ATRenew Inc. Q4 FY2024 earnings call

• 2024 fourth quarter and full year results exceeded targets. Revenues for the fourth quarter exceeded the high end of guidance, and full year revenue grew significantly outpacing the pre - owned electronics industry and national retail sales of consumer goods.
• Focused on growing 1P business and advancing user experience. Grew product revenues in the fourth quarter by 26.6% year - over - year. Forced increasing volume of firsthand supplies from individual users for recycling. Collaborated with JD.com, with Tritium contributing over 50% of the total recycling value in JD's recycling program in the fourth quarter.
• Direct sales to consumers had breakthroughs. 1PtoC sales total GNV reached a new milestone at RMB5.5 billion in 2024. Retail revenue as a percentage of net product revenues was 29% in the fourth quarter, up by 8 percentage points year - on - year. Spent 100 million Yuan on new media marketing in 2024.
• Extended multi - category recycling and services to 673 AHS stores in 2024. Service revenue of Taiji Town saw steady increase, and Taipei consignment business transaction value increased nearly six times year - on - year. Adjusted pricing and operational strategy in Apple official trading business, realizing improved profit margin in the fourth quarter, while closing certain lockmaking businesses in overseas businesses leading to downsized overseas product revenue.
• 2025 strategy focuses on three commitments: experience driven growth with further investment in retail business, building the AHS Recycle brand, and strengthening fulfillment capabilities. Will concentrate resources on direct engagement with consumers, actively explore new media capabilities for brand building, and enhance fulfillment capabilities with plans to establish nationwide network of 5,000 stores and 5,000 member two - door service team over next three years.

The fourth quarter of 2024 saw total net revenues grow 25.2% year - over - year to RMB4.85 billion. Full year revenue reached RMB16.33 billion, representing a 25.9% year - over - year growth. Product revenues in the fourth quarter grew by 26.6% year - over - year. Net service revenues were RMB389 million in the fourth quarter, an increase of 10.7%, and reached RMB1.48 billion for the full year, a 13.5% year - over - year increase. Non - GAAP income from operations was RMB130 million in the fourth quarter and RMB410 million in the full year 2024, growing 61% and 62.8% year - on - year respectively. The total number of transactions grew healthily to over 35.3 million. Multi - category recycling services transaction volume increased nearly threefold year - over - year in 2024, contributing 8.6% of total service revenue, up from 2.3% in 2023.

• Anticipates total revenues for the first quarter of 2025 to be between RMB4,550 million and RMB4,650 million, representing a year - over - year increase of 24.6% to 27.4%.
• Plans to speed up store openings and expanding two - door service team by net adding 800 stores and 1000 two - door staff in 2025. Will boost brand investment by amplifying AHS presence on new media platforms like Douyin and Xiaohongshu.
• Mid - to - long - term goal is to establish nationwide network of 5,000 stores and 5,000 member two - door service team to cater to diverse recycling and trading needs.

Q: Could you kindly share your plans to capture the growth opportunities in 2025 on the back of nationwide consumer electronics trading subsidies? May you help us quantify the add - ons from this year's subsidy? What's the outlook for of your top line?

A: We believe China's pre - owned electronics market had significant untapped potential. Leverage our unique industry position and front - end capabilities to seize opportunities and increase our penetration rates in core scenarios. By leveraging our recycling service capabilities, we aim at an accelerated growth of the top line in 2025. Plan to speed up store openings and expanding our two - door service team by net adding 800 stores and 1000 two - door staff in 2025. Will also boost brand investment by amplifying AHS presence on new media platforms like Douyin and Xiaohongshu.

Q: Do you pay attention to recent AI models like Deep Seek and have a plan to optimize your business with AI?

A: ATRenew has AI applications in some business scenarios, like in automated quality inspection centers using AI image recognition to improve inspection accuracy. Since the fourth quarter of last year, have actively embraced cutting - edge trend and deployed open source large language models for efficiency improvement in store operations compliance check, digital operation trainings, etc. Will further deploy AI applications in more departments and business scenarios this year to achieve cost reduction and efficiency improvement in more recycling scenarios and business processes.

Q: Can you just flush out your updated thinking on capital management priorities, particularly as it relates to reinvesting for growth versus returning capital to shareholders via buybacks?

A: We remain optimistic about the growth of the second - hand recycling industry over the next three to five years. Will adopt a balanced approach when expanding our store network and fulfillment capabilities in 2025. Continue to actively engage with our Board of Directors during the interim for extension of repurchase plan. Will balance the use of cash and invest more when industry opportunities grow to increase long - term shareholder returns.