ATRenew Inc. Q1 FY2026 earnings call

• Core Strategy Execution
  • Maintains a 1P-centric strategy focused on second-hand consumer electronics recycling and trading, continuing to optimize the 1P2C ratio to increase direct-to-consumer sales of high-quality refurbished devices.
  • Validates the effectiveness of the company's three-stage long-term development strategy for the second-hand industry.
• Offline Fulfillment Expansion
  • Operates 2,156 self-operated AHS Recycle stores across major Chinese cities, and expanded the professional door-to-door service team to 2,248 members, lifting the face-to-face transaction fulfillment ratio to 80%.
  • 966 self-operated stores offer multi-category recycling services, an increase of nearly 300 stores year-over-year; 841 of these stores have enabled full multi-category service capabilities with upgraded layouts and user experiences.
• Key Partnership & Channel Growth
  • Continues deep collaboration with JD.com on consumer trading programs; trading order volume via the JD sourcing channel grew to 70% year-over-year volume share, outpacing overall company growth.
  • Expanded 1P2C retail across PiPi selection, official website and new media channels, with monthly retail sales of compliant refurbished devices exceeding RMB 200 million in March 2026.
• 3P Platform Development
  • Lowered usage barriers for small and medium-sized merchants by streamlining platform processes, offering free shipping on the first three orders for new registered merchants, and extending large-client operational capabilities to smaller businesses, leveraging Douyin to reach fragmented consumer markets.
• Multi-Category & International Expansion
  • Sustained rapid double-digit growth in the PaiPai consignment business, driving overall expansion of multi-category recycling beyond consumer electronics.
  • Exported high-quality older-generation devices to international markets to meet differentiated demand, unlocking an incremental profit margin of over 4%.

Overall total net revenue for Q1 2026 was RMB 6.16 billion, growing 32.4% year-over-year. 1P (Product) segment: Net product revenue was RMB 5.73 billion, growing 34.4% year-over-year, accounting for 93.0% of total revenue. Within 1P product revenue, compliant refurbished product revenue grew 76.1% year-over-year, with on-demand refurbishment revenue growing roughly 180% year-over-year, and 1P2C retail revenue from refurbished devices growing nearly 150% year-over-year; 1P2C revenue accounted for 45.1% of total 1P product revenue, up 12.1 percentage points year-over-year. The 1P gross profit margin improved to 15.9% from 15.2% year-over-year. 3P (Service) segment: Net service revenue was RMB 430 million, growing 10.4% year-over-year, accounting for 7.0% of total revenue. Multi-category recycling contributed over RMB 83 million in revenue, representing 19.3% of total service revenue; overall recycling GMV grew 81.5% year-over-year, with gold recycling GMV growing 83.3% and second-hand luxury recycling GMV growing 58.8% year-over-year. The 3P platform overall take rate was 4.92%, in line with management expectations. PJT Marketplace (3P B2B platform) reached nearly 2 million total registered merchants, doubling year-over-year, with registered contracted buyers growing over 120% year-over-year.

• For the second quarter of 2026, management guides total revenue between RMB 6.24 billion and RMB 6.34 billion, representing 25% to 27% year-over-year growth.
• The company's 2026 full-year revenue scale growth is now expected to outpace initial internal targets, with meaningful full-year margin improvement also projected.
• The existing $50 million share repurchase program, originally set to expire in June 2026, has been extended by an additional 12 months with total amount and other terms unchanged; approximately $11 million of the program had been utilized as of the end of Q1 2026.
• Management plans to share a detailed updated overseas expansion strategy in the next quarterly earnings call.

No explicit material risks or operational failures were discussed by management during the call.

Q: Does management have updated full-year 2026 guidance for revenue and profit growth? / A: Management reaffirms its strategic priority on the end-to-end 1P business, which enables better user experience and higher value creation. Government policy support for consumer electronics trade-ins, plus increased investment from brands and platforms, allows the company to source first-hand inventory more efficiently at lower cost. Overseas business grew rapidly in Q1, and management will continue disciplined expansion while using AI to accelerate incubation. For 2026, management expects faster scale growth than initial internal targets, with meaningful margin improvement.

Q: What are the company's 2026 plans for store network expansion and door-to-door fulfillment capacity building? / A: Management completed a Q1 review of the store network, optimizing by phasing out underperforming stores and increasing efficiency at high-performing locations. The company will continue its proven cadence of new store openings followed by performance consolidation, and maintains its long-term target of 5,000 total stores in China. Door-to-door service staff increased by nearly 500 year-over-year to support face-to-face fulfillment in key scenarios like JD trade-ins, and flexible workforce capacity will be activated during peak seasons to maintain service quality.

Q: What drove Q1 inventory growth, and what is the outlook for normalized inventory levels? / A: Inventory increased partially because the company offered more attractive pricing to users amid stable second-hand market prices and rising new device upstream costs, holding high-quality inventory to sell in Q2 rather than rushing turnover. The inventory build also aligns with the strategic shift to higher 1P2C sales, which have slightly longer average inventory turnover days than bulk B2B sales. Management expects inventory to return to normalized lower levels by the end of Q2, and the inventory increase will not have a material impact on core business turnover thanks to PJT Marketplace's pricing support.