ZKH Group Limited Announces Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results

Rhea-AI Summary

ZKH Group (NYSE: ZKH) reported its Q4 and FY2024 financial results, showing mixed performance. Net revenues for Q4 2024 decreased 3.0% to RMB2,370.2 million (US$324.7 million), while full-year revenues increased slightly by 0.5% to RMB8,761.3 million.

Q4 highlights include a gross margin of 17.1%, remaining flat year-over-year, while operating loss increased to RMB32.6 million. The company reported a Q4 net loss of RMB29.1 million, compared to a net profit of RMB20.2 million in Q4 2023.

For FY2024, ZKH showed improved cash flow generation with positive operating cash flow of RMB229.1 million, marking their first full year of positive cash inflow. The company's gross margin improved to 17.2% from 16.7% in 2023, though it recorded a full-year net loss of RMB268.0 million, an improvement from RMB304.9 million loss in 2023.

Positive

• First full year of positive operating cash flow at RMB229.1 million
• Improved gross margin to 17.2% in FY2024 from 16.7% in 2023
• Reduced net loss to RMB268.0 million from RMB304.9 million YoY
• Strong cash position of RMB2.06 billion
• Reduced operating expenses as percentage of revenue to 19.9% from 21.0%

Negative

• Q4 2024 revenue declined 3.0% YoY to RMB2,370.2 million
• Q4 net loss of RMB29.1 million vs profit of RMB20.2 million in Q4 2023
• Operating loss increased to RMB32.6 million in Q4 2024
• Net service revenues decreased 48.0% in Q4 2024
• Full-year operating loss of RMB338.8 million

Insights

Financial Analyst

ZKH's Q4 and FY2024 results present a mixed financial picture with improving fundamentals despite challenging top-line performance. The company's Q4 net revenues decreased by 3.0% year-over-year to RMB2,370.2 million, while posting a net loss of RMB29.1 million compared to a profit in the same period last year. For the full year, revenues grew marginally by 0.5% to RMB8,761.3 million.

The most notable positive development is ZKH's transition to positive operating cash flow, generating RMB229.1 million for the full year - their first annual positive operating cash flow, indicating improving operational efficiency. Gross margin improved to 17.2% for the full year (from 16.7%), reflecting success in optimizing their product mix toward higher-margin private label products and reducing procurement costs.

However, concerns arise from the company's continued unprofitability and revenue stagnation. While net losses narrowed from RMB304.9 million in 2023 to RMB268.0 million in 2024, Q4 showed deterioration from a profit to loss position year-over-year. The 48.0% decline in service revenues suggests their marketplace model optimization may be impacting growth potential. The decrease in fourth quarter revenue amid "business optimization" initiatives signals potential challenges in maintaining growth while improving profitability.

Management's projection of domestic profitability in 2025 represents a critical milestone to watch, especially as they balance growth investments with margin improvement. Their international expansion, particularly in the U.S., opens new growth vectors but may require significant investment before contributing meaningfully to profitability.

Operations Management Expert

ZKH's operational adjustments display a deliberate shift toward quality over volume in their MRO procurement business. The stated "business optimization" initiatives appear to be a strategic realignment targeting elimination of low-margin, extended-credit marketplace transactions in favor of more profitable products and customers. This explains the 48% drop in service revenues against a mere 0.9% decline in product revenues during Q4.

The fulfillment expense reduction of 10.8% alongside improvements in warehouse and distribution costs demonstrates effective supply chain streamlining. Their 8.5% cut in sales and marketing expenses while maintaining revenue suggests improved sales efficiency and potentially higher customer retention. These operational improvements have directly contributed to the RMB229.1 million positive operating cash flow - a critical inflection point for long-term sustainability.

ZKH's emphasis on private label products represents a strategic pivot toward higher-margin offerings that could eventually deliver sustainable competitive advantage. Their continued investment in digitalization and AI capabilities (9.5% increase in Q4 R&D) indicates a focus on platform enhancement rather than just cost-cutting. These investments should help automate processes, improve customer experience, and potentially create technology-enabled barriers to competition.

The international expansion into the U.S. market brings both opportunity and operational complexity. While geographic diversification reduces market concentration risk, the company must balance resource allocation between domestic profitability and international growth. The cash position of RMB2.06 billion provides operational flexibility while they execute this transition toward higher-quality, more profitable business lines.

SHANGHAI, March 18, 2025 /PRNewswire/ -- ZKH Group Limited ("ZKH" or the "Company") (NYSE: ZKH), a leading maintenance, repair and operations ("MRO") procurement service platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024.

