ATRenew Inc. Reports Unaudited Second Quarter 2023 Financial Results
- Total net revenues grew by 38.1%
- Adjusted income from operations reached RMB52.0 million
- Loss from operations of RMB61.0 million
- Net loss of RMB64.8 million
Second Quarter 2023 Highlights
- Total net revenues grew by
38.1% toRMB2,963.7 million (US ) from$408.7 million RMB2,145.7 million in the second quarter of 2022. - Loss from operations narrowed down to
RMB61.0 million (US ) from$8.4 million RMB168.2 million in the second quarter of 2022. Adjusted income from operations (non-GAAP)[1] wasRMB52.0 million (US ), compared to an adjusted loss from operations (non-GAAP) of$7.2 million RMB42.3 million in the second quarter of 2022. - Number of consumer products transacted[2] was 7.7 million, compared to 7.8 million in the second quarter of 2022.
Mr. Kerry Xuefeng Chen, Founder, Chairman, and Chief Executive Officer of ATRenew, commented, "We are pleased to announce a post-COVID performance that exceeded our guidance. During the second quarter of 2023, total net revenues increased by
Mr. Rex Chen, Chief Financial Officer of ATRenew, added, "During the quarter, we made another profitability breakthrough on the back of a strong recovery of revenue growth. Non-GAAP operating income reached a new high of
1. See "Reconciliations of GAAP and Non-GAAP Results" for more information. |
2. "Number of consumer products transacted" represents the number of consumer products distributed to merchants and consumers through transactions on the Company's PJT Marketplace, Paipai Marketplace and other channels the Company operates in a given period, prior to returns and cancellations, excluding the number of consumer products collected through AHS Recycle; a single consumer product may be counted more than once according to the number of times it is transacted on PJT Marketplace, Paipai Marketplace and other channels the Company operates through the distribution process to end consumer. |
Second Quarter 2023 Financial Results
REVENUE
Total net revenues increased by
- Net product revenues increased by
42.2% toRMB2,636.7 million (US ) from$363.6 million RMB1,854.1 million in the same period of 2022. The increase was primarily attributable to an increase in the sales of pre-owned consumer electronics. - Net service revenues increased by
12.1% toRMB327.0 million (US ), compared to$45.1 million RMB291.6 million in the same period of 2022. This increase was primarily due to the recovery of Paipai and PJT marketplaces from the COVID-19 pandemic.
OPERATING COSTS AND EXPENSES
Operating costs and expenses were
- Merchandise costs were
RMB2,325.8 million (US ), compared to$320.7 million RMB1,653.8 million in the same period of 2022, representing an increase of40.6% . This was primarily due to the growth in product sales. - Fulfillment expenses were
RMB268.8 million (US ), compared to$37.1 million RMB275.2 million in the same period of 2022, representing a decrease of2.3% . The decrease was primarily due to the decreases in logistics expenses and operation center related expenses as the Company kept optimizing its store and operation station networks, but was partially offset by an increase in personnel costs as the Company's recycling activities developed compared with the same period of 2022. - Selling and marketing expenses were
RMB335.3 million (US ), compared to$46.2 million RMB293.4 million in the same period of 2022, representing an increase of14.3% . The increase was primarily due to (i) an increase in advertising expenses and promotional campaign related expenses, (ii) an increase in commission expenses in relation to channel service fees, and (iii) an increase in office and traveling related expenses. The increase was partially offset by a decrease in personnel cost and amortization of intangible assets and deferred cost resulting from assets and business acquisitions, after recognizing the impairment loss of intangible assets and deferred cost in the fourth quarter of 2022. - General and administrative expenses were
RMB57.5 million (US ), compared to$7.9 million RMB45.2 million in the same period of 2022, representing an increase of27.2% , primarily due to (i) an increase in expected credit loss relating to credit risk, (ii) an increase in professional service and consulting fees. The increase was partially offset by a decrease in personnel cost. - Technology and content expenses decreased by
24.6% toRMB45.0 million (US ) from$6.2 million RMB59.7 million in the same period of 2022. The decrease was primarily due to the changes in technological personnel cost and technology expenses in relation to platforms as the Company's platforms matured.
