ATRenew Inc. (RERE) May 2026 Conference Transcript

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to AT Renew Inc.'s first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. We will be hosting a question and answer session after management's prepared remarks. Please note, today's event is being recorded. I will now turn the call over to the first speaker today, Ms. Jessie Chen, Head of Investor Please go ahead, ma'am.

Hello, everyone, and welcome to AQRI News First Quarter 2026 Earnings Conference Call. Speaking first today is Kerry Chen, our Founder, Chairman, and CEO, and he will be followed by Rex Chen, our CFO. After that, we will open the call to questions from the analysts. The First Quarter 2026 financial results were released earlier today. The earnings press release and investor slides accompanying this call are now available at our IR website, ir.atrenew.com. There will also be a transcript following this call for your convenience. For today's agenda, Kerry will share his thoughts of our quarterly performance and business strategy, followed by Rex, who will address the financial highlights. Both Kerry and Rex will participate during the Q&A session. Please note our safe harbor statements. Some of the information you will hear during our discussion today will consist of forward-looking statements, and I refer to you our safe harbor statements in the earnings press release. Any forward-looking statements that management makes on this call are based on assumptions as of today, and that HONU does not take any obligations to upgrade our assumptions on these statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings request release, which contains a reconciliation of non-GAP measures to GAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB and all comparisons are on a year-over-year basis. Now, I'd like to turn the call over to Kerry for business and strategy updates.

We are very happy to share with you the success of this year, and to improve some ideas about the development of the two-year-old business industry.

Hello everyone, and thank you for joining ATRI News' first quarter of the 2026 Earnings Conference Call.

We are pleased to review our operating results and share our latest perspectives regarding capability building in the second-time industry this year. 今年年初,我们延续了春节不打羊的运营策略,如期实现了业绩开门红,于第一季度实现了整体业绩的加速增长,集团总收入61.6亿元加速增长了32.4%,其中EP产品的收入增长同比增长34.4%为主要驱动力, 3P服务增长同比增长10.4% 保持健康的发展节奏 在利润端,Nangap经营利润同比增长70.2%至1.9亿元

Nangap的经营利润率健康提升69个基点至3.1% At the beginning of the year, we maintained and interrupted services during the Chinese New Year holiday achieving a strong start and delivering accelerated overall growth in the first quarter. Total net revenues reached R&B $6.16 billion, representing an accelerated growth rate of 32.4%. This momentum was primarily driven by 1P product revenue, which surged 34.4% year-over-year, while 3P service revenue maintained a healthy 10.4% year-over-year growth rate. Profitability also improved. Non-GAAP operating profit grew 70.2% over a year to 190 million RMB, while the non-GAAP operating profit margin expanded by 69 basis points to 3.16%.

In the entire revenue and scale growth process, we are firmly in the main strategy of the U.P. as the main strategy. In addition to the overall revenue and scale expansion, we continue to advance our 1P-centric strategy, to restrain our core foundation in the resuppling and trading of second-hand consumer electronics.

To drive greater value for retail users, we optimized our 1P2C ratio by securing first-hand supply sources and enhancing compliant refurbishment output.

We have the best-to-date business development and the best-to-date market development will be able to provide more access to the online service. Thank you.

On the supply side, we capitalized on industry trends by prioritizing trade-in scenarios that deliver superior use experiences, while shifting more fulfillment to offline via two-door services. In 2026, the government maintained strong support for trade-ins and further advanced fiscal and financial coordination. Against this backdrop, AHS Recycle continues to work closely with JD.com to create industry-leading trading solutions, providing a seamless one-stop trading experience at highly competitive prices to meet diverse consumer needs. As a result, within the JD sourcing channel, trading orders outpaced overall growth, with volume share further expanding year-over-year to about 70 percent. 因为我们持续牵引用户在线下场景进行面对面的交付。 一级度在遍布全国主要城市的2156家门店之外, 我们进一步扩大了上门交付的团队规模。 有2248位专业的上门人员将交付服务带到用户面前, 面对面的交付比例达到80%, Through the reciting fulfillment process, we actively guide users towards face-to-face transactions in offline settings. In the first quarter, we expanded beyond our network of 2,156 stores across major cities and scaled up our door-to-door service team to 2,248 professionals, bringing our services directly to users' doorsteps. This strategy has lifted our face-to-face fulfillment ratio to 80%, fostering deep connection and trust through AHS Recycle's fulfillment capabilities and brand presence. Looking ahead to peak seasons like major promotional campaigns and flagship device launches, we will further implement flexible workforce solutions to enhance face-to-face fulfillment, timeliness, and user experience even during the business times. 同比增长有180% 我们的合规翻新机能力为2C的零售 扩充了更多的优质二手商品