Fourth Quarter and Fiscal Year 2024 Operational and Financial Highlights 

in thousand RMB, except for number of customers, percentage and basis points ("bps")	Fourth Quarter			Fiscal Year
	2023	2024	Change	2023	2024	Change
GMV[1]	3,207,139	2,690,311	-16.1 %	11,083,035	10,479,461	-5.4 %
GMV by Platform
ZKH Platform	2,907,077	2,435,037	-16.2 %	10,112,872	9,475,550	-6.3 %
GBB Platform	300,062	255,274	-14.9 %	970,163	1,003,911	3.5 %
GMV by Business Model
Product Sales (1P)	2,321,861	2,324,005	0.1 %	8,336,846	8,530,328	2.3 %
Marketplace (3P)[2]	885,279	366,306	-58.6 %	2,746,189	1,949,133	-29.0 %
Number of Customers[3]	42,220	46,192	9.4 %	66,562	83,958	26.1 %
ZKH Platform	31,174	36,116	15.9 %	48,211	57,679	19.6 %
GBB Platform	11,046	10,076	-8.8 %	18,351	26,279	43.2 %
Net Revenues	2,443,961	2,370,223	-3.0 %	8,721,175	8,761,318	0.5 %
Gross Profit	417,151	404,998	-2.9 %	1,452,434	1,510,471	4.0 %
% of Net Revenues	17.1 %	17.1 %	1.8bps	16.7 %	17.2 %	58.6bps
Operating Loss	(6,779)	(32,589)	380.7 %	(398,724)	(338,770)	-15.0 %
% of Net Revenues	-0.3 %	-1.4 %	-109.8bps	-4.6 %	-3.9 %	70.5bps
Non-GAAP EBITDA[4]	43,272	(13,330)	-130.8 %	(211,896)	(193,258)	-8.8 %
% of Net Revenues	1.8 %	-0.6 %	-233.3bps	-2.4 %	-2.2 %	22.4bps
Net Profit/(Loss)	20,229	(29,102)	-243.9 %	(304,900)	(268,043)	-12.1 %
% of Net Revenues	0.8 %	-1.2 %	-205.6bps	-3.5 %	-3.1 %	43.7bps
Non-GAAP Adjusted Net Profit/(Loss)[5]	27,538	(15,033)	-154.6 %	(287,507)	(159,527)	-44.5 %
% of Net Revenues	1.1 %	-0.6 %	-176.1bps	-3.3 %	-1.8 %	147.6bps

"2024 presented a dynamic demand landscape, yet we delivered robust performance, further solidifying our leadership in China's MRO industry and expanding our global footprint." stated Mr. Eric Long Chen, Chairman and Chief Executive Officer of ZKH. "During the past year, we continued to enhance our profitability, bolstered by a growing customer base, increased customer loyalty, and advancements in digitalization and artificial intelligence. Notably, in 2024, we reached a significant milestone by broadening our international presence, particularly as our U.S. operations gained momentum. Looking ahead, we remain steadfast in our commitment to enhancing our products and supply chain capabilities and advancing our digitalization and artificial intelligence initiatives. While our strategic business optimization initiatives temporarily affected overall GMV growth, we believe the impact of these adjustments has gradually faded, placing us on a stronger path toward solid and sustainable growth, and we are confident that we will achieve full-year profitability for our domestic operations in 2025."

Mr. Max Chun Chiu Lai, Chief Financial Officer of ZKH, added, "Despite challenges in the demand environment and the impacts of business optimization, we concluded the year with resilient results, alongside overall enhancements in profitability. This is reflected in the improvement in both gross margin and net margin in 2024, driven by our expanded business scale and continued efforts to optimize our supply chain, sales force, and organizational structure. Our cash position has also strengthened, as we generated net cash of RMB170.7 million from operating activities in the fourth quarter and RMB229.1 million in 2024, marking our third consecutive quarter and our first full year of positive net cash inflow from operating activities. With this solid foundation, we are poised to leverage future growth opportunities and enhance shareholder returns."

[1] GMV is the total transaction value of orders placed on the Company's platform and shipped to customers, excluding taxes, net of the returned amount.

[2] The proportion of GMV generated by the marketplace model was 27.6% and 24.8% for the fourth quarter of 2023 and for the fiscal year of 2023, and 13.6% for the fourth quarter of 2024 and 18.6% for the fiscal year of 2024, respectively.

[3] Customers are customers that transacted with the Company during the reporting period, mainly comprised of enterprise customers in various industries.

[4] Non-GAAP EBITDA is defined as net profit/(loss) before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses.

[5] Non-GAAP adjusted net profit/(loss) is defined as net profit/(loss) excluding share-based compensation expenses.

