ATRenew Inc. Q2 FY2025 earnings call

• Business updates: Achieved above - expectation revenue growth in the second quarter. The secondhand industry shows a stable and rapidly growing trajectory. 1P product and 3P service revenues grew strongly. - Operational dynamics: Enhanced front - end development of recycling scenarios and strengthened in - store and doorstep fulfillment capabilities. AHS Recycle builds strong brand recognition. C2B recycling business in 1P maintained double - digit growth. Operated 2,092 AHS stores nationwide by the end of the second quarter. Self - operated to - door service team expanded to 1,160 personnel. Refurbished products contributed to 1P revenue. 3P service revenue sustained growth. - Strategic goals: Leverage trade - in programs and supply chain capabilities to partner with strategic allies and be China's largest and most robust leader in pre - owned consumer electronics transactions and services. Leverage AHS Recycle's brand value to expand high - value product category recycling businesses. Create a closed - loop ecosystem integrating commercial monetization and user acquisitions across different transactions to be a pioneer of sustainable consumption. Launched AHS Recycle Green Wallet to promote eco - friendly recycling and green consumption.

In the second quarter, total revenue reached RMB 4.99 billion, representing a year - over - year growth of 32.2%. Within this, 1P product revenue grew by 34% year - over - year to RMB 4.56 billion, accounting for 34.4% of product revenue. 3P service revenue increased by 15.4% year - over - year to RMB 430 million with an overall take rate of 5.3%. Refurbished products contributed 13.5% of 1P revenue. The B2B marketplace PJT saw warehousing inspection GMV growth and new user traffic. Paipai's consignment GMV in the second quarter surged 128% year - over - year. Multi - category recycling GMV and related service revenue both increased by nearly 110% year - on - year with a take rate of 3.4%.

• For the third quarter of 2025, anticipate total revenues to be between RMB 5,050 million and RMB 5,150 million, representing a year - over - year increase of 24.7% to 27.1%. - Announced a 3 - year shareholder return program committing to return no more than 60% of annual non - GAAP net profit to shareholders via dividends, share repurchases or a combination of both from 2025 through 2027. - On June 30, authorized a new share repurchase program under which the company may repurchase up to USD 50 million of its shares over 12 months starting from June 30, 2025.

• Forward - looking statements are based on assumptions as of today, and ATRenew does not undertake to upgrade assumptions on these statements. - Non - GAAP financial measures need to be referred to the earnings press release for reconciliation to GAAP measures. - Forecasts for revenues are subject to change based on market and operational conditions.

Q: Seeing such strong growth momentum in the first half, what are the company's growth expectations for the second half of the year? What are your measures to tackle the high base in the third quarter due to the home appliances national subsidy that was implemented in August last year. Additionally, without the company actually having an updated version of the full year revenue and profit target?

A: From a longer - term perspective, the circular economy model centered on trade - ins and secondhand consumption has enduring potential. Currently, focusing on 2 core strategy priorities: maximizing recycling and fulfillment capabilities including in - store and to - door capabilities; positioning AHS Recycle as China's leading recycling brand. Confident in realizing revenue growth targets for the second half of the year. Regarding profitability, maintain strategy of enhanced investment in brand and capability building, expecting scale effects to gradually drive improvements in operating profit margins starting next year.

Q: Just from a supply standpoint, any notable trends in trade - in activity via JD.com or your off - line stores in terms of volumes or the underlying mix of products? And then related to that, any updated thoughts on how the subsidies have obviously impacted volumes more recently and sort of what inning do you think we might be in as it relates to subsidy - driven growth.

A: Smartphones remain the strongest C2B recycling category. The trade - in program co - launched by JD.com and AHS Recycle sustained robust growth. Enhanced in - store and to - door fulfillment capabilities enabled 80% offline fulfillment adoption across Tier 1 to Tier 4 cities. Closely monitor policy development. Recent government directives signal strong commitment to stimulating consumption through subsidy allocations. Optimized fulfillment to capture subsidy - driven replacement demand, with strong double - digit growth in C2B recycling results, especially in JD's trade - in scenarios. Trade - in and secondhand consumption will gain further traction as mainstream behaviors, and will expand recycling and trade - in scenarios, strengthen store and door - to - door fulfillment, amplify brand influence and deliver superior value and user experiences.