在零售渠道方面 通过同步发令 开拍严选 二回收官网 新媒体三个渠道 合规翻新机的2C销售收入 同比增长近150% 其中今年3月份 严选业务的合规翻新机的销售 单月业绩突破了2亿元 再次实现了新的业务里程碑 低域以上 今年一季度产品收入的2C零售占比提升至45.1% 对比去年同期的33%和去年四季度的41.7% 分别上升了12.1%和3.4%

During the first quarter, we leveraged our proprietary compliant refurbishment business to add depth to our supply chain. with compliant refurbished product revenue increasing 76.1% year-over-year. Our on-demand refurbishment model was a standout performer, growing by roughly 180% in revenue. Our compliant refurbishment capabilities allowed us to provide more quality second-hand devices directly to consumers. In terms of retail channels, we expanded across PyPySelection, our official website, and new media channels, which drove nearly 150% year-over-year growth in 1P2C retail revenue from refurbished devices. March marked a significant breakthrough with monthly retail sales of compliant refurbished products topping $200 million. As a result, 1P2C accounted for 45.1% of our product revenue in the first quarter of 2026, rising 12.1 percentage points from 33% young year and 3.4 percentage points from 41.7% quarter-over-quarter. This strategic pivot toward direct-to-consumer sales allows us to align our recycling prices with real-time retail trends, ensuring we offer better resulting prices, maintain a strong price advantage, and create greater value for end-users. Starting high quality products from older generations, specifically N-3 and N-4 models, we targeted differentiated demand for device generations in the international markets to drive compliant exports. This strategy allows us to steadily expand our global scale and unlock an additional over 4% growth profit margin. Turning to our 3T business, PJT Marketplace also delivered healthy and rapid growth in both scale and revenue, further reinforcing its position as industry infrastructure. As we onboarded more new users, we offered free shipping on the first three orders to those new users on PJT Marketplace. We are also replicating the operational capabilities PJT Marketplace has built in serving large clients and extending them to small and medium-sized merchants. By streamlining platform processes, we have lowered the barrier to using platform and improved both transaction efficiency and convenience, enabling small and medium-sized merchants to sell their products at better prices.

同比增长接近三倍

我们看到越来越多的偏好性价比的小微用户 到平台上面来逃货 这也验证了拍子堂供应链 分散下层策略有效落地

Leveraging TJT Marketplace robust supply chain capabilities at the industry's leading B2B platform We deliver high-quality supplies to those merchants while reaching fragmented markets through Zouin's user base. By the end of the first quarter, the number of total registered merchants on TJT Marketplace nearly doubled year-over-year to almost 2 million. Notely, the number of registered contracted buyers surged by over 120%, as an influx of small and micro buyers seeking high-quality value-for-money products came up to the platform. This validates the effective implementation of our PJT marketplace supply chain strategy to penetrate fragmented markets. Under our 3P business model, PaiPai continues to shift toward the consignment model. Under this model, the PaiPai team provides merchants with standardized operational services, making the pre-owned retail easier for them to manage. Since the second quarter of last year, PaiPai consignment has continued to provide merchants with broader access to curated retail channels.