Fourth Quarter 2024 Financial Results

Net Revenues. Net revenues were RMB2,370.2 million (US$324.7 million), representing a decrease of 3.0% from RMB2,444.0 million in the same period of 2023, mainly due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model.

in thousand RMB, except for percentage	Fourth Quarter
	2023	2024	Change
Net Revenues	2,443,961	2,370,223	-3.0 %
Net Product Revenues	2,324,986	2,303,451	-0.9 %
From ZKH Platform	2,028,986	2,049,520	1.0 %
From GBB Platform	296,000	253,931	-14.2 %
Net Service Revenues	98,592	51,226	-48.0 %
Other Revenues	20,383	15,546	-23.7 %

• Net Product Revenues. Net product revenues were RMB2,303.5 million (US$315.6 million), representing a decrease of 0.9% from RMB2,325.0 million in the same period of 2023, primarily due to lower revenues generated on the GBB platform.
• Net Service Revenues. Net service revenues were RMB51.2 million (US$7.0 million), a decrease of 48.0% from RMB98.6 million in the same period of 2023, primarily due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model.
• Other Revenues. Other revenues were RMB15.5 million (US$2.1 million), a decrease of 23.7% from RMB20.4 million in the same period of 2023, mainly due to lower revenues from warehousing and logistic services and operating lease services for certain types of machinery and equipment.

Cost of Revenues. Cost of revenues was RMB1,965.2 million (US$269.2 million), representing a decrease of 3.0% from RMB2,026.8 million in the same period of 2023, mainly due to the effectiveness of the Company's measures to reduce overall product procurement costs.

Gross Profit and Gross Margin. Gross profit was RMB405.0 million (US$55.5 million), representing a decrease of 2.9% from RMB417.2 million in the same period of 2023. Gross margin was 17.1%, remaining flat compared with the same period of 2023, mainly due to lower revenue contribution from the marketplace model, while both the gross margin of the product sales model and the take rate of the marketplace model from the ZKH Platform increased, driven by business optimization, reduced procurement costs, and higher proportion of GMV from higher-margin private label products. 

in thousand RMB, except for percentage and basis points ("bps")	Fourth Quarter
	2023	2024	Change
Gross Profit	417,151	404,998	-2.9 %
% of Net Revenues	17.1 %	17.1 %	1.8bps
Under Product Sales (1P)
ZKH Platform	291,915	335,894	15.1 %
% of Net Product Revenues from ZKH Platform	14.4 %	16.4 %	200.2bps
GBB Platform	18,688	13,958	-25.3 %
% of Net Product Revenues from GBB Platform	6.3 %	5.5 %	-81.7bps
Under Marketplace (3P)	98,592	51,226	-48.0 %
% of Net Service Revenues	100.0 %	100.0 %	-
% of GMV from the Marketplace Model (Take Rate)	11.1 %	14.0 %	284.8bps
Others	7,956	3,920	-50.7 %
% of Other Revenues	39.0 %	25.2 %	-1,381.7bps

Operating Expenses. Operating expenses were RMB437.6 million (US$59.9 million), an increase of 3.2% from RMB423.9 million in the same period of 2023. Operating expenses as a percentage of net revenues were 18.5%, compared with 17.3% in the same period of 2023. Excluding the share-based compensation expenses, operating expenses as a percentage of net revenues were 17.9%, compared with 17.1% in the same period of 2023.

• Fulfillment Expenses. Fulfillment expenses were RMB95.1 million (US$13.0 million), a decrease of 11.8% from RMB107.8 million in the same period of 2023. The decrease was primarily attributable to lower employee benefit costs, warehouse rental costs, and distribution expenses. Fulfillment expenses as a percentage of net revenues were 4.0%, compared with 4.4% in the same period of 2023.
• Sales and Marketing Expenses. Sales and marketing expenses were RMB151.6 million (US$20.8 million), a decrease of 10.9% from RMB170.0 million in the same period of 2023. The decrease was primarily attributable to lower marketing and promotion expenses and travel expenses. Sales and marketing expenses as a percentage of net revenues were 6.4%, compared with 7.0% in the same period of 2023.
• Research and Development Expenses. Research and development expenses were RMB41.4 million (US$5.7 million), an increase of 9.5% from RMB37.8 million in the same period of 2023. The increase was primarily attributable to higher employee benefit costs and expenses related to technology and information services, such as cloud services. Research and development expenses as a percentage of net revenues were 1.7%, compared with 1.5% in the same period of 2023.
• General and Administrative Expenses. General and administrative expenses were RMB149.5 million (US$20.5 million), an increase of 38.1% from RMB108.2million in the same period of 2023. The increase was primarily attributable to higher employee benefit costs and share-based compensation expenses. General and administrative expenses as a percentage of net revenues were 6.3%, compared with 4.4% in the same period of 2023.