LOSS FROM OPERATIONS
Loss from operations was
Adjusted income from operations (non-GAAP)[1] was
NET LOSS
Net loss was
BASIC AND DILUTED NET LOSS PER ORDINARY SHARE
Basic and diluted net loss per ordinary share were
Adjusted basic and diluted net income per ordinary share (non-GAAP)[1] were
CASH AND CASH EQUIVALENTS, RESTRICTED CASH, SHORT-TERM INVESTMENTS AND FUNDS RECEIVABLE FROM THIRD PARTY PAYMENT SERVICE PROVIDERS
Cash and cash equivalents, restricted cash, short-term investments and funds receivable from third party payment service providers were
Business Outlook
For the third quarter of 2023, the Company currently expects its total revenues to be between
Recent Development
On December 9, 2022, ATRenew announced an extension of the Company's existing share repurchase program under which the Company may repurchase up to
On June 20, 2023, ATRenew released its third annual environmental, social, and governance ("ESG") report, highlighting its key achievements in these three areas.
On the environmental front, greenhouse gas emission intensity associated with the purchase of electricity (scope 2) has continued to decrease, following the downward trend from when the Company first disclosed this metric in its 2020 ESG report. In 2022, ATRenew oversaw the responsible recycling and green disposal of approximately 270,000 units of electronic devices, reducing e-wastes by 43.2 tons. The Company also reused 18 tons of packaging fillers for B2B businesses and 36,000 cardboard boxes for B2C businesses. In terms of social responsibility, the Company obtained ISO 9001 quality management system certification and donated a cumulative amount of
On June 30, 2023, AHS Recycle, ATRenew's C2B recycling brand, debuted as a trade-in service provider on Apple's official website and in its flagship stores in mainland
Conference Call Information
The Company's management will hold a conference call on Wednesday, August 23, 2023 at 08:00 A.M. Eastern Time (or 08:00 P.M. Beijing Time on the same day) to discuss the financial results. Listeners may access the call by dialing the following numbers:
International: | 1-412-317-6061 | |
United States Toll Free: | 1-888-317-6003 | |
Mainland China Toll Free: | 4001-206115 | |
Hong Kong Toll Free: | 800-963976 | |
Access Code: | 9633225 |
The replay will be accessible through August 30, 2023 by dialing the following numbers:
International: | 1-412-317-0088 | |
United States Toll Free: | 1-877-344-7529 | |
Access Code: | 4883084 |
A live and archived webcast of the conference call will also be available at the Company's investor relations website at ir.atrenew.com.
About ATRenew Inc.
Headquartered in
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
Use of Non-GAAP Financial Measures
The Company also uses certain non-GAAP financial measures in evaluating its business. For example, the Company uses adjusted income from operations, adjusted net (loss) income and adjusted net (loss) income per ordinary share as supplemental measures to review and assess its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with
The Company presents non-GAAP financial measures because they are used by the Company's management to evaluate the Company's financial and operating performance and formulate business plans. The Company believes that adjusted income from operations and adjusted net (loss) income help identify underlying trends in the Company's business that could otherwise be distorted by the effect of certain expenses that are included in loss from operations and net loss. The Company also believes that the use of non-GAAP financial measures facilitates investors' assessment of the Company's operating performance. The Company believes that adjusted income from operations and adjusted net (loss) income provide useful information about the Company's operating results, enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision making.
The non-GAAP financial measures are not defined under
The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the
Investor Relations Contact
In
ATRenew Inc.
Investor Relations
Email: ir@atrenew.com
In
ICR LLC.