其中注册签约买家 用户数快速增长超过120% 在这过程中

In the first quarter, the consignment business maintained a rapid double-digit growth, helping pre-owned retail merchants move closer to consumers. 多品内回收于一季度保持了高速的业绩增长 整体回收规模同比增长81.5% 其中黄金交易规模增速83.3% 二十二的交易规模增速58.8% 均呈现扎实的成长性 截至今年的3月末,我们在966家爱回收门店开通了多品类回收业务,较去年3月末增加了近300家 预计今年年内,我们将在更多的爱回收至于门店开通多品类回收能力,包括与更多的加盟商协作、建设黄金回收等服务能力 结合多品类的业务发展

爱回收门店的位置和空间都在升级 为新老用户提供更好的交互环境和品牌价值传递 Multi-Catware Recycling sustained rapid growth in the first quarter with overall Recycling GMV up 81.5% year-over-year Among them, Gold Recycling GMV grew 83.3% and Secondhand Luxury Recycling GMV grew 58.8% both showing solid growth momentum. By the end of March, we launched multi-catural recycling services across 966 AHS stores, adding nearly 300 stores compared to the end of March last year. Looking ahead, we expect to roll out this capacity to more self-operated AHS stores through the rest of the year, while also working with more franchisees to build those recycling service capabilities. Alongside the growth of our multicultural business, we are also upgrading the locations and layouts of our stores, creating a better fulfillment experience and conveying greater brand value to both new and existing users.

In summary, the overall 3P service take rate was 4.92% in the first quarter, in line with our expectations. 以上业绩印证了我们此前分享的三级发展战略的有效性 基于2026年的市场动态 我们再次重申 再次复盘战略的长期性 低级战略 继续夯实二手手机3C业务基本盘的健康增长 在二手行业的品类判断中 我们识别到具备规模和巨大渗透率发展空间的二手手机三期品类 在国家移旧换新促进消费和行业升级的过程中 我们积极布局回收和移旧换新的场景 加强爱回收的品牌新制建设 来服务更广泛的用户的开放和升级需求 为更多电子产品实现第二生命周期 并为社会创造更多价值 过程中我们坚定地建设EP能力 增加对AI工具的使用 做好价格体验 中端用户的服务 供应链的效率 通过合规翻新来扩大产业链的价值厚度

通过更多比例的QC零售来提升产业链的价值 These results validated the effectiveness of the three-stage development strategy we previously shared. Based on 2026 market dynamics, let me revisit the long-term nature of our strategy. Stage one, we continue to solidify the healthy growth of our core second-hand consumer electronics business. In our category assessment within the second-hand industry, we identified second-hand consumer electronics as a category with both scale and enormous room for further penetration. As national trading policies promote consumption and industry upgrades, we are actively positioning ourselves in recycling and trading scenarios, strengthening the brand recognition of AHS Recycle to serve broader user replacement and upgrade needs, enabling more electronic products to achieve a second life cycle, and creating greater value for society. Throughout this process, we are steadfastly building our 1P business capabilities, increasing our use of AI tools, optimizing pricing experiences and end-user services, and supply chain efficiency, while expanding our industry value chain through compliant refreshment and creating more value to retail users through a higher portion of retail sales. 。

走进更多大众消费商圈, 占据独特的场景与地理位置,

鼓励更多年轻用户参与到回收与绿色消费。 Stage 2, we are strengthening AHS Recycle's position as China's leading recycling brand. We believe that in the second-hand service industry, pricing, trust, and convenience are the three core pillars that define the long-term use experience. And in the industry's long-term development path, Brand equity holds enduring value. Young trade-in scenarios, we maintain independent and prudent brand investments in AHS Recycle across Douyin and Xiaohongshu. Combined with the revived initiative, AHS Recycle has partnered with an increasing number of consumer brands to penetrate more mainstream commercial districts, from local communities to shopping districts, from campuses to workplaces. By securing these unique scenarios and locations, AHRS Recycle encourages more younger users to participate in recycling and grain consumption. and have the ability to promote the user's ability to support the user's users. Stage 3, we continue to advance breakthroughs in our overseas strategy. The B2B business in overseas markets represents a business model we are familiar with. By accumulating reputation and capabilities of export of China-sourced supplies, we continue to explore global version of TJT marketplace and product development while systematically building capabilities to directly serve end consumers. 判断了三个机遇方向得以验证,即一,二手市场的价格走势整体平稳坚挺,夯实了行业长期健康发展的基础。

第二点,与我们业务核心驱动力高度相关的苹果产品在市场份额方面显示出很大的优势。 The third thing is that the market market market and the market market market is increasing. We can get the value of the market market.