Loss from Operations. Loss from operations was RMB32.6 million (US$4.5 million), compared with RMB6.8 million in the same period of 2023. Operating loss margin was 1.4%, compared with 0.3% in the same period of 2023.

Non-GAAP EBITDA. Non-GAAP EBITDA was negative RMB13.3 million (US$1.8 million), compared with RMB43.3 million in the same period of 2023. Non-GAAP EBITDA margin was negative 0.6%, compared with 1.8% in the same period of 2023.

Net (Loss)/Profit. Net loss was RMB29.1 million (US4.0 million), compared with net profit of RMB20.2 million in the same period of 2023. Net loss margin was 1.2%, compared with net profit margin of 0.8% in the same period of 2023.

Non-GAAP Adjusted Net (Loss)/Profit. Non-GAAP adjusted net loss was RMB15.0 million (US$2.1 million), compared with non-GAAP adjusted net profit of RMB27.5 million in the same period of 2023. Non-GAAP adjusted net loss margin was 0.6%, compared with non-GAAP adjusted net profit margin of 1.1% in the same period of 2023.

Basic and Diluted Net (Loss)/Profit per ADS^[6] and Non-GAAP Adjusted Basic and Diluted Net (Loss)/Profit per ADS^[7]. Basic and diluted net loss per ADS were RMB0.18 (US$0.02), compared with basic and diluted net profit per ADS of RMB0.98 in the same period of 2023. Non-GAAP adjusted basic and diluted net loss per ADS were RMB0.09(US$0.01), compared with non-GAAP adjusted basic and diluted net profit per ADS of RMB0.45 in the same period of 2023.

[6] ADSs are American depositary shares, each of which represents thirty-five (35) Class A ordinary shares of the Company.

[7] Non-GAAP adjusted basic and diluted net (loss)/profit per ADS is a non-GAAP financial measure, which is calculated by dividing non-GAAP adjusted net (loss)/profit attributable to the Company's ordinary shareholders by the weighted average number of ADSs.

Fiscal Year 2024 Financial Results

Net Revenues. Net revenues were RMB8,761.3 million (US$1,200.3 million), representing an increase of 0.5% from RMB8,721.2 million in 2023, primarily driven by higher revenues from the product sales model, partially offset by a decline in revenues from the marketplace model due to the optimization of certain businesses with low margins and long customer credit terms.

in thousand RMB, except for percentage	Fiscal Year
	2023	2024	Change
Net Revenues	8,721,175	8,761,318	0.5 %
Net Product Revenues	8,341,603	8,449,468	1.3 %
From ZKH Platform	7,381,501	7,450,211	0.9 %
From GBB Platform	960,102	999,257	4.1 %
Net Service Revenues	307,412	244,707	-20.4 %
Other Revenues	72,160	67,143	-7.0 %

• Net Product Revenues. Net product revenues were RMB8,449.5 million (US$1,157.6 million), representing an increase of 1.3% from RMB8,341.6 million in 2023. The increase was mainly attributable to higher revenues generated from the ZKH platform and the GBB platform, primarily driven by increased customer numbers.
• Net Service Revenues. Net service revenues were RMB244.7 million (US$33.5 million), a decrease of 20.4% from RMB307.4 million in 2023, primarily due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model.
• Other Revenues. Other revenues were RMB67.1 million (US$9.2 million), a decrease of 7.0% from RMB72.2 million in 2023, mainly attributable to lower revenues generated from the Company's warehousing and logistic services and operating lease services for certain types of machinery and equipment.

Cost of Revenues. Cost of revenues was RMB7,250.8 million (US$993.4 million), representing a decrease of 0.2% from RMB7,268.7 million in 2023, mainly due to the effectiveness of the Company's measures to reduce overall product procurement costs.

Gross Profit and Gross Margin. Gross profit was RMB1,510.5 million (US$206.9 million), an increase of 4.0% from RMB1,452.4 million in 2023. Gross margin was 17.2%, compared with 16.7% in 2023, primarily due to improved gross margin of the product sales model from the ZKH Platform, resulting from business optimization, reduced procurement costs, and higher proportion of GMV from higher-margin private label products.