Email: atrenew@icrinc.com
Tel: +1-212-537-0461
ATRENEW INC. | ||||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(Amounts in thousands, except share and per share and otherwise noted) | ||||||||||||
As of December 31, | As of June 30, | |||||||||||
2022 | 2023 | |||||||||||
RMB | RMB | US$ | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 1,703,626 | 1,492,949 | 205,887 | |||||||||
Restricted cash | — | 210,000 | 28,960 | |||||||||
Short-term investments | 782,230 | 599,009 | 82,607 | |||||||||
Amount due from related parties, net | 115,501 | 168,008 | 23,169 | |||||||||
Inventories | 433,467 | 735,407 | 101,417 | |||||||||
Funds receivable from third party payment service | 316,277 | 241,178 | 33,260 | |||||||||
Prepayments and other receivables, net | 539,077 | 468,035 | 64,545 | |||||||||
Total current assets | 3,890,178 | 3,914,586 | 539,845 | |||||||||
Non-current assets: | ||||||||||||
Amount due from related parties, net, non-current | 180,000 | — | — | |||||||||
Long-term investments | 219,583 | 485,372 | 66,936 | |||||||||
Property and equipment, net | 118,600 | 121,039 | 16,692 | |||||||||
Intangible assets, net | 544,650 | 404,420 | 55,772 | |||||||||
Other non-current assets | 95,744 | 82,496 | 11,377 | |||||||||
Total non-current assets | 1,158,577 | 1,093,327 | 150,777 | |||||||||
TOTAL ASSETS | 5,048,755 | 5,007,913 | 690,622 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Short-term borrowings | 123,983 | 278,983 | 38,474 | |||||||||
Accounts payable | 73,335 | 70,364 | 9,704 | |||||||||
Contract liabilities | 195,369 | 257,670 | 35,534 | |||||||||
Accrued expenses and other current liabilities | 449,489 | 320,933 | 44,259 | |||||||||
Accrued payroll and welfare | 132,468 | 119,171 | 16,434 | |||||||||
Amount due to related parties | 47,604 | 73,647 | 10,156 | |||||||||
Total current liabilities | 1,022,248 | 1,120,768 | 154,561 | |||||||||
Non-current liabilities: | ||||||||||||
Operating lease liabilities, non-current | 33,523 | 17,857 | 2,463 | |||||||||
Deferred tax liabilities | 111,312 | 87,753 | 12,102 | |||||||||
Total non-current liabilities | 144,835 | 105,610 | 14,565 | |||||||||
TOTAL LIABILITIES | 1,167,083 | 1,226,378 | 169,126 | |||||||||
TOTAL SHAREHOLDERS' EQUITY | 3,881,672 | 3,781,535 | 521,496 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' | 5,048,755 | 5,007,913 | 690,622 |
ATRENEW INC. | ||||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||||||||||
(Amounts in thousands, except share and per share and otherwise noted) | ||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||
2022 | 2023 | 2022 | 2023 | |||||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||
Net revenues | ||||||||||||||||||||||||
Net product revenues | 1,854,133 | 2,636,676 | 363,614 | 3,763,065 | 5,211,854 | 718,748 | ||||||||||||||||||
Net service revenues | 291,586 | 326,983 | 45,093 | 589,158 | 623,599 | 85,998 | ||||||||||||||||||
Operating (expenses) income (1)(2) | ||||||||||||||||||||||||
Merchandise costs | (1,653,834) | (2,325,763) | (320,737) | (3,293,856) | (4,577,884) | (631,319) | ||||||||||||||||||
Fulfillment expenses | (275,201) | (268,823) | (37,072) | (571,421) | (535,209) | (73,809) | ||||||||||||||||||
Selling and marketing expenses | (293,405) | (335,303) | (46,240) | (601,199) | (634,344) | (87,480) | ||||||||||||||||||
General and administrative expenses | (45,227) | (57,528) | (7,933) | (90,185) | (133,968) | (18,475) | ||||||||||||||||||
Technology and content expenses | (59,726) | (45,042) | (6,212) | (123,265) | (92,475) | (12,753) | ||||||||||||||||||
Other operating income, net | 13,447 | 7,836 | 1,081 | 24,688 | 9,872 | 1,361 | ||||||||||||||||||
Loss from operations | (168,227) | (60,964) | (8,406) | (303,015) | (128,555) | (17,729) | ||||||||||||||||||
Interest expense | (2,516) | (2,501) | (345) | (3,519) | (3,312) | (457) | ||||||||||||||||||
Interest income | 2,053 | 5,623 | 775 | 3,777 | 13,575 | 1,872 | ||||||||||||||||||
Other income (loss), net | 32,739 | (1,721) | (237) | (5,884) | (2,291) | (316) | ||||||||||||||||||
Loss before income taxes and share of loss in | (135,951) | (59,563) | (8,213) | (308,641) | (120,583) | (16,630) | ||||||||||||||||||