Now, let me share a few thoughts on the 2026 market environment. Industry data shows that new device shipments in China have dipped slightly this year by about 4%. However, if we look at the brand mix, Apple and Huawei remain mainstream brands in the print-owned market. Both grew against a broader trend in the new device market, supported by their supply chain capabilities and pricing advantages. This has validated the three opportunities we previously identified. First, pricing trends in the print-owned market remain broadly stable and resilient, laying a solid foundation for the long-term healthy development for the industry. Second, Apple products, which are closely tied to our core business drivers, have demonstrated market share advantages. Third, brands and platforms continue to place greater emphasis on trading programs. Their increased investment here supports our efficiency in acquiring first-hand recycling supplies. Taking these together, we expect to deliver robots and rapid growth this year by leveraging our efficient automated quality inspection technology and value-added supply chain capabilities, we will further unlock economies of scale. Now I'd like to turn the call over to our CFO RACs for financial updates. Good day everyone, I'm pleased to share our financial performance for the first quarter of 2026, our revenues grew rapidly and profits reached a record high. As China's circular economy continues to advance and trading programs for consumer electronics remain ongoing, we sustained strong growth momentum in the first quarter. During the quarter, we leveraged our direct-to-customer recycling scenarios and face-to-face fulfillment capabilities, enhanced our supply chain and retail capabilities, and further strengthened user mindshare of the AHS Recycle Brand. First quarter, total revenue exceeded the high end of our guidance, increasing by 32.4% to 6.16 billion RMB, while non-GAAP operating income surged by 70.2% to over 190 million RMB. To review the financials in detail, please note that all figures are in RMB and all comparisons are on a year-over-year basis unless otherwise stated. In the first quarter, total revenue growth was primarily driven by continued growth in net product revenue. Net product revenues increased by 34.4% to $5.73 billion, largely attributable to the growth in online sales of free-owned consumer electronics. Service revenues were $430 million in the first quarter, with presenting an increase of 10.4%. The increase was largely driven by PJP marketplace and multi-catware recycling business. The overall tick rate of our market space was 4.92% for the first quarter of 2026. During the quarter, our multi-culture recycling business contributed over $83 million RMB in revenue, accounting for 19.3% of service revenue. To discuss operating expenses, to provide greater clarity on the trends of our actual operating-based expenses, we will mainly discuss our non-GAAP operating expenses, which better reflect how management views our operating results. The reconciliations of GAAP to non-GAAP results are available in our earnings release and the corresponding Form 6K finished with the U.S.S.E.C.E.C.E. That cost increased by 33.2% to $4.82 billion, in line with the growth in product sales. Growth profit margin for our 1P business was 15.9%. Margin improvement in pre-recycling scenarios, compliant refurbishment capabilities incorporated in our supply chains, and an increasingly diversified retail channel mix. This allowed us to increase the proportion of higher margin retail sales, with 1P2C revenue accounting for 45.1% of product revenue in the first quarter of 2026, up from 33% in the same period last year. that the PYO system increases by 22.5% to 520 million. NGAP fulfillment expenses increased by 22.7% to 520 million. Under the NGAP measures, we are driven by higher personnel costs, driven by the growth of our business compared to the same period in 2025. Additionally, operating center-related expenses rose along with the increasing volumes of right resulting in transactions. Land gap fulfillment expenses as a percentage of total revenues decreased to 8.5% from 9.1%. Selling and marketing expenses increased by 17.9% to 490 million. Land gap selling and marketing expenses increased by 27% to 490 million. primarily driven by an increase in commission expenses in relation to channel service fees. Lung Gap selling and marketing expenses as a percentage of total revenues decreased to 8% from 8.3%. General and administrative expenses increased by 25.9% to $79.8 million. Lung Gap G&A expenses also increased by 33% to $79 million, primarily due to an increase in personnel costs. Landgap G&A expenses as a percentage of total revenues remain flat year-over-year at 1.3%. Research and development expenses increased by 33.5% to 73.4 million. Landgap R&D expenses increased by 36.4% to 72.3 million. primarily due to an increase in personnel costs. Non-GAAP R&D expenses as a percentage of total revenues increased to 1.2% from 1.1%. As a result, our non-GAAP operating income exceeded $190 million in the first quarter of 2026 compared to non-GAAP operating income of $110 million in the first quarter of 2025 the quarter, compared to 2.4% in the first quarter of 2025, representing an increase of 69 basis of 2026 cash and cash equivalents, restricted cash, short-term third-party payment service providers, total 1.72 billion. Our financial reserves are sufficient to support reinvestment in business development and shareholder return. During the first quarter of 2026, we repurchased a total of approximately 0.5 million ADSs for approximately 2.7 million U.S. dollars. On the 30th of 2025, the board has authorized a share repurchase program under which the company may repurchase up to 50 million U.S. dollars of our shares over 12 months. In 2026, we repurchased approximately 11 million U.S. dollars under this program, authorized the extension of the existing share repurchase program for 12 months from June 30, 2026, with key terms unchanged. Turning to the business outlook, for the second quarter of 2026, we anticipate total revenues to be between 6,240 million RMB to 6,340 million RMB, representing an increase of 25% to 27% year-over-year. Please note that this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change. Concludes our prepared remarks, Operator, we are now ready to take questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then to. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. The first question today comes from Rafael Tsai with DBS. Please go ahead.