in thousand RMB, except for percentage and basis points ("bps")	Fiscal Year
	2023	2024	Change
Gross Profit	1,452,434	1,510,471	4.0 %
% of Net Revenues	16.7 %	17.2 %	58.6bps
Under Product Sales (1P)
ZKH Platform	1,046,209	1,192,189	14.0 %
% of Net Product Revenues from ZKH Platform	14.2 %	16.0 %	182.9bps
GBB Platform	61,789	55,243	-10.6 %
% of Net Product Revenues from GBB Platform	6.4 %	5.5 %	-90.7bps
Under Marketplace (3P)	307,412	244,707	-20.4 %
% of Net Service Revenues	100.0 %	100.0 %	-
% of GMV from the Marketplace Model (Take Rate)	11.2 %	12.6 %	136.1bps
Others	37,024	18,332	-50.5 %
% of Other Revenues	51.3 %	27.3 %	-2,400.5bps

Operating Expenses. Total operating expenses were RMB1,849.2 million (US$253.3 million), a decrease of 0.1% from RMB1,851.2 million in 2023. Operating expenses as a percentage of net revenues were 21.1%, compared with 21.2% in 2023. Excluding the share-based compensation expenses, operating expenses as of a percentage of net revenues were 19.9%, compared with 21.0% in 2023.

• Fulfillment Expenses. Fulfillment expenses were RMB391.7 million (US$53.7 million), a decrease of 10.8% from RMB439.0 million in 2023. The decrease was primarily attributable to lower employee benefit costs, warehouse rental costs, and distribution expenses. Fulfillment expenses as a percentage of net revenues were 4.5%, compared with 5.0% in 2023.
• Sales and Marketing Expenses. Sales and marketing expenses were RMB641.5 million (US$87.9 million), a decrease of 8.5% from RMB700.8 million in 2023. The decrease was primarily attributable to lower employee benefit costs, marketing and promotion expenses and travel expenses. Sales and marketing expenses as a percentage of net revenues were 7.3%, compared with 8.0% in 2023.
• Research and Development Expenses. Research and development expenses were RMB169.5 million (US$23.2 million), a decrease of 3.6% from RMB175.9 million in 2023. The decrease was primarily attributable to lower employee benefit costs and traveling expenses, partially offset by higher expenses related to technology and information services, such as cloud services. Research and development expenses as a percentage of net revenues were 1.9%, compared with 2.0% in 2023.
• General and Administrative Expenses. General and administrative expenses were RMB646.5 million (US$88.6 million), an increase of 20.7% from RMB535.5 million in 2023. The increase was primarily attributable to higher share-based compensation expenses and allowance for credit losses, partially offset by lower employee benefit costs and travel expenses. General and administrative expenses as a percentage of net revenues were 7.4%, compared with 6.1% in the same period of 2023.

Loss from Operations. Loss from operations was RMB338.8 million (US$46.4 million), compared with RMB398.7 million in 2023. Operating loss margin was 3.9%, compared with 4.6% in 2023.

Non-GAAP EBITDA. Non-GAAP EBITDA was negative RMB193.3 million (US$26.5 million), compared with negative RMB211.9 million in 2023. Non-GAAP EBITDA margin was negative 2.2%, compared with negative 2.4% in 2023.

Net Loss. Net loss was RMB268.0 million (US$36.7 million), compared with RMB304.9 million in 2023. Net loss margin was 3.1%, compared with 3.5% in 2023.

Non-GAAP Adjusted Net Loss. Non-GAAP adjusted net loss was RMB159.5 million (US$21.9 million), compared with RMB287.5 million in 2023. Non-GAAP adjusted net loss margin was 1.8%, compared with 3.3% in 2023.

Basic and Diluted Net Loss per ADS and Non-GAAP Adjusted Basic and Diluted Net Loss per ADS. Basic and diluted net loss per ADS were RMB1.64 (US$0.22), compared with RMB22.08 in 2023. Non-GAAP adjusted basic and diluted net loss per ADS were RMB0.97 (US$0.13), compared with RMB6.58 in 2023.

Balance Sheet and Cash Flow

As of December 31, 2024, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB2.06 billion (US$282.3 million), compared with RMB2.12 billion as of December 31, 2023.

Net cash generated from operating activities was RMB170.7 million (US$23.4 million) in the fourth quarter of 2024, compared with net cash used in operating activities of RMB59.3 million in the same period of 2023. Net cash generated from operating activities was RMB229.1 million (US$31.4 million) in 2024, compared with net cash used in operating activities of RMB567.9 million in 2023.

Exchange Rate

This announcement contains translations of certain Renminbi ("RMB") amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ were made at a rate of RMB7.2993 to US$1.00, the exchange rate in effect as of December 31, 2024, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The Company makes no representation that any RMB or US$ amounts could have been, or could be, converted into US$ or RMB, as the case may be, at any particular rate, or at all.

