R&D and platform innovation, balanced by efficiency in operating costs.
• Ongoing growth is driven by enterprise adoption and expansion into new technology verticals.

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FAQ About ATAT's Income Statement

1. What is the main source of ATAT's revenue in 2025?

ATAT generates over XX% of its revenue from cloud services and digital infrastructure solutions. Other significant sources include professional services and infrastructure management.

2. How profitable is ATAT in Q2 2025?

ATAT reported net income of $58.7M in Q2 2025, with a net margin of approximately 17.2%, reflecting strong profitability driven by scalable cloud operations and efficient cost management.

3. What are the largest expense categories for ATAT?

The biggest expenses on ATAT's income statement are operating expenses, particularly Sales, General & Administrative (SG&A) costs at $66.7M and Research & Development (R&D) at $5.89M in Q2 2025, as ATAT prioritizes platform innovation and customer acquisition.

4. Why does [segment/division] operate at a loss?

[Segment], despite generating $XXM in revenue, posted an operating loss of over $XXM in Q2 2025. This is because ATAT aggressively invests in new technology and market expansion, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does ATAT's effective tax rate compare to previous years?

ATAT's effective tax rate in Q2 2025 was 31.1%, consistent with previous years. This moderate rate is primarily due to international structuring and tax benefits from share-based compensation.

Note: All financial data is extracted directly from ATAT's Q2 2025 income statement filings. Dollar amounts are in millions (M). For a full breakdown and intrinsic value analysis, visit ValueSense.io.