Hello, hello. Can you hear me?

I can hear you.

I'll recap in English Congratulations for the brilliant first quarter results Does management have any updated guidance on Revenue and Profit Growth for the full year of 2026? Thank you.

Thank you for the question.

We continue to actively pursue our full year operating targets. From a strategic perspective, we will continue to prioritize our 1P business, which spans the end-to-end value chain and enables us to deliver a better user experience and create greater value. In terms of scale growth, we've seen the government's continued promotion of consumer electronics trading programs, the expansion of eligible categories and meaningful subsidy support, together with dedicated investments by brand manufacturers and platforms including JD.com. in trading scenarios. These factors allow us to capitalize on this momentum and secure more for first-hand supply efficiently and at lower cost. They also reduce our reliance on traffic-driven marketing and performance advertising for a high-value low-frequency consumer electronics category.

We will continue to look at the future.

For our international business, we are advancing at a steady pace. In the first quarter, overseas revenue grew rapidly year over year. This was largely driven by our solid domestic inventory base as our confined export supply chain capabilities gradually strengthened. Meanwhile, we are exploring opportunities to bring more of the capabilities we have built in China to overseas markets. This includes results in fulfillment, platform capabilities, and export opportunities of automation technologies, among others. We will also remain disciplined in our international expansion investments while actively applying new AI technologies to accelerate business from the incubation stage towards rapid growth. As a forecast, we look forward to update you with more development from the overseas business during the next Earnings Conference call.

This will be the most important part of the AI-to-reporting process. In the field of AI-to-reporting process, we will strongly encourage the AI-to-reporting process of learning and sharing and sharing knowledge from the front-end doorbells, the upgrade-to-reporting process, and the increase in multiple levels. We will be able to expand the process for the long-term process, and increase and increase and increase.

Regarding efficiency improvements, building flexible fulfillment capabilities in our 1P scenarios, as well as incorporating AI across automated quality inspection, R&D and operations, will be key priorities as we strengthen our 1P model. In terms of AI-enabled productivity, we actively encourage AI learning and knowledge sharing across the organization. We have already made progress in areas such as in-store compliance audits and risk control, resisting pricing algorithm, optimization, and coding efficiency. Going forward, we will gradually expand these applications, laying the groundwork for long-term organizational efficiency gains and improved profitability. Taken together, we expect to scale in 2026 at a pace faster than what we expected internally at the beginning of the year. We also expect to achieve meaningful margin improvement. Thank you for the question.

The next question comes from Wang Zhao with CICC.