Conference Call Information

The Company's management will hold a conference call on Tuesday, March 18, 2025, at 8:00 A.M. U.S. Eastern Time or 8:00 P.M. Beijing Time to discuss its financial results and operating performance for the fourth quarter and fiscal year 2024.

United States (toll free):	+1-888-317-6003
International:	+1-412-317-6061
Mainland China (toll free):	400-120-6115
Hong Kong (toll free):	800-963-976
Hong Kong:	+852-5808-1995
Access Code:	2393351

The replay will be accessible through March 25, 2025 by dialing the following numbers:

United States:	+1-877-344-7529
International:	+1-412-317-0088
Replay Access Code:	5969362

A live and archived webcast of the conference call will also be available on the Company's investor relations website at https://ir.zkh.com.

About ZKH Group Limited

ZKH Group Limited (NYSE: ZKH) is a leading MRO procurement service platform in China, dedicated to propelling the MRO industry's digital transformation to drive cost reduction and efficiency improvement industry-wide. Leveraging its outstanding product selection and recommendation capabilities, ZKH provides digitalized, one-stop MRO procurement solutions that enable its customers to transparently and efficiently access a wide selection of quality products at competitive prices. The Company also facilitates timely and reliable product delivery with professional fulfillment services. By catering specifically to the needs of MRO suppliers and customers through its unmatched digital infrastructure, the Company empowers all participants in the value chain to achieve more.

For more information, please visit: https://ir.zkh.com.

Use of Non-GAAP Financial Measures 

This press release contains the following non-GAAP financial measures: non-GAAP adjusted net loss, non-GAAP adjusted net loss per ADS, basic and diluted, and non-GAAP EBITDA. The non-GAAP financial measures should not be considered in isolation from or construed as alternatives to their most directly comparable financial measures prepared in accordance with accounting principles generally accepted in the United States of America. Investors are encouraged to review the historical non-GAAP financial measures in reconciliation to their most directly comparable GAAP financial measures.

The Company defines non-GAAP adjusted net loss for a specific period as net loss in the same period excluding share-based compensation expenses. The Company defines non-GAAP EBITDA as net loss before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses. Non-GAAP adjusted net loss per ADS is calculated by dividing adjusted net loss attributable to the Company's ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods and then multiplied by 35.

The Company presents these non-GAAP financial measures because they are used by the management to evaluate the Company's operating performance and formulate business plans. The Company believes that these non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net loss and certain expenses that are not expected to result in future cash payments or that are non-recurring in nature. The Company also believes that the use of these non-GAAP financial measures facilitates investors' assessment of its operating performance, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the management in financial and operational decision making.

The non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies. The Company's non-GAAP financial measures do not include all income and expense items that affect the Company's operations. They may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider the non-GAAP financial measures as substitutes for, or superior to, their most directly comparable financial measures prepared in accordance with GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Results" set forth at the end of this press release.

Safe Harbor Statement 

This press release contains forward-looking statements. These statements are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expects," "anticipates," "aim," "estimates," "intends," "plans," "believes," "is/are likely to," "potential," "continue," and similar statements. Among other things, the quotations from management in this press release and ZKH's strategic and operational plans contain forward-looking statements. ZKH may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press release and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about ZKH's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: ZKH's mission, goals and strategies; ZKH's future business development, financial condition and results of operations; the expected changes in its revenues, expenses or expenditures; the expected growth of the MRO procurement service industry in China and globally; changes in customer or product mix; ZKH's expectations regarding the prospects of its business model and the demand for and market acceptance of its products and services; ZKH's expectations regarding its relationships with customers, suppliers, and service providers on its platform; competition in the Company's industry; government policies and regulations relating to ZKH's industry; general economic and business conditions in China and globally; the outcome of any current and future legal or administrative proceedings; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in ZKH's filings with the SEC. All information provided herein is as of the date of this announcement, and ZKH undertakes no obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

In China:

ZKH Group Limited
IR Department
E-mail: IR@zkh.com

Piacente Financial Communications
Hui Fan
Tel: +86-10-6508-0677
E-mail: zkh@thepiacentegroup.com

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: zkh@thepiacentegroup.com

 

 

 