Income tax benefits | 13,876 | 11,700 | 1,614 | 26,989 | 23,560 | 3,249 | ||||||||||||||||||
Share of loss in equity method investments | (3,175) | (16,978) | (2,341) | (4,950) | (17,817) | (2,457) | ||||||||||||||||||
Net loss | (125,250) | (64,841) | (8,940) | (286,602) | (114,840) | (15,838) | ||||||||||||||||||
Net loss per ordinary share: | ||||||||||||||||||||||||
Basic | (0.78) | (0.40) | (0.05) | (1.78) | (0.71) | (0.10) | ||||||||||||||||||
Diluted | (0.78) | (0.40) | (0.05) | (1.78) | (0.71) | (0.10) | ||||||||||||||||||
Weighted average number of shares used in | ||||||||||||||||||||||||
Basic | 161,498,812 | 162,923,637 | 162,923,637 | 161,374,917 | 162,541,334 | 162,541,334 | ||||||||||||||||||
Diluted | 161,498,812 | 162,923,637 | 162,923,637 | 161,374,917 | 162,541,334 | 162,541,334 | ||||||||||||||||||
Net loss | (125,250) | (64,841) | (8,940) | (286,602) | (114,840) | (15,838) | ||||||||||||||||||
Foreign currency translation adjustments | (10,885) | 32,103 | 4,427 | (10,386) | 21,573 | 2,975 | ||||||||||||||||||
Total comprehensive loss | (136,135) | (32,738) | (4,513) | (296,988) | (93,267) | (12,863) |
ATRENEW INC. | ||||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND | ||||||||||||||||||||||||
(Amounts in thousands, except share and per share and otherwise noted) | ||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||
2022 | 2023 | 2022 | 2023 | |||||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||
(1) Includes share-based compensation | ||||||||||||||||||||||||
Fulfillment expenses | (7,518) | (7,041) | (971) | (22,281) | (12,548) | (1,730) | ||||||||||||||||||
Selling and marketing expenses | (4,147) | (4,297) | (593) | (19,553) | (8,101) | (1,117) | ||||||||||||||||||
General and administrative expenses | (16,401) | (17,944) | (2,475) | (32,984) | (36,943) | (5,095) | ||||||||||||||||||
Technology and content expenses | (5,170) | (5,745) | (792) | (9,729) | (10,431) | (1,439) | ||||||||||||||||||
(2) Includes amortization of intangible assets | ||||||||||||||||||||||||
Selling and marketing expenses | (91,126) | (77,430) | (10,678) | (176,881) | (155,925) | (21,503) | ||||||||||||||||||
Technology and content expenses | (1,580) | (482) | (66) | (3,160) | (964) | (133) |
Reconciliations of GAAP and Non-GAAP Results | ||||||||||||||||||||||||
(Amounts in thousands, except share and per share and otherwise noted) | ||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||
2022 | 2023 | 2022 | 2023 | |||||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||||||||
Loss from operations | (168,227) | (60,964) | (8,406) | (303,015) | (128,555) | (17,729) | ||||||||||||||||||
Add: | ||||||||||||||||||||||||
Share-based compensation | 33,236 | 35,027 | 4,831 | 84,547 | 68,023 | 9,381 | ||||||||||||||||||
Amortization of intangible assets | 92,706 | 77,912 | 10,744 | 180,041 | 156,889 | 21,636 | ||||||||||||||||||
Adjusted (loss) income from | (42,285) | 51,975 | 7,169 | (38,427) | 96,357 | 13,288 | ||||||||||||||||||
Net loss | (125,250) | (64,841) | (8,940) | (286,602) | (114,840) | (15,838) | ||||||||||||||||||
Add: | ||||||||||||||||||||||||
Share-based compensation | 33,236 | 35,027 | 4,831 | 84,547 | 68,023 | 9,381 | ||||||||||||||||||
Amortization of intangible assets | 92,706 | 77,912 | 10,744 | 180,041 | 156,889 | 21,636 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Tax effects of amortization of | (13,876) | (11,700) | (1,614) | (26,989) | (23,560) | (3,249) | ||||||||||||||||||
Adjusted net (loss) income (non- | (13,184) | 36,398 | 5,021 | (49,003) | 86,512 | 11,930 | ||||||||||||||||||
Adjusted net (loss) income per | ||||||||||||||||||||||||
Basic | (0.08) | 0.22 | 0.03 | (0.30) | 0.53 | 0.07 | ||||||||||||||||||
Diluted | (0.08) | 0.22 | 0.03 | (0.30) | 0.51 | 0.07 | ||||||||||||||||||
Weighted average number of | ||||||||||||||||||||||||
Basic | 161,498,812 | 162,923,637 | 162,923,637 | 161,374,917 | 162,541,334 | 162,541,334 | ||||||||||||||||||
Diluted | 161,498,812 | 168,037,389 | 168,037,389 | 161,374,917 | 168,910,942 | 168,910,942 |
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SOURCE ATRenew Inc.