Please go ahead. 咱们今年的开店以及上门能力建设的目标 谢谢 我自己翻译一下 感谢提问 一季度期间我们盘变了全国的门店 从点位 流量等维度评估 淘汰了一些维部的门店 同时也让我们的优质门店进一步的习效 更集中并高效的承接来自线上的流量 我们非常注重门店的质量 并且以扩充品类的方式提供了开通多品类回收服务能力的门店的比例 截止一季度末在965家爱回收自营门店中有841家开通了多品类的服务能力 实现了更加用户友好的门店形象和空间设计 进一步提升了爱回收的品牌形象和交付体验 爱回收过去多年的开店经验是跳跃时的发展 新开一批夯实一批继续新开 在开店策略上我们将继续遵循这样的经验操作

中长期来看我们全国5000家门店的目标不会改变 Thank you for the question During the first quarter, we reviewed our nationwide store network based on sectors such as location quality and traffic performance. We optimized our store footprint by phasing out certain underperforming stores while further improving the efficiency of our high-quality stores so they can better and more efficiently capture online traffic. We also maintained focus on store quality. By expanding service categories, we continue to increase the proportion of stores capable of providing multi-catware recyclable services. By the end of the first quarter, 841 of our 965 self-operated AHS stores have enabled multi-category service capabilities, alongside more user-friendly store layouts and upgraded in-store experiences, further strengthening AHS recycles brand image and fulfillment experience. We have our AHS velocity at store openings. It follows a leapfrog pattern, opening new stores, solidifying store performance, and then further ramping up store openings. We will continue to follow this rhythm based on our past experience. Looking at the long term, our goal of reaching 5,000 stores in China remains unchanged.

Thank you very much.

At the same time, we added nearly 500 two-door service teams nationwide year-over-year. This helped increase the proportion of face-to-face fulfillment in key service scenarios, including JD's trading services, expand fulfillment coverage, improve service speed, and further and reinforce our industry-leading fulfillment experience. In addition, we are also building up flexible workforce capacity. During peak seasons, such as major promotional campaigns and flagship device launches, we can quickly activate additional two-door capacity to ensure fulfillment experience and quality while meeting face-to-face demand.

Thank you for the question.

The next question comes from Brian Lantier with Zach Smallcap. Please go ahead.

Good evening, and I'll add my congratulations on the strong performance this quarter. I was wondering if you could provide some insight into the growth of inventory in the first quarter. Specifically, is the inventory build mostly due to anticipated demand growth or changes in the product mix? And how should we think about normalized inventory going forward? Thank you.

This year, we have received a very high-quality review of users' information. We will provide a good quality of money to experience the value of the cost of users. This year, the total increase and increase and increase the cost of EP2C. The 2C is the maximum cost of the cost of the 2-3. The cost of the EP2C is the maximum cost of the cost of the cost of the cost of the cost. 由于排气堂人士行业的基础设施,我们掌握了行业的价格能力,因此存货的增加并不会对核心业务中产生显出的影响 QE因为部分品牌厂商在新品发布过程中才用了提价的策略,因此我们判断二手的价格会相对稳定,存货的价格也相对稳定 So we did not increase in QE, so we expect that in the next year, our return will be back to a relatively low rate. Because in the next year, the return of QE will return to QE.

Thank you for the question. Our recycling and trading business continue to gain user recognition, especially during the trading scenarios. As we build stronger user mindshare, we are also enhancing the customer experience by offering more attractive pricing against the backdrop of the rising uptrend cost for new devices, especially memory price hikes. Second-hand market prices have remained relatively stable compared to past cycles, and we have even seen price increases in some products. As a result, we are not in a hurry to reprise our high-quality inventory for faster turnover, and part of it will be sold in the second quarter as inventory will normalize. In addition, the increase in inventory is consistent with our strategy of strengthening 1P2C sales. On average, inventory turnover days for 1P2C retail are longer than those of bulk sales. Therefore, as our revenue mix continues to shift towards 1P2C, inventory turnover days may increase to some extent. That said, as PJT marketplace remains an important piece of industry infrastructure, it supports our strong pricing capabilities. Therefore, the increase in inventory is not expected to have significant impact on turnover in our core businesses. Thank you for the question.

This concludes our question and answer session. I'd like to turn the conference back over to management for closing remarks.

Thank you all again for joining us. A replay of today's call will be available on our IR website shortly, followed by a transcript when ready. If you have any additional questions, please feel free to email us at iratatrenew.com. Have a good day.

This conference is now concluded. Thank you for attending today's presentation. You may now disconnect.