ZKH GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share, ADS, per share and per ADS data)
		As of December 31,		As of December 31,
		2023		2024
		RMB		RMB		US$
Assets
Current assets:
Cash and cash equivalents		1,090,621		1,423,943		195,079
Restricted cash		159,751		92,939		12,733
Short-term investments		874,210		543,978		74,525
Accounts receivable (net of allowance    for credit losses of RMB107,032 and    RMB145,789 as of December 31,    2023 and December 31, 2024,    respectively)		3,639,794		3,090,323		423,373
Notes receivable		352,997		234,213		32,087
Inventories		668,984		625,390		85,678
Prepayments and other current assets		168,117		179,387		24,576
Total current assets		6,954,474		6,190,173		848,051
Non-current assets:
Property and equipment, net		145,288		183,572		25,149
Land use right		11,033		10,808		1,481
Operating lease right-of-use assets, net		224,930		179,945		24,652
Intangible assets, net		20,096		15,931		2,183
Goodwill		30,807		30,807		4,221
Total non-current assets		432,154		421,063		57,686
Total assets		7,386,628		6,611,236		905,737
Liabilities
Current liabilities:
Short-term borrowings		585,000		311,000		42,607
Current portion of long-term borrowings		-		997		137
Accounts and notes payable		2,883,370		2,553,396		349,814
Operating lease liabilities		91,230		81,379		11,149
Advance from customers		19,907		27,433		3,758
Accrued expenses and other current    liabilities		448,225		365,333		50,050
Total current liabilities		4,027,732		3,339,538		457,515
Non-current liabilities:
Long-term borrowings		-		38,887		5,327
Non-current operating lease liabilities		146,970		109,096		14,946
Other non-current liabilities		507		25,224		3,456
Total non-current liabilities		147,477		173,207		23,729
Total liabilities		4,175,209		3,512,745		481,244
ZKH Group Limited shareholders' equity:
Ordinary shares (USD0.0000001 par value;    500,000,000,000 and 500,000,000,000    shares authorized; 5,621,490,964 and    5,658,952,794 shares issued and    outstanding as of December 31, 2023 and    December 31, 2024, respectively)		4		4		1
Additional paid-in capital		8,139,349		8,305,304		1,137,822
Statutory reserves		6,013		6,303		864
Accumulated other comprehensive    (loss)/income		(25,154)		4,764		653
Accumulated deficit		(4,908,793)		(5,177,126)		(709,263)
Treasury stock		-		(40,758)		(5,584)
Total ZKH Group Limited shareholders'       equity		3,211,419		3,098,491		424,493
Total liabilities and shareholders' deficit		7,386,628		6,611,236		905,737

 

 

ZKH GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(All amounts in thousands, except share, ADS, per share and per ADS data)
	For the three months ended						For the year ended
	December 31, 2023		December 31, 2024				December 31, 2023		December 31,2024
	RMB		RMB		US$		RMB		RMB		US$
Net revenues
Net product revenues	2,324,986		2,303,451		315,571		8,341,603		8,449,468		1,157,572
Net service revenues	98,592		51,226		7,018		307,412		244,707		33,525
Other revenues	20,383		15,546		2,130		72,160		67,143		9,199
Total net revenues	2,443,961		2,370,223		324,719		8,721,175		8,761,318		1,200,296
Cost of revenues	(2,026,810)		(1,965,225)		(269,235)		(7,268,741)		(7,250,847)		(993,362)
Operating expenses
Fulfillment	(107,823)		(95,066)		(13,024)		(438,959)		(391,687)		(53,661)
Sales and marketing	(170,026)		(151,556)		(20,763)		(700,791)		(641,519)		(87,888)
Research and development	(37,841)		(41,444)		(5,678)		(175,915)		(169,496)		(23,221)
General and administrative	(108,240)		(149,521)		(20,484)		(535,493)		(646,539)		(88,575)
Loss from operations	(6,779)		(32,589)		(4,465)		(398,724)		(338,770)		(46,411)
Interest and investment income	10,418		14,467		1,982		53,703		64,246		8,802
Interest expense	(6,556)		(2,819)		(386)		(19,343)		(19,003)		(2,603)
Others, net	23,086		(7,893)		(1,081)		59,659		26,497		3,630
Profit/(loss) before income tax	20,169		(28,834)		(3,950)		(304,705)		(267,030)		(36,582)
Income tax benefits/(expenses)	60		(268)		(37)		(195)		(1,013)		(139)
Net profit/(loss)	20,229		(29,102)		(3,987)		(304,900)		(268,043)		(36,721)
Less: net loss attributable to non-    controlling interests	(44)		-		-		(393)		-		-
Less: net loss attributable to redeemable    non-controlling interests	-		-		-		(193)		-		-
Net profit/(loss) attributable to ZKH Group       Limited	20,273		(29,102)		(3,987)		(304,314)		(268,043)		(36,721)
Accretion on preferred shares to   redemption value	(79,870)		-		-		(660,070)		-		-
Net loss attributable to ZKH Group       Limited's ordinary shareholders	(59,597)		(29,102)		(3,987)		(964,384)		(268,043)		(36,721)
Net profit/(loss)	20,229		(29,102)		(3,987)		(304,900)		(268,043)		(36,721)
Other comprehensive income:
Foreign currency translation adjustments	76,369		51,569		7,065		26,756		29,918		4,099
Total comprehensive income/(loss)	96,598		22,467		3,078		(278,144)		(238,125)		(32,622)
Less: comprehensive loss attributable    to non-controlling interests	(44)		-		-		(393)		-		-
Less: comprehensive loss attributable to    redeemable non-controlling interests	-		-		-		(193)		-		-
Comprehensive income/(loss) attributable         to ZKH  Group Limited	96,642		22,467		3,078		(277,558)		(238,125)		(32,622)
Accretion on Preferred Shares to     redemption value	(79,870)		-		-		(660,070)		-		-
Total comprehensive income/(loss)         attributable to ZKH Group Limited's         ordinary shareholders	16,772		22,467		3,078		(937,628)		(238,125)		(32,622)
Net loss per ordinary share attributable       to ordinary shareholders
Basic and diluted	(0.03)		(0.01)		(0.00)		(0.63)		(0.05)		(0.01)
Weighted average number of shares
Basic and diluted	2,138,210,789		5,713,526,267		5,713,526,267		1,528,540,765		5,736,262,553		5,736,262,553
Net loss per ADS attributable to       ordinary shareholders
Basic and diluted	(0.98)		(0.18)		(0.02)		(22.08)		(1.64)		(0.22)
Weighted average number of ADS (35       Class A ordinary shares equal to 1       ADS)
Basic and diluted	61,091,737		163,243,608		163,243,608		43,672,593		163,893,216		163,893,216

