RERE - Earnings call 3 2023

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Operator

Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to ATRenew Incorporated Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded.I'd now like to turn the call over to the first speaker today, Mr. Jeremy Ji, Director of Corporate Development and Investor Relations at the company. Please go ahead, sir.

Jeremy Ji

Jason. you, Thank welcome Call. and Third XXXX Quarter Hello, to Conference Earnings everyone, ATRenew's

this Speaking Founder, were also slides our are Chen, of and financial will Kerry quarter and call Rex, your first be is today the investor analysts.The and There from call our ir.atrenew.com. will today. harbor following will we thoughts for address highlights. open be at today's transcript his third business available The by website, to release questions that, Rex cover and financial he our followed safe statements. call join Kerry Chairman agenda, earlier the IR Rex accompanying After Kerry who will Chen, by convenience.For Q&A results this a CFO. the XXXX me will performance our the released will Both strategy CEO, share followed and earnings quarterly session.Let

not on of measures. includes of during of consist hear Some measures in ATRenew today obligations statements that which a this does our forward-looking release, harbor press safe to to contains the information on forward-looking our assumptions refer to measures. statements any I reconciliation Please non-GAAP today statements earnings of upgrade certain these will and based to call this financial makes as release. assumptions of GAAP the refer call on statements.Also, take management our Any you you'll the that discussions discussion are non-GAAP earnings and press

like updates. RMB stated, and a are and Kerry call conference that during are Finally, year-over-year to in this strategy over the on otherwise business unless to mentioned comparisons figures turn for note please basis.I'd now all all call

Xuefeng Chen Kerry

welcome Hello, Earnings Third to Conference Call. [Interpreted] XXXX and Quarter everyone, ATRenew's

adversely of and sales not both During exceeded quarter, The in in growth product once again profit. did our revenue new business. impact flat we terms expectations the third

business for the fourth support at RMB expectations in operating festive Apple's quarter, of to supply serves in X.XX XX.X% our the quarter, engagement serving This overall for our industry pre-owned drives revenue our is and our development quarterly year-over-year increasingly the a XXXX expansion. and the new AHS to for network adjusted a long-term for the our we enhancing stores. designed September These competitive margin clear.During our raise a to dedicated to focus, upgraded Within trade million JD.com's and outlook business, with operating context, growth was in service of in schedule.Our a time, months stores of to XP with in technology as the era Importantly, team secondhand merchant people revenues the choosing to offering surpassed reliable X brand.Alongside XX% as lifestyles.With year-over-year customer X.XX industry. expectations. reached thrive and recycling into X as some and X,XXX the base which quarters automation business operating primary year.During and further and the results high-quality scale confident attracted convenient beginning and by primarily Total RMB official leader of income of the same by business, greater nearly performance inclusion to secondhand noteworthy increase, strategic secured industry the the the At of exceeding retail consistently of the organization, representing a new from confirming stores revenue X.X products, recycled more growth. growing XX.X% platform our buy the new XX.X are to larger our year-over-year operational industry-leading scale. strategic services XP efficiency reached core to program, grew products the multi-categories bolstered ahead economies in first cost.I'd surpassing continues our important In remains CXB adjusted this of trading national to off-line offer these upgrades. highlights which RMB our a we third pre-owned attributable are efficient XX record while billion, supplementary capabilities, The resulting our margin further core guidance. marking adjusted drivers.During through of leveraged encourage Within our cost, share X.X%, premier amounted X.X% existing was user automation capabilities billion, setting our a and XP RMB billion. total ability increase and reducing initial technology the national-wide we users, business a like have an and revenues ended of quarter, improve X driver our increases our awareness as of quarter, store

the RMB This percentage in brand, aspect revenues, refurbishment our value This the our the capabilities are retail of profit recycle chain recycling Selection and have gain year-over-year its costs, Selection. the the Since our CXB was marginal exploring contributed increasing of brand intended and the closed end and selling by renamed our BXC from that to into the is in X% of been working capabilities, retail CXB initiative stores been the AHS First, pre-owned with the enhanced consumers.Second, exceeded October, complementing strategic recycling refurbished Beijing to XXX in adding will of there BXC X% be was controllable the CXB terms cities products. of raised.Starting solidifies AHS July higher-tier during core more brand. greater business of Shanghai products. impact multi-category authorized which compliance services a could bolster July, of million. AHS in values to AHS We underscoring this from provide believe a upgrade integrated brand, sales and loop the increase products RMB Android users during further as secondhand X%, a capabilities.In of revenue will with variety models more strength on a main revenue, a XXX both of in monthly equipped direct-to-consumer our AHS Huawei year, Paipai quarter, brand has consumers recondition refurbishment, the of products.With in for further quarter, value retail multiple further the complex benefit to gross trust greater quality while refurbished total of to million and electronic we of we third worthiness business as Recycle

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the take of revenue XXX million, RMB increased During to quarter, year-over-year by XP an X.X%. with overall rate X.X%

and real-time PJT XXX,XXX device services year-over-year up quarter, and quarter, products. bulk the business on while and price heroes system features registered retail Marketplace us enhance the for for the consumer to on ranges active platform align provide business demand high-quality the to opened continues to has our broader enhancing small equipped to allow turnover. to portable their with improved site. XX.X% realizing significantly the an supplies, our users' for adjustments marketplace affordable of we inventory more We also marketplace, infrastructure operate during goods.During Paipai support or third and number of consignment pre-owned of JD's users grade our to the inspection upgraded of BXC leads to with by have while management period.Our costs, by further terminal. through shipping management merchants This low-price and embedded JD.com. device PJT reducing the The cost-efficient, transactions. burden we PJT JD's analysis, faster meet join, merchants increased medium-sized had capabilities.The product strategy main retail Regarding preferences Paipai's BXB users, quality end become By amassed purchasing proprietary over and time labor them model

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as that strength third brand revenues fewer marketing representing role, our of expenses higher a a percentage of X%, quarter, channels required X.X selling selling key points. expenses. played decrease as adjusted we year-over-year the a had The percentage percentage XP and recycling During of name were of a

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aligns mission.Now, are to anti-corruption. to foundation of strengthens I'd with CFO, company's the accepted and our This principles turn Rex, sustainable our to and rights, the over We committed upholding updates. call human commitment labor, areas long-term environment, universally for the for in financial the our XX like development

Chen Chen

you. Thank Hello, everyone. Yes.

new another revenues We are guidance. GAAP of achieved in income exceeded operating report on pleased another top quarter, the our end yet to profitable as we that the record

expenses last non-GAAP and during are from with an operating expenses compared actual total in RMB XXXX same overall and to total the to Non-GAAP expenses, in management recovery consumer the increased non-GAAP a our than rate, as pre-owned by note better reflect into XX.X please share-based comparisons content with X.X% revenues in period a otherwise expenses million. in in on revenues RMB a of selling as XX.X%. content excluding by fulfillment percentage SBC and online Non-GAAP activities. release expenses the mainly to percentage RMB decreased we the sales expenses SEC.Merchandise decreased XX.X increase expenses and decreased period million, a in from XP revenues a period amortization by quarter a assets. year.Selling year-over-year our was results XXX.X to in operating-based was marketing X.X% period the last increased from same decreased expenses expenses expenses, in of both Under XX.X% X.X% XX.X% of Non-GAAP expenses the growth million, decreased relation G&A and decreased our X.X% record million, was of by expenses non-GAAP RMB by to to same due activities group operating the margin fulfillment doubled in XXX.X for the revenues was period X.X% content X.XX%.Turning the was the total how that channels.Sales totaled to and to amounts quarter, due XX.X% to technology XX.X% X,XXX.X to at company's unless measures, due Paipai our XXX.X and refurbished clarity Non-GAAP SBC the to increased operating revenues. the operating finished take X% to XX.X% XXXX. X,XXX year.As as profit Non-GAAP in X-K, primarily year.Technology million, The to marketing marketing from offline from RMB technological RMB million, marketplaces the last also in Non-GAAP decrease our to while Growth X.X% revenues refer and to of RMB as by Non-GAAP by primarily million. marked financial new our GAAP the in which which total the the the by million. margin in excluding increase to percentage operating The corresponding XP Net increase platforms with we to increased X.X% decreased non-GAAP assets. to provide costs as last company's same decreased level million, XX.X% XXX.X Fulfillment total X.X% selling X.X% revenues net primarily million net RMB decrease SBC from Non-GAAP high. increase X.X% to in our service of to of of product and devices stated.In by RMB to expenses, compared product will the grew PJT driven year. same Before X.X% with by electronics, XX.X% of by a on XX.X% to growth expenses, by million. increased in product income RMB service XX.X basis, are in recycling personnel our which from The through result, and XXX.X was expenses are expenses to the revenues. third developed excluding marketing of pandemic million. as XX.X technology on.Non-GAAP last X all the in discuss by to going matured. XX.X due third more product third increased in an details, non-GAAP period in RMB will RMB expenses compensation intangible revenues intangible quarter. Gross million, costs in our available year.G&A was in early of as This operations. same net same X% X.X%, SBC driven to billion, margin influence here X.X% period the Form a was excluding year. expenses amortization company's last and business views increased increase and trends the of XXXX. expenses. Gross sales revenues by expenses The RMB an increase COVID-XX primarily and primarily X.X% was was X,XXX increased greater G&A line of to results and the margin RMB expenses percentage the recalculations RMB revenues

billion. and X.X As September XXXX, payment totaled cash, third-party of service receivable investments, XX, from cash restricted RMB and cash requirements, short-term providers funds

sustainable of consideration a million market in quarter Our of ADSs a sufficient the repurchased total we on for hand safeguards X.X outlook.During third million. X USD growth cash the XXXX, open cash

and As a X,XXX XX.X% preliminary to September approximately our This the outlook, subject XX.X ready turning of X,XXX share million fourth of change. concludes increase million and earnings to and forecast XX.X%. on total to take USD we XX.X XXXX, currently current our remarks representing total to views million, for for the ADSs questions. of today.Operator, million market reflects business are company be conditions, RMB operational programs.Now, our expects RMB repurchased had XXXX, now which XX, a its the for in we quarter between of year-on-year prepared the purchase already This to are

Operator

from Instructions] first Our question from Goldman [Operator Sachs. comes Victor Tang

Weiting Tang

my recent impact revival this performance? management management grant on recycling does question. outlook Kuhn. And the update in of Thank Can Mainland channel Management, official inclusion And Huawei's operations also asking the Can question XXXX? Apple's provide your taking on single-state share phone what new [Interpreted] Ronald an cell on for its management will take China? in of some panelist, behalf color on you, I'm for our performance? promotion

Xuefeng Chen Kerry

we recycling in for year's observed enthusiasm trading. a this user and Throughout Double Eleven, surge [Interpreted]

During the an Both of totaled milestone channels single-month grant RMB BXC the XXX increase XX% value by in pre-sale transaction representing CXB period the the sales year-on-year. increased XXX reached RMB XXth recycling Shanghai October.And all after of and total across million, orders million promotion, also our in year-on-year. Beijing on significantly November XX% values

reflecting user business circular immense approach resilience business brand within recycling our Recycle of November, we total and growth of Our end of about potential the performance and the towards the the XXXX, model million loyalty million, economy.As the our the X,XXX fourth fiscal revenue from speaks in volumes scoring trends business for guidance AHS economy quarter in ahead remain confident we XX.X% X,XXX year promising RMB the evolution ranges to RMB growth.Looking year-over-year of to our XXXX XX.X% and circular to of strategies.

are We our from confident refurbished in compliant to executing realize our strategy profitability business. higher

reflecting This iPhone can mainstream for during services.Our of to website recycle allow and of recycling a trading means XX period.In Our official for recycling XP most have business, key phone Mainland in significantly accounting up orders number electronics huge, efficiency that limited shipments robust, sustained pre-owned of services China remains fourth the consumers. industry-leading. XX the iPhone is is multi-category we Mainland stores in the popularity further to third value of began circulation qualifications XX among RMB recycling share and from Apple's amount business the million room the allows expansion and trading in sales, iPhone quarter, our and involvement continue our revenues. flagship for XX to products. secured be in trading increase XX% for despite Apple automation generating penetration Apple's iPhones, of China we generations Apple's programs, consumer is technology.Apple the and the still recent in and X recycling quarter, us scale official sales enhancement recycling in the new lineups. new brand of products to the us lineups rate rate The There lineups retention which

Operator

The comes from Xiaoxin next CICC. question from Chen

Xiaoxin Chen

Could talk handling use the you shares [Interpreted] and how management about repurchased? the of cash are

Chen Chen

cash funds to and business payment X.X investments As cash, service strategic cash third-party of summed short-term to billion September from long-term the RMB XX, development. and support our providers XXXX, our and receivable total recurrence, restricted

of on voting. of expectations behalf the is or XX.X her Can to been third flow program So more further the repurchase about op out are Joyce existing of enhanced the comment that be strengthen adopted. operational use of and flow multi-category devoid into inflow million technological margins? management from repurchasing of to first business? long-term in of potential, foreseeable dividends America. believe been value the the electronics, Congrats second December capital continuously advantages business.Second, on is the of first, we margin [Interpreted] another of of increase question had I'll the non-GAAP since XXXX, Recycle By cash, question USD the for deploy since AHS your the manner the one will another share But to future.There the our expenditure cash cash refurbishment. repurchase per-owned will strong improve color programs main continue of the quarter. the We My to on plan on and refurbishment your areas of question company's due strengthening shares and share mature and shareholders.We We operating consumer later stocks. end business with My progress to outlook Bank total the on booked quarter rights from through prudent which spent XXXX. to positive What's stocks repurchase core cash profit Ju in conduct share cash a based business Can a margin? the stock, gross of especially to on for and control charity stock margins. issues, question we as the through competitive we conducive read disciplined XXXX management Repurchased long-term have are the will the her. continue compliant is

Chen Chen

third So shift our to XX.X%, due in margin quarter a of was year-over-year so gross was which overall mix. revenue XXXX, strategic the profit decline in

by costs, such, contributed to quarters, total bolstering XP businesses. And X focused downsizing the year-over-year. on we have as XP revenues, which service past XX.X% involves the our X% Over several our revenues,

stood gross the adjusted gross the business, profit this reasons in sales the view during XP new counter September, of our for we to aligned There phone This expectations X margin profit that of are proactively margin fluctuation. our third detailed refurbished XX.X%. at of profit preparation behind quarter would the this.First, devices a with margin in gross taking XP So quarter. price sales season seasonal

product the to supply, We merchants prices. demand industry by ensuring Such procured to meet selling gross and aims margin resulting of supplement adjustment reducing procurement secondhand that also in partners, finished relatively from we a for to their profitability.Second, costs lower adjusted our devices their supply.

However, as non-GAAP our automation ratio the technology X.X% X%, further delivering ratio dropped improves optimized our fulfillment efficiency op selling the fulfillment revenues X.X%. marketing expenses the our margin efficiencies, the cost of total and against along and and selling to with and expense marketing the

user X with Although we RMB especially that devices. up experience.In joyful XP's reach notable our suggests to activated a acceptance consumers quarter, competitive able X in billion an gross the reflecting margin recycling of globally revenue, pre-owned to refurbishment compliant of third prices lifespan with iPhones more pre-owned provide pre-owned generated decreased, business years, were iPhone's electronic XX% devices. devices, can Research being Apple and

to business in early our growth operating businesses. the business compliant Although, an refurbishment promising growth overall anticipate is adjusted the Apple and margins stages, refurbished market improvement We still domestic refurbishment of in its potential. shows attributable

Operator

back I'd to hand As questions there at for are the to remarks. no time, like conference management closing this further

Jeremy Ji

IR our followed Thank a ready. Thank joining for you transcript us. A on again website today's by replay available shortly, be you. call when all of will

Have us nice any ir.atrenew.com. feel day. a additional to e-mail If questions, free please at you have

Operator

today's The conference concluded. has you attending now presentation. Thank for

You disconnect. may now

ATRenew (RERE) 22 Nov 232023 Q3 Earnings call transcript