RERE - Earnings call transcript Q3 2024

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Operator

Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to ATRenew Inc.'s Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note today's event is being recorded. I will now turn the call over to the first speaker today, Mr. Jeremy Ji, Director of Corporate Development and Investor Relations of the company. Please go ahead, sir.

Jeremy Ji

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

our we first our questions be he Chen, Chen, is from followed After Chairman Rex Speaking Kerry and the Founder, analysts. today call open will the and CEO, by CFO. to that, will

call The XXXX There transcript at available our were website, ir.atrenew.com. financial your released earnings a today. The for are third and this the this call also quarter will following be release investor results earlier slides convenience. accompanying IR

For Kerry quarterly share who thoughts performance attention highlights. will his and the pay the Rex, Please Rex Both to address today's by join safe will agenda, session. statements. on the Kerry and business our strategy, will Q&A financial followed harbor

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

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

Xuefeng Chen Kerry

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

strategic consumer in highlights, performance pre-owned industry. We goods share our are our the to trade-ins our and on practices promoting insights latest pleased

transaction revenue market sources, XX.X%, consumer line increased growth reached in for the growth over grew the and core overall by billion, is electronics year-over-year, year-over-year. of product To third secondhand with the business China in total which X.XX dive year-over-year RMB revenue deeper, forecast. Mainland revenue XX.X% by Our by in significantly recycling Breakdown recycling our quarter achieving XX% outpacing our China. of

a spending physical stores to the keep year, goods. slows pace the of As for total our as sources to firsthand idle down, our At had pre-owned consumer we to primary Physical remain AHS we touch securing supply. this crucial building stores and quarter nationwide. meet the X,XXX of third stores demand recycling user collect consumer most the end channel for products trust growing of open of points new

We to AHS stores our of user to will brand and capabilities awareness Recycle. AHS service enhance continue the top-of-mind experience reinforce

anticipate X accelerating the our opening store X As we next a to in result, years.

Regarding the highlighted quarter users. trend growing call recycling of that second we the data business, interim of trading earnings services our adoption our mainstream among shared during

and subsidies, for observed JD.com experience recycling promotion, via JD other by which mentioning and services. quarter, the year-over-year, consumer with Group increased order user demand co-investing services with value third the been by in smartphones worth is In electronics strong doubled not regular year-over-year. It Although and we worked direct recent services trading yet goods capabilities. XX% have provided closely Business of trading collected trading brand Singles through Day Electronics over in fulfillment of we trading that

years. fastest the recent achieved have in rate We growth

by of year-over-year increase XX% During products a XXX% JD.com brand total products promotion, generating became popular, value via of even the collected. the recycled Trading value increased more year-over-year. of solutions in

co-built inspection capabilities and user consumption relentlessly year-over-year. generated our fully covering end-to-end capabilities trading be by with ] of earnings. Against front, quarter distribution and JD.com highlights from and JD.com, utilized On our trading fourth educating experience. supply XX% in [ national These reflected stimulus increased the China's revenue established we subsidies, retail the chain XP sales advancing backdrop will fulfillment recycling, our

providing a This with official Apple our generated first increased healthy from grew platform goods by business category the growth gross profit this improvement expansion multi-category steady efforts, Additionally, year-over-year. segment asset-light experience quarter, in revenue of transaction sequentially. In stores. in the XXX% and the third program value in by trading XXX% business, our margin achieved user innovative is rooted year-over-year. service existing quarter, recycling our In also

existing recycling As end obtaining and stores. driver the stores competitive as nationwide offered strengthens of position contributes It acquiring XXX AHS store of of stores September, also service recycling cross-selling. serves a user, The the key profit frequency per business asset-light multi-category incremental visits multi-category for services. also our to and higher

pre-owned Leveraging our open products. end, selling on XX.X%, more proprietary electronic media official revenue Recycle the consumer sales meet as AHS well stores XPXC respectively. growing by Paipai AHS on the capabilities, and value-driven and pre-owned JD.com, year-over-year, supply stores demand channels websites through direct-to-consumer XXX.X% products. third product as our chain physical new official retail our grew quarter, In for Paipai user channels XXX.X% as JD.com, Recycle engagement been websites to effective have consumers are On and particularly strong like

and uplift Regarding had of third service of the Take its accounted same to of period Paipai which revenues; XXXX. POP take Paipai the consignment core of Take slightly, on aggregated for business offering. direct retail down XX.X% rate X.XX%. its compared in a of rate Marketplace by pivoted upgraded revenue, PJT while year-over-year functions adjusted X.X% X.X% it rate total increased an for quarter business

million on we margin GAAP XX.X first will achieved RMB RMB of our which achievement quarter income operating front, economies and tied to of this is reporting a non-GAAP X.X% non-GAAP CFO, of On XXX our This million. later. operating Rex of a income elaborate scale, with are closely profitability operating our the

market IDC the products grow. believe: referencing the option value demand outpacing driving We for becomes spending trading observed among pre-owned money users, thus is the smartphones year-over-year. of slows consumer secondly, have disposal and firstly, XX% continues industry industry; assured roughly a for down, insights growing electronics by and trending consumer of growth quality as secondhand that the China's to We pre-owned

the its experienced, have is you secondhand market stage. of growth many As in

and foundation, of on of serving strengthening focuses and businesses, securing increasing to trendy and supplies Recycle firsthand chain strategy our trading consumer whether we secondhand or or and sales refurbishment We our plus our economies unleashing capabilities more our are By which core value and leveraging gold market and from supply value. supply integrating long-term supply. substantial AHS within For there bags for while scenario in trust retail consumer effective scale advantages vintage secondhand our the unique sources of industry. characteristics users watches, the massive market, compliance and achieving consumer electronics consumers, is consumers chain are brand, business footwear, that liquor this business, the efficiently believe electronics accessories,

innovation, and our categories. expand cover to experience-centric more focus relentlessly services and on keep offerings will product user We

long As we are top-of-mind building AHS committed remain Recycle steadfast in creating user a in value, the into brand we run. to

consumers of Recycle educating continue new brand the progressive as exposure via on brand media platforms We AHS and Kuaishou. Douyin such

consumers committed rate and further development, of by of the to transaction share, longer-term user are full the solidifying recycling, competitive position year, doubling industry at in our services. This for and we the serving mind trading acquiring containers needs and industry-leading brands. experiences spectrum their growth Looking recycling with on empty campaign ESG, retailing strategic [ for with brand. collaboration group-wide the physical Aihuishou Recycle exchange in ] in AHS front of initiated Group, the cosmetic established partnership to L'Oreal We a gifts encouraging consumer L'Oreal has leading revised dispose of responsibly of

in this encourages initiative to recycling of awareness our broader use participation while user services, protection. about and attraction addition eco-friendly brands' In consumer repeated raising environmental

I'd over CFO, for updates. our the Rex, to turn Now like call financial to

Chen Chen

everyone. Hello, [Interpreted]

year-over-year We strong milestone are pleased of growth to under on and non-GAAP revenues. report quarter operating quarterly measures GAAP under measures profit another profitable the first total

primarily with in taking XX.X% and financials, RMB on a ongoing our look solid net are unless in XX.X% revenues increased a preowned growth third all electronics product overall of recycling to quarter, transaction marketplace offline XXXX. RMB and trend in in overall of million, went otherwise please XXX revenue RMB revenues in of The revenues by upward RMB primarily product growth revenues. service increased and due service of by the revenues the multi-category value million, the amounts to stated. In the total are in comparisons increase Net primarily consumer Before delivering detailed The that XX.X%. all year-over-year PJT an X,XXX was business. quarter sales online take the an channels. Net X.XX% from to an representing along generated through of increase Marketplace service basis our driven increased marketplaces, third were by increase million, at gross the note X,XXX by driven rate

take During rate. to delivering the in RMB quarter, XX over contributed healthy multi-category recycling a improvement service million business revenues,

X% business recycling X.X% with close quarter attributed in third XXXX. period in the multi-category the to of service same of of to compared XXXX Our revenues

X.X% better group XX.X% margin expenses, from non-GAAP and fulfillment in a are and as the in a with here year. U.S. excluding in same of discuss second, was measures, we last revenues to recycling increase increased due costs increased million, reflect business assets and XXXX; growth level decreased X%. General our acquisitions. transaction of XX.X% XX.X% we and the increase which with RMB expenses RMB XXX increase marketing of quarter logistics by on. Non-GAAP increased provide network GAAP total our from and RMB let's assets by percentage same to: clarity our refer X.X% to expenses to primarily expanded X.X% expenses, decreased of release operations. period and margin to to available greater share-based operating To XP million. with XX.X% compared Gross management expenses, Gross non-GAAP results our XX.X with increased expenses increase million, as in which for store RMB marketing period resulting compared year. and operating facility-related to the to operating period more we in SEC. Merchandise as will XX.X% advertising by RMB SBC was same an expenses to operation third Non-GAAP Non-GAAP expenses activities discuss increased line our of an we expenses by in on million, costs in Fulfillment actual the corresponding from and business expenses The XX.X% views the administrative X,XXX product SBC XXXX. reconciliations and XX% expenses excluding our sales. by amortization revenues million. million, decreased Non-GAAP campaign-related in Under marketing at costs expenses an Now the compensation deferred compared of third by XX.X% the expenses conducted XXX first, XXX also profit the in will expenses. selling non-GAAP the due total as base earnings quarter was furnished results Form to intangible the last to RMB primarily our in expenses X.X%. Selling with as XXX measures the trends X.X% and of the how from percentage selling personnel in and fulfillment promotional X-K expenses. and and

acquisitions. in increased increased a non-GAAP RMB XX.X and by XX.X% RMB G&A Excluding technology to due business RMB content increased system. the and million. SBC and increases X.X% an intangible expenses with and expenses, operation increase assets increased XX.X as technology total Non-GAAP costs of expenses a primarily revenues to by percentage due million, content million, to connection excluding X.X%. Technology and costs and expenses amortization assets Non-GAAP of X%. personnel centers decreased office-related XX.X expenses to from primarily as SBC total expenses. and our maintenance G&A XX.X% of from Non-GAAP costs from was X.X% to to in ongoing The percentage by expenses revenues personnel of expenses X.X% deferred to content and in increase resulting

substantial Non-GAAP the year-on-year. of quarter was in our million result, X.X% increase third XXX XXXX, non-GAAP compared operating operating X.X% a XXXX. a of representing in third profit the quarter was of margin XX.X% As income RMB to

operating from we measures non-GAAP our of reflected delighted GAAP at This have million. been majority the of reporting. RMB impact quarterly digesting In addition report XX.X the to are amortization to the operating our under milestone first income, income we

XX, repurchase are total our XXXX, our as million million we up authorized buyback XX, ADSs approximately USD of approximately we have under quarter of to million our returned X.X through the XX In a September of of XX.X plan, X.X million XXXX, to XXXX. used June for USD repurchase third we USD ADSs. million shareholders ADSs In to to share of which ongoing terms XX.X

as remains balance ADSs our September investments smartphone receivable October growth sustainable of XX, position outlook. pre-owned third-party during flagship we providers cash our short-term from even were payment and though billion Total repurchased in more cash, and compared RMB safeguarding restricted and products equivalents, preparation obtained totaled dropped of open a the cash for cash As market, and second as X.X service the fourth in brand cash of models funds XXXX, September released products more when -- in with quarter the strong, end and promotion quarter, the the collected

Now turning to outlook. business the

For an preliminary conditions, increase total revenues the fourth to year-over-year. XXXX, views we between of and representing to operational our X,XXX of RMB remarks. to that million, concludes we change. This our XX.X% to million on Please only note and this and are quarter forecast which X,XXX anticipate market now current Operator, be are questions. RMB subject ready prepared take the reflects XX.X%

Operator

question will with Ju America. Joyce Bank today first from The be Instructions] [Operator of

Joyce Ju

of for after? your quarter business subsidies and the [Interpreted] year how you incremental on management help XXXX business what from the trading Specifically, And expectations Could quantify are business trading the trade-ins? the driving in growth? do elaborate fourth how a also bit are

Xuefeng Chen Kerry

for been XXX% trading were In [Interpreted] National through Thank the Day Goods efforts mover business in with a Consumer Singles' options the Recycle. question. X promotion, by first trading recycling closely by continued third and quarter, factors: First, as and increased your This increased recycling were trading program. trading by business working supporting year-over-year. There AHS joint you with over JD.com JD doubled. where offered We've grand during the trading value XX%, JD.com our with the convenient momentum

Second, phone subsidies. the new of promotion, many launched products ahead coupled grand trading with brands

services consumers over services. Third, recycling prefer trading regular

to smartphones on with our scheme, Although on appliances. supply discounts is the appliances smartphones chain actively used trading from their thanks are enjoyed smart exchanging direct for our not home secondhand subsidies thriving, and yet partnership Users nationwide industry-leading current trading cross-category have capabilities. stimulation JD new

when purchasing trade-ins we approach. Alongside users in brands, appliances during stages. educating new early continue to grand For consumers orders need phones experience instance, and users more still purchasing there where of were is in adoption used XXX,XXX the cost-effective home believe that traded promotion. We their help platforms its to the this

our Electronics, JD For of substantial XX scenario expect units with we of million annually. that channel we the instance, expect collaboration, of And through rate this nearly rate. smartphones distributed through growth there penetration advancement is has this the

to look goal Ministry we to scale of and the consumer -- the trading and of of fiscal advances for development our variety policies, the the capabilities, consumer forward social strengthening believe objectives trading supply remain their scale large-scale become committed in support behavior, and We progress upgrades enhance program. We mainstream. improvements and goods chain extend secondhand consumer to economic Finance As that providing of and support to evolution infrastructure to sentiment. fostering are variety destining efficient equipment the industry in its for on the

the fulfillment optimizing As fulfillment face-to-face quality services, step, experience, next the uplifting bringing continue price placement, of our inquiry proportion order inspection ultimately to level. orders, we services next the

Operator

comes question with ] from Won next The [ Zhao CICC.

Unknown Analyst

do This color And grow this recycling plan how you on segment segment? of business? contribution? year. Could What's please business further multi-category the [Interpreted] shown emerging you more provide the has strength this your profit progress to

Xuefeng Chen Kerry

[Interpreted] you for the Thank question.

service is and AHS on gross of users' multi-category brand recognized recycling asset-light by Recycle remain in as level AHS To by for the value of and XX% revenue, core converted fulfillment existing demand, has segments, and million the luxury quarter, the multi-category gold, the XX stores. Breaking category, premium as RMB luxury business over This services for XX% store strength we meet the an our generating developed gold was After leveraging increased operates operating profit. to and business, In by recycling competitive respectively. items. business recycling enhanced recycling deducting stores. down built rapidly offer year-over-year, further growing accounting of the profit. store high-value goods, XXX% which It XX% was business other platform and multi-category costs, liquor third goods jewelry, Our model.

take this the millions. more second-tier pricing advantages XXX had needed now business the massive stores, thrive size integrate potential our In capabilities luxury embraced possess In similar operated self-operated AHS terms offer road, multi-category recycling and recycling the mainstream services long-term Users to in gradually users to with add services of transparent market reaching recycling and lower-tier covering and XXX cities. our due making of and competitive in our revenue hundreds pre-owned market, rate the contribution, gold extended domestic categories first recycling services, service to market down stores. services on the are with with pricing X promising. Of size the existing to services multi-category the service have convenience we premium huge for levels. joint opportunities cities, and multi-category exploring We

the users. in expand ability to we meet recycling continue we AHS our store more network, needs confident are to of As

Operator

The with Research. Small-Cap Zacks Michael next Kim question comes from

Michael Kim

to follow up just of earlier on your comments. Maybe some

on in curious It in demand with of are macro pre-owned on both China, phones supply demand to growth Just what for side on terms smartphones as the you're tailwinds challenging would get given market the ongoing the your rising volumes? of in thoughts well used backdrop. side shipments as in just smartphones transaction like seem there new seeing somewhat for the with

to thoughts So there? your just get curious

Xuefeng Chen Kerry

for [Interpreted] question. the Thank you

on the the consumer cross-category has our better trading of under have directly national policies, phones initiative, from category side, to sources. capture and not mobile us supply enabled First, trading capabilities the our recycling main subsidy yet benefited although

capabilities, including in coverage quality the our This single product As calls, in has our from and refurbishment refurbishment processes have primarily. business to grown enhance supply we XP mentioned of digits, year, digits earnings meaningful sales. previous boost self-developed industry-leading rate chain that pre-owned compliant double compliant

On more basis. retailers. the one reconditioning, Marketplace, at more meeting needs are are in from and a we of revenue on PJT products growth identifying which our hand, suitable has refurbished products resulted annual for sustained effective quarterly We both through

off-line believe revenue purchasing cost-effective channels and quality from to leverage other distribution, prudent by consumers XXX% our On hand, this segment, are retail AHS our We official options pre-owned gaining over that from smartphones. On XPX assured serve consumers increased grew year-over-year. by Select market. directly seeking the the year-over-year. consumer revenue self-operated acceptance, mass retail we especially Within in stores XXX% websites increasing AHS

We continue our channels efforts and to retail advance our brand capabilities.

Operator

This session. management back conference to I remarks. concludes to for the closing would question-and-answer like any over turn the

Jeremy Ji

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

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

Operator

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

that marked present were live an [Interpreted] You the by of may transcript this are disconnect. [Portions spoken call.] now interpreter on

ATRenew (RERE) 20 Nov 242024 Q3 Earnings call transcript