 

 

 

ZKH GROUP LIMITED
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except share, ADS, per share and per ADS data)
	For the three months ended						For the year ended
	December 31, 2023		December 31, 2024				December 31,2023		December 31,2024
	RMB		RMB		US$		RMB		RMB		US$
Net profit/(loss)	20,229		(29,102)		(3,987)		(304,900)		(268,043)		(36,721)
Income tax (benefits)/expenses	(60)		268		37		195		1,013		139
Interest expenses	6,556		2,819		386		19,343		19,003		2,603
Depreciation and amortization expense	16,547		12,685		1,738		73,466		54,769		7,503
Non-GAAP EBITDA	43,272		(13,330)		(1,826)		(211,896)		(193,258)		(26,476)
	For the three months ended						For the year ended
	December 31, 2023		December 31, 2024				December 31,2023		December 31, 2024
	RMB		RMB		US$		RMB		RMB		US$
Net profit/(loss)	20,229		(29,102)		(3,987)		(304,900)		(268,043)		(36,721)
Add:
Share-based compensation expenses	7,309		14,069		1,927		17,393		108,516		14,867
Non-GAAP adjusted net profit/(loss)	27,538		(15,033)		(2,060)		(287,507)		(159,527)		(21,854)
Non-GAAP adjusted net profit/(loss)       attributable to ordinary       shareholders per share
Basic and diluted	0.01		(0.00)		(0.00)		(0.19)		(0.03)		(0.00)
Weighted average number of ordinary       shares
Basic and diluted	2,138,210,789		5,713,526,267		5,713,526,267		1,528,540,765		5,736,262,553		5,736,262,553
Non-GAAP adjusted net profit/(loss)       attributable to ordinary       shareholders per ADS
Basic and diluted	0.45		(0.09)		(0.01)		(6.58)		(0.97)		(0.13)
Weighted average number of ADS (35       Class A ordinary shares equal to 1         ADS)
Basic and diluted	61,091,737		163,243,608		163,243,608		43,672,593		163,893,216		163,893,216

 

 

 

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SOURCE ZKH Group Limited

FAQ

What were ZKH's Q4 2024 revenue and profit figures?

ZKH reported Q4 2024 revenues of RMB2,370.2 million (US$324.7 million), down 3.0% YoY, with a net loss of RMB29.1 million.

How did ZKH's operating cash flow perform in 2024?

ZKH generated positive operating cash flow of RMB229.1 million in 2024, marking their first full year of positive cash inflow.

What was ZKH's gross margin performance in FY2024?

ZKH's gross margin improved to 17.2% in FY2024 from 16.7% in 2023, driven by business optimization and reduced procurement costs.

How much did ZKH reduce its net loss in FY2024?

ZKH's net loss improved to RMB268.0 million in FY2024 from RMB304.9 million in 2023.

What is ZKH's cash position as of December 31, 2024?

ZKH had cash, restricted cash and short-term investments of RMB2.06 billion (US$282.3 million) as of December 31